Amid new revelations about GM, senators seek jail time for product safety cover-ups
07/16/2014 3:20 PM
07/16/2014 3:33 PM
On the heels of a report that General Motors officials knew, but failed to tell federal regulators that faulty ignition switches likely caused several fatal car accidents, three Democratic senators introduced legislation Wednesday to make it a crime for a corporate officer to conceal serious product dangers.
“Recent revelations of morally reprehensible hiding of known harms by GM officials should prompt criminal prosecution, not just public condemnation,” Connecticut Sen. Richard Blumenthal, the bill’s lead author, charged. “Concealment can kill – and corporate officers should be held accountable for it.”
The “Hide No Harm” bill, co-sponsored by Sens. Tom Harkin of Iowa and Bob Casey of Pennsylvania and backed by a host of consumer groups, would subject senior corporate officers to up to five years in prison for failing to disclose that a product posed serious dangers to consumers. It would create a safe harbor from criminal liability for officers who notify a federal regulatory agency and individuals who are at risk of serious injury.
Introduction of the legislation came on the same day that The New York Times added fuel to the scandal consuming General Motors, which already has dismissed 15 employees over the firm’s failure for more than a decade to address ignition switch problems in its Chevy Cobalt, Saturn Ions and four other models.
The Times said that GM’s fatality reports to the National Highway Traffic Safety Administration, along with internal company documents, show that GM engineers knew that ignition switches likely turned off the engines of several cars that swerved off roads and highways, killing the drivers. However, the newspaper said, the company avoided stating a cause or probable cause for four of the accidents in filings with the regulatory agency between 2004 and 2009.
GM has said that at least 13 people died due to the switch failures, which also disabled the vehicles’ air bags. Plaintiffs’ attorneys believe the number of fatalities is much higher and that hundreds of people were injured, some critically.
The company recalled more than 2 million of the affected models in February, but since then, the furor has only mushroomed, while the Justice Department conducts a criminal investigation.
With new Chief Executive Officer Mary Barra vowing to build a “new GM” and to do the right thing, the company has recalled 29 million cars this year, many for similar ignition switch defects.
Asked about the Times report, GM spokesman James Cain capsulized what is becoming a company mantra: “We are confronting our problems openly and directly. We are taking responsibility for what has happened and making significant changes across our company to make sure that it never happens again.”
GM’s general counsel, Michael Millikin, is due to testify Thursday before a subcommittee chaired by Democratic Sen. Claire McCaskill on Thursday, but to date, no senior officer of GM has been shown to have been aware of the switch problem before it was finally divulged to NHTSA early this year.
GM ran full-page ads in the Times and the Washington Post Wednesday headlined “the key to safety.” The ads said that GM is “working hard to repair the vehicles involved in the ignition recall,” but urged drivers in the meantime not to use heavy key chains, but to use a single key – “a simple step … to make driving your vehicle safe and worry free.”
At a news conference at the capitol, however, Blumenthal said that’s “not the key to safety,” but rather the key is corporate responsibility. He said that “consumer and worker safety should always come before corporate profits.”
Public Citizen and other consumer advocacy groups pointed to several other cases in which corporate officers withheld information about dangerous products. They said it’s been proven that:
--Merck failed to disclose the risks of the arthritis drug Vioxx from doctors and patients for more than five years, resulting in as many as 139,000 heart attacks.
--Simplicity Cribs sold products that company officials knew were defective, leading to the deaths of at least 11 babies.
--Toyota Motors knew, while selling millions of Lexuses and other models, that two defects could cause their gas pedals to suddenly accelerate, but failed to tell the public or regulators, resulting in numerous fatal accidents.
“Our current fines and penalties are not tough enough to ensure that every business is playing by the same rules,” said Katherine McFate, president and chief executive officer of the Center for Effective Government.
Public Citizen President Robert Weissman said that the Senate bill “would protect the public because it would firnally put formidable penalties on these rule-breakers and help deter” irresponsible behavior.
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