Coming amid lingering resentment over the federal bailouts of GM and Chrysler, the Toyota case took on political dimensions, with some critics accusing regulators in the Obama administration of acting on behalf of government-controlled automakers to damage their most potent foreign rival. Those accusations have resurfaced lately in criticisms of the National Highway Traffic Safety Administration's failure to be more aggressive in its scrutiny of GM.
The administration long has denied playing favorites, and in his public statements last week Holder gave a subtle but clear indication that GM -- whose post-bankruptcy comeback the administration claims as one of its biggest successes -- wouldn't receive preferential treatment.
"No company is above the law," he said, "and we will never tolerate activities like the conduct at issue in this case."
DOJ officials haven't confirmed news reports that the U.S. Attorney's Office in Manhattan is probing GM's response to ignition switch problems. Asked about the reports last week, Holder declined to comment.
The legal path the DOJ took in pursuing Toyota was a novel one, but it could set the pattern for how regulators and prosecutors target wrongdoing by automakers.
Investigators found evidence that Toyota had consciously withheld information from NHTSA. But nowhere in the 12-page statement of fact signed by Toyota is there evidence that the company submitted false information.
Federal law gives NHTSA no authority to impose criminal penalties on car companies unless they are found to have lied to the agency. "Other than for filing a false report, there are no criminal penalties under the laws NHTSA administers," Allan Kam, a former senior enforcement attorney at the agency, said in an interview. "But the Department of Justice has all kinds of tools that NHTSA doesn't have."
To turn what it knew into a criminal case, the DOJ had to charge Toyota with a crime more often associated with crooked telemarketers than car companies: wire fraud. Many of the reassurances Toyota gave its customers were made electronically, including over the Internet. By not properly alerting customers to potential safety flaws in its vehicles, Toyota could have been found guilty of a lie of omission, rather than one of commission.
Preet Bharara, U.S. attorney for the Southern District of New York, called the wire fraud charge "a new and aggressive way of going after these problems." For automakers, this serves as a warning: They can face enormous financial penalties even if they don't lie to NHTSA.
Should GM's case proceed to a criminal prosecution, it likely would take a different path.
Toyota was legally vulnerable because of a relentless public relations campaign intended to protect its reputation for quality, durability and reliability. The company said it had solved a problem -- even as it covered up a problem that the public and regulators didn't know about yet.
It took more than a decade for GM to recall cars with defective ignition switches, a delay that could steer prosecutors toward charges of criminal negligence. But the company has been apologetic, not defensive, in its communications to customers, meaning that a wire fraud case might be less appropriate in GM's case.