Former VW boss's lawyer slams Dieselgate probe

Former Volkswagen king-maker Dr Ferdinand Piech has been unusually quiet about the company's Dieselgate crisis as he exits the battlefield, but that hasn't stopped his lawyer labeling it as a waste of time and money.

The German celebrity lawyer Gerhard Strate, who has outgoing Volkswagen Group strongman Dr Piech on his client list, has fired a broadside at the Dieselgate investigation commissioned by the Volkswagen Group’s supervisory board.

Strate told German newspaper Handelsblatt the Jones Day lawyers investigating Dieselgate were getting rich by wasting time.

“Very many lawyers are working on this. That doesn’t bode well. The regime of the hourly fee has its own momentum,” the 67-year-old lawyer said.

“There’s a lot of talk, a lot of reading and a lot of writing down. You can also get rich by wasting time. I don’t think the millions and millions being paid in fees to Jones Day are in proportion to the fruits of its labor. There is grounds for skepticism.”

The car company, smashed by the uncovering of Dieselgate emissions fraud in September 2015, signed up Jones Day later that year (under pressure from the US Department of Justice) to find out who did what, when and who covered it up.

The emissions-cheating scandal, with 11 million cars using software tricks to pass emissions tests on laboratory tests, has so far cost Volkswagen and Audi more than $US25 billion in fines.

Strate was also hugely critical of using private law firms to investigate huge corporate fraud instead of government departments, insisting it made him “dubious”.

“I’m very critical of that and I think this development is highly dubious because the work of public prosecutors is being done by private law firms,” he told the German newspaper.

“There’s a good reason why we in Germany have a code of criminal procedure that sets clear rules for the conduct of such investigations.

“I also ask myself where is the final report of Jones Day that VW commissioned.”

The firm did release a summary in 2016 for the benefit of the US Department of Justice, but there are growing doubts that it will ever release the findings.

“It could also be that the US authorities in the course of their settlement with VW demanded that information that went beyond their own findings should simply not be made public anymore,” Strate told Handelsblatt. “That is all very opaque and therefore unacceptable.”

When Volkswagen’s investigators themselves were investigated, with Munich prosecutors raiding their German offices on March 16, Volkswagen filed a legal complaint against the raiders despite its promises to fully cooperate with investigating authorities.

“I don’t see that (the raids) as a problem in the least for the state prosecutors,” he said.

While not speaking on behalf of Dr Piech, it’s likely the lawyer and his long-time client have exchanged more than passing conversations about it.

While not implicated in the scandal, few who know Dr Piech’s methods doubt that his pressure and forcefulness during his time as Volkswagen Group Chairman and Supervisory Board Chairman at least indirectly lead to the crisis.

Dr Piech has become so embittered since his April 2015 resignation from the Volkswagen Group board that he is negotiating to sell his 14.7 per cent voting stake in Porsche Automobil Holding SE, the family company that controls 31.5 per cent of Volkswagen Group voting shares.

The 79-year-old engineer has been pushed off the family company’s board, with seats being slashed from 12 to six members, and won’t be considered for any of the board seats at its May 30 annual meeting.

The final schism came about after Dr Piech accused his relations of not doing enough to identify and fix the Dieselgate scandal, which didn’t go over well with his cousin, Hans Dieter Poetsche, the family company chairman and the Volkswagen Group chairman.

He is negotiating with his cousins (who have first right of refusal) to sell them his stake in the company, which is expected to net him well in excess of €1.3 billion.