Feds: Engineer manipulated diesel emissions at Fiat Chrysler

September 24, 2019 - 3:33 pm

DETROIT (AP) — A Fiat Chrysler engineer pleaded not guilty Tuesday to charges alleging that he rigged software in more than 100,000 pickup trucks and SUVs sold in the U.S. so they would pass emissions tests even though they were spewing far more pollution on the roads.

The alleged scheme involving Emanuele Palma isn't as big as the Volkswagen emissions scandal, which involved nearly 600,000 vehicles. But the indictment shows that investigators are still on the case, months after Fiat Chrysler agreed to a $650 million civil settlement and said it would fix Jeep Grand Cherokees and Ram 1500 trucks with "EcoDiesel" engines made between 2014 and 2016.

Palma, who was a Detroit-area engineer with a Fiat Chrysler engine subsidiary, is charged with conspiracy, violations of the federal Clean Air Act, wire fraud and making false statements.

Prosecutors allege that Palma manipulated software to make the pollution control system perform differently under government testing than during regular driving.

"As a result of his engineering decisions, his management, his lies, these vehicles on the road emitted dramatically higher pollutants than were allowed by law," Assistant U.S. Attorney Timothy Wyse told a judge in US. District Court in Detroit.

Palma's attorney, Ken Mogill, said, "We intend to defend this very vigorously."

U.S. Magistrate Judge Elizabeth Stafford rejected Wyse's request that Palma, a native of Italy who still works at Fiat Chrysler, wear an electronic monitoring device while he's free on bond.

Fiat Chrysler released a brief statement, saying it continues to cooperate with investigators. The automaker in January agreed to a settlement with U.S. and California regulators. The deal, however, didn't resolve any potential criminal liability.

"We acknowledge that this has created uncertainty for our customers, and we believe this resolution will maintain their trust in us," Mark Chernoby, the company's head of North American safety and regulatory compliance, said at the time.

In 2017, more than a year before his death, Fiat Chrysler CEO Sergio Marchionne said there was no comparison between the situations at his company and Volkswagen because there was no intent by Fiat Chrysler to cheat. He said some software on the Fiat Chrysler engines wasn't disclosed to the Environmental Protection Agency because it's standard among automakers and disclosure wasn't previously required.

"There's not a guy in this house that would even remotely attempt to try something as stupid as that," he said of cheating. "And if I found a guy like that, I would have hung him on a door."

Bruce Huber, a professor at Notre Dame law school, said the mention of co-conspirators in Palma's indictment suggests that more people will be charged.

"Either people were disobeying leadership or leadership knew about it and lied," Huber said. "Either way it's not going to reflect positively on either the corporate culture or management efficacy."

Meanwhile, prosecutors in Germany on Tuesday charged VW's chief executive, chairman and former chief executive with stock manipulation for not telling investors in 2015 that the scandal was about to break.

Volkswagen in 2017 pleaded guilty in the U.S. and agreed to pay $4.3 billion in civil and criminal penalties on top of billions more to buy back cars.

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