JUNE 1998 · VOLUME 19· NUMBER 6

Federal officials in June imposed big civil fines against American Honda Motor Company and Ford Motor Company for allegedly tampering with emission control devices.

The officials refused to explain why no criminal charges were filed against the companies, although they did not rule out criminal charges being filed in the future.

Honda will spend $267 million to settle allegations that it violated the Clean Air Act by selling vehicles with disabled emission control diagnostic systems. That amount includes $12.6 million in civil penalties -- the largest civil penalty in Clean Air Act history.

Ford will spend $7.8 million -- $2.5 million in civil fines -- to settle allegations that it violated the Clean Air Act by illegally installing a device which defeats the emissions control system in 1997 Ford Econoline vans.

Federal officials alleged that Honda disabled the misfire monitoring device on 1.6 million 1996 and 1997 model year Accords, Civics, Preludes, Odysseys and Acuras, as well as 1995 Honda Civics. When the misfire device is disabled during an engine misfire, the system's malfunction indicator light will not operate. Because the vehicle's owner is unaware that the engine needs to be serviced, increased exhaust emissions of hydrocarbons and damage to the vehicle's catalyst may occur.

Honda failed to report this fact when applying for certificates of conformity, which allow for vehicles to be legally sold if they meet federal emission standards, federal officials said.

At a press conference at the Justice Department, federal officials were peppered with questions about possible criminal aspects of the case.

One reporter asked, "Is there any way that this could happen accidentally?"

"I'm trying to figure out the most politically correct way to answer this," answered Bruce Ferguson, a prosecutor with the Environmental Protection Agency's enforcement office. "Certainly engineers who are designing these cars know what they are doing when they put certain things in their computer codes. It is pretty clear to us that Honda knew that they were turning off the misfire detection system. ... With Ford, there was a motivation there -- they thought they were helping fuel economy. So, the engineers knew what they were doing. The next obvious question is, 'Did they know they were violating the law?' Frankly, the companies never told us that. Companies don't come up during negotiations and say, 'Yes, we knew we were violating the law.' So, the only thing I could do is speculate about that. I think the law is clear. The companies, I'm sure, have a different opinion about that."

Another reporter asked why no criminal charge was brought against the companies.

"These cases were both civil cases and they released the companies from liability on the civil," said Lois Schiffer, assistant attorney general for the Justice Department's environment and natural resources division. "They do not in any way address or foreclose any effort of criminal enforcement."

Asked if there is an ongoing criminal investigation, Schiffer said, "This is the Justice Department, so we don't comment one way or the other."

When asked why the Department didn't settle both civil and criminal cases globally, Schiffer said, "In the environmental area ... we almost always settle civil separate from criminal."

When asked why, in a similar case from the 1970s, Ford was criminally charged and convicted, but not here, prosecutor Thomas Carroll said that the Ford case from the 1970s "involved an allegation of intentional falsification of data in reports submitted to the EPA."

"Part of the criminal component [was] that they had a report that they had to make to the agency, they didn't like what it said, and somebody changed what it said," Carroll said. "In these cases, to get certificates of conformity to sell the vehicles, the companies have to submit data and make disclosures to the agency, and we allege that they did not adequately disclose, that they omitted material information from those disclosures."

Carroll declined to answer queries as to whether there was evidence of falsification in the current Honda and Ford cases.

"You are saying you are not going to tell us whether there was falsified information given to the government," one reporter said. "You are not going to tell us if there is an ongoing criminal investigation. And if you close an ongoing criminal investigation, you are not going to tell us. So, how do we know that you haven't already closed the criminal case?"

"I don't do what ifs," Schiffer snapped.         

-- Russell Mokhiber