U.S. FTC probing whether VW intentionally destroyed documents

[November 12, 2016]  By David Shepardson

WASHINGTON (Reuters) - The U.S. Federal Trade Commission wants a federal judge to allow the agency to take additional testimony from Volkswagen AG's <VOWG_p.DE> U.S. unit over allegations the German automaker intentionally destroyed documents last year over its diesel emissions scandal.

The FTC said in court documents filed late Thursday that it has been investigating since March whether Volkswagen Group of America destroyed documents related to its "Dieselgate" scandal.

VW admitted in September 2015 to installing secret software in its diesel cars to cheat exhaust emissions tests and make them appear cleaner in testing than they really were. In reality, the vehicles emitted up to 40 times the legally allowable pollution levels.

The FTC said a Volkswagen witness at an August deposition could not answer 250 separate questions and now wants court approval to question another VW official.

Volkswagen spokeswoman Jeannine Ginivan said Friday the automaker "continues to cooperate with the U.S. Department of Justice and work with other government agencies to make things right for our customers and achieve a fair resolution."

VW has previously faced allegations it destroyed documents - both in a whistleblower lawsuit and state lawsuits.

In March, a fired Volkswagen Group of America employee filed a whistleblower lawsuit, accusing VW of deleting documents and obstructing justice in the diesel emissions investigations.

Daniel Donovan, who worked as an information technology employee in VW's general counsel office, claimed in his lawsuit that he was fired in December 2015 "because of his refusal to participate in a course of action" that would destroy evidence and obstruct justice.

The lawsuit was settled in June, and Donovan agreed to cooperate with VW's internal investigation. A lawyer for Donovan did not immediately return a call seeking comment.

Attendees take part in the 2016 Volkswagen Passat reveal in the Brooklyn borough of New York September 21, 2015. REUTERS/Darren Ornitz

Three U.S. states filed suit in July against Volkswagen, asserting at least eight employees in VW's engineering department deleted or removed incriminating data in August 2015 after a senior attorney advised them of an impending order not to destroy documents. The lawsuits said "some but not all of the data has been recovered."

In total, Volkswagen has agreed to date to spend up to $16.5 billion in connection with the scandal, including payments to dealers, states, clean energy programs and attorneys for owners.

A court filing this week said lawyers for VW dealers are seeking legal fees of up to $36.2 million. Lawyers for 2.0-liter owners confirmed in a court filing that VW has agreed to pay $175 million in legal fees.

VW has agreed to spend up to $10.03 billion to buy back as many as 475,000 polluting 2.0-liter vehicles. As of last week, 78 percent of owners who have registered for the settlement are choosing the buyback option, VW said. Buybacks will begin later this month.

(Reporting by David Shepardson; Editing by Jonathan Oatis)

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