German prosecutor searches VW’s dieselgate law firm

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By Edward Taylor and Jörn Poltz | FRANKFURT, March 16

FRANKFURT, March 16 German prosecutors have
searched the offices of the law firm hired by Volkswagen to investigate its diesel emissions test cheating,
as they step up their efforts to identify those involved in the
scandal.

Europe’s biggest carmaker condemned the search, carried out
on Wednesday but reported on Thursday, as “unacceptable in every
way” and said it would use every legal step to defend itself.

The law firm, Jones Day, declined to comment. The Munich
prosecutor’s office was not immediately available for comment.

Jones Day was searched on the same day as Volkswagen’s (VW)
premium brand Audi’s headquarters were searched, in a
sign prosecutors are stepping up efforts to find who was
responsible for – and who may have known about – the biggest
business crisis in the 80-year-old group’s history.

“In our opinion the search of a law firm mandated by a
company contravenes the principles of the code of criminal
procedure,” VW spokesman Eric Felber said in a statement.

While client attorney privilege is sacrosanct when there is
a formal mandate, there is a grey area when a lawfirm is not
formally tasked with representing a particular individual,
according to law professor Werner Beulke said.

Jones Day was mandated by VW’s supervisory board to lead an
open-ended investigation into an emissions test cheating
scandal.

While in northern German Federal states, prosecutors are
barred from searching lawfirms, there is no nationwide ruling on
the matter from Germany’s Federal Court of Justice, leaving an
opening for southern Bavarian prosecutors to search VW’s
lawfirm, Beulke said.

VW has never published the full Jones Day report, although a
summary of its findings was compiled in the form of a “Statement
of facts” for the U.S. Department of Justice.

Jones Day found wrongdoing by certain high-level VW
employees but exonerated members of the management board and
Volkswagen used the findings to negotiate a $4.3 billion
settlement with U.S. authorities.

VW has maintained that its executive board did not learn of
the illegal emissions cheating devices installed in VW cars
until late August 2015 and formally reported the cheating to
U.S. authorities in early September that year.

In January, German prosecutors in Braunschweig widened their
probe of VW, searched 28 premises, and raised the number of
people under investigation to 37 from 21, including former Chief
Executive Martin Winterkorn.

In February, a media report said former chairman Ferdinand
Piech had informed top directors about potential cheating of
diesel emission tests six months before the scandal became
public. VW strongly denied this.

(Additional reporting by Joern Poltz, Irene Preisinger and Jan
Schwartz)



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