Schumer, Blumenthal: U.S. Must Send Dramatic & Strong Message That Actions Like Volkswagen's Will Never Be Tolerated Again; Consumers, Taxpayers Deserve to be Made Whole

Statement

U.S. Senators Charles E. Schumer and Richard Blumenthal today called on the U.S. Environmental Protection Agency (EPA), in conjunction with the Department of Justice, to levy the maximum possible fine of $18 billion against Volkswagen following reports that the company may have intentionally developed and implemented software designed to trick emission testers and approximately 482,000 consumers. The "defeat devices" were used by Volkswagen to circumvent EPA emission standards during normal driving operations and deceive testers during emission tests in laboratories or testing stations. Schumer and Blumenthal said that the maximum possible fine of $18 billion would result in approximately $37,500 per offending car.

Moreover, Schumer and Blumenthal explained that both affected consumers and U.S. taxpayers should be made whole by Volkswagen. Schumer and Blumenthal said that many affected consumers may have purchased the diesel Volkswagen vehicles because of their energy efficiency and were thus deceived by the company. In addition, the resale value of the car may never be recovered. Therefore, Schumer and Blumenthal are urging the EPA to ensure that any potential settlement includes substantial rebates to affected consumers.

Schumer and Blumenthal are also urging the EPA to ensure that any potential federal settlement include full reimbursement to the United States Treasury of any tax credit or other federal repayment received on behalf of the fraudulent cars. According to reports, Volkswagen may have received upwards of $200 million in tax credits and other federal incentives because of the vehicles' energy efficiency. Schumer and Blumenthal said that Volkswagen should be forced to pay these incentives back, as it may constitute as a form of tax fraud because the cars did not actually meet many of the IRS's qualifications for receiving these credits.

"This deliberately deceptive and massive fraud by Volkswagen is breathtaking and must be swiftly dealt with," said Senator Schumer. "The EPA must do the right thing here and impose the full fine of $18 billion on Volkswagen and then work to ensure impacted consumers receive recoupment. Whether a rebate or a refund, American consumers who bought these sham cars deserve to recoup thousands for the lie and this incredible inconvenience. Moreover, taxpayers and the federal government -- which provided upwards of $200 million in ill-gotten tax credits to VW -- must be made whole as soon as possible. Volkswagen used bogus standards to drive profits and accelerate their market share. None of this was fair to the American consumer or the taxpayers, and we must do all we can to make them whole and to send a message to would-be wrongdoers that this must never happen again."

Senator Blumenthal said: "Volkswagen willfully deceived over 11 million car owners worldwide, knowingly and fraudulently installing defeat devices that allowed their diesel vehicles to cheat emissions testing while emitting 40 times the allowed levels of pollution. The Department of Justice must conduct a thorough and vigorous investigation, holding executives personally responsible for any criminal acts, and the EPA must ensure that VW pays back tax credits and other federal benefits it received. Volkswagen buyers must be fully compensated for this outrageous harm--including an offer to buy back every car, or separately pay for resale price loss. Asking owners to wait up to two years for a fix--that may ultimately drive down gas mileage and impact performance--is unacceptable. Volkswagen must immediately repay owners for the significant loss in value these cars have sustained as a result of this massive fraud."

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