Senate panel to investigate VW’s use of tax credits

David Shepardson
Detroit News Washington Bureau

Washington — The Senate Finance Committee on Tuesday said it was opening an investigation into Volkswagen AG’s use of about $50 million in tax credits for diesel cars that the automaker has now acknowledged have software that evades emissions rules.

In a letter to VW CEO Matthias Muller and VW’s top U.S. executive, Michael Horn, Senate Finance Chairman Orrin Hatch, R-Utah, and the ranking Democrat, Ron Wyden of Oregon, want VW to answer questions about tax credits for cars that are among the 482,000 diesel vehicles that had “defeat devices” on them allowing them to emit up to 40 times allowable pollution in real-world driving.

The committee set an Oct. 30 deadline for “all certifications and quarterly reports filed by Volkswagen related to eligibility of Volkswagen vehicles for the advanced lean-burn technology motor vehicle credit.” It asks whether “Volkswagen make false or misleading assertions in any of the materials submitted to, or communications made to, the U.S. government regarding eligibility of Volkswagen vehicles for the lean-burn technology motor vehicle credit” and “Which Volkswagen employees were primarily responsible for preparing and submitting these certifications? Which Volkswagen employees were the primary points of contact for communication with the Internal Revenue Service regarding the advanced lean-burn technology motor vehicle credit?”

In 2005, Congress created the Alternative Motor Vehicle Credit that allowed buyers to get a tax break on the first 60,000 qualifying vehicles sold by a manufacturer. The 2009 Jetta TDI Sedan and SportWagen qualified for $1,300 in tax credits per vehicle — vehicles that VW has admitted used the defeat device — along with other 2010 models that were approved for the credit.

VW’s tax credits also are among the issues that the Justice Department is investigating. The House Energy and Commerce Committee’s panel on investigations will hold a hearing Thursday, while Democrats on the House Government and Oversight Committee want a hearing in that committee as well. A Senate Finance committee spokeswoman said it would be premature to say if the panel plans a hearing.

On Monday, the state of West Virginia filed suit against VW, demanding refunds for the premium prices consumers paid for the diesel cars. And two Environmental Protection Agency officials will testify Thursday before the House Energy and Commerce Committee on the government’s investigation into the cheating, which involves 482,000 VW diesel cars sold in the United States. Michael Horn, VW’s president and CEO of its U.S. unit, also will appear.

More than two weeks after EPA disclosed that VW had used the defeat devices, VW has yet to announce a recall or disclose a fix. The Justice Department, 45 state attorneys general, German prosecutors and environmental regulators around the world are investigating. The investigation is looking at the fact that U.S. taxpayers gave VW owners about $50 million in tax credits to buy the “clean diesel” cars.

A May 2014 study conducted at West Virginia University found elevated levels of emissions on two VW diesel cars. Their data was given to the U.S. Environmental Protection Agency and the California Air Resources Board, which investigated.