Toyota case shows it’s hard to prosecute execs

WASHINGTON (AP) — Efforts to conceal the extent of
dangerous car defects at Toyota Motor Corp. were so pervasive,
prosecutors say, that an exasperated employee at one point warned that
"someone will go to jail if lies are repeatedly told."
Yet no one has gone to jail, nor is likely to.
Justice Department last week socked the car company with a $1.2 billion
penalty but brought no criminal charges against individual executives,
an unsatisfying resolution for consumer activists who say prison is the
best deterrence for corporate malfeasance.
But prosecutors say
they had little choice, in part because of constraints with evidence and
the challenge of gathering testimony and information from witnesses
outside the United States.
The same internal memos and public
statements that buttressed the case against the corporation might well
have been inadmissible as evidence against specific individuals. And it
can be hard to prove that the person whose name is on a certain damning
document was directly responsible for the misstatements or knew that
they were wrong, legal experts say.
While the case against the
company may be overwhelming, lodging personal responsibility for
misstatements "is more difficult to prove beyond a reasonable doubt,"
said Stephen Saltzburg, a law professor at George Washington University.
Bharara, the U.S. attorney for the Southern District of New York, whose
office brought the case, told reporters last week that while he had not
foreclosed the possibility of criminal charges against individuals, he
expected the settlement to be the end of the matter.
When people
who break the law live outside the country, "there are problems of
evidence and problems of proof," Bharara said when asked about the
prospect of prosecuting individuals at the company. Evidence and
documents that can be brought into play against a corporation, he said,
might not be admissible against specific people.
Toyota, which
acknowledged hiding information about defects, said in a statement that
in the four years since the recalls, it had "made fundamental changes to
become a more responsive and customer-focused organization, and we are
committed to continued improvements."
The penalty is the largest
of its kind ever brought against an auto company, according to the
Justice Department. The department also filed a wire fraud charge
against Toyota that the government says it will dismiss in three years
if the company complies with the terms of the settlement. Even so, some
consumer advocates fear a monetary penalty alone generally doesn’t do
enough to scare executives at other companies from breaking the law.
$1.2 billion is an enormous number, it is going to be very easily
absorbed by the company," said Jack Gillis, director of public affairs
for the Consumer Federation of America, a consumer advocacy research and
lobbying group. "So shouldn’t there have been some personal culpability
among the decision-makers?"
Court documents filed in the case
accuse Toyota of intentionally withholding from consumers and regulators
information about problems that could make some of its cars accelerate
out of control. One such problem, involving ill-fitting floor mats,
attracted negative attention for the company following a 2009 car crash
in San Diego that killed a family of four.
Prosecutors say Toyota
made public statements that were misleading or false and key information
about the extent of the problems was never disclosed. For example, they
point to an inaccurate timeline that the company provided to Congress
on when it learned about a problem with sticky gas pedals that could
cause unwanted acceleration. They also cite misleading disclosures to
safety regulators and a 2009 online statement assuring the public that
the "root cause" of one of the problems had been addressed.
engineers found that the gas pedals could stick, they told their parts
supplier to start making a redesigned version and to scrap any pedals
with the old design. But management canceled the fix and instructed the
engineers not to tell the supplier in writing so there would be no paper
trail, a violation of Toyota’s own policy, prosecutors said.
the federal rules of evidence, prosecutors would have had a better
chance of introducing those statements as evidence against the
corporation than against any one individual, legal experts say.
would have to pinpoint some individual who wrote those statements
knowing they were false," said Paul Rothstein, a Georgetown University
law professor. "That would be hard to do, even if they could pinpoint
who actually composed the statement. That person might not have known it
was false."
General Motors Co. is facing a separate federal
criminal probe in New York over delays in recalling small cars with a
deadly ignition switch problem. It’s unclear whether any individuals are
being investigated in that case or whether prosecutors would confront
the same evidence problems if they wanted to charge specific people.
Associated Press writer Tom Krisher in Detroit contributed to this report.
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