On Sept. 22, New York Attorney General Eric Schneiderman all but announced that he would take the lead on behalf of other state attorneys general investigating Volkswagen’s fraudulent diesel emissions devices.
“We look forward to collaborating with attorneys general across the nation on this matter,” Schneiderman’s press release said, a mere four days after California Air Resources Board officials, joined by the U.S. Environmental Protection Agency, announced that they had uncovered the fraud.
At last count, 44 other prosecutors had signed up. California Attorney General Kamala Harris is not one.
Instead, she is directing her own inquiry into the six-year effort by Volkswagen to conceal the levels of toxic nitrogen oxide and soot that spewed from its diesel cars and fouled California’s air.
“We have been a leader in terms of environmental protection. We’re invested in this as a priority,” Harris told me. “It is important that California is a leader in investigating the harm and hopefully in fashioning the consequences.”
As the state’s top prosecutor, Harris is well within her authority. California was a scene of any crime that occurred. As a politician on the rise, Harris is taking some risk, though one with potential for great reward.
Harris could show herself to be a guardian of consumers, public health and the environment if she manages to bring a case while running for the U.S. Senate seat that is opening in 2016 with Barbara Boxer’s retirement. Although the race is far from settled, polls show Harris leads her nearest rival, Rep. Loretta Sanchez, a Southern California Democrat.
Rose Kapolczynski, Boxer’s political consultant, points to one of Sanchez’s main problems: She’s one of roughly two dozen members of Congress in the massive Los Angeles media market. All seek public attention; few have much success.
“Kamala Harris, on the other hand, is sitting in a statewide elected position,” Kapolczynski said. “Unlike some statewide elected officials, Kamala Harris is dealing with real news.”
Separate from VW, Harris’ deputies are investigating former California Public Utilities Commission President Michael Peevey, another matter that would attract statewide attention if it results in charges.
Peevey stepped down from the post he held for 12 years in December. In January, Harris’ agents searched his suburban Los Angeles home, seizing computers, photos and storage devices.
The scope of the case isn’t public, but Peevey helped oversee the inquiry into the PG&E natural gas pipeline explosion that killed eight people in San Bruno in 2010, and Southern California Edison’s shutdown of the San Onofre nuclear power plant in 2013.
“There is no question I have been following what has been going on for quite some time,” Harris said. “We’re obviously investigating the claims fully.”
The main case, however, involves Volkswagen.
As it sought to become the world’s largest automaker, Volkswagen marketed its diesels based on their performance, their high mileage and their environmental purity, all designed to appeal to California motorists.
Adding to Harris’ jurisdictional claims, Volkswagen operates a testing lab in Oxnard and the Electronics Research Laboratory in Belmont. As recently as June, the research unit issued a press release touting VW’s environmental innovations.
The company might have gotten away with its lies, at least for a time, but for the California Air Resources Board. The board and EPA began investigating in May 2014 when an independent nonprofit organization and university researchers in West Virginia alerted authorities to their discovery of anomalous VW emission results.
After a December recall failed to resolve the problems, the California air board in July confronted Volkswagen with evidence that the cars met this state’s strict standards when they were undergoing controlled smog tests, but not when they were being driven in normal conditions.
Volkswagen executives finally started coming clean on Sept. 2 by admitting that the company installed defeat devices intended to evade smog tests. Two weeks later, the scandal became international news.
The California air board sits atop a trove of evidence. As it pursues its own investigation, the board is helping Harris’ shop. Several foreign governments are seeking air board documents. U.S. prosecutors will want information, too, as will the other states. Texas already has sued Volkswagen, as have private law firms representing VW owners who feel ripped off.
“We have the resources to take it on,” Harris said. “We will work with other states. But California is uniquely impacted.”
Harris’ civil and criminal divisions are engaged in the inquiry. But given the scope and complexity, there’s no certainty that California can file a case in the next 12 months, let alone resolve it. Federal prosecutors could elbow aside this or any other state that might seek to bring a criminal case.
Harris likened the case to the nationwide litigation over the mortgage meltdown. The U.S. Justice Department took the lead, properly so, and New York sought to take the lead for the states.
But noting that no state was harder hit by the housing crisis than California, Harris initially refused to accept the deal structured by the feds. After some brinkmanship, she managed to secure a far larger settlement for the state, $20 billion in 2012.
In 2001, as California emerged from the energy crisis, then-Attorney General Bill Lockyer, reflecting public anger at the time, said he hoped to escort Enron chief Ken Lay into a prison cell, and introduce him to a “tattooed dude who says, ‘Hi, my name is Spike, honey.’” He never got the chance; Lay died.
Harris isn’t quite that flamboyant. Certainly, candidate-politicians who seek nothing more than to lead the 6 o’clock news risk being seen as grandstanding. But then as now, working stiffs fume at the privileged few, and surely would reward any prosecutor who could walk white -collar crooks to the bar of justice.