> Mr. Schmidt did not identify any Volkswagen superiors who might have pressured him to lie to regulators.
I think the point here is refusal to co-operate with prosecutors. They wanted to know who at Volkswagen told him to lie, and they would have been happy to let him off the hook if he co-operated. He refused, essentially continuing to demonstrate his loyalty to VW and thus perpetuating his complicity in the criminal justice process of the very crime he was now convicted of. He failed to demonstrative effective repentance, and now must serve as warning example to other white collar criminals.
First, it's piling another crime onto all the other crimes.
Second, any such agreement, by nature of being illegal, would be unenforceable. Even if he has already collected on it, the company would be required to demand the money back if the deal is ever discovered. Yet if he had somehow managed to hide the money out of the company's reach, he would have been in a position to renege on the deal.
TL/DR: don't make illegal deals with criminals who are smart enough to understand the prisoners' dilemma.
Unless the CEO personally ordered it (which seems unlikely), someone somewhere below the CEO ordered this. You will eventually find someone down the chain who cannot identify a superior that pressured them to do it.
That in no way implies he's covering for superiors out of loyalty to VW.
Looks like in his own mind his only crime was being loyal to a corrupt foreman. Classically German.
> “A script, or talking points, I was directed to follow for that meeting was approved by management level supervisors at VW, including a high-ranking in-house lawyer, ” he said in the letter. “Regrettably, I agreed to follow it.”
None of that implies he was ordered to lie to regulators. It says he concealed software and followed a script, not that the people who wrote or approved the script knew he would be lying to regulators by following that script, or that he was concealing software.
The justice system punishes people. There are around 2.2M people in US prisons.
Schmidt was involved in corruption --- for profit --- which duped ordinary people into releasing around 1MM tons of pollution in to the atmosphere in a single year; about the same as all the power generation for the 66 million people in the UK.
What's the scale of the damage that most of the other 2.2M people in prison did? Sold some drugs? Stole a crappy old car?
The justice system punishes society by failing to adequately rehabilitate offenders. As a result many go on to reoffend. So really the current system is only punishing the next innocent victims of crimes perpetrated by released inmates.
See the difference in reoffending rates between Norway and the USA, and their different approaches to prison time. For a start, the US views the inmates as "criminals", Norway views the inmates as people who did something illegal.
Interesting point you are making here. In Norway's case it's "what someone did", and if he stops doing it, it's fine again whereas if you think/say "these people are criminals" it appears as if these people are inherently bad, which is a worse basis to help people improve.
Giving execs who order criminal acts jail time will be far more effective. Just you watch - VW will absolutely colour between the lines now.
It's easy to gamble when it's the house's money on the table, but when the instigators face real punishment they'll sharpen right up.
In the EU, fines can be expressed as a percentage of annual revenue. So imagine something strict enough to work. I'm sure a fine of 25% of annual global revenue for 10 years would put a lot of pressure where it needs to be, for example.
Targeting the individuals responsible seems more fair and efficient on the whole, if more difficult to implement.
Or, maybe a few million dollar fine, after they got a profit of a few billion. That'll learn 'em!
What happens to all the employees, assets, shareholders etc.?
If VW is "executed" do you mean all the shares are seized and re-sold or do you mean everyone loses their jobs - discs are wiped, factories demolished etc etc.?
Corporations are people, right? Punish the person. The corporation can decide whether to shift the punishment down to the responsible people (conduct their own internal investigation to find the responsible people, and punish them appropriately), and work towards a structure where these things won't happen or can be detected early.
I disagree with this part. Fining the company just pushes prices up to compensate for the loss. It might cause the company to not be competitive and go out of business but that's mostly punishing people who didn't do anything. We need to hold the individuals responsible for their behavior. I agree with you that prison doesn't seem effective but if we use financial penalties they should be harsh and targetting the individual. I suspect someone who has been very rich for decades suddenly being lower middle class or poor would be much scarier than going to a country club with an ancle bracelet for a few years.
But then that is in a sane world. You're right that most companies would just either eat the losses, or hike up prices to compensate - leaving the executives with another jolly story to tell at the country club.
Why? As far as I know, recidivism in corruption is rather common. And if you send the corruptors home with a pat on the back, it will probably be more common.
OP is wrong.
We want cultural and financial incentives not to do wrong. We also want raw primal fear, if you do this evil shit they’re gonna get you and lock you away forever type fear... if you do this stuff.
And if you accept that that is the goal, it is then logical to put resources toward the most efficient means of accomplishing it, to maximize your chances of success. I find it unlikely that long prison terms are that most efficient means in most cases (an exception might be dangerous likely re-offenders), given considerable evidence that it is ineffective in discouraging most forms of crime, and in some cases can increase likelihood of engagement in crime by ex-convicts.
Edit: there probably is value in some amount of prison time as a deterrent though, as I elaborate on in the comment below. My main point is that I highly doubt there is anything like a linear relationship, if any relationship at all, between the length of prison sentences and the effectiveness of the deterrent. And given that (if in fact it's true,) we might as well keep sentences reasonably short, and use the resources saved more effectively.
Likewise capital punishment does not prevent or lower murderer rate. There is no correlation at all.
So we have to seperate prevention and fear. The fear that you’d have to go to jail is the reason why punishment exists. we want people to know their actions are always held accountable in the perfect system - but unfortunately not.....
Prevention is education and make sure every community has a fair balance of income - a poor community is of course going to have a high crime in theory.
Now, I'm a pretty analytical person, so I'm probably most likely to be affected by deterrents (although perhaps also most likely to believe I could avoid getting caught!) A more impulsive criminal might not consider the possible consequences much at all; certainly not enough to distinguish between a low or high number of years locked up.
So if we take it as a given that long prison terms are not particularly more effective at deterrence than short ones - and I believe there is evidence to back that up, but I'm not an expert; if I were actually in a position to change these things I'd obviously do the research! - and that keeping people in prison costs a large amount of money, it seems to me best to reduce prison terms to the minimum degree possible while maintaining their deterrent benefit, and to redirect the savings into things that evidence suggests are effective in reducing crime (education, social programs, etc.)
Ironically, given my initial comment, this kind of highly calculated crime (the VW emissions) is probably most likely to be deterred by prison sentences. Once again though, I don't expect a long sentence (and 7 years seems long to me for a non-violent crime) would be any more effective than a short one. I mean, would you risk _any_ non-trivial amount of time behind bars just to help your bosses make more money?
> In this case, the financial penalties imposed on the companies themselves seem like a more effective tool.
The ultimate goal here is to hold car makers accountable for their systematic fraud and violation of emissions standards. Accountability will deter future violators.
There's no better way to convince "golden-parachute" executives to take these transgressions seriously than to put violators in jail.
Off topic, but this is what I dislike about the GPDR, the subjective enforcement. Do I as an SMB stop selling to EU because I can't afford the potential fine (risk management of course, never would intentionally violate)? Or do I trust arbitrary selective enforcement?
Would you fine them $100 billion? While many were already on the brink of bankruptcy, because of the self-inflicted damage? If anything, they received money from the government to survive.
Granted, they should have never been allowed to get to the point where not saving them meant an even bigger crash for the economy. They shouldn't have been allowed to leverage their money as much as they did, and they should have been split up into dozens of smaller banks.
But failing that, it seems like imprisonment of wealthy billionaire executives who thought "they've got nothing to lose" if they risk their customers' money the way they did seems like the best option there.
Reaches for bailouts with one hand, and then does million dollar refurbishments. Then cracks jokes about it later, after moving on to being a shill wasting space on Ubers board, essentially wasting the time and resources of Uber, by being a paid voice of Kalanick.
His decision to piss money so thoughtlessly, and get precisely nothing as punishment is depressing.
My friends from Eastern Europe share stories of outrageously corrupt politicians, that everyone knows is corrupt. I sometimes wonder, if many parts of the western world are really so different. Instead of politics, the corrupt parasites congregate at the head of large businesses. It does seem to work out better for them.
the wealthiest among us can afford any fine, and it stings.
but who has seven years of their life to give away? nobody. this is catastrophic for the individual and his family, and it should be.
I mean, if you've got an idea, I'd love to hear it. But it seems to me that's it's not just the thought of, "This is illegal; I might go to prison," but it's "This is illegal; I might go to prison, and they're actually pursuing executives responsible for these things."
"In this case, the financial penalties imposed on the companies themselves seem like a more effective tool."
The problem with just punishing the company as a whole, instead of also pursuing the executives responsible, is that it doesn't actually discourage acting badly. Any individual action tends to get lost in the amorphous blob of the company. The company might suffer, and the individual might be asked to resign with their golden parachute, but they're not going to suffer. They're not going to feel any actual pain that would stop anyone else from doing the same thing.
The ones who are getting off easily, IMHO, are the regulators. Their job would be to make sure cars respect emissions limits in all contexts, and that would mean actively testing the cars in many different configurations.
How is it possible that it never occurred to anyone there, to test cars in real-world conditions, just to make sure the results they were getting weren't contaminated by the normal testing setup?
This is utter intellectual laziness and should incur some kind of reprimand.
Or maybe regulators should hire Mr Schmidt and put him in charge of future testing. He would know what to look for.
...and the politicians who are supposed to oversee them.
I agree 100%.
> This is utter intellectual laziness
Of course this was done under a laughably thin guise of impartiality ("if we use real-world tests, we would introduce an unfair element of randomness"), but in truth it was clear to anyone who cared that the regulations are deliberately softened to make it easy for manufacturers.
Boring example: the European driving cycle only defines measurements up to a top speed of 130km/h. So it's legal for manufacturers to ignore regulations from 131km/h onwards. Why not enforce adherence up to the rated top speed? Because... uh...
> How is it possible that it never occurred to anyone there, to test cars in real-world conditions
It has occurred to many people. Manufacturers have fought it tooth and nail -- I wonder why.
Even in Germany, which all but depends on its automotive industry, this is widely considered a disgrace (except, of course, in the circles relevant to the inception of regulations).
In fact, many people consider it a strategic mistake to go soft on the German auto industry, allowing them to fall behind. I'm sure it'll bite them. But only after the current politicians and CEOs have left office, so why should they care?
Just because it's not on the cycle, does not mean regulations don't apply. It means they are not verifying compliance.
Seven years is a very light sentence for this. I would guess that sort of damage makes him easily a top 1% criminal. Of the entire world.
Probably you mean, has caused x deaths directly instead of has caused x deaths indirectly?
That effects everyone on the entire planet. I think committing a crime that affects ever single human life should be considered a very serious crime. That should lead to very serious punishments.
I do not think the punishment was harsh.
Seriously though, scale of impact only matters in the context of the weight of the impact, otherwise lots of preposterous things would be dire crimes.
When lying about emissions people tend to get taxed lower for the lower emissions (at least in many countries in the EU) and also people rather buy a car with a low emission than a car with a higher emission rate.
If you acknowledge that prison isn't an effective method for many other crimes, what's your specific point here, in relation to this case?
What puts this person apart from, say, someone in prison for taking drugs?
If we agree that prison is a giant waste of time, should we really be starting with white collar criminals?
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Also it was seen as a positive thing because it gave regular employees an excuse to say no when execs come asking to cheat.
James Liang was previously convicted. He was an engineer working at the VW test center in LA. His group was directly working to keep CARB and the EPA from discovering the defeat device. My understanding is he was really a mid level engineer.
My source for this information is a book about the scandal and also the history of the VW/Audi engineering culture called "Faster, Higher, Farther: The Volkswagen Scandal". Its well worth the read.
Mr. Schmidt had been a Volkswagen employee since 1997 and was named general manager of the company’s engineering and environmental office in Auburn Hills, Mich., in 2013
In other words, not only would punishing shareholders be unfair and stifle investment, it might have other unintended consequences that would hurt the economy.
Really, you need to spread the pain across every level from grunt to CEO to shareholder. With relative culpability based on influence on and benefit from such behaviors.
It should be limited to the most recent (five?) years of profit at a maximum; but determined by the valued magnitude of the profits obtained by the infringement (multiplied by something, maybe 3-5?, for punitive effect).
Each stock should have that share of debt added to it; zero interest over time, full remainder due upon sale, and reduced by future dividends. The actual debt needn't be tracked per stock; it is sufficient to differentiate between affected and not.
Criminal liability belongs with those actively participating or criminally negligent in their oversight.
The only other book I've read about the era is The House of Morgan, which covers the history of JP Morgan bank. It's highly recommended as well. It tells a convincing tale as bankers as the good guys (gentlemen bankers), who funded Thomas Edison, the transatlantic cable, Charles Lindbergh's transatlantic flight, and who raised the funds and managed the purchases necessary to win WWI.
If anyone else has finance books to recommend I'd love to hear them.
OK, I was with everyone saying higher-ups need to be held accountable, but now you're spewing utter nonsense. It's not like the shareholders knew what was going on. What are they going to be "held accountable" for? For being lied to by a cheating company? It's almost like going after taxpayers because they subsidized a criminal's public transportation.
They have had a loss, which they may or may not have felt (e.g. if they had to sell, they most certainly did; If those shares were collateral, which is extremely common, they most certainly did). And then there was a gain, which they only had if they did not have to sell.
There's also the issue of opportunity cost.
Really, the only way economics make sense is if you assume that everything is valued at its real value at any time -- not just when it changes hands.
“When the price of a stock can be influenced by a "herd" on Wall Street with prices set at the margin by the most emotional person, or the greediest person, or the most depressed person, it is hard to argue that the market always prices rationally. In fact, market prices are frequently nonsensical.”
“Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace, and those who read their Graham & Dodd will continue to prosper.” — Warren Buffett
Your premise of "the only way economics make sense is if you assume that everything is valued at its real value at any time -- not just when it changes hands" is absurd on its face; one only need look back nine or ten years for confirmation of this. If what you say were true, Bear Stearns would still exist, and you would have to claim that those real estate hedge funds were at their "real value" both in 2006 and in 2007 even though the latter was pennies on the dollar. Is it any comfort to say, "well, that stock collapsed but I at least I bought it at its 'real value' that it had up until yesterday?"
Unless your point is that economics cannot possibly make any sense, I suppose.
Bear stearns had pledged 104% of their capital. They weren’t the only one in such a condition, and in this sense it is unfair, but the closing down was justified.
The law was changed from “mark to market” (the standard evaluation for decades) to “Mark to fantasy” specifically so that many bankruptcies would not need to be declared - but without a $700B injection at the time, many more would have happened.
You cannot have consistent book keeping if two entities can book the same item at the same time for materially different values at the same time. It is as simple as that.
Why? The other way seems to make sense to me.
If I had VW stock that I had to sell in between to pay my down payment, i most definitely have lost, regardless of it going up later. If I used my VW stock as collateral for something else, I would have had much less collateral to pledge.
Assuming a “buy and hold” universal is not a reasonable assumption.
Assuming anyone might need to liquidate at any minute is not necessarily more reasonable, but it is more consistent with reality
And how would that work?
Most shareholders with enough voting rights to matter are organizations themselves. This would essentially cease any attempt due to the absurd and never-ending complexity holding people accountable.
"Corp X needs to be accountable!"
"It's shareholders must pay!"
[looks up shareholders]
"Corp Y is a shareholder of X"
"Corp Y needs to be accountable!"
"It's shareholders must pay"
[looks up shareholders]
"Corp Z is a shareholder of Y"
"Corp Z needs to be accountable!"
The separation of ownership and management is what got us in this problem to begin with. Pointing the finger back at ownership when it's a corporation with thousands, or maybe even millions, of shareholders is stepping backwards in time and approach.
Owners don't make the decisions, managers who effectively have no boss make decisions and they're the ones who should pay.
And they are not the largest shareholder, they hold about 20%. Qatar holds 17% and Porsche a tad over 50%.
Stockholders - especially those that originally bought company stock when it was issued - assume liability already, if the company goes under their stock is worthless, if the company is fined their dividends drop.
To make them liable beyond that for something they themselves do not control in a way that would enable you to assign blame is excessive.
> their dividends drop
Corporations are rarely fined even 100% of their profits from illegal actions.
If the punishment is simply going to be temporary drop in returns, and that maximum damage inflicted upon a corporation and investor is dissolution, that dissolution should be wielded with a casual frequency. Corporations are benefiting from breaking the law. They get caught, and they still benefit.
Many of these arguments center around 1) a drop in returns is punishment enough 2) it would be difficult. Both are simplistic pat answers that defend the corporation as a one-way valve for wealth that disintermediates the criminal from the crime. How is it that I am responsible for all of my actions, except when my action is a pooled investment?
The ultimate question is can money only harm up to its denominal value?
Or are you suggesting we lock up anybody who owns a few shares?
Is it just a carry over from disliking wealthy privileged people in general? Someone please chime in.
When companies act against the interest of the societies in which they exist, it's at the direction of executives, managers, or other "higher level people." If they're caught, their punishments sometimes don't even negate their wrongdoing, let alone match up to crimes which are generally less harmful to the rest of the world. They get away with it, and when they don't, it's not that bad for them. The lack of justice is infuriating.
That's a big assumption, IMO. It's quite a huge assumption on how high it actually goes.
> and they nearly always get away with it.
Based on on your presumption of guilt?
I don't support presuming the guiltiness of top level executives that had no idea "because they should have known." Its reminiscent of a witch hunt.
That was an expensive vacation.
Seriously, good to see justice served. Curious to see what Germany does to the top execs there.
The other half is asking when the German justice system will finally start their prosecution.
I don't disagree that the government went after VW hard, and it's very likely that the fine would've been much lower had the same crime been perpetrated by GM.
However, I think government took a tougher stance because VW was a foreign company, period; not because VW was viewed as a competitor to domestic car makers. People don't cross shop domestic and VW.
Huh? Don't most people just shop for ... cars?
There are definitely brands that I __will not ever__ buy.
//Most// American Cars: Won't buy because I really distrust the quality of the engineering and the reliability of the end product.
Volvo: My parent's car /always/ had seriously expensive maintenance issues; I don't recall them even doing things half as bad to their car as what I do to mine. (OMG the bumps in the place I'm living right now x.x;)
British Cars: Not even Top Gear UK liked the non-sports car versions.
Mainland Asian cars: Something about the cabin and control configuration just feels /wrong/ to me; I might consider them again if I see one that feels right. This is just based on a very small sample size of rental cars I've driven over the years.
Cars that I'd comparison shop and have on the short list?
Pretty much any Japanese car. There have been some annoying recalls on things like airbags, but I've never been burned and the control configuration just feels right.
EDIT: >> I forgot about Subaru. No data, would consider.
Tesla; They're expensive... but by the time I buy another car (will we still be buying cars?) maybe they'll have caught up. Their engineering I actually respect.
I honestly don't know why the other American car companies can't match that standard... maybe they're too busy being chasing profits instead of building a quality brand the right way.
British cars??? What Britsh cars.
Needless to say, they'll all contain foreign-made components.
PS: I would classify Ford Europe as an Anglo-German car company : Design and Engineering are mainly in Cologne and south UK (e.g. Chelmsford). There is actually not that much sharing with the US, most of the European line-up is specific.
Note this is slowly changing now, with ever less duplication of similar car models around the world.
None of this is clear cut for any of the others I mentioned either! They all have supply chains all over the EU and further afield.
I won't be buying another domestic at all again for gassers. If I get another ICE it'll be a Honda Civic, always liked them and they finally have a hatchback which is my preferred style. That said my wife just got a Suburu Crosstrek and my next car is a Tesla Model 3. I'm expecting fit and finish and maybe minor issues with the Tesla but overall I believe it's time to move to electric and never look back.
I don't say this too often about too many things but I'm very eager to hand Tesla money as I believe in the mission(s) that Musk is on. Tesla being a domestic corporation doens't hurt at all either. I don't own any stock.
I've owned a fair number of Subies and probably am going back to them for my next daily driver. Unless I get something like a Bolt. Can't see myself happy with a Model 3, I've owned too many cars with touchscreens and I dislike 'em.
The one exception is the Tesla stuff, and that's because they're paving the way forward and I want to support it. If I made enough money, I'd stretch my budget and already have a Model S (anyone hiring?). I fully expect them to be slightly problematic. I don't use the most stable software on my computer at all times either. :) Rebooting the computer and dragging the car into the shop are two different levels of inconvenience. Being domestic does help Tesla in my book. We'll be happy with our Subaru alongside. And never ruling out Honda Civics, while I hate modded ones, a nice base 40MPG+ Civic always got my engine pumpin. I get a kick out of efficiency as much as I do horsepower.
Anyway, I'm certainly an example of crossing "lines" in the auto industry. From Pontiac domestic powerhouse to Honda gas sipper to Tesla electric. GM screwed me over multiple times, financially, broken promises from them. That corporation has no use for me to even stay alive, won't get another cent from me. And if I'm not buying GM, why bother with Ford/Chrysler which are also inferior quality to the Korean/Japanese stuff. But crossing mental buying-boundaries, I don't care, I mostly just don't want to wrench or have my car wrenched on frequently.
People do comparison shop and change brands.
2 Acura RDXs, 2 Dodge Stratus (coupe and sedan), 1 Toyota Prius, 1 Nissan Murano, 1 Hyundai Elantra (wife's car)
Current - Acura RDX (lease) and a Ford Mustang (buy). And that's just me. I don't think anyone in my family is brand specific. Dad likes Ford but drives a Chevy last 2 cars. Has a used Saab SUV also.
Whatever looks pretty / getting good reviews / fulfills a need. I wanted a convertible this time around; Mustang fit the bill nicely.
Would never say I wouldn't buy a VW - just haven't liked the style yet. I'd buy (lease) an Audi Q5 or Porsche Macan though - their in the VW family. I'm trying to get a Macan when the RDX lease runs out.
I don't know of any charges so far, which is worrying, but the StA put "the end of the year" as their target for convicting people, so they clearly expect these cases to take on the order of a year or two to carry through. http://www.ndr.de/nachrichten/niedersachsen/braunschweig_har...
Not "just engineers". They were, but they were responsible for some extraordinarily impressive stuff when they were. Hatz also presided over powertrain development for what is indisputably Porsche's truly golden era for its sports cars, where they are almost never regarded as anything but some of the best on the planet.
They invested a billion dollars building out their facility in Chattanooga, TN and employ thousands of people, contributing to the economy and tax coffers. This is not their first plant either.
Hurting VW also hurts Americans and the local economy there.
Any US Auto Lobby also represents VW, Honda and Toyota in addition to Ford, GM and Chrysler. They all make cars in the US and have significant operation there.
If you actually read the parent post post that I was responding to:
>"but there is a widespread public opinion that this was a welcome opportunity to punish a pesky German competitor, by throwing the book at them by the US government working together with the US auto lobby"
It's clear that I was responding to the silly suggestion of there being a conspiracy by the US against a "German" competitor since VW is also a US car manufacturer.
And in the USA at least, there just aren't enough diesel cars to really make a difference. Almost all diesel vehicles here are heavy trucks and busses and they dwarf the emissions of the cars to the point of making them inconsequential.
I don't mean to say that it isn't terrible that any people die because of transport emissions ... but the alternative was to emit more CO2 ... we don't know the exact human cost of that ... but it is not zero.
I mean, compare VW's massive criminal conspiracy to cheat on pollution tests and poison the earth and willfully lie about it when confronted, to Apple negotiating a tax deal with Ireland, and tell me VW's similar payment is unfairly high.
Before the clean diesel lie was uncovered, environmental scientists were mystified as to why European cities had so much fine particulate pollution, which has led to thousands of deaths . So maybe we should be happy that this age of international corporate law enforcement has allowed locally influential multinationals to be held to account.
In 2014, the EPA was informed of the scandal, and the university doing the research, published that 6 major car manufacturers all used defeat devices, including GM, Ford, and VW.
Prosecution started in 2015, and only against VW.
>Prosecution started in 2015, and only against VW.
Why not? They were the ones that fraudulently claimed they could achieve low emissions without urea injection, used defeat devices, and impeded the investigation into their malfeasance.
This is like when the US went after the Swiss Banks which paid Billions in fines, yet none of the US banks got in trouble although they where all doing the same thing.
I feel like this guy could have been a lot of people we know. You get asked to cook some numbers, it comes in all official, legal even signs off on it, and now you're liable. Whistle blowing is not an easy thing to do. Not when you're in that deep.
I feel like the people at the top should be thrown in jail, but they can't because they're all in Germany. Meanwhile, is Germany going to let this guy rot, when really their government should offer to extradite one of the people at the top who had full knowledge and authorization over this, in exchange for commuting this patsy's sentence?
Let's go back to the Stanley Milgram experiments. Say Milgram was a sick fuck and those people did administer a lethal dosage to the guy in the other room. Who would go to jail?
Throw everyone we can get our hands on in jail pour encourager les autres. Once it becomes clear that anyone participating in such a scheme, at any level, faces years in prison, it will be less likely to happen again, and as a direct result hundreds of fewer Americans will not be murdered by illegal air pollution in the future.
Every car manufacturer currently does. Some even literally killed people by cheaping out on braking systems.
Yet no US car executive is in jail.
This is purely a political play.
By the way, Germany operates jails, as well. It's not like the United States have to prosecute everything on the planet themselves.
I believe his participation in fraud should have repercussions, but I hardly feel like caging him up for 7 years is "justice". I'm not saying I know what the perfect justice would be, but I think it should be closer to restitution to those he harmed, rather than just punishment.
Ultimately, I think incarceration is a savage practice, and I hope for the day we're able to deliver justice without resorting to locking someone up. I think humanity will eventually look back at our practice of mass incarceration as quite primitive.
This guy, statistically, was involved in a scheme that robbed a whole lot more people of a whole lot more years than that due to the effects if pollution on public health.
It’s the same with other faulty products on an individual scale. People make daily decisions based on vague ideas about the risks involved, not with the idea that they avoid all risk. For example you aren’t allowed to pack a parachute incorrectly on the basis that skydiving is dangerous anyway.
I wonder if the USA would've gone through the diplomatic rigmarole to get him extradited. Anyone familiar with these sorts of cases have an opinion?
That’s very unlikely, though.
The current legal consensus is that the German constitution bans any extradition of any person to a country that has death penalty (no matter if the person faces it or not)
Around as much as the US doe to rich politically linked US execs. Practical example: remind me how much was GM fined, and how long did the exec serve for emission cheating ?
GM also paid 900 million dollars to the government as a fine and set aside 600 million to pay victims of the car.
A report was commissioned which basically says GM failed to understand its own cars enough to understand why the failure was important. Another apparent compounding factor was the 2008 bankruptcy of GM.
Most likely nothing from what I can see in the news.
That's executive pay at VW?
It's also affordable to live there, and all their cities big and small have the rail infrastructure the US lost decades ago.
I earn way less than that (like half and with no bonuses) and I still have the best salary of everyone I know at my age.
For example, my grandfather was flown by helicopter to the hospital, got a surgery and was in recovery for about 3 days and it cost him about $20.
This guy was small fry in the VW management structure.
Perhaps the original link was http://www.detroitnews.com/story/business/autos/foreign/2017... and it was changed to the NYT story later? For some reason that article shows up in my history.
That article attributes the quote to the presiding District Judge:
> He had a base salary of $130,000, received bonuses of at least $40,000, and had a net worth over $1 million, Cox said Wednesday.
But I can't help but get the impression that many countries only seem to punish foreign companies. I don't think Germany is punishing German executives, are they? Nor the US punishing American executives?
That the US trials were faster is no surprise.
It seems like there is a presumed guilt of executives. That's unhealthy IMO.
It's not guilt as much as responsibility/accountability. As a senior manager you are responsible in the end, and it can often be shown that you either knew about the criminal activity (intent), or should have known about the criminal activity (negligence). It's hard to escape responsibility as a seinor manager and that is healthy.
And executives are ultimately responsible for their company. They are supposed to set the standard for their company and ensure their company follows it. If their company commits crimes and they know about it, they should have stopped it and are culpable. If they didn't know about it, there's still the question whether they should have known.
For the VW scandal, top executives have been fired (with no real consequence) but not judicially punished.
That would negatively impact all the employees that had no input or knowledge.
Punish the decision makers and the ones who knew about it.
If we don't punish institution itself, companies are motivated to hire and promote the people ok with small risk of jail in exchange of money and status. Which is exactly what is happening.
I agree. Though I think there is also a case to be made for punishing further up the 'chain of responsibility' - ultimately including the shareholders (who were punished by the market - and rightly so).
So, a guy that takes the fall so that the superiors can get scratch free.
This can involve anything from some guarantees of financial security post-prison and favorable push for "early exit" from prison, to blackmail and threats for the person's family.
It would look exactly the same.
This is about the car-maker, the company, saving money.
Why would we have an idea about that without being either told and/or compensated for it?
He was worried that VW pays too much for proper emissions tech, even though it didn't concern him personally in any financial stake?
Because he presumed that he was untouchable?
Edit: 60 in the US, many more globally.
That's probably true but that point seems to be used as a jab to sell newspapers, at the very least it's inflammatory. Meanwhile, two-stroke engines, older diesel engines, airplanes using leaded avgas may be as bad as the ten million slightly off tune VWs. And I say this as a person with a parent very ill with lung disease COPD and IPF.
I'm not saying the exec deserves to go free but seven years is excessive. Even manslaughter (in my country) gets you two years which means you go to prison, in the US I think that's called a felony.
But these aren't illegal.
The point about the deaths is "it was specifically illegal and they did it anyway, with these quantifiable consequences".
It’s the same logical trade off of speed limits and cars in general, raising the speed limit costs lives but if it saves more man hours worth of lives than lives it costs it’s worth it.
Imagine what humanity could be capable of achieving with just a small increase in morality in the executive class. The problem in the world is not capitalism, as so many think, but corruption. Saying you are doing one thing, but actually doing something else.
[...] plead guilty to felony charges of illegally importing nearly 600,000 vehicles equipped with devices to circumvent emissions standards [...]
It satisfies the need revenge I guess.
And then following that I say "also I'll sell my driving services to hundreds of thousands but lie to them about how I get them to work, because if they knew I was driving they'd balk because they don't want blood on their hands"
And then following that I say "also I'll invest in complex technology to hide my car from the police so that I will never be caught"
With those minor modifications your scenario is a totally reasonable analogy.
(It doesn't have to be jail time: it could involve expanding public transit, or promoting urbanism over suburbanism, or introducing congestion charges, or regulating car ownership heavily, or lowering speed limits, or lots of other things.)
Perhaps this is a silly way to look at things.
Personally I have the option to ride a bike and electric (nuclear+hydro) trains instead of driving a car, so that's what I do.
But that's just my opinion
But yes, sentences should be far shorter across the board.
Really? You'd say that cheating on emissions standards is worse than say beating someone over the head with a bat and robbing them?
If someone has the power to poison a whole nation, with that power comes equal responsibility for their actions. If they act in good faith, we tend to forgive their mistakes, even if they have disastrous consequences. But there's no good faith here. We know he intended to poison them.
There is no serious ethical justification for considering a mugging to be worse. None has been presented here. We just naturally 'feel' that when the powerful commit crimes, these are mistakes (they are not). When the weak commit crimes, they need to be put in their place, because the weak and poor breaking the law is abhorrent to our neoliberal ideology -- the rich are supposed to assault the poor, this is just how things are. The opposite is unthinkable.
Not to mention willfully flouting the law. They need to set a precedent.
exec fraud, such as insider trading, is much harder to punish and the sentences more lenient relative to the $ taken
How much liability should companies and their executives shoulder when their decisions lead to the statistical increase of hundreds or thousands of premature deaths?
My comment likely will be auto shadow banned or never seen because of automated HN censorship.
It's neat to see jail time trickle down though, seems like a better deterrent than a financial cost. It seems to me that it would be easier to believe the financial cost would not hit you, that you could get out of it or not have the cash. Where a jail time potential would make me think twice about anything potentially shady.
38,000 people a year die early because of diesel emissions testing failures.
but it's tremendously important: what would we say about a person who killed or contributed directly to the killing of 38,000 people?
your fact seems less "real" because it's a statistical individual, but they are morally equivalent.
He should be sent back to Germany, trialed there, and the US can only sue the company. Everything else is a huge violation according to US thinking even.
Think about China would jail and trial a US citizen that is doing on business for Google in China.
This is a global-scale fraud including long term environmental side-effects.
Those vehicles are still out there and will be circulating for at least 10 more years.
This guy should dry in jail.
Certainly the court disagrees with me, but in my mind it ran to standards within the requirements of the test, it meets the requirements. Seems like the test is flawed to me.
Does your computer program deserve to be debugged, fixed, and recompiled when it has thrown an error? What would that even mean? Was it evil or bad because it didn't perform how we wanted it to?
If we had strong AI, then yes, certain strong AIs would be more deserving of resources from the commons than others - that's exactly what MIRI is working on.
And if you step back from "program" to "project" (meaning the whole system of code + the autonomous decisions of humans, including groups of humans working as companies, to continue developing the code), then yes, certain projects do deserve to be fixed more than others do. A particularly difficult crash in Python 3.6 is much more worth debugging than one in Python 2.4, which in turn is much more worth debugging than one in GW-BASIC, because the net benefit for humanity in exchange for the opportunity cost varies widely.
Conversely, I think people should think about crime in a more reinforcement learning approach i.e. rehabilitative.
I view humans as machines essentially. If a machine breaks you fix it, but there is no emotional garbage attached.
That's the concept I was trying to get across.
Viewing humans as machines doesn't work precisely because humans have agency. A machine generally does not decide to break, and a machine generally can be properly fixed (or if it can't, it's obvious). Attempting to convince a machine that it will suffer some negative consequence for misbehavior is unlikely to have any results at all.
Meanwhile, especially for humans making decisions about corporate strategy (which means that they're in a culture that's pretty firmly incentivized towards "is this profitable"), credibly convincing them that they will suffer punishment is a great way to change their behavior and prevent them from deciding to do something unwanted. And one way to credibly convince people that they will suffer punishment for an action is to actually punish people who do the same thing.
It's very unlikely this executive will make the same mistake again, punishment or no punishment. Rehabilitation isn't the point. But we need to make an example of them, and I say that without the slightest shred of emotion.
I know its not a popular opinion, and I don't expect to convince you of my views in a couple sentences, but generally speaking I think the notion of punishment should always be viewed in the context of societal functioning.
If we do as you suggest and punish an executive, does that actually lead to decreased occurances? If so by how much? What about the next time it occurs? Can we completely prevent another occurance? Can we decrease its probability? At what costs to the person and society? What caused it in the first place?
These are all much more important questions to mold a system of punishment than our current focus which almost completely lacks any measurements and analyses and is still steeped in vague moralities derived from historical accident and our own intuitions which are perforated with biases and flaws.
My argument does not rely on free will at all. (If you notice, I have made the argument that the same thing would apply to AIs, and I am certainly not arguing that AIs have free will.)
My argument simply relies on two assumptions: first, that the agent in question sorta-rationally responds to incentives, and second, that the agent in question believes that punishment applied to other, similar agents after certain actions also could apply to them, if they take the same action.
If a human believes that they can make a better outcome themselves by doing action A instead of not doing action A, they will likely do so. Concretely, if an employee believes that they will cause a better outcome for the company and get rewarded for it personally by taking an action, with little risk, they will likely do so. This is borne out by evidence almost as plenteous as evidence that humans require food to live; it needs no controlled study. This happens all the time and essentially all productivity under capitalism requires this to hold up.
If a human believes that action A brings significant risk to themselves, they will probably refrain from doing so. And the convincing threat of prison time does actually cause humans to refrain from actions. fThis is also borne out by everyday life; there are plenty of outright illegal things you can do to make your company significantly more profitable, like poisoning your competitors, that happen extremely rarely.
So I don't understand why you are questioning "Does punishment as deterrent work?" from first principles, as if it is not settled. Do you disagree with the arguments above? I have to say that if you do, I feel like I am arguing with someone who disagrees that food is required for humans to live. I certainly can defend that position logically, I would just feel ridiculous doing so.
Nothing about changing incentives requires free will - it is a simple if statement to say, if risk outweighs reward, refrain, else proceed. You do not need any free will to potentially act contrary to the if statement. I would think if you believe people don't have free will, it makes this argument easier.
(In terms of morality, I am the sort of Christian who believes that every prisoner should be set free and that Christ has redeemed every last human, regardless of what they did, and that if every last murderer and rapist went to heaven, I would join them in singing praises because I wouldn't deserve to be there one bit more than they would. If you go just a week or two back in my comments on this site, you'll find me asking if I am morally/religiously compelled to work for the end of prisons. But I am not making a moral argument in this thread, and I hope it's clear that the argument I'm making is wildly divorced from my morality - I am trying to acknowledge that it is rational to imprison people as punishment, even as I believe that it is immoral to do so.)
Three things (and, note, I currently hold this position weakly and welcome further thoughts that either oppose or support it):
1. There is no story in the Bible, to my knowledge, of prison being used by people the Bible calls good. There are a few places where someone is imprisoned and God uses the situation for good - Daniel in the lion's den, Paul and Silas in the prison of Phillipi, etc. - but you never see e.g. Moses or David or anyone say to build a prison or to put someone in confinement, as far as I recall.
2. Nothing in Mosaic law (again, that I know of) talks about prison as a means for punishment / correction. You put people to death for offenses that we wouldn't consider capital today, sure. You exile them. You certainly have them pay restitution. But there's no Biblical command that a moral society should even have a prison.
3. There are plenty of passages like Isaiah 61, "to proclaim liberty to the captives and the opening of the prison to those who are bound," Matthew 25, "I was in prison and you came to visit me," etc. that seem to have an underlying assumption that everyone who is in prison is there unjustly. Even if they're meant to be read metaphorically, the metaphor only works right if you think of prison as unequivocally bad. There's no sense that some people deserve the experience of being in prison, or that justice requires leaving some people in prison.
Therefore, I have trouble seeing a society that puts people in prison and calls it moral as in accordance with a Biblical view of morality. Of course the whole idea that Western civilization is built on "Judeo-Christian" morals is flimsy in many ways, but for prison in particular, there seems to be a particular lack of support.
Furthermore, there is no excuse for what they did. They knew it was wrong. They knew it was against the law. It was not an accident; it was a deliberate act. There's not really any rehabilitation that can take place here.
I don't know how you even respond to such an absurdity beyond calling it out for what it is: absurd.
So, yeah, where I sit this is a good thing. If it were simply a bug that the company was open and honest about, then lets fix it and move on. If they cover it up, then there’s a solid ethical case for severe consequences in my mind.
The damage has been done to the environment. Lives were shortened in amounts that are fairly precisely quantifiable. Competitors were economically disadvantaged. The market for fuels was distorted by a criminal act. This was all done intentionally, to cheat a system that was supposed to improve air quality, throwing such efforts into doubt.