With the legislative and administrative arms of government purchased and paralyzed by big corporate interests today, judicial process is one of the last hopes for bringing illegal activities to light and compelling/embarrassing relevant parties into needed reforms.
This is precisely how the financial cartel was finally broken up in 1932 (three long years after the crash of ’29) by the The Glass-Steagall Act which was only passed into law after The Pecora Commission hearings effectively cross examined key bankers on the public record where admissions were then relayed by journalists in the national papers.
Similar important public airing is being done on platforms like Twitter by people like Eric Hunsader of Nanex who exposes the security crimes of High Frequency Trading (HFT) firms with real time data that he captures, posts and sends to industry-captured regulators like the Securities Exchange Commission (SEC), as a form of public shaming every day. This week after years of tireless effort from Hunsader and others, several major US exchanges came out in favor of installing ‘speed bumps’ as a way to fractionally slow down trading signals currently being used by HFT to abuse legitimate investor order flows. Up until now, the ‘Flashboys’ IEX application to the SEC to become approved as a listed exchange with the ‘speed bump’ protection for investors embedded, has been stalled indefinitely in ‘closed door’ meetings with firms like Citadel who are reaping billions from HFT abuses and have opposed IEX’s application. In this instance and many more, there can be no doubt that the SEC is captured by those it is mandated to regulate and not the investing public it espouses to protect.
The ‘Emissions-gate’ VW case is another modern day opportunity for the essential public airing of corporate crime. Excellent and willing trial lawyers (who are not purchased by the status quo) and willing to stand up to power, and journalists who are willing to freely report on it, are a critical part of maintaining a functioning democracy.
One of the major reasons that regulation and prosecution have so miserably failed in deterrence over the past decade, have been the proliferation of behind closed door negotiations and ‘neither admit nor deny’ settlements with offenders. It has become so common place, that so-called enforcement agencies, don’t acknowledge that the practices are unethical, inappropriate and corrosive to the function of a just society.
But some good news out of Florida this week where the EPC of Hillsborough County voted unanimously to hire outside trial lawyers and sue VW for the deception and damage caused by their fraud. See, Hillsborough County Environmental Protection Agency sues Volkswagen:
On Wednesday the Environmental Protection Commission of Hillsborough County (EPC) unanimously approved the initiation of legal proceedings against German automaker Volkswagen for violating EPC rules prohibiting the manufacture, installation, sale or advertisement for sale of vehicles with defective emission control systems. VW has admitted to designing, manufacturing and installing “defeat devices” which work to fool emission testing protocols, making it appear to regulators that certain diesel powered Volkswagens meet emissions standards when in fact they do not.
The vehicles at issue also include diesel models manufactured by Volkswagen subsidiaries Audi and Porsche. Well over 1,000 of the following defective vehicles are believed to be operating in Hillsborough County (list not necessarily exhaustive):
Volkswagen Beetle, Beetle Convertible, Golf, Golf SportWagen, Jetta, Jetta SportWagen, Passat, Touareg, Audi A3, A6 Quattro, A7 Quattro, A8, A8L, Q5, Porsche Cayenne.
For a recap of the facts at hand, these vehicles:
“…emit up to 40 times the permitted levels of nitrogen oxide (NOx) when operating in real world conditions, outside of the testing environment. Volkswagen programmed the vehicles to reduce emissions when operating on a stationary dynamometer. The vehicle’s software could detect that the car was running on a dynamometer, and as such, performance was automatically dialed back by the car’s computer, allowing it to meet emissions standards. Once the car was back on the open road, the vehicle’s computer switched to its higher performance, higher polluting – and thus illegal – mode.
The deception reached the highest levels of the world’s largest automaker, Volkswagen, AG. Volkswagen’s CEO Martin Winterkorn, who was forced to resign after the scandal was revealed, said: “I personally am deeply sorry that we have broken the trust of our customers and the public.” Volkswagen Group of America CEO Michael Horn said, “Our company was dishonest with the EPA … and with all of you.” The German newspaper Der Spiegel has reported that at least 30 management level people in VW knew about the deceit for years, although the company continues to deny that accusation.”
Good people of conscience must continue to fight every day to restore the principles of justice, due process and ethical practices to our business and regulatory systems. Doing so makes our economy, society and future, stronger and sustainable. The other way lies only more darkness and degradation. Time to admit, repent, reform and recover.