GM lawyers questioned by federal prosecutors over recalls
22 Aug 2014
US federal prosecutors had learned that lawyers for General Motors Co were present at key meetings during which information about problems with some of its vehicles were discussed, Reuters reported citing a source close to the investigation said.
The prosecutors from the US Department of Justice had questioned how lawyers attending the meetings participated in them and what they did subsequently with the information that was shared during the meetings, according to the source.
The auto major in a report issued in June detailed how for 11 years it neglected an ignition-switch problem linked to at least 13 deaths but attributed the failing according to the report to incompetent lower-level employees, shielding the top brass.
Lower-level lawyers were among the 15 people GM had dismissed in the safety debacle that had led to the recalls involving millions of vehicles.
Employees in the company's legal department are under investigation for concealing evidence from regulators about a faulty ignition switch, The Wall Street Journal reported, citing sources.
According to the report, concealing evidence about the faulty ignition switch could have led to a potential delay in the recall of the affected vehicles.
US senators, had demanded to know in July why General Motors had not fired its top lawyer general counsel Michael Millikin, after it came to light this year that the automaker's litigation department was aware of widespread and deadly ignition flaw but failed to escalate the safety issue.
Meanwhile, Fortune reported that earlier this summer, as part of its effort to manage the crisis, GM launched a compensation protocol to pay back people who had suffered serious injuries, or had lost loved ones, in crashes involving the ignition switch problem.
The company asked lawyer and compensation advocate Kenneth Feinberg to manage the General Motors Compensation Protocol. He said at the time that the ''only limitation [GM] really laid out, was the limitation that only certain eligible vehicles are subject to this program.''
The list of eligible vehicles, was shorter than what might be expected. Not all cars with faulty ignition switches, or key rotation problems, qualified under the Feinberg protocol.
According to Alan Adler, a spokesman for the Detroit automaker, who spoke to Fortune, only the roughly 2.5 million cars involved in the initial ignition switch recalls, which happened between February and March, would be eligible for the compensation protocol.
Seventeen models were recalled in that time frame and were included in the compensation plan which involved Cobalts, several Pontiac models, and two Saturns.
That left over 10 million cars that GM had recalled since March for the same problem - faulty ignition switches leading to ''unintended key rotation and the possibility that air bags might not deploy in a crash because of a loss of power'' - whose owners were not eligible to file a claim under the Feinberg protocol, according to Adler.
According to Camille Biros, the deputy administrator of the protocol, who spoke to Fortune, the list of eligible vehicles was entirely in the hands of GM, which was confirmed to be entirely true by Adler.
Among the vehicles recalled since March, there have been three fatalities in two crashes involving Chevrolet Impalas, Adler said.
