Did VW take EU money to develop clean engines and use it to make defeat devices?
Photograph by Rob Stothard — Getty Images
By Fortune Editors and Reuters
August 1, 2017

The EU anti-fraud office investigating whether Volkswagen used EU funds and European Investment Bank (EIB) loans to develop devices that cheated emission tests has sent its findings and recommendations to German prosecutors, in a move that could deepen its legal jeopardy.

VW was plunged into the biggest business crisis in its 80-year history when the cheating scandal was exposed in September 2015. It has cost the company more than $25 billion in fines, compensation and vehicle refits.

Recent discoveries have breathed fresh life into that scandal and broadened it. German media have alleged the German press that VW, BMW and Daimler (the maker of Mercedes-Benz) colluded in fitting their diesel vehicles with sub-optimal exhaust treatments, despite knowing that more effective systems that actually complied with legal limits existed. BMW has denied the allegations.

Read: German Car Makers Pressured to Reduce Emissions as Election Approaches

The EIB had lent VW 400 million euros ($470 million) in 2009 with the aim of helping it build cleaner engines. At the time, VW was spending heavily on promoting its new generation of diesels in the U.S. and Europe as a cleaner alternative to gasoline-powered engines.

European anti-fraud office OLAF said it had investigated whether there was any link between the funds VW received and the production of engines or devices that could be used to manipulate emission tests. Volkswagen has denied misusing the funds and said they were used for their designated purpose.

Read: German Prosecutors are Investigating Volkwagen CEO Matthias Müller

“OLAF sent its final report and a judicial recommendation to the German national authorities, namely the public prosecutor’s office in Braunschweig, Germany, as well as an administrative recommendation to the European Investment Bank,” OLAF said.

It added it had recommended the EIB review the implementation of its anti-fraud policies. The bank was not available for immediate comment.

 

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