Keep your friends close and your enemies closer. Volkswagen ignored that famous advice from Michael Corleone when it comes to Daniel Donovan, who now claims he was wrongfully fired on December 6 for refusing to participate in the destruction of documents related to the diesel scandal. Donovan files whisle blower lawsuiton March 7. Two days later, Michael Horn, CEO for North America operations, left the company.
The lawsuit claims Volkswagen destroyed evidence for weeks after the diesel cheating was revealed by the Environmental Protection Agency in a press conference September 18. The destruction of data and documents occurred despite a hold order from the Justice Department. Donovan claims Volkswagen justified its actions by claiming a “lack of storage space.”
According to Fortune, Donovan worked as a technology employee at the company’s office of general counsel in Michigan. He was responsible for electronic information management for personal injury and product liability cases. The suit further alleges that Volkswagen has denied Jones Day & Co, the independent investigating company hired to delve into the company’s actions leading up to the cheating scandal, access to information about the destruction of data and documents.
A spokesperson for Volkswagen Group of America provided Fortune with the following statement: “The circumstances of Mr. Donovan’s departure were unrelated to the diesel emissions issue. We believe his claim of wrongful termination is without merit.” No doubt he was late to work on at least one occasion and may have used the executive washroom without permission.
But wait. It gets worse. A news report in German newspaper Süddeutsche Zeitung, created in conjunction with German radio station NDR, claims Volkswagen updated its diesel cheating software as late as January, 2015 — months after the California Air Resources Board had begun an investigation into the emissions of the company’s diesel engine cars. That update is said to have added input from the steering wheel position sensor to help the computers in the cars figure out whether an emissions test was in progress. There is no movement of the wheel during such tests. By adding the new data, the computer was able to allow the cars to operate in the higher emissions non-testing mode more of the time.
So what’s the takeaway from these latest revelations and allegations? Volkswagen is in deep doodoo and the pile is getting higher by the minute. US officials seemed to be leaning toward a remedy that would de-emphasize monetary fines in exchange for a commitment by Volkswagen to build more electric cars in the US. That approach has been pushed by Elon Musk, among others.
If nothing else, Donovan’s allegations might make it more likely that someone is going to jail. And if officials believe they have been deliberately lied to, that may tilt the balance more toward punitive measures rather than remedial action. Firing Daniel Donovan could be the most expensive mistake Volkswagen has ever made.