Transcript: Sen. Claire McCaskill’s Q&A with NHTSA & DOT officials on GM’s ignition switch recall

Partial transcript of Sen. Claire McCaskill’s (D-Missouri) Q&A with NHSTA Acting Administrator David Friedman and Department of Transportation Inspector General Calvin Scovel on “Examining the GM Recall and NHTSA’s Defect Investigation Process”. The U.S. Senate Committee on Commerce, Science, and Transportation’s Subcommittee on Consumer Protection, Product Safety, and Insurance’s hearing was held on April 2, 2014:

Sen. Claire McCaskill (D-Missouri):
…I know that there was a $1.2 billion settlement in conjunction with a criminal investigation. Actually technically it was a wire fraud charge that the forfeiture occurred around. But the failure to give information to NHTSA or to lie to NHTSA, that is capped at $35 million. So if you don’t have a situation that the facts lend themselves to a criminal prosecution but rather it’s a withholding of information, which by the way could be a negligent withholding of information, it wouldn’t have to be an intentional withholding of information. Is $35 million enough? I mean, is that really deterrent to companies like General Motors or Toyota or Chrysler or any of the companies that are supposed to be giving this data?

David Friedman, Acting Administrator of NHTSA:
Senator, when we find evidence that automakers have not acted in a timely manner, we will fine them to the maximum extent allowed by law. In the last Congress, we did support increasing that fine to $300 million.

Sen. Claire McCaskill (D-Missouri):
And do you believe that’s necessary too, Mr. Scovel?

Calvin Scovel, Inspector General of the U.S. Department of Transportation:
Sen. McCaskill, I believe that’s a policy consideration for the administration and for the Congress. In considering the purposes behind such penalties, whether it be those that can be similarly related to the basis for a sentencing in criminal proceedings, retribution, prevention, deterrence, rehabilitation. Certainly deterrence is one factor that the Congress and the Department ought to consider in deciding whether to raise the penalty from $35 million to any figure above that, whether it’s a question of is $35 million regarded by some automakers as simply a cost of doing business, that can certainly be a conclusion that some may draw from it. There may well be information that an Inspector General or the Government Accountability Office may be able to derive through an audit process to help the Congress and the Department make that determination.

Sen. Claire McCaskill (D-Missouri):
I know you mentioned the workforce assessment that’s ongoing. I think I was struck when I was going through the materials for this hearing because I asked the question about your budget, Mr. Friedman, especially for defect investigations. Your budget has been at $10 million for defect investigations for a decade. Now, this is a decade that has seen major changes in automobile manufacturing. It has seen a much more complicated engineering scenario where we have inter-dependence of computers. It is – the complexity has gone up exponentially over the last decade. Do you believe $10 million is adequate to spend in this country for defect investigation for the entire automobile industry?

David Friedman, Acting Administrator of NHTSA:
Senator, the President has requested an increase in our budget across NHTSA in order to better increase our abilities to address the wide variety of challenges we face. In 2012 alone, 33,561 lives were lost on our highways due to a variety of factors, whether it was impaired driving, not wearing seat belts, safety technology that hadn’t yet been brought into the fleet as well as a smaller portion of that associated with defects. We have been asking to increase our budget because each one of those lives lost is a tragedy.

Sen. Claire McCaskill (D-Missouri):
But within your budget Mr. Friedman, you’re not asking for an increase in the defects investigation. I mean, the budget that’s been submitted doesn’t show an increase. The money is going to other places in your agency.

David Friedman, Acting Administrator of NHTSA:
I believe we have asked for some increases in resources, certainly some increases in staff. And part of what we have been doing is investing – using our resources to invest in technology to make our efforts significantly more efficient. One of the things we have done is invest in a new computer tool that’s derived from IBM’s Watson technology in order to enhance our ability to find patterns, to quickly get to those patterns, to connect the information, and we do have plans to continue expanding that effort. We need to put more tools in place to be able to sift through the data that we have so that we can find these patterns or examine the defects and get them fixed.

Sen. Claire McCaskill (D-Missouri):
In 2007, you considered opening an investigation into airbag non-deployment, as you mentioned in your testimony. You chose not to. Was the basis of that decision recorded anywhere?

David Friedman, Acting Administrator of NHTSA:
I don’t believe we have complete records of that. This goes back to one of the findings in the Inspector General’s report. Frankly, it is something that is currently hamstringing our ability to fully pull together all of what happened. However, I do have staff actively working on making sure we understand what happened. But that is something that has changed and it is something that we will have going forward – already have and will continue to have going forward that hopefully a case like this will not happen again. But if it does, we will have better resources to understand exactly what happened.

Sen. Claire McCaskill (D-Missouri):
I think we need to have the resources and the expertise at NHTSA to find these defects and then obviously we’ve got to have the transparency of the process that is available to the public and available to anyone who wants to see it. And part of the complaints that I hear about NHTSA is that it is very difficult sometimes to get information out of NHTSA by safety advocates that are trying to do their work in the public arena in terms of safety, and I think we’ll continue to follow up on that.


Sen. Claire McCaskill (D-Missouri):
…Do you monitor the legal claims against manufacturers?

David Friedman, Acting Administrator of NHTSA:
The legal claims are one of the pieces of information that does come into NHTSA through the early warning system – through our early warning data system. However, depending on where those claims are in the process in terms of litigation, whether or not that litigation or the findings were sealed, we may not have all the access to that information.

Sen. Claire McCaskill (D-Missouri):
But you were monitoring because it’s very easy to find – I mean, I can go on my iPad right now and Google lawsuits against General Motors and pull up hundreds of them, I’m sure, in fairly quick order. You all do that. So you’d know if a complaint’s been filed on a defect on an automobile?

Because what I’m trying to do is harness the great work that clearly is going on since it was a lawyer who figured this out, harness that work for your agency, and I don’t get the sense that you all are paying those close of attention to these cases.

David Friedman, Acting Administrator of NHTSA:
We’re paying very close attention to these cases. We get definite injury reports, which include claims – unsubstantiated claims in some cases – associated with these vehicles. So we get those reports. And when we see something that raise concern, we do – we check out and ask for additional details.

In this case, with the Cobalt and other vehicles, if my numbers are correct, I believe we reached out 98 times to follow up on various claims – death and injury claims – associated with these vehicles. We looked at that data and that information as part of that process.

Sen. Claire McCaskill (D-Missouri):
So I’d be interested in knowing the specifics of that – those 98 claims. When you looked at them, how many of them have been settled, how many were tried, how many went to a jury verdict, what were the verdicts. If you actually did that, I’d like to see that documentation.

My next question is if you look and you find one of those cases it’s been settled and it’s confidential, do you have the legal authority to ask that manufacturer to give you the details of that lawsuit?

David Friedman, Acting Administrator of NHTSA:
I don’t know of the exact details of our legal authority. I do know that, for example, if it hasn’t been sealed, depending on the case, we can ask for additional information.

Sen. Claire McCaskill (D-Missouri):
Let’s assume it’s been sealed. Let’s assume that General Motors or Toyota or Chrysler or any of them insist that they will not settle with the victim unless there is an agreement of confidentiality. Do you have the ability, independent of the confidentiality between the victim and the defendant, do you have the ability to go directly to the defendant and get that information?

David Friedman, Acting Administrator of NHTSA:
I’ll have to verify with my team but I do not believe we have the ability to request sealed documents.

Sen. Claire McCaskill (D-Missouri):
How about subpoena? You can subpoena, right?

David Friedman, Acting Administrator of NHTSA:
Yes.

Sen. Claire McCaskill (D-Missouri):
Okay. That worries me you didn’t know.

David Friedman, Acting Administrator of NHTSA:
It worries me as well.

Sen. Claire McCaskill (D-Missouri):
So how often have you utilized the subpoena power of NHTSA to get more information from automobile manufacturers?

David Friedman, Acting Administrator of NHTSA:
That’s something I’ll definitely get back to you on the record.

Sen. Claire McCaskill (D-Missouri):
Okay. I would be very interested in that.

And then finally, I’m a little bit worried about this whole deployment of airbags power on, power off. As you have said – your testimony said that you believe the specifications were that if power was off, the airbag was still able to deploy. We are now learning that the reason the airbag didn’t deploy is because the power was off. This is a problem.

David Friedman, Acting Administrator of NHTSA:
And it may be even more complicated than that actually, and that’s one of the questions that we actually have in our timeliness query to General Motors. It is possible that it’s not simply that the power was off but a much more complicated situation there. The very specific action of moving from “on” to the “accessory” mode didn’t turn off the power but may have disabled the algorithm. That to me frankly doesn’t make sense from my perspective. Certainly if a vehicle is moving, the airbag algorithm should require those airbags to deploy. Even if the vehicle is stopped and you turn from “on” to “accessory” I believe the airbag should be able to deploy. This is exactly why we’re asking General Motors this question to understand is it truly a power issue or is there something embedded in their algorithm that is causing this – something that should not have been there in their algorithm.

Sen. Claire McCaskill (D-Missouri):
Yeah. Well, it’s pretty important that we figure that out, and then what you need to do is you need to look across the entire manufacturing spectrum on this issue. Because either an airbag is dependent on power or it isn’t, and if it is dependent on power, we’ve got an issue.

David Friedman, Acting Administrator of NHTSA:
Yes, Senator. In fact, I’ve already directed my staff at least days if not a week ago as we were digging into this to reach out to automakers and to suppliers because I have the same concern that you have that I want to make sure that we fully understand this issue so that Americans drive on our roads are safe. Safety must always be our top priority.

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