BERLIN -- Volkswagen Group has been under investigation for more than a year, as officials on three continents have pored over documents and testimony, digging for evidence that the automaker's top leadership approved the diesel-cheating program that has plunged the company into crisis. In Germany, the hunt has come up empty so far, prosecutors say.
In Brunswick, the closest office to Volkswagen's home town of Wolfsburg, prosecutors are investigating 21 people and have a "fairly good" picture of how the scandal evolved, according to Klaus Ziehe, the spokesman. That doesn't include any clear-cut link between top executives -- who make up the company's management board -- and the decisions to implement the scheme.
"If we had reasonable indications in the diesel probe suggesting that board members knew something about illegal action, we would put them on the suspect list, and we would also have communicated that to the public," Ziehe said, speaking of the management board. "You may understand from the fact that this didn’t happen that so far we don’t have these indications."
The automaker admitted last year to systematically rigging environmental tests for diesel emissions, forcing its former CEO Martin Winterkorn to resign and exposing it to fines and other costs that have already reached $20 billion.
Volkswagen has had to cope with a ban on sales of diesel models from the group in the U.S. and an avalanche of lawsuits and probes over the issue that have pushed to find how high up the decision-making went. The company has repeatedly said there was a limited group of engineers behind the wrongdoing and no one at the top was a part of it.
Like many European companies, Volkswagen has a management board made up of top executives as well as a U.S.-style board of directors known as a supervisory board.
VW’s supervisory board hired U.S. law firm Jones Day last year to run an internal investigation to get to the bottom of the matter. Those lawyers report to the U.S. Department of Justice and VW’s supervisory board, which created a special six-member committee to deal with the diesel-emissions scandal. The Justice Department is conducting its own criminal probe and may reach a settlement with the carmaker by January. It secured one guilty plea by a veteran engineer last month.
VW has repeatedly stated that top management were unaware of the decision to install the software to cheat emissions tests. "The then and current board of management of Volkswagen AG had, at any rate, no knowledge of the use of unlawful engine management software at the time," Volkswagen wrote in its annual report for 2015. Later reports declared that nothing changed in that statement.
The automaker declined to go beyond those written statements. "Due to the ongoing investigations the company can’t comment on this," VW spokesman Eric Felber said by phone.
"This remains an ongoing investigation," said Peter Carr, a spokesman for the U.S. Justice Department, who declined to comment further. Jones Day didn’t respond to two phone calls requesting comment.
Evidence could emerge
Still, new evidence could emerge as the probe winds on, said Michael Kubiciel, a law professor at Cologne University. White-collar cases tend to take years both in Germany and the U.S.
"It would certainly be ideal for VW if nothing more surfaced as to whether board members were involved," Kubiciel said. "In a case of that magnitude, one year isn’t that much. You can’t generally say there won’t be anything new surfacing."
The VW leadership’s ignorance of the scheme wouldn’t bar German prosecutors from seeking fines, Kubiciel said. It’s enough to show that a midlevel manager participated in the crime.
Yet knowledge by the management board could make it easier to prove fraud, the central allegation in the German criminal case, said Uwe Hellmann, a professor of criminal law at the University of Potsdam. Without the involvement of top leadership, prosecutors may have a hard time showing that the goal was to gain illegal profits, a prerequisite for fraud, he said.
Engineers may have manipulated the software simply because they found no other way to satisfy demands by higher ups to meet strict U.S. emission standards. Their motive may not have been money, Hellmann said.
The issue of what top executives knew and when they knew it is also crucial for a series of German investor lawsuits that seek about 8 billion euros ($8.7 billion) in damages.
Brunswick prosecutors won’t discuss fine amounts with VW before the probe nears its final stage, said Ziehe, the spokesman. The inquiry is likely run through much of next year, or perhaps longer, he said. His office is investigating six additional suspects for manipulation of CO2 emissions data, another one for allegedly destroying information relevant to the probe.
"Some of the suspects have comprehensively testified and there are also witnesses who told us a lot," Ziehe said.
Former CEO Martin Winterkorn and VW brand chief Herbert Diess are also under investigation for alleged market-manipulation over how they disclosed the scandal to investors. VW has said it informed markets properly.
Law professor Hellmann said it’s unlikely a smoking gun will suddenly appear, such as an email by a board member showing he was involved. Instead, investigators will likely look for enough circumstantial evidence to build a case that a top leader knew what was going on.
"I can’t image such complex events can simply go unnoticed by the management board," he said. "That’s the gut feeling, at least. But for a criminal charge you need evidence."