Congress puts General Motors back on the hotseat today, with CEO Mary Barra and other executives testifying about the cover-up of its ignition-switch defect. That cover-up became more clear last night, thanks to a New York Times report on internal documents relating to the fatal crashes. The documents show that GM officials knew that some of the crashes were because of a loss of power and that the fatalities related to failed airbag deployment as a result, but said nothing — even as a woman was erroneously convicted of vehicular homicide:
The car crash that killed Gene Erickson caught the attention of federal regulators. Why did the Saturn Ion he was traveling in, along a rural Texas road, suddenly swerve into a tree? Why did the air bags fail? General Motors told federal authorities that it could not provide answers.
But only a month earlier, a G.M. engineer had concluded in an internal evaluation that the Ion had most likely lost power, disabling its air bags, according to a subsequent internal investigation commissioned by G.M. …
The company repeatedly found a way not to answer the simple question from regulators of what led to a crash. In at least three cases of fatal crashes, including the accident that killed Mr. Erickson, G.M. said that it had not assessed the cause. In another fatal crash, G.M. said that attorney-client privilege may have prevented it from answering. And in other cases, the automaker was more blunt, writing, “G.M. opts not to respond.” The responses came even though G.M. had for years been aware of sudden power loss in the models involved in the accidents.
The release of the assessments came too late for one woman:
Mr. Erickson was riding in the front seat of a Saturn Ion driven by Candice Anderson in 2004. They were an hour from Dallas when the car suddenly drove into a tree, killing Mr. Erickson but sparing Ms. Anderson. Only recently did Ms. Anderson, who pleaded guilty to criminally negligent homicide after the accident because she had a trace of Xanax in her system, learn that she was not to blame.
Despite the earlier determination by the engineer, Manuel Peace, that the engine’s shutting off had most likely been the reason for the crash, G.M., in its response to regulators, said there may not have been “sufficient reliable information to accurately assess the cause” of the incident.
That sounds a lot like obstruction of justice. GM later stated that the communication was protected by attorney-client privilege because the Erickson family had filed a lawsuit against GM, but that’s nonsense; the report wasn’t made as part of privileged communication between the engineer and his own attorney. Documents such as those are part of the discovery process in any lawsuit, and knowingly withholding documentary evidence in a criminal case is obstruction of justice.
The hearings are already underway, and perhaps Barra will get asked about why they allowed a woman to get convicted of manslaughter while GM had knowledge of potentially exculpatory information about the accident. They want to know more about the attempt by GM’s engineers and attorneys to keep this kind of information from the public, and apparently from the courts:
General Motors executives return to Capitol Hill on Thursday morning for what is sure to be another round of harsh questioning about their handling of an ignition switch defect linked to at least 54 accidents and 13 deaths.
Lawmakers plan to press Mary T. Barra, GM’s chief executive, and general counsel Michael P. Millikin on why top officials remained unaware of the defect for more than a decade even as the company’s attorneys settled legal claims resulting from accidents linked to the problem.
Thursday’s hearing will mark the first time GM’s top lawyer publicly answers questions about the ignition switch debacle.
“There’s a reason Michael Millikin will be testifying in addition to Mary Barra — and that’s because [Sen. Claire McCaskill] will be posing some tough questions that haven’t yet been answered about the role GM’s legal department played in delaying this recall,” said Andrew Newbold, a spokesman for McCaskill (D-Mo.).
An internal investigation by GM found that information about the switch defect never made its way to top executives and instead remained trapped in the company’s engineering and legal departments. Anton R. Valukas, the former U.S. attorney who oversaw the probe, concluded that a pattern of “incompetence and neglect” allowed the problem to fester for more than a decade before executives ordered the first of a series of recalls this year. In the aftermath of the report, Barra dismissed 15 employees, including several GM lawyers involved in safety issues at the company.
Neither the Washington Post nor the New York Times addresses the other big issue in the GM defects issue, which have now resulted in more than 29 million recalled vehicles since the first of the year. The NHTSA knew about the complaints involving airbags and loss of power, but repeatedly ignored them, as Liz Peek explained in March:
By 2011 there had been 204 complaints lodged. In 2010 then-Congressman Barney Frank inquired on behalf of a constituent about the multiple accidents apparently brought on by the random deceleration issue. He was told by NHTSA that it had “insufficient evidence to warrant opening a safety defect investigation.” By that time, there had been several fatalities related to Cobalts’ stalling. Still, NHTSA did nothing.
At the same time, after the Obama administration had orchestrated a government takeover of General Motors, NHTSA hit Toyota with its largest-ever fine and demanded a recall of some 9 million cars and trucks. Over several years, NHTSA had received more than 3,000 reports of sudden acceleration in Toyotas; there had been some 75 fatal crashes. Though the incidents of problems continued to mount, it was not clear at the time of the recall what exactly accounted for the mishaps. The Wall Street Journal announced that a report attributing most of the accidents to driver error had been “temporarily blocked” by safety officials, acting under the direction of Secretary of Transportation Secretary Ray LaHood. …
Meanwhile, back in Detroit, evidence of problems in various GM cars – and especially the Chevy Cobalts — continued to mount. To date, the auto maker has reported 13 deaths related to sudden deceleration in various GM models. While the government is now questioning why the Detroit firm delayed initiating a recall of the troubled vehicles, one can also challenge NHTSA’s hands-off attitude.
According to The Times, there were only 260 complaints specifically mentioning stalling, but almost 8,000 reports of problems that could be tied to the same defect – plenty of complaints to alert safety watchdogs. In all, the vehicles recalled have been involved in 78 deaths and 1,581 injuries.
By 2010, the US government had invested heavily in GM (and Chrysler) in a two-staged bailout of the automakers. Treasury held a considerable amount of stock in GM, which critics claimed would turn into a white elephant for taxpayers while the Obama administration spent years bragging about saving GM. “GM is alive, and Osama bin Laden is dead,” Barack Obama and Joe Biden repeatedly reminded voters in 2012. Only after Treasury finally divested itself of GM stock in December 2013 did this defect start to get attention — and the recalls have cost stockholders, including those who bought from Treasury, more than a billion dollars already this year.
If this set of circumstances had occurred in the private sector, such as a hedge fund dumping shares right before massive recalls and findings of years-long and known defects, you can bet that the SEC and probably the FBI would be conducting an investigation of insider trading and corruption, especially with the deaths involved in this defect. Congress should be asking the same questions, and they should start by subpoenaing communications records between the NHTSA and Treasury before another epidemic of disk-drive failures breaks out.