#Dieselgate could date back to 1999

If emissions cheat Volkswagen thought it was done with US lawsuits and investigations, it couldn’t have been more wrong.

After paying US$15.3 billion to settle its cheating crimes with the US Federal Government and 44 states, Volkswagen had hoped a massive shift towards electric cars, set to be announced at September’s Paris Motor Show, would let it distance itself from its cheating past.

However, it’s now facing not only a backlash in Europe and the UK for not compensating owners, but allegations from three US states that it began using emissions-cheating software in 1999 -- not the 2008 as previously claimed.

The allegations could throw the Volkswagen Group back in the fire that began with having half a million US #Dieselgate cars, emitting up to 35 times more NOx than the law allows.

And, to rub salt into its wounds, an independent Italian testing body has found that recalled and repaired #Dieselgate Audis and Volkswagens actually emit more NOx than they did before. And, after almost a decade of effort, one of its leading executives has declared Volkswagen’s expensive (and now hideously expensive) diesel push into the US to be over.

Automotive News has uncovered the Attorneys General of New York, Maryland and Massachusetts are angling to tack hundreds of billions of dollars more onto the Volkswagen Group’s legal bill -- insisting the carmaker knew it was rigging diesel engines to cheat as far back as 1999.

The software was allegedly developed within the Volkswagen Group’s premium division, Audi, to lower the NOx emissions that climbed after its engineers began injecting extra pulses of fuel per cycle, which they found quieted the rattling sound of its V6 diesel.

They dubbed it the “acoustic function”.

The Volkswagen Group spent a decade perfecting the emissions-cheating technology on the European market as the European Union twiddled its legislative thumbs, the three attorneys allege, before trying it in the United States.

They insist the Volkswagen Group developed six generations of the devices, which only switch on their full emissions-cleaning properties if the cars detect they’re working in laboratory conditions.

The lawsuits from the three attorneys allege that retired Volkswagen Group CEO Martin Winterkorn knew about the devices and that the company had a prearranged plan to obfuscate and confuse any curious American investigators or legislators.

In a series of press conferences to announce the lawsuits yesterday, the AGs said Volkswagen’s “top brass” had plans to hide the truth about the cheater engines, proving the company had a culture of corporate arrogance and disregard for the law.

“This cover-up was deep, wide and long-lasting,” New York Attorney General Eric Schneiderman said yesterday.

“It extended from front-line engineers throughout the corner offices ... and right into the CEO suites.

“The toxic corporate culture that produced this fraud must be stopped. Substantial penalties must be imposed on the Volkswagen companies, above and beyond the amount they have to pay to make American consumers whole," he said.

The New York suit also alleges that current Volkswagen Group CEO Matthias Müller was made aware of the software-coded #Dieselgate defeat device in 2006, with Schneiderman insisting he was “clearly in the loop”.

With Audi and Porsche are also included (other affected Volkswagen Group brands Seat and Skoda are not sold in North America), Maryland Attorney General Brian Frosh yesterday suggested the penalties from the new lawsuits could run into hundreds of billions of dollars. That could be enough to bankrupt the Volkswagen Group, or at least force it to put its eight-strong collection of volume, premium, luxury and sports car brands on the open market in a fire sale.

The New York lawsuit alleges the Dieselgate scandal has its roots at Audi’s quest to lower the diesel rattle from its V6 diesel motors in an effort to make them compatible with large luxury cars and SUVs.

“In 1999, Audi used a defeat device to solve the problem during testing," the New York suit insisted.

It began using the software-coded switching system in production cars in 2004, the New York Attorney General insisted, and turned off the extra fuel-injection pulses if it failed to register enough steering wheel movement, which suggested it was on test-bed rollers.

The issue arose, the suit alleged, because Volkswagen wanted to diesel passenger cars in the US, but its engineers couldn’t keep its NOx traps from choking up with soot after about 80,000km, well short of the 150,000-mile (about 240,000km) US minimum standard.

The only way around it, the New York Attorney General said, was to borrow the Audi defeat device. Volkswagen and Audi production cars began using the systems in the U.S. in 2008, and Porsche followed later.

For its part, Volkswagen argues that it has already paid the price for its corporate failings, insisting it was fully cooperating with the California Air Review Board and the Environmental Protection Agency to arrive at a coherent “national resolution” of any lasting environmental problems.

“It is regrettable that some states have decided to sue for environmental claims now, notwithstanding their prior support of this ongoing federal-state collaborative process," Volkswagen spokeswoman Jeannine Ginivan said in a statement.

To highlight his allegations of a corrupt and unethical corporate culture, Schneiderman boosted his press conference allegations by screening an enlarged internal email from Volkswagen’s environmental and engineering director Oliver Schmidt to its US product communications spokesman Mark Gillies. In August, 2014 – a full year before the scandal exploded – Schmidt wrote to Gillies that Audi’s V6 “has exactly the same issue [as Volkswagen’s 2.0-litre, four-cylinder diesels], but not public yet. They have not been caught”.

“These actions highlight how stubborn and unrepentant the culture at Volkswagen is that gave rise to the systematic cheating and deception described in this complaint," Schneiderman said.

The New York investigators also released a 2004 email from the Volkswagen Group’s director of quality management to Winterkorn, telling the CEO “a thorough explanation for [high] emission cannot be given to authorities.”

While European authorities have always claimed there are no plans to force the company to follow its US lead and compensate affected owners up to US$10,000 and offer to buy back their vehicles, a backlash is brewing in its homeland.

Volkswagen has claimed a settlement with 8.5 million affected European customers isn’t necessary because the European NOx limit is higher than it is in the U.S. and the fix is faster and easier, getting affected cars back on the road faster.

British, German and Italian advocates are arguing that not forcing the carmaker to compensate its owners means it’s getting away with cheating, and it’s also highlighted ructions in the EU’s type approval processes for new models.

“Volkswagen justifies compensation payments to US consumers with the argument that their cars cannot be as easily fixed as in Europe,” the European Consumer Organization (BEUC) said.

“This excuse now seems to be built on sand. VW must compensate European consumers. This is the only possible way forward for VW to make up for this ongoing consumer detriment.”

The Italian Government found the relatively lax German stance particularly galling.

Just last month it insisted the German Transport Department (KBA) was being politically convenient by pointing the finger at Fiat for a time-dependent defeat device in its 500X when it had allowed the #Dieselgate scandal to fester under its watch. It retested the Fiat after the KBA complaint and insisted it complied with EU law.

Italian advocacy group AltroConsumo followed that up by releasing test data from an Audi Q5 TDI whose defeat device had been removed, showing its NOx emissions were 25 per cent higher than the legal limit.

“It is imperative that the German testing agency who approved the fix, but also their national counterparts, urgently re-examine the solutions to repair the affected cars and that they publish these results," the BEUC said in a statement yesterday.

“Consumers need to be 100 per cent certain that their car will be in conformity with emission thresholds after the recall.”