GM Internal Investigation Does Not Absolve Management of Criminality

Brooke's carThe long-awaited General Motors recall report, which was compiled by attorneys with longstanding and lucrative ties to the company, has been released with few surprises. GM-hired attorneys claim that no high-level executives at the company were responsible for the deadly ignition switch recall delay that cost at least 13 people their lives. The report does nothing to vindicate GM. The company’s management must be investigated by the Justice Department.

The legal team responsible for the “investigation” was headed by Jenner and Block chairman, Anton Valukas. While Mr. Valukas is most often described as a former federal prosecutor by the media, the fact that Jenner and Block are long-time cronies of GM is not often mentioned. The company served as lead counsel for GM during its $15.8 billion IPO. Two former top GM attorneys were also partners at Jenner and Block, as reported by Reuters.

The fact that GM’s current general counsel, Michael Millikin, was the co-leader of the investigation also goes unmentioned. The list of cronies that put together the report grows, with GM lawyers at King and Spalding contributing. King and Spalding is the legal firm representing GM in accident victim lawsuits.

While the conflicts of interests arising from GM using its paid attorneys (as also reported by the NY Times) to investigate the recall debacle are obvious, the facts are damning enough without any report; whether that report was penned by cronies or not. If GM executives did not know for over 10 years what was going on with defective vehicles that cost lives of motorists, they should have. The buck stops with the top management and being negligent should not be viewed much better than being complicit. The complicity of GM remains in question, especially when reviewing the company’s early response to the scandal.

There is no excuse for the actions at GM, which allowed dangerous vehicles to remain on the roads for over 10 years. Media attention to ongoing lawsuits regarding the defect that led to the loss of lives was the only reason GM finally addressed the problem. A clear picture of just how deceptive the company has been comes into view when we look at how GM spokesman, Alan Adler, first addressed criticisms of the delayed recall. I have repeatedly sought answers to who was responsible for prompting the early despicable defense by GM that blamed accident victims and potholes for the fatal crashes.

Here was the response from GM in February of 2014 when it underestimated the victim count for defective ignition switches at six and blamed the victims, as reported by the NY Times:

In a separate news release, G.M. said it knew of six deaths in five crashes in which the front air bags did not deploy.

“All of these crashes occurred off-road and at high speeds, where the probability of serious or fatal injuries was high regardless of air bag deployment. In addition, failure to wear seat belts and alcohol use were factors in some of these cases,” the statement said.

Alcohol was involved in two of the five crashes, resulting in three of the deaths, Alan Adler, a spokesman for G.M., said in a telephone interview.

The statement said G.M. was also aware of 17 other crashes “involving some type of frontal impact and nonfatal injuries where the air bags did not deploy.”

Mr. Adler said it was possible that hitting a deep pothole could turn off the ignition, but that G.M. had received no such reports. A figure for the weight of key rings causing the problems was not available.

GM CEO, Mary Barra, also seems to be getting a free pass from the media. The fact remains that Ms. Barra was the head of product development in 2011. As such, she was in charge of quality control and should have been aware of the serious issues with defective ignition switches which were known to many.

One of the most important sets of documents needing to be scrutinized are those relating to a July, 2011 meeting which addressed the deadly ignition switch defect. A chronology of events provided by GM admits, “In late July 2011, a meeting was held at GM involving Legal Staff, Field Performance Assessment (“FPA”) and Product Investigations Personnel who would be involved in the Field Performance Evaluation (“PFE”) process.”

Are we to believe that the significance of this issue was not deemed high enough for senior management, including Ms. Barra, to be made aware of the situation? Again, if senior management did not know what was happening as the company was being sued by accident victims for a product defect, the ignorance of the matter is no excuse and does not absolve them of guilt.

The clear fact is that GM was aware of a deadly defect and delayed recalling dangerous vehicles for over 10 years. While attempts at improvement to safety at this stage are welcome, the victims of the past negligence at GM deserve justice. General Motors as a corporation is responsible for the actions, or lack thereof, of its management and both the company and its individuals should face further investigation and criminal charges, if warranted.

Mark Modica is an NLPC Associate Fellow.