Corporate 'siloing' an obstacle to charging GM employees: prosecutor

Thu Sep 17, 2015 6:38pm EDT
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By David Ingram

NEW YORK (Reuters) - The chief U.S. prosecutor in Manhattan blamed gaps in federal law and "siloing" within General Motors Co (GM.N: Quote) for the failure so far to charge any individual employees who may be responsible for faulty ignition switches linked to 124 deaths.

The lack of individual prosecutions infuriated GM's critics despite the company agreeing to pay $900 million to end a criminal investigation of the defects and a cover-up.

GM, the No. 1 U.S. automaker, signed what is known as a deferred prosecution agreement with the U.S. Department of Justice to avoid a conviction on charges of fraud and hiding information from a regulator. The company would see the charges dropped in three years if it hires an independent monitor and meets other terms.

Responding to criticism from victims, lawmakers and safety advocates, U.S. Attorney Preet Bharara said at a news conference on Thursday he understood the calls to hold individuals legally accountable but insisted his office's hands were probably tied.

"We're not done, and it remains possible that we will charge an individual, but the law doesn't always let us to do what we wish we could," Bharara said.

Bharara, whose office began investigating GM in February 2014, told reporters that it is lawful for an automaker's employees to put a potentially deadly product on the market. The auto industry is unlike many others in that regard, he said.

What is unlawful, Bharara said, is to hide problems from regulators, but he said the reporting responsibility is generally so diffuse at automakers that no single person could be held responsible.

"A particular person may have had only partial knowledge, and contributed in a chain of actions," he said.   Continued...

General Motors Co., CEO Mary Barra  addresses the media before the start of the annual GM Shareholders meeting at  GM world headquarters in Detroit, Michigan June 9, 2015.   REUTERS/Rebecca Cook