{"id":106177,"date":"2018-02-12T12:00:46","date_gmt":"2018-02-12T12:00:46","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=106177"},"modified":"2018-02-07T10:29:57","modified_gmt":"2018-02-07T10:29:57","slug":"how-volkswagen-paid-25-billion-for-dieselgate-and-got-off-easy","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2018\/02\/how-volkswagen-paid-25-billion-for-dieselgate-and-got-off-easy\/","title":{"rendered":"How Volkswagen Paid $25 Billion for Dieselgate \u2014 And Got Off Easy"},"content":{"rendered":"

Volkswagen paid huge government penalties in the U.S., but virtually nothing in Europe. Two things now seem clear: Some very senior officials knew of the wrongdoing \u2014 and they\u2019re not likely to face meaningful prison time.<\/em><\/p><\/blockquote>\n

\"\"<\/a>

Volkswagen emission test – The Telegraph<\/p><\/div>\n

6 Feb 2018 – <\/em>On Dec. 6, former Volkswagen engineer Oliver Schmidt was led into a federal courtroom in Detroit in handcuffs and leg irons. He was wearing a blood-red jumpsuit, his head shaved, as it always is, and his deep-set eyes seemed to ask, \u201chow did I get here?\u201d As Schmidt\u2019s wife tried to suppress tears in a second-row pew, U.S. District Judge Sean Cox sentenced him to what, had it been imposed in Schmidt\u2019s native Germany, would rank among the harshest white collar sentences ever meted out: seven years in prison.<\/p>\n

Schmidt was being punished for his role in VW\u2019s \u201cDieselgate\u201d scandal, one of the most audacious corporate frauds in history. Yet his sentence brought no catharsis, least of all to Cox, who at times seemed pained while imposing it. Sometimes, he told Schmidt apologetically, his job requires him to imprison \u201cgood people just making very, very bad decisions.\u201d<\/p>\n

Schmidt was a henchman, everyone understood, and his sentence, a stand-in. The judge was addressing a set of people in Germany who are beyond the reach of U.S. prosecutors because Germany does not ordinarily extradite its nationals beyond European Union frontiers. Above all, the Detroit courtroom was haunted by the shadow of an individual who was absent: Martin Winterkorn, who was VW\u2019s CEO during almost all of the fraud. His name was uttered only twice, yet his aura loomed over the entire hearing.<\/p>\n

The outlines of the scandal are well known. For nearly a decade, from 2006 to September 2015, VW anchored its U.S. sales strategy \u2014 aimed at vaulting the company past Toyota to become the world\u2019s No. 1 carmaker \u2014 on a breed of cars that turned out to be a hoax. They were touted as \u201cClean Diesel\u201d vehicles. About 580,000 such sedans, SUVs and crossovers were sold in the U.S. under the company\u2019s VW, Audi and Porsche marques. With great fanfare, including Super Bowl commercials, the company flacked an environmentalist\u2019s dream: high performance cars that managed to achieve excellent fuel economy and emissions so squeaky clean as to rival those of electric hybrids like the Toyota Prius.<\/p>\n

It was all a software-conjured mirage. The exhaust control equipment in the VW diesels was programmed to shut off as soon as the cars rolled off the regulators\u2019 test beds, at which point the tailpipes spewed illegal levels of two types of nitrogen oxides (referred to collectively as NOx) into the atmosphere, causing smog, respiratory disease and premature death.<\/p>\n

At first, Volkswagen insisted the fraud was pulled off by a group of rogue engineers. But over time the company has quietly backed away from that claim, increasingly focusing on protecting a small cadre of top officials. The crime may well have started among a relatively small number of engineers afraid to admit to feared top executives that they couldn\u2019t reconcile the company\u2019s goals and the law\u2019s demands.<\/p>\n

Over the past two years, prosecutors in the U.S. and Germany have been tracing who was aware of the scheme and have identified more than 40 people involved, spread out across at least four cities and working for three VW brands as well as automotive technology supplier Robert Bosch. In a new, potentially explosive move, some U.S. prosecutors are pushing to indict Volkswagen\u2019s former CEO. Such a step would be largely symbolic \u2014 the U.S. has no power to extradite them \u2014 but it would send a message that the misconduct was egregious and directed from the top.<\/p>\n

And it would highlight a stark contrast in punishment. U.S. authorities have extracted $25 billion in fines, penalties, civil damages and restitution from VW for the 580,000 tainted diesels it sold in the U.S. In Europe, where the company sold 8 million tainted diesels, it has not sustained any major fines, nor offered snookered owners a single Euro in compensation.<\/p>\n

\"\"<\/a>

The exhaust pipe of a Volkswagen commercial vehicle in Stuttgart, Germany, on Sept. 28, 2017.
(Marijan Murat\/AFP\/Getty Images)<\/p><\/div>\n

There\u2019s no doubt that Schmidt was guilty. He admitted that he\u2019d been part of a cover-up. Yet he was far from the mastermind. Schmidt claimed not to have learned of the cheating until June 2015, just three months before the decadelong conspiracy ended, though he admitted that he \u201csuspected\u201d it in 2013.<\/p>\n

Schmidt, now 48, was an engineer who for several years was VW\u2019s main point of contact with U.S. environmental regulators. He had only recently been promoted to a midlevel officer (making about $170,000 a year) when he got involved in the cover-up. Everything about him exuded a car-oriented company man. Born in Lower Saxony, the VW-dominated state where about 110,000 of the company\u2019s 600,000 employees work, Schmidt came to the company in 1997, straight out of military service. About 50 personal letters submitted through his attorney \u2014 \u201cI don\u2019t think I\u2019ve ever seen as many,\u201d Cox observed \u2014 extolled him as a loyal and loving son, brother, husband, uncle and friend. In his spare time, the letters recounted, Schmidt enjoyed collecting old slot-car racing sets and restoring classic VW Beetles. When Schmidt got married, in 2010, he and his wife \u2014 herself an automotive engineer \u2014 held the ceremony in the showroom of a friend\u2019s Volkswagen dealership in Miami. Schmidt was an all-too-loyal VW lifer.<\/p>\n

His punishment was designed to further \u201cgeneral deterrence,\u201d Cox explained at the hearing. In other words, the point was to send a message to other corporate officials that following illegal orders is no defense. It doubtless reflected frustration as well.<\/p>\n

Schmidt had committed his crime, Cox told him, \u201cto impress \u2026 senior management and the board.\u201d He was talking about Winterkorn, who was not only CEO from 2007 until the scandal brought him down in 2015, but also chairman of the company\u2019s management board. Schmidt and a second employee had made presentations to Winterkorn and other senior officials at a meeting on July 27, 2015, according to versions of the facts endorsed by both Schmidt\u2019s counsel and the prosecutors.<\/p>\n

Winterkorn was a notorious micromanager \u2014 he was known for carrying a micrometer with him, so he could personally measure VW parts and tolerances down to the hundredth of a millimeter \u2014 and an imperious martinet. He was also then the highest paid CEO in Germany, having made $18.6 million the previous year, more than 100 times Schmidt\u2019s pay.<\/p>\n

Schmidt and a colleague had been summoned before Winterkorn to help solve a crisis. U.S. regulators had taken the drastic action of refusing to permit the sale of VW\u2019s model year 2016 diesels \u2014 so crucial to its U.S. strategy \u2014 and the CEO wanted Schmidt to explain what was going on. As Schmidt would lay out, regulators with the California Air Resources Board (CARB) and the U.S. Environmental Protection Agency had discovered a serious anomaly: VW Clean Diesels complied with NOx-emissions standards when tested in the lab, but then discharged up to 40 times the legal limit when driven on a road. Dissatisfied with more than a year of evasions and stonewalling, the regulators had decided to bar VW\u2019s 2016 diesels from the U.S. until they got better answers.<\/p>\n

The July 2015 meeting with Winterkorn delved into detail about the company\u2019s misbehavior, legal filings allege. \u201cAn unindicted co-conspirator presented certain technical aspects of the defeat device,\u201d according to Schmidt\u2019s sentencing memo. (\u201cDefeat device\u201d is the phrase used to describe the software that enabled VW diesels to fool emissions tests.) Schmidt warned attendees of \u201cthe potential severe consequences to VW if regulators discovered the cheating.\u201d A slide in his presentation raised a disturbing prospect \u2014 \u201cIndictment?\u201d \u2014 according to the FBI agent\u2019s affidavit that initiated the charges against Schmidt.<\/p>\n

Schmidt and his colleague explained to the group \u201cin unmistakable terms that Volkswagen had been cheating, how they were cheating,\u201d prosecutor Benjamin Singer told Cox at the sentencing. (The prosecutors and Schmidt\u2019s attorney, David DuMouchel, declined to be interviewed.)<\/p>\n

\"\"<\/a>

Former Volkswagen engineer Oliver Schmidt was arrested on Jan. 7, 2017.
(Broward Sheriff’s Office via Getty Images)<\/p><\/div>\n

If one believes the prosecutors and Schmidt \u2014 that Winterkorn was unmistakably informed of the cheating at the meeting \u2014 the CEO\u2019s response to that information looked suspiciously like a cover-up. Winterkorn did not direct his subordinates to notify authorities about the cheating or launch an investigation to determine exactly what had happened.<\/p>\n

Instead, he sent Schmidt on a mission to persuade U.S. regulators to allow the sale of 2016 VWs.<\/p>\n

Winterkorn \u201cdirected Mr. Schmidt to seek an informal meeting with a senior-ranking CARB official he knew from his time in the U.S.,\u201d according to Schmidt\u2019s sentencing memo. \u201cRather than advocate for disclosure of the defeat device to U.S. regulators,\u201d the FBI agent alleged in his affidavit, \u201cVW executive management authorized its continued concealment.\u201d<\/p>\n

Before leaving on his mission, Schmidt \u201csought and obtained approval for the \u2018storyline\u2019 he intended to convey during his meeting with CARB,\u201d Schmidt\u2019s memo asserted. The script was approved by at least four senior VW officials below Winterkorn, according to the memo, which added, \u201cMr. Schmidt was instructed not to disclose the defeat device or any intentional cheating.\u201d<\/p>\n

In August 2015, Schmidt flew from Germany to Michigan, where he successively lied to two CARB officials. He emailed \u201cdetailed updates\u201d to his boss in Germany and 10 other \u201csenior people,\u201d conveying that \u201che was following the script of deception and deceit that VW, with Schmidt\u2019s input, had chosen,\u201d prosecutor Singer stated.<\/p>\n

Finally, a different VW engineer, unable to stomach the deceit any longer, went off-script and confessed to CARB during a meeting on Aug. 19. A VW supervisor formally conceded use of the defeat device to regulators on Sept. 3, and the EPA and CARB made VW\u2019s confession public on Sept. 18, 2015.<\/p>\n

Winterkorn stepped down five days later, asserting that he was \u201cstunned\u201d by the events of \u201cthe past few days,\u201d adding that he was \u201cnot aware of any wrongdoing on my part.\u201d The company\u2019s supervisory board exonerated him the same day, stating that he \u201chad no knowledge of the manipulation of emissions data.\u201d\u00a0In testimony before the German Parliament in January 2017, Winterkorn insisted he had never even heard the phrase \u201cdefeat device\u201d until the scandal erupted publicly. On four occasions that day he declined to answer legislators\u2019 questions, citing ongoing criminal inquiries by German prosecutors.<\/p>\n

So far, the Schmidt sentencing in Detroit is the ex-CEO\u2019s closest brush with American criminal justice. Twenty-seven months after the conspiracy was exposed, Winterkorn has not been charged with any offense in either the U.S. or Germany. (His U.S. counsel declined comment for this article.)<\/p>\n

Will he ever be? Will anyone higher up the ladder than Oliver Schmidt ever answer for this remarkable crime?<\/p>\n

******************************<\/p>\n

It\u2019s very unclear. U.S. prosecutors want to indict Winterkorn, but have not yet received approval from the brass at the Department of Justice, according to two sources familiar with the process.<\/p>\n

That would seem like a huge step. Yet in truth, a U.S. indictment of Winterkorn or other top VW figures is increasingly becoming moot simply because the prosecutors can\u2019t gain access to most of the key figures in the case. Winterkorn hasn\u2019t set foot in the U.S. since the scandal broke and, after Schmidt\u2019s crushing sentence, is not likely to do so anytime soon.<\/p>\n

Among the eight VW engineers charged in the U.S., only Schmidt and James Liang, a non-supervisor sentenced to 40 months this past August, are actually in the U.S., and only one other \u2014 an Audi engine development supervisor, Zaccheo Giovanni Pamio, who happens to be an Italian national \u2014 is extraditable.<\/p>\n

That means the judicial focus is shifting to Germany. There, three sets of prosecutors are certainly going through the proper motions. The authorities in Braunschweig \u2014 acting for the state of Lower Saxony, where both the parent company, VW AG, and its VW brand passenger car unit are based \u2014 say they are investigating 39 individuals for fraud in connection with Dieselgate, one for obstruction of justice, and three for financial market manipulation (which in this instance would mean the failure to promptly disclose the gestating crisis to shareholders). In Munich, Bavarian prosecutors are looking at 13 individuals at VW\u2019s Audi unit, based in Ingolstadt, for fraud and false advertising. And in Stuttgart, three executives are under scrutiny for market manipulation.<\/p>\n

The two market manipulation inquiries focus on Winterkorn and three very senior current VW officials. The Braunschweig prosecutors, for instance, are looking at\u00a0supervisory board chairman Hans Dieter P\u00f6tsch (who was CFO when the scandal broke) and current VW brand manager Herbert Diess, while the Stuttgart authorities are scrutinizing P\u00f6tsch and current\u00a0CEO Matthias M\u00fcller. (VW declined to comment on the record for this article other than to provide a written statement in which it asserted that its executives fully complied with disclosure laws.)<\/p>\n

Yet progress is strikingly slow. There have been only two German arrests so far. One was of Pamio; the other was of Wolfgang Hatz, a senior supervisor at, successively, Audi, VW and Porsche. German prosecutors do not confirm the identities of detained individuals or what they\u2019re charged with, but the Munich probe is focusing on fraud and false advertising, the office says.<\/p>\n

We may not see many criminal prosecutions in Germany, let alone convictions or lengthy sentences. The country\u2019s law presents many serious hurdles. There\u2019s no criminal liability for corporations, for starters. There\u2019s no statute barring a criminal conspiracy, no relevant criminal clean air law, and no law against lying to regulators or investigators. (The latter is actually protected by the robust German right to silence, according to Carsten Momsen, a law professor at Berlin\u2019s Free University.) Prosecutors\u2019 tools to reward and turn perpetrators into state witnesses are weaker than those wielded by their American counterparts. And some of the criminal laws that do exist \u2014 written to catch individuals who swindle other individuals \u2014 may be ill-suited to capturing the corporate machinations that happened in this case.<\/p>\n

The result is breathtakingly different outcomes for both the company and its customers in the two countries. In the U.S., the system has delivered swift consequences. Facing harsh corporate criminal sanctions, flexible and draconian criminal laws, and streamlined consumer class-action procedures, Volkswagen quickly capitulated. Within nine months \u2014 breakneck speed in the legal realm \u2014 it agreed to pay roughly $15 billion in civil compensation and restitution to consumers and federal and state authorities for the 2.0-liter cars involved, and the sum has since crept up to more than $25 billion, as deals were reached for the 3.0-liter cars, and for criminal fines and penalties. Volkswagen has bought back or fixed most of the offending vehicles, and customers have received thousands of dollars per car in compensation for a variety of losses, including the deception itself and diminished resale value. The company pleaded guilty in April to federal criminal charges of conspiracy, fraud, making false statements and obstruction of justice.<\/p>\n

VW gave U.S. prosecutors liberal access to the fruits of an investigation it commissioned by the Jones Day law firm, which conducted more than 700 interviews and collected more than 100 million documents. (The inquiry is ongoing, according to VW.) VW also helped recover forensically thousands of pages of documents that had been deleted by scores of VW employees in the final days of the conspiracy. In return, U.S. prosecutors gave the company credit for cooperation, slicing 20 percent from its criminal fine, which came to $2.8 billion even after the reduction.<\/p>\n

In Canada, too, the company has paid compensation, including a $290 million deal for 3.0-liter cars just reached in January. And in South Korea, Volkswagen also paid dearly, receiving record fines and seeing eight local VW and Audi officials charged criminally, with one now serving an 18-month prison term.<\/p>\n

Yet in Germany and Europe, it\u2019s been a totally different story. There, VW has not offered compensation to any customer. In Germany, where the key decisions were made and all the decision makers reside, no criminal or administrative fines or penalties have yet been imposed.<\/p>\n

VW\u2019s \u201ccooperation,\u201d which so impressed American prosecutors, hasn\u2019t extended beyond U.S. borders. Volkswagen has not shared the Jones Day materials with German prosecutors, for instance. And last April, the company revealed that it would be breaking its repeated promise to issue a report summarizing the results of the Jones Day inquiry. VW said the public statement of facts that accompanied its guilty plea revealed the inquiry\u2019s key findings, and that any further announcement would risk undermining ongoing investigations or conflicting with its plea agreement. But the plea bargain document is just 30 double-spaced pages, identifies nobody by name, and, as prosecutorial documents often do, plays its cards close to the vest. It includes only one sentence, for instance, about the July 27, 2015, meeting that was so central to the Schmidt prosecution. (It states that a meeting took place, but gives no hint of what was discussed or that senior executives were present.)<\/p>\n

Even when German law enforcement has taken aggressive action, it has been stymied so far. Last March, Munich authorities raided Jones Day\u2019s German offices and seized materials from the firm\u2019s VW investigation. But the Federal Constitutional Court has temporarily blocked their examination, at Jones Day\u2019s request, while it sorts out issues of attorney-client privilege and the privacy rights of interviewed employees. German court precedents are deeply divided on these questions, according to professor Momsen.<\/p>\n

The definitions of \u201cdefeat device\u201d in the U.S. and EU are nearly identical. Nevertheless, VW contends the software was lawful outside North America. Germany\u2019s Federal Motor Transport Authority, or KBA \u2014 notoriously lax in its diesel oversight policies \u2014 rejected this theory in December 2015.<\/p>\n

The company has also insisted non-American customers suffered no injury. Because of more lenient NOx limits abroad, it maintains, most of those cars could be fully addressed with simple software fixes. Yet many engineers can\u2019t fathom how software alone could possibly repair a NOx problem without correspondingly reducing fuel economy and undermining the durability of the emissions control equipment \u2014 the very problems that led VW to cheat in the first place. The KBA and other national regulators have approved these fixes, but haven\u2019t released any test results shedding light on what the recalls achieved. \u201cVW could not do miracles regarding NOx emissions without replacing the hardware,\u201d argues Yoann Bernard of the International Council on Clean Transportation, which commissioned the 2014 study by West Virginia University that first revealed VW\u2019s use of a defeat device.<\/p>\n

Plaintiffs\u2019 lawyers abroad are suing VW over the affected diesels there. But, like the criminal authorities, they are hampered by a slew of handicaps. Under EU rules, all 8 million EU customers who bought Dieselgate cars could theoretically sue in Lower Saxony, where VW AG is based. But in Germany there are no consumer class actions. In addition, plaintiffs have very limited discovery rights; lawyers are prohibited from accepting contingency fees; and plaintiffs who sue run the risk that if they lose, they will have to pay not just their own legal fees, but a portion of their adversary\u2019s, as well.<\/p>\n

To be sure, VW isn\u2019t yet in the clear. It may yet be hit with penalties worth hundreds of millions of euros, imposed by German state prosecutors or by the BaFin, the Federal Financial Supervisory Authority (something like the U.S. Securities and Exchange Commission).<\/p>\n

And two groups of plaintiffs \u2014 VW shareholders, and owners of VW diesels \u2014 are attempting to overcome the obstacles to civil litigation. The bigger threat comes from German shareholders, who allege that VW failed to disclose the budding scandal. Plaintiffs\u2019 lawyers are using a \u201cmodel\u201d litigation mechanism, a class action analog available only for shareholder suits, which is scheduled to begin in September in the Higher Regional Court of Braunschweig. But that procedure is expected to take years and the amount recovered may be a fraction of the huge sums sought (\u20ac9.5 billion, or $11.2 billion), depending on how early or late the court concludes VW should have disclosed the crisis. At the same time, an innovative \u201cgroup action\u201d was filed in Braunschweig in November on behalf of a German consumer group \u2014 to whom 15,347 VW diesel owners had assigned their claims \u2014 by the Berlin office of the American law firm, Hausfeld.<\/p>\n

In fairness, Volkswagen\u2019s obstructive stance abroad may be more defensible when one considers the vast divide between the political, social and regulatory milieus in Europe and the U.S. Since the scandal broke, further testing has made clear that cheating on diesel emissions was endemic across Europe. In December 2016 the European Commission began investigating whether regulatory authorities in Germany and six other EU nations have been lax in their oversight of diesel emissions. Though VW\u2019s cheating was, in most instances, more brazen in methodology, its diesels\u2019 NOx emissions outside the U.S. appear to have been no worse than their competitors\u2019. Moreover, BMW, Fiat Chrysler Automobiles, Daimler (maker of Mercedes), PSA (maker of Peugeots and Citro\u00ebns), and Renault-Nissan have all come under scrutiny over the past year by either German or French authorities for possible diesel emissions irregularities. (The manufacturers deny wrongdoing.)<\/p>\n

Even in the U.S., it\u2019s become clear, VW\u2019s conduct \u2014 though still the most egregious \u2014 was not unique. In May, the Justice Department sued Fiat Chrysler for having allegedly placed a species of defeat device on 104,000 model year 2014-16 Jeep Grand Cherokees and Dodge Ram 1500 pickups, the most popular diesel pickup sold in America. (FCA, which denies wrongdoing, is in settlement negotiations.)<\/p>\n

European and, especially, German industrial, labor and even environmental policy favored the production of diesel cars. Regulatory oversight was slight, penalties for violations were trifling, and national regulators were disinclined to handicap their home country\u2019s carmakers vis-\u00e0-vis those of neighboring countries, whose regulators were presumed to be winking at the same gamesmanship.<\/p>\n

Dieselgate\u2019s $25 billion consequences in the U.S. have transformed the political landscape in Europe, however. The scandal has drawn attention to a long simmering public health issue that, it turns out, was not caused by Volkswagen alone, but rather by the diesel car industry and the political culture that nurtured and protected it. For example, a European government report has found that 72,000 EU residents die prematurely each year because of NOx emissions.<\/p>\n

In February, the Administrative Law Court in Leipzig will decide a case brought by an advocacy group called Environmental Action Germany that could eventually result in diesel car bans in as many as 70 German cities. Diesel auto sales are dropping precipitously in anticipation, and in December VW CEO Matthias M\u00fcller shocked the automotive world by suggesting in a newspaper interview that the time had come for Europe to abandon key tax subsidies that have long supported the diesel industry.<\/p>\n

The regulatory, environmental and cultural gap between the EU and the U.S. is closing. But it was that chasm that spawned Dieselgate, and that chasm that Schmidt toppled into. So there is some injustice in the fact that Schmidt will pay so dearly. Yet there will be even greater injustice if he is the only one to do so.<\/p>\n

\"\"<\/a>

Diesel Volkswagen and Audi vehicles that VW bought back from consumers sit in the parking lot of the Pontiac Silverdome on Aug. 4, 2017, in Pontiac, Michigan. (Jeff Kowalsky\/AFP\/Getty Images)<\/p><\/div>\n

The key contours of the Dieselgate affair emerged soon after the scandal broke. Since then the slowly accumulating evidence amassed and presented (or leaked) from criminal, civil and media investigations have only made the breadth of VW\u2019s conspiracy clearer. Examining the chronology of the company\u2019s behavior in light of that information leaves little doubt that knowledge of the wrongdoing reached high up the ranks, repeatedly coming within a whisker of CEO Winterkorn himself.<\/p>\n

In 2006, Volkswagen initiated a strategy to revive its then-moribund U.S. sales by marketing a clean diesel car. The challenge was that diesels produce more NOx than gasoline engines, and American NOx regulations were far more stringent than Europe\u2019s \u2014 permitting only about one-sixth of what Europe then allowed. Most ways of cleaning NOx reduced fuel economy, harmed performance, took up space, increased cost or required frequent servicing. (Environmentally, Europe had focused on reducing greenhouse gases, including carbon dioxide. Diesels, due to their excellent fuel economy, were great at reducing carbon emissions. But diesels also produced NOx, which causes smog. Because of the history of smog problems in Los Angeles, regulators from CARB and the EPA had long been more sensitive to the health dangers posed by NOx than their European counterparts.)<\/p>\n

VW\u2019s U.S. strategy was born under then-CEO Bernd Pischetsrieder, and continued when Winterkorn replaced him in January 2007. In early 2008, Winterkorn announced a 10-year plan that called for tripling the company\u2019s U.S. sales by 2018, enabling it to surpass General Motors and Toyota to become the world\u2019s leading automaker. Clean Diesel was the linchpin of the plan, which, by mid-2015, had succeeded.<\/p>\n

Winterkorn was the prot\u00e9g\u00e9 of the chairman of VW\u2019s supervisory board, Ferdinand Pi\u00ebch. (German companies have two boards: a management board, composed of top executives, and a non-executive supervisory board.) Pi\u00ebch, who had been CEO himself from 1993 to 2002, was considered the most influential figure in the company\u2019s history. A gifted engineer and prophetic leader, he was also ruthless; Pi\u00ebch boasted about his willingness to fire executives if they didn\u2019t deliver quickly.<\/p>\n

VW had an arrogant culture, shielded by the vital role the company plays in its nation\u2019s economy; its officials\u2019 cozy relationship with German politicians; and its unusual quasi-public status (the state of Lower Saxony controls 20 percent of its voting stock). Pi\u00ebch had survived major scandals, including a corporate espionage debacle in the 1990s, which led to a $100 million settlement with General Motors, and a nearly decade-long labor scandal that surfaced in 2004, in which the company made illegal payments to labor representatives and politicians. The company had a \u201ccorrupt corporate culture,\u201d lacking in \u201copenness and honesty,\u201d former Deputy U.S. Attorney General Larry Thompson, who became VW\u2019s outside monitor in June under the terms of its U.S. guilty plea, told a German newspaper in December.<\/p>\n

In Winterkorn, Pi\u00ebch selected a Ph.D. engineer and former quality assurance chief with a reputation for perfectionism and micromanagement. Just a few years later Forbes would comment with wonder at how, in 2011, he visited the VW factory in Chattanooga, Tennessee \u2014 where some diesels were manufactured \u2014 \u201cno less than seven times\u201d to oversee the U.S. launch of the 2012 Passat. \u201cHe drove early prototypes,\u201d the article continued, \u201cand pored over initial quality, using a micrometer he carries in his pocket to measure the tiniest of gaps between body panels. Even minor paint flaws didn\u2019t escape the former quality manager, one American executive recalled. \u2018He finds everything.\u2019\u201d<\/p>\n

Under Pischetsrieder and then Winterkorn, two sets of engineers attacked the riddle of how to build a diesel passenger car for the U.S. market. It was a tall order, given how draconian U.S. environmental regulations were, at least in the company\u2019s view. A high-level VW supervisor, Wolfgang Hatz (since arrested in Germany), was captured on video in 2007, complaining about California\u2019s rules in a widely repeated remark that would come to be seen as prophetic. \u201cThe CARB is not realistic,\u201d he said. \u201cWe can do quite a bit, and we will do a quite a bit. But impossible we cannot do.\u201d<\/p>\n

\"\"<\/a>

An Audi AG A3 35 TDI emissions certification vehicle, produced by Volkswagen AG, is tested inside the Transportation Pollution Research Center laboratory in Incheon, South Korea on Oct. 1, 2015. (SeongJoon Cho\/Bloomberg via Getty Images)<\/p><\/div>\n

And so the two sets of VW engineers, located in different cities, embarked on their missions. One group would design the 2.0-liter engines for VW and Audi cars. A second set, from Audi, would design the 3.0-liter engines for SUVs and luxury vehicles for both brands.<\/p>\n

Both groups quickly homed in on the same solution: a defeat device. It is unclear whether they acted independently; to date U.S. prosecutors have not alleged coordination. Each group was aware of, and adapted, a variant of the cheating software that Audi had developed as far back as 1999, and had in its diesel V6 SUVs in Europe from 2004 to 2006.<\/p>\n

At the time that the earlier cheating software was allegedly being implemented on Audis in Europe, Winterkorn was already just a couple steps from the action. He was CEO of Audi, while Hatz \u2014 reportedly a Winterkorn confidant \u2014 was Audi\u2019s head of engine development. When Winterkorn became CEO of VW AG in 2007, he promoted Hatz to head engine development for VW AG.<\/p>\n

A succession of four top supervisors for engine development for the VW Brand, serving from 2006 to 2015, all knew about the cheating software, as did, from as early as 2006, the head of exhaust control measures for all of VW AG, according to U.S. prosecutors. Three of these five individuals have been indicted in the U.S., for conspiracy to commit wire fraud and making false statements. But all are in Germany, beyond the prosecutors\u2019 extradition powers. (None have filed papers in the Detroit criminal proceedings. Lawyers for two of them declined comment, and the others could not be reached by ProPublica.) None of the five have been charged in Germany.<\/p>\n

News of the fraudulent software reached \u201csenior Audi managers\u201d as early as 2008, according to U.S. prosecutors. In January 2008, they assert, members of that team sent a presentation to the head of the group, Zaccheo Pamio, and other senior Audi managers, warning that the software solution was possibly illegal and \u201chighly problematic in the U.S.\u201d In July 2008, a member of Audi\u2019s environmental certification team wrote Pamio that the software was \u201cindefensible.\u201d The plan went forward, nonetheless. (Last July, Pamio was charged in federal court in Detroit with conspiracy, wire fraud and making false statements. That same month he was arrested by Munich authorities. His lawyers declined comment.)<\/p>\n

In 2011, the cheating spread to a third VW brand in another city, seemingly creating still more opportunities for word to leak up to executives. VW had just acquired Porsche, and Porsche engineers in Stuttgart sought to adapt Audi\u2019s 3.0-liter diesel engine for use in a Porsche Cayenne SUV for the U.S. market. That September, Audi engineers explained to Porsche engineers how the cheat software worked, according to a civil complaint filed by the New York State Attorney General\u2019s office, and Porsche adopted the fraudulent technology. By this time Winterkorn had moved Hatz to Porsche as head of research and development. He served on Porsche\u2019s management board, where he worked alongside VW\u2019s current CEO, M\u00fcller.<\/p>\n

Meanwhile, in Wolfsburg, problems with the 2.0-liter diesel exhaust systems were forcing knowledge of the cheat software further up the corporate hierarchy to people who knew Winterkorn personally and well. Engineer Liang had learned of unusually high numbers of hardware failures involving the NOx treatment equipment. The problem, as he diagnosed it, stemmed from the fact that the equipment was being used too much \u2014 not just during lab testing, but sometimes on the road. He proposed refining the cheat software to ensure that full exhaust treatment would be triggered solely during testing.<\/p>\n

In July 2012 he and other engineers met with Hans-Jakob Neusser and Bernd Gottweis, according to U.S. prosecutors. Neusser was then head of engine development at the VW brand. Gottweis was a member of the powerful Products Safety Committee, answering to the head of quality management at VW AG, Frank Tuch. Tuch met weekly with Winterkorn, according to an account in VW\u2019s in-house magazine. Gottweis was a close confidant of Winterkorn and was sometimes referred to as \u201cthe fireman\u201d at VW \u2014 someone who put out fires.<\/p>\n

\"\"<\/a>

Volkswagen CEO Matthias M\u00fcller attends a news conference after the Diesel Conference on Aug. 2, 2017, in Berlin, Germany.
(Steffi Loos\/Getty Images)<\/p><\/div>\n

Liang\u2019s solution was approved, and his more finely tailored defeat device was installed on the next generation of VW diesels, which arrived in mid-2013. In addition, a recall was carried out in 2014 to retrofit older models with the tweaked software. Customers and regulators were told that the recall was to fix a dashboard warning light and address certain environmental issues. (Neusser and Gottweis have been charged in the U.S. with conspiracy to commit wire fraud and making false statements in the U.S.; neither has been charged in Germany. Neusser\u2019s attorney declined comment, and Gottweis could not be reached.)<\/p>\n

In late 2013, the fact that cheat software was being used in 3.0-liter engines reached the top echelons of Audi, according to U.S. prosecutors, presenting still another opportunity for someone to blow the whistle. An Audi engineer, prompted by the concerns of a manager in the environmental certification department, had his people prepare a presentation to a \u201cthen-senior executive and member of Audi\u2019s brand management board,\u201d describing in detail how the software worked. The engineer who sent the presentation advised every recipient to delete the email and attachment after downloading it.<\/p>\n

That same month, Schmidt saw a different presentation about Audi\u2019s fraudulent software. \u201cIt would be good if you deleted us from the cover page,\u201d Schmidt emailed afterwards. \u201cIf such a paper somehow falls into the hands of the authorities, VW can get into considerable difficulties.\u201d<\/p>\n

In March 2014, the biggest clue about the criminal conduct festering within VW began filtering out into the automotive community, soon reaching Gottweis, Tuch, and, through them, Winterkorn. At an industry conference, researchers at West Virginia University presented a study, which would be published in May. They had studied the emissions of three randomly selected diesel cars available in the U.S. A BMW X5 had done fine, but a VW Jetta and VW Passat had each performed suspiciously, passing the test in the lab, but emitting up to 35 times the lawful NOx limit during real-world driving.<\/p>\n

In Wolfsburg, VW engineers, led by Neusser, Gottweis and others formed an ad hoc committee to address the study. Their goal, according to prosecutors, was to concoct evasive and misleading responses to regulators\u2019 anticipated questions.<\/p>\n

On May 23, 2014, Gottweis wrote a now infamous report about the West Virginia study, which Tuch forwarded to Winterkorn the same day, as part of his regular weekend package of reading materials. (VW suspended Tuch in October 2015, and he resigned in February 2016. He could not be reached for comment.)<\/p>\n

The memo, revealed by Bild Am Sonntag in 2016, has been regarded as a smoking gun by Winterkorn\u2019s critics. \u201cA thorough explanation for the dramatic increase in NOx emissions cannot be given to the authorities,\u201d Gottweis wrote. \u201cIt can be assumed that authorities will then investigate\u201d to see if VW used a \u201cdefeat device,\u201d he continued, explaining what a defeat device was. A team is working on software changes that can \u201creduce the real driving emissions,\u201d he noted, \u201cbut this will not bring about compliance with the limits either.\u201d<\/p>\n

For its part, Volkswagen asserts that nothing in the Gottweis report should have caused its CEO to suspect that anything more than a routine product defect was afoot. \u201cThis memo merely raised the prospect that U.S. regulators would investigate whether a defeat device was in use,\u201d the company\u2019s lawyers wrote in its motion to dismiss U.S. shareholder litigation in August 2016; \u201cit did not state or imply that a defeat device had actually been installed, or what it meant if a defeat device were found by U.S. authorities, much less the potential magnitude of any associated financial risks resulting from such a finding.\u201d<\/p>\n

Winterkorn admits receiving the report, according to papers his attorney filed in U.S. civil litigation, \u201cbut does not recall whether he read [it] that weekend.\u201d He also admits being aware of the West Virginia University study by May 2014 \u2014 15 months before the conspiracy ended \u2014 but says, according to the same filing, that \u201che believed a task force of Volkswagen employees were working to address the situation.\u201d<\/p>\n

\"\"<\/a>

Volkswagen engineer James Liang leaves court in Detroit, Michigan, on Sept. 9, 2016, after pleading guilty to one count of conspiracy in the company’s emissions cheating scandal.
(Virginia Lozano\/Detroit News via AP)<\/p><\/div>\n

One was. At its behest, VW engineers, including Liang, lied to CARB and EPA regulators for more than a year. They even promised regulators that they\u2019d address the problem with a software fix, carried out through yet another recall in late 2014.<\/p>\n

In November, Winterkorn was advised of this recall in a one-page memo that estimates the fix would cost just \u20ac20 million to effectuate \u2014 a negligible sum for a company whose 2014 net operating profit would come to \u20ac12.7 billion. Winterkorn, in his testimony before the German Parliament, said the memo reassured him that the problem had been addressed.<\/p>\n

But by early 2015 CARB had discovered that the recalled vehicles still exceeded NOx limits during real-world driving.<\/p>\n

By that time, Schmidt, who\u2019d been at VW\u2019s environmental office in Auburn Hills, Michigan, for three years, had been promoted. In February 2015, he had returned to Wolfsburg to become one of three deputies to Neusser, who, by then, had become chief of development for the VW Brand, overseeing 10,000 employees.<\/p>\n

In July, CARB told VW engineers that it would refuse to certify the company\u2019s 2016 diesels until it got better answers. That precipitated the July 27, 2015, meeting at which Schmidt and a colleague made their presentations to Winterkorn and other top executives, including Herbert Diess, then and now the highest executive in charge of its VW brand passenger car unit, and a member of VW\u2019s management board.<\/p>\n

\u201cWinterkorn admits,\u201d his attorney wrote in a U.S. legal filing, \u201cthat on July 27, 2015, after a regular meeting about damage and product issues, he, Diess, and other VW AG personnel participated in an informal meeting during which there was a discussion regarding approval for the sale of model year 2016 diesel vehicles.\u201d However, the attorney, Gregory Joseph, continues, \u201cWinterkorn denies that he knew the cause or significance of the issues related to diesel emissions before September 2015.\u201d<\/p>\n

To date, the company has been vague and noncommittal about the July 27 meeting, and it declined to comment on it for this article. \u201cIndividual employees discussed the diesel issue on the periphery of a regular meeting about damage and product issues,\u201d the company said in a March 2016 press release, its last and fullest public discussion of matter. \u201cIt is not clear whether the participants understood already at this point in time that the change in the software violated U.S. environmental regulations. Mr. Winterkorn asked for further clarification of the issue.\u201d (The company is expected to describe its perspective on the meeting more fully in late February in a filing in German securities litigation, though such filings are not public.)<\/p>\n

The lying to US regulators continued until Aug. 19, when an engineer confessed to CARB regulators. Later that month, after word of this development reached Wolfsburg, a high-level in-house attorney notified employees that a \u201clitigation hold\u201d would be issued on Sept. 1, after which they would not be permitted to destroy pertinent documents. About 40 Volkswagen engineers took this as a directive to start deleting immediately. Some notified Bosch engineers, who did the same.<\/p>\n

Top VW officials clearly sensed trouble. By August they had asked the American law firm Kirkland & Ellis to look into possible regulatory liability for use of a defeat device. VW received the reassuring news that the largest fine that had ever been meted out for a Clean Air Act violation had been just $100 million, in 2014, for an incident involving 1.1 million cars \u2014 more than twice as many vehicles as were then known to be implicated in VW\u2019s Clean Diesel problems.<\/p>\n

Yet the incident being used as a benchmark was hardly similar. In that instance, Hyundai-Kia, which never admitted wrongdoing, had overstated fuel economy by 1 to 6 miles per gallon because it used figures obtained in the most favorable tests it had run, rather than by averaging results from a large number of tests. But the cars\u2019 emissions were never illegal, no recalls were required, and no lying to regulators had been alleged.<\/p>\n

The text of the Kirkland memo suggests that the lawyers hadn\u2019t been informed that the company had been lying to regulators for a decade. The lawyers urged VW to find out if statements made to regulators had been \u201ccomplete and not misleading.\u201d Given the lack of information, the memo concluded that \u201cwe are currently unaware of any facts that suggest any such [criminal] issues in the present situation.\u201d (Kirkland & Ellis did not return calls and emails seeking comment on the memo, which became public when plaintiffs\u2019 lawyer Michael Melkerson filed it in a lawsuit on behalf of diesel owners who opted out of the federal class action.)<\/p>\n

On Sept. 3, 2015, a VW supervisor confessed to CARB in writing the use of a defeat device, formalizing his subordinate\u2019s earlier oral admission. Winterkorn was notified the next day, VW has acknowledged. Still, despite German laws requiring that material market information be disclosed immediately, VW shareholders were given no inkling that anything was amiss. They learned only when CARB and EPA stunned the world on Sept. 18 with the news that the company had admitted using an illegal defeat device on close to 500,000 2.0-liter cars sold in the U.S. The Justice Department announced a criminal investigation the next day. Three days after that, VW revealed that some 11 million cars worldwide were equipped with the dual-mode software that the U.S. regulators had discovered. Over that week, the company\u2019s shares lost about \u20ac32.5 billion in value ($38.5 billion at today\u2019s rates). In the ensuing months, the total decline ballooned to about \u20ac55.6 billion ($66 billion).<\/p>\n

Volkswagen argues that it had no obligation to disclose anything until U.S. regulators announced they were issuing a \u201cnotice of violation\u201d in September 2015. \u201cVolkswagen believes that it duly fulfilled its disclosure obligation under capital markets laws,\u201d the company asserted in a written statement for ProPublica. \u201cRight up until the publication of the notice of violation, the board of management believed, based on the advice of its U.S. external legal counsel and numerous precedents, that Volkswagen could resolve the issue consensually with U.S. regulators.\u201d<\/p>\n

As the Dieselgate investigation slowly churned, allegations of a much vaster conspiracy unexpectedly emerged this summer. Der Spiegel reported then that since 1999 all five German carmakers \u2014 Audi, BMW, Daimler, Porsche and Volkswagen \u2014 had been colluding in ways that may have violated competition laws. (VW, which owns three of the brands, and Daimler have admitted to EC competition authorities that some discussions might have been improper; BMW maintains they were lawful.)<\/p>\n

The participants held more than 1,000 meetings relating to 60 working groups on different aspects of automotive production, including emissions control. As early as 2007, according to the magazine, the emissions group began colluding on specifications for exhaust equipment that was used to control NOx emissions in some of the diesel engines. This new scandal could hurt VW executives by bringing even more scrutiny to their actions \u2014 or help them by suggesting every car company was doing the same thing.<\/p>\n

In early 2018 came yet more news that sullied German automakers, as filmmaker Alex Gibney\u2019s \u201cDirty Money\u201d documentary and The New York Times\u2019 Jack Ewing reported that research organizations funded by those manufacturers \u2014 including VW \u2014 had, in 2014, gassed monkeys with diesel exhaust fumes from a modern-day, allegedly Clean Diesel VW and an old Ford diesel pickup truck, each running on rollers in a lab, in order to show their relative effects. When the news broke in January, VW CEO M\u00fcller wrote to employees, calling the tests \u201cunethical, repulsive and deeply shameful\u201d and apologizing for \u201cthe poor judgment of individuals who were involved.\u201d The CEO said the company is investigating and \u201cwe will be coming to all the necessary conclusions.\u201d VW\u2019s stock price fell when the reports of the monkey tests emerged. But that was a minor bump in a resurgence of the company\u2019s shares: They\u2019re now priced just above where they were when Dieselgate was revealed.<\/p>\n

\"\"<\/a>

Hundreds of Golfs, Beetles, Jettas, Passats Volkswagen cars and some Audi A3s are parked in a parking lot north of the Pikes Peak Raceway on August 24, 2017, in Colorado Springs, Colorado.
(RJ Sangosti\/The Denver Post via Getty Images)<\/p><\/div>\n

That Liang and Schmidt \u2014 and perhaps eventually Pamio \u2014 would end up being the only ones to take the fall for Dieselgate in the U.S. is happenstance. Though Liang was working in Wolfsburg when the conspiracy began in 2006, he was transferred in 2008 to VW\u2019s Oxnard, California, test center, near Los Angeles, to help with the Clean Diesel launch. He was still working there in October 2015 when the FBI knocked on his door in the nearby affluent community of Newberry Park.<\/p>\n

Liang began cooperating immediately, according to the government. A slight, mild-mannered man with a wife and three children, Liang, now 63, had worked for VW for 34 years. He was never a supervisor. Still, because of his long involvement in the scheme \u2014 from start to finish \u2014 Judge Cox sentenced him last August to 40 months in prison, a lengthier term than prosecutors had requested.<\/p>\n

Schmidt\u2019s presence in the U.S. was strange, even reckless. Acting without counsel, he contacted FBI agents in November 2015, offering aid with their investigation. The FBI flew him from Wolfsburg to London to meet with him there. U.S. prosecutors flew there, too, to participate. But the agents and prosecutors later determined that Schmidt lied extensively at the five-hour debriefing, falsely exonerating himself and his superiors, and setting back their probe.<\/p>\n

Evidently imagining that he was still on good terms with the government, in December 2016 Schmidt had his U.S. lawyer notify the FBI that he and his wife would be travelling to Florida later that month for their annual Christmas vacation. (He owned some rental properties in Florida, and had hoped to retire there.) On Jan. 7, 2017, as they headed home to Germany, eight officers converged on Schmidt in a men\u2019s room at the Miami International Airport. They brought him out in shackles and then led him away. His wife was left alone, crying amid a pile of luggage.<\/p>\n

Had Schmidt remained in Germany, it\u2019s unclear whether he could have been charged under German law, and it\u2019s inconceivable that the result would\u2019ve been a seven-year sentence. Prosecutors would be hard-pressed to bring a major case against him and the same is true for the VW suspects still in Germany. One possible charge is false advertising, but that is narrow, not necessarily apt \u2014 it is aimed primarily at unfair competition \u2014 and carries a two-year maximum term, according to two German law professors who have studied corporate crimes: Michael Kubiciel, of the University of Augsburg, and Momsen of Berlin\u2019s Free University. (Momsen is associated with a law firm that represents a VW employee in the inquiry, but says he is not personally working on that case.)<\/p>\n

The relevant German fraud statute, in turn, is generally designed to capture individuals who swindle others out of money. \u201cFraud requires proof of a concrete financial loss on the part of an individual consumer,\u201d writes Kubiciel in an email. \u201cProving that a manipulation of the diesel engine caused concrete financial damage is not easy, if possible.\u201d<\/p>\n

\u201cYou need to be able to figure out,\u201d says Momsen in an interview, \u201cwhat is the damage in dollars or euros?\u201d That\u2019s challenging, he continues, because the cars were roadworthy and safe. It\u2019s not clear whether German judges will consider the fact that a vehicle was polluting more than the consumer realized to constitute the sort of financial damage the law recognizes. As VW put it in its statement to ProPublica concerning its civil liability in Europe, \u201cCustomer satisfaction is our highest priority and the modification we have provided our customers in Europe entails no change to performance, fuel economy or other key vehicle attributes, as confirmed by our regulator.\u201d<\/p>\n

 <\/p>\n

Indeed, scores of consumer lawsuits have been tried in Germany and Volkswagen appears to be winning most of them, according to newspaper accounts and interviews with three European plaintiffs\u2019 lawyers. Even when judges have ruled that VW used an illegal defeat device, many have still concluded that consumers suffered no compensable injury.<\/p>\n

The main remaining criminal statute in play is the one barring market manipulation. VW executives might appear to have been astoundingly tardy in notifying the market of the building crisis at their company. Yet there are hurdles here, too. Executives can point, for instance, to the Kirkland & Ellis report \u2014 predicting modest sanctions in the vicinity of $100 million \u2014 and argue that that didn\u2019t sound like a \u201cmaterial\u201d loss that needed to be disclosed.<\/p>\n

Perhaps, despite the many daunting obstacles, German prosecutors will yet manage to obtain some convictions. It sounds as if Oliver Schmidt will be rooting for them. In a letter to Cox before his sentencing, he described how he had pored over the government\u2019s VW evidence \u201cduring my many sleepless nights in my prison cell.\u201d As Schmidt put it, \u201cI\u2019ve learned that my superiors that claimed to me to have not been involved earlier than me at VW knew about this for many, many years. I must say that I feel misused by my own company.\u201d<\/p>\n

____________________________________________<\/p>\n

Additional reporting by Jesse Eisinger.<\/em><\/p>\n

Go to Original \u2013 propublica.org<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

6 Feb 2018 – Volkswagen paid huge government penalties in the U.S., but virtually nothing in Europe. Two things now seem clear: Some very senior officials knew of the wrongdoing \u2014 and they\u2019re not likely to face meaningful prison time.<\/p>\n","protected":false},"author":4,"featured_media":106182,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[242],"tags":[],"class_list":["post-106177","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-exposures"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/106177","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=106177"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/106177\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media\/106182"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=106177"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=106177"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=106177"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}