General Motors agreed on Thursday to pay a $900 million fine to avoid prosecution over faulty ignition switches in its cars that have been tied to dozens of fatal crashes, but consumer advocates pounced, saying the federal government settled too cheaply.
Under the settlement, GM will pay the fine by the end of next week and submit to three years of monitoring, and the Department of Justice will drop the two pending criminal charges of wire fraud and conspiring to conceal facts that it lodged against the automaker for its role in the ignition switch disaster, which has resulted in at least 124 deaths and prompted the recall of 2.6 million cars.
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But in a fiery statement, Ralph Nader called GM a “homicidal fugitive from justice.” And he was just as critical of U.S. Attorney Preet Bharara and Attorney General Loretta Lynch, accusing them of “reverse malicious prosecution to inoculate General Motors,” and saying the settlement “gives new meaning to the surrender of federal law enforcement.”
He also called for lawmakers to hike criminal penalties for carmakers that knowingly violate safety standards in the next transportation bill, which Congress is currently struggling to piece together.
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Sens. Richard Blumenthal (D-Conn.) and Ed Markey (D-Mass.) also lit into the settlement, saying it failed to require “adequate and explicit admission of criminal culpability from GM and individual criminal actions,” and called it “extremely disappointing.”
“The 124 families who lost loved ones deserved an explicit acknowledgment of criminal wrongdoing, and individual criminal accountability, as well as a larger monetary penalty,” they said. “GM knowingly concealed information that could have prevented these deaths, and it is shameful that they will not be held fully accountable for their wrongdoings.”
The two senators renewed calls for Congress to take up their legislation that would strengthen criminal penalties for knowing motor vehicle safety violations.
The GM settlement is not as large as the $1.2 billion that Toyota agreed to pay last year to avoid prosecution for hiding safety problems related to uncontrolled acceleration in some of its vehicles.
In a statement on the settlement, GM said it would also cough up $575 million to settle some of the civil lawsuits it is facing.
“The mistakes that led to the ignition switch recall should never have happened. We have apologized and we do so again today,” said GM CEO Mary Barra. “We have faced our issues with a clear determination to do the right thing both for the short term and the long term. I believe that our response has been unprecedented in terms of candor, cooperation, transparency and compassion.”
In a district court document detailing the deal, U.S. attorneys stated that GM “admits that it failed to disclose to its U.S. regulator and the public a potentially lethal safety defect that caused airbag non-deployment in certain GM model cars, and that GM further affirmatively misled consumers about the safety of GM cars afflicted by the defect.”
As part of the settlement, the automaker has agreed to pay for an independent monitor to watchdog its actions for the next three years. The company will have to set up a free hotline so people can communicate anonymously with that overseer and has agreed that it won’t retaliate against whistleblowers.
Jennifer Scholtes contributed to this report.
