US attorney general Eric Holder announces criminal charge and deferred prosecution agreement with Toyota
20 Mar 2014
The US Department of Justice said yesterday the just concluded four-year investigation on the widespread incidents of unintended vehicle acceleration on certain Toyota vehicles between 2009 and 2010, revealed that Toyota concealed information about defects from consumers and regulators, putting lives at risk because of faulty parts, while it sought "to defend its brand" (See: Toyota admits hiding safety defects; penalised $1.2 bn). Here is the full text of the remarks by attorney general Eric Holder at the press conference announcing criminal charge and deferred prosecution agreement with Toyota Motor Corporation.
"Good morning – and thank you all for being here. Today, I am joined by Secretary Foxx of the US Department of Transportation and United States Attorney for the Southern District of New York Bharara. We are here to announce a new development in our ongoing effort to protect the American people – and to hold accountable those whose actions harm and endanger consumers nationwide.
"The US Department of Justice has officially concluded its criminal investigation into Toyota Motor Company regarding the widespread incidents of unintended vehicle acceleration that caused panic for Toyota owners between 2009 and 2010. Those incidents produced one of the largest consumer recalls in the history of the automotive industry. Today, we can say for certain that Toyota intentionally concealed information and misled the public about the safety issues behind these recalls.
"Our years-long criminal investigation examined the way the automaker disclosed complaints about problems of sudden acceleration associated with many of its most popular Toyota and Lexus models. Rather than promptly disclosing and correcting safety issues about which they were aware, Toyota made misleading public statements to consumers and gave inaccurate facts to Members of Congress. And they concealed from federal regulators the extent of problems that some consumers encountered with sticking gas pedals and unsecured or incompatible floor mats that could cause these unintended acceleration episodes.
"While Toyota conducted a limited recall of some vehicles with floor mat issues in September 2009, the company delayed a broader recall until early 2010 – despite internal tests warning of the dangers posed by other, unrecalled vehicle models. As Toyota admits in the Statement of Facts filed alongside the criminal information in this case, the company ''made these misleading statements and undertook these actions of concealment as part of efforts to defend its brand.'' In other words, Toyota confronted a public safety emergency as if it were a simple public relations problem. And they mounted this coverup despite widely-documented incidents, and even tragic accidents, like the one that took the lives of an off-duty California Highway Patrol Officer and members of his family.
"As part of the resolution of this case, Toyota will fully admit wrongdoing. It will pay a financial penalty of $1.2 billion. And going forward, the company will submit to rigorous review by an independent monitor that will examine and assess the manner in which Toyota reports safety issues to the public and its regulator.
"The $1.2 billion payment represents the largest criminal penalty imposed on a car company in U.S. history. This is appropriate given the extent of the deception carried out by Toyota in this case.
"Put simply, Toyota's conduct was shameful. It showed a blatant disregard for systems and laws designed to look after the safety of consumers. By the company's own admission, it protected its brand ahead of its own customers. This constitutes a clear and reprehensible abuse of the public trust.
"That's why this agreement is so important: it secures concessions that will change the practices of the company – and the industry – to better ensure public safety and awareness. It punishes illegal and fraudulent conduct in the strongest possible way. And, by including a strong independent monitor that will allow us to reform the company's behavior – and confirm that Toyota's talk of ''fundamental changes'' is backed up by action – this agreement will enable us to accomplish a great deal more than we otherwise would have.
"And my hope and expectation is that this resolution will serve as a model for how to approach future cases involving similarly situated companies.
"When car owners get behind the wheel, they have a right to expect that their vehicle is safe. If any part of the automobile turns out to have safety issues, the car company has a duty to be upfront about them, to fix them quickly, and to immediately tell the truth about the problem and its scope. Toyota violated that basic compact.
"Other car companies should not repeat Toyota's mistake: a recall may damage a company's reputation, but deceiving your customers makes that damage far more lasting.
"Under the terms of the criminal information filed today, Toyota will also be charged with wire fraud. The Department will defer prosecution of Toyota for three years – provided that Toyota complies with the agreement in every respect and continues to fully cooperate with federal authorities. But let me be clear: the Department has not, and will not, consent to foreclose criminal prosecution if the terms of this agreement are not rigorously honored.
"Today's announcement underscores the fact that the Departments of Justice and Transportation remain firmly committed to protecting consumers, ensuring the safety of the American people, and combating fraud in all its forms. No company is above the law, and we will never tolerate activities like the conduct at issue in this case. That's why my colleagues and I will continue to meticulously and deliberately investigate any such matter that's brought to our attention – within this industry or beyond – using every tool, resource, and authority at our disposal to ensure that justice is done.
"I'd like to thank everyone who made this agreement possible – particularly U.S. Attorney Preet Bharara and the outstanding lawyers in the Southern District of New York, who led this investigation. I am grateful for the committed efforts of officials, agents, and staff at the FBI – as well as dedicated public servants at the Department of Transportation and NHTSA. And I'd like to turn things over to my friend and colleague Secretary Foxx, who will provide additional details on today's agreement."
