Dieselgate Collusion

Watchdog and Industry Accomplice?

  • Why it matters

    Why it matters

    The Dieselgate scandal affects millions of cars worldwide and has cost Volkswagen billions in fines already.

  • Facts

    Facts

    • The Federal Motor Transport Authority, or KBA, is in charge of approving new vehicle types and checking automakers’ compliance with emissions standards.
    • The agency is affiliated with the ministry of transportation, and has been suspiciously close with the industry in recent years.
    • Emails show that the KBA used VW equipment and drivers for measuring pollution levels, making it easier for carmakers to cheat.
  • Audio

    Audio

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Rückrufaktion Volkswagen Abgasskandal
A Volkswagen software update. Just one of the areas where collusion between carmakers and their watchdog may have allowed for emissions cheating. Source: DPA

Germany’s Federal Motor Transport Authority, charged with approving new vehicle types and supervising automakers, failed as a watchdog in the years leading up to — and even during — the Dieselgate scandal, according to an investigation by Handelsblatt’s sister publication, WirtschaftsWoche.

Internal emails and witness statements suggest the agency was far closer to the car industry than its supervisory role warranted, and may have deliberately turned a blind eye to emissions cheating, and even colluded with manufacturers to cover up the fraud.

One source suggested corruption at the authority, called the KBA in Germany, may have assisted the systematic manipulation of diesel emissions tests, to approve cars that did not comply with environmental standards.

KBA head Ekhard Zinke appears to have allowed a close relationship between the federal agency and the industry it was supposed to control.

“I won’t take any cars off the streets for environmental reasons,” Mr. Zinke said a couple of years after he took the helm in 2004. He said safety concerns might prompt him to withhold approval for new cars, but not pollution.

The KBA, which operates under the jurisdiction of the transport ministry, has the power to approve or recall production models, and monitors compliance with safety and pollution standards.

The auto industry appears to have been able to count on Mr. Zinke’s cooperation, as it used a whole bag of tricks to make diesel vehicles appear cleaner than they were.

The KBA used equipment provided by carmakers to measure emissions levels, allowed Volkswagen to send its own drivers for emissions tests, and failed to follow up on suspicions that the vehicles provided for emissions measurements weren’t regular cars, but specially prepped to pass the tests.

“If the head of the authority says he’d never heard of defeat devices before Dieselgate, that’s like the head of the cycling association saying he’s never heard of doping.”

Emissions testing technician

An internal concept paper from November 2015 shows the authority doubted Volkswagen was using standard vehicles from its production line for official emissions tests. The paper, seen by WirtschaftsWoche, states that the agency was unsure “whether [VW] production models were used for all type tests concerning CO2 emissions” or that the KBA was in fact able to take accurate measurements.

Volkswagen said approval of new vehicle types required using cars representative of the production model, and that if production hadn’t yet started, pre-production models were used.

But Jürgen Resch, head of the DUH environmental organization, said he suspects carmakers presented prepped vehicles for tests. These “golden cars” look like the regular car, but are modified to ensure they pass the emissions check. Mr. Resch informed the parliamentary inquiry commission of the DUH’s suspicions.

According to insiders, as early as 2006, the KBA had evidence of automakers using software to switch on emissions control only during tests, and switch off exhaust cleaning during normal driving. An investigation into these “defeat devices” was planned, but seems never to have been carried out.

Instead, the KBA actually scaled back its once-exhaustive supervision of the industry.

A technician who says his firm was formerly contracted by the KBA to perform random checks at car factories says tests used to be more stringent. Technicians picked a vehicle as it rolled off the conveyor belt, loaded it on to a truck and transported it to the test rink themselves. “I never took my eyes off the car, so that it couldn’t be exchanged for a prepped one,” he said, speaking on condition of anonymity.

Even then, automakers’ shameless attempts to rig emissions tests were common knowledge, according to the technician. Yet about 15 years ago, these random tests were stopped without explanation.

Today, KBA boss Mr. Zinke claims he was completely ignorant of emissions cheating. Speaking before the parliamentary inquiry committee, he said the technical side of his agency’s work wasn’t his strong point, and he had never heard of defeat devices.

His words were met with incredulity. Social Democrat transport expert Arno Klare said, “The KBA president is one of the most powerful people in Germany when it comes to the auto industry. I didn’t sense that at all with Mr. Zinke.”

A technician with a service provider that handles testing for the KBA said Mr. Zinke’s claim was unbelievable. “If the head of the authority says he’d never heard of defeat devices before Dieselgate, that’s like the head of the cycling association saying he’s never heard of doping,” he told WirtschaftsWoche.

The KBA didn’t just fail to detect fraudulent software. WirtschaftsWoche investigations show it also allowed carmakers to use their own drivers to cheat emissions tests.

When a manufacturer wants a new car approved, the firm sends its own drivers, who must then drive the vehicle at the test facility according to standard rules, for example following a well-defined curve.

In February 2016, the transport ministry called the KBA to inform the agency of claims that VW drivers were instructed to drive a different curve resulting in lower CO2 emissions, an insider told WirtschaftsWoche. The ministry demanded the KBA rectify the problem. Yet the practice continued following the ministry’s call.

Volkswagen told WirtschaftsWoche that measurements were conducted “within legal requirements” under the supervision of the KBA. The authority did not respond to a request for comment.

Even after the Dieselgate scandal broke, the KBA continued close cooperation with manufacturers.

In November 2015, after defeat devices had been discovered in millions of VW cars, automakers had to provide software updates to cut emissions from their vehicles. First, the KBA had to approve them. But internal emails show the KBA checked how effective they were using laptops provided by Volkswagen.

German daily Bild recently reported that the KBA also colluded with Porsche to trim reports about defeat devices, change test reports and withhold facts, in order to spare the carmaker a massive recall. The newspaper claimed the authority knew that 22,000 Porsches across Europe were equipped with fraudulent software for more than a year, but waited for the firm to develop a software update before ordering a recall.

For Audi’s S4, S5 and A4 models the KBA never ordered a recall at all. Instead, the manufacturer — now suspected of inventing defeat devices — quietly stopped selling the cars a few months ago. An Audi spokesperson said the models needed adjustment because internal measurements showed deviations in consumption or emissions.

The KBA apparently never detected these deviations. Nor did it order an overhaul. Instead, the carmaker adjusted the three models’ CO2 emissions labels and reapplied for approval, the spokesperson said. The KBA declined to comment.

The Social Democratic candidate for chancellor, Martin Schulz, recently called the KBA and the industry “absurdly chummy.” But why would an industry and its watchdog ever get that close?

One reason might be that the KBA is partly financed through fees for vehicle approvals. “If you’re too harsh with an automaker, they’ll go abroad for the next approval,” a source within the KBA said. “Every employee at the agency always has that at the back of their mind. It’s always about your own job, too.”

And there may have been even more direct criminal aspect to the relationship. In 2016, the transport ministry investigated KBA employees on suspicion of corruption, a source close to the ministry told WirtschaftsWoche. “It was about gifts from the car industry,” the insider said. The KBA did not reply to a request for comment. The ministry of transportation declined to comment.

Mr. Schulz has called for the agency to be broken up. “Supervision of the car industry must be fundamentally restructured,” he said.

The SPD’s transport expert Mr. Klare said the KBA should remain in charge of approving vehicles, but the German Environment Agency should monitor compliance with emissions levels.

Peter Mock, head of the European section of the International Council on Clean Transportation, which helped uncover the Dieselgate scandal in the US, has also called for a European authority to supervise carmakers.

So far, Germany has blocked European oversight. After the scandal broke, the European Commission proposed radical reform of the vehicle approval processes that would have given Brussels far more power. The plan has since been watered down, though the EU can still check emissions tests and car inspections.

Meanwhile, German transport minister Alexander Dobrindt still officially backs Mr. Zinke. But sources told WirtschaftsWoche the KBA is a sore topic at the ministry. Some suggested the authority might need greater public oversight.

For now, the agency is to be restructured, with two separate departments responsible for approving and checking vehicles in future. The KBA will also get more personnel, and its own test facilities, and increased powers to conduct random tests.

 

A version of this article first appeared in WirtschaftsWoche. To contact the authors: simon.book@wiwo.de; martin.seiwert@wiwo.de; annina.reimann@wiwo.de; melanie.bergermann@wiwo.de; sven.prange@wiwo.de; silke.wettach@wiwo.de

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