Volkswagen is paying the State of California an additional $86 million in fines, largely to cover the costs of prosecuting the automaker.
Just one day after Volkswagen received word that it would not be fined in its home country, Germany, for the diesel debacle, the State of California slapped it with an additional $86 million in fines.
The civil penalty, which is on top of the nearly $15 billion settlement it reached with the U.S. government and California last week, is mostly to cover the $76 million the state rang up in prosecuting the automaker for its diesel problem.
“We must conserve and protect our environment for future generations and deliver swift and certain consequences to those who break the law and pollute our air,” said Kamala Harris, California’s attorney general.
The other $10 million will be dedicated to grants for government agencies and universities, to be used in part to study technology that can help detect so-called “defeat devices,” similar to those used by VW during diesel emissions tests.
(To see more about the German government’s free pass for VW, Click Here.)
“Today’s filing formalizes the agreement with the California Attorney General announced last week to resolve consumer protection claims related to the diesel matter in California,” the maker said in a statement.
In addition to the $14.7 billion settlement, VW is paying $603 million to resolve litigation with 44 other U.S. states, the District of Columbia and Puerto Rico.
As part of the settlement, the company will buy back or fix more than 450,000 diesel cars and set up environmental and consumer compensation funds.
The fines come on the heels of the news that the German government doesn’t plan to levy any fines, but is requiring the automaker to return the cars to a legally compliant condition,” according to Transport Minister Alexander Dobrindt.
(VW brand boss Diess not quitting despite criminal investigation. For more, Click Here.)
The news wasn’t necessarily well received in Germany in light of the aforementioned $14.7 billion settlement the company reached with U.S. officials.
Oliver Krischer, a member of the opposition Green party in Germany, told Bloomberg, “it’s not acceptable that the government doesn’t take any real consequences from the emissions scandal and gives a blank check for tricks and deceptions.”
Adding fuel to the fires is the fact that two of the company’s top current and former executives, Herbert Diess and Martin Winterkorn, are involved in criminal investigations in Germany regarding their conduct after being made aware of the problem.
Despite that cloud, he said he has no intention of stepping down. “It’s not up for debate,” Diess told the Sueddeutsche Zeitung.
(U.S. officials announce the diesel deal with VW. Click Here for more.)
The lack of a financial punishment is the result of a sympathetic government seeking to make it easier for the automaker to recover in the near term. VW sold about 8.2 million diesel-powered vehicles in Europe. If were to force the automaker into a settlement similar to the one in the U.S., VW’s payout would exceed $100 billion, according to some estimates.