GM’s Legal Team Targeted in Federal Probe of Faulty Ignition Switches

(Los Angeles Times/MCT ) -

The Department of Justice is investigating whether the legal department of General Motors Co. concealed evidence from safety regulators about defective ignition switches that have been linked to at least 13 deaths and more than 50 crashes.

General Motors confirmed the investigation and said it was cooperating with authorities.

Several other inquiries may also examine whether members of GM’s legal team hid information about problems with 2.6 million older Chevrolet Cobalts, Saturn Ions and other small cars from safety officials and higher management at the automaker.

The National Highway Traffic Safety Administration and Congress also are looking into why GM delayed recalling the vehicles until earlier this year even though some of its employees knew about the problem for at least a decade.

“We are cooperating fully with the Department of Justice in their investigation,” GM said in a statement Friday. “Our own internal investigation found that individuals failed to disclose critical pieces of information and the company operated in siloes. We have made significant changes to our structure so that will not happen again.”

A GM-commissioned report prepared by former U.S. Attorney Anton Valukas blamed poor communication and incompetence for the automaker’s failure to recall the cars with faulty switches until this year.

But that explanation has met with skepticism from some involved in the probes.

“I find it hard to believe that, out of 210,000 employees, not a single one stood up and said, ‘I think we are making a mistake here,’ ” Rep. Tim Murphy, R-Pa., said at a congressional hearing on the issue in June.

Rep. Phil Gingrey, R-Ga., whose district was home to one of the crash victims, called the Valukas report “a big coverup.”

After Valukas released his report, GM fired 15 people. Five additional GM employees were disciplined. The automaker has apologized for not recalling the vehicles sooner. It also has set up a compensation fund for victims of crashes caused by the faulty switches and their survivors.

GM’s legal department is a focus of scrutiny because the automaker’s lawyers approved settlements with victims and their families and would have reviewed depositions and other evidence pointing to problems with the switches.

“The question is who knew what and when they knew it. That’s not clear,” said Carl Tobias, a University of Richmond law professor.

The Justice Department has ramped up its involvement in cases in which the auto industry has failed to recall vehicles with safety defects, Tobias said.

The agency recently appointed David Kelley, a former U.S. attorney, to serve as the independent safety monitor at U.S. operations of Toyota Motor Corp.

The appointment of the monitor is part of the agreement that the automaker reached with federal prosecutors in March that settled a four-year criminal investigation into whether Toyota properly reported safety complaints about sudden-acceleration problems in its vehicles. The settlement also included a $1.2 billion fine.

Toyota was formally charged with one count of wire fraud, but the Justice Department will dismiss the charge after three years if the automaker abides by the settlement terms. The case focused on reports of floor mats jamming gas pedals and of gas pedals getting stuck on their own.

The huge Toyota fine and the various GM investigations are part of an increase in auto-industry oversight by regulators. At the same time, automakers are jumping on recalls quickly and going back and recalling cars that could have been recalled for safety reasons earlier in their life cycles.

The industry has called back more than 46 million vehicles in the U.S. so far this year, according to automakers and NHTSA reports. That amounts to nearly one in five light vehicles on the road and eclipses the one-year recall record of 30.8 million set in 2004.