This page contains a Flash digital edition of a book.

DAVID MALAMED The Deferred Prosecution Option

Laura Christian holds a photo of her daughter, Amber Rose, who was killed in a car crash

during the 2008 financial crisis, The Globe and Mail reported. The Department of Justice’s (DOJ) deal with GM was bitterly criticized by consumer advocate groups and by the families who suffered the loss of a loved one because of the faulty switch. “GM killed over 100 people by knowingly putting a defective ignition switch into over one million vehicles,” Clarence Ditlow, head of the Center for Automotive Safety, told CNBC. “Today, thanks to its lobbyists, GM officials walk off scot-free while its customers are six feet under.” One of the most vocal critics of the negotiated settlement

was Laura Christian (in photo) of Maryland, whose 16-year-old daughter, Amber Rose, died in July 2005 aſter her new Chevrolet Cobalt crashed and the airbags failed to deploy because of the defect. The tragedy was heightened for Christian because she had just recently reconnected with her daughter, whom she had given up for adoption as an infant. Paramedics said her daughter would have survived, the New York Daily News reported, if the devices had worked properly. Several US politicians also railed against the deal. “Demo-


N SEPTEMBER, US FEDERAL PROSECUTORS agreed to settle a criminal probe into General Motors for concealing an igni- tion switch defect linked to at least 124 deaths and 275 inju-

ries, according to lawyers in charge of a fund established by GM to compensate victims. “Under the deal, General Motors agreed to pay US$900 million as part of a deferred prosecution agree- ment [DPA], but no GM executives will be prosecuted for cover- ing up the deadly defect,” the Wall Street Journal reported. The GM deal, however, would not have happened in Canada,

which does not allow DPAs, although momentum is building to adopt them. As part of the DPA, any charges would be dismissed if GM complied with oversight and other terms for a period of three years. “The company acknowledged that some of its employees knew about the problem for more than a decade, but no cars were recalled until early last year,” CNBC reported. “GM hired former federal prosecutor Anton Valukas to investigate the matter, and he found no wrongdoing on the part of top execu- tives. Instead, he blamed the problem on a bureaucratic corpo- rate culture that hid problems and failed to take action.” The settlement caps a two-year probe that tainted GM’s repu-

tation and transformed the Detroit-based automaker’s relation- ship with the federal government, which had bailed it out


cratic Senators Richard Blumenthal of Connecticut and Ed- ward Markey of Massachusetts called the agreement ‘extremely disappointing,’ and said victims deserved ‘individual criminal accountability, as well as a larger monetary penalty,’ ” the Globe said. “[US Attorney Preet] Bharara did not rule out charging individual GM employees, but said there are ‘legal and factual’ challenges to prosecuting them. ‘The law does not always let us do what we wish we could do.’ ” The DOJ likely chose to charge GM with wire fraud, CNBC

speculated, “because the company used electronic communi- cations to interact with the government’s National Highway Traffic Safety Administration, the agency that it is required by law to notify when it finds out about a safety defect. In May 2014, NHTSA levied a record civil penalty of US$35 million against GM. It said the company violated federal law when it failed to notify the government of safety-related defects within five days of learning about them. NHTSA said GM also failed to respond in a timely manner to the government’s requests for information during its investigation of the defective switches.” The GM settlement was by no means a precedent. In 2014,

Toyota agreed to pay US$1.2 billion to settle a DOJ investiga- tion, admitting that it hid information about defects that caused Toyota and Lexus vehicles to accelerate unexpectedly and resulted in injuries and deaths. Eric Holder, the attorney general at the time, said the penalty was the largest of its

Photo: Jamie Hogge Bill Pugliano/Getty Images

Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68