- The Washington Times - Tuesday, February 23, 2010

A federal grand jury and the Securities and Exchange Commission have issued subpoenas to Toyota Motor Corp., the world’s biggest automaker disclosed Monday as its beleaguered executives prepared for several grueling congressional hearings that will begin in the House Tuesday.

Federal prosecutors in New York have begun a criminal investigation into Toyota’s burgeoning safety problems, which have resulted in the worldwide recall of 8.5 million vehicles, including more than 6 million in the United States.

The safety issues range from sudden unintended acceleration episodes in some of Toyota’s most popular vehicles sold in America to braking problems in its gasoline-electric hybrid Prius, which was Japan’s top-selling car last year.

The grand jury probe “is welcome,” said Clarence Ditlow, executive director of the Center for Auto Safety, a nonprofit advocacy group.

“Quite simply, economic penalties under the National Traffic and Motor Vehicle Safety Act are too small and don’t get the attention of corporate executives,” said Mr. Ditlow, adding, “Criminal investigations and subpoenas will get their attention.”

The federal grand jury issued its subpoena Feb. 8, while the Los Angeles office of the SEC delivered a subpoena to Toyota last Friday seeking information about the sudden-acceleration problem and Toyota’s disclosure policies.

Toyota revealed the subpoenas in a filing it made with the SEC on Monday.

On Sunday, the House Oversight and Government Reform Committee released a July 9, 2009, document from Toyota’s Washington office boasting of its success in convincing U.S. regulators to allow the company to implement a cheap fix to address the sudden-acceleration problem. Toyota President Akio Toyoda will testify before the oversight committee on Wednesday.

Among numerous “Wins for Toyota Safety Group,” the document listed the “negotiated ‘equipment’ recall” on Camry and Lexus ES sedans regarding sudden acceleration. The “win” saved the company “$100 million-plus” and was accomplished “with no defect found.” As a result, only 55,000 Lexus ES and Toyota Camry vehicles were recalled to replace their floor mats.

In August, a month after the document was issued, an off-duty California Highway Patrol officer and three members of his family were killed in a Lexus ES crash caused by sudden acceleration. That incident prompted the October recall of 3.8 million vehicles related to the floor-mat issue. After a fatal December crash involving sudden acceleration occurred in Texas while the floor mats were in the trunk, Toyota recalled 2.3 million U.S. vehicles last month to fix a sticky accelerator pedal.

“Safety is everybody’s responsibility. It’s not just the federal government’s job to catch safety defects,” said Olivia Adair, a spokeswoman for the U.S. Department of Transportation. “It’s the responsibility of automakers to come forward when there is a problem. Unfortunately, this document is very telling.”

In a statement issued Sunday, Toyota said: “Our first priority is the safety of our customers and to conclude otherwise on the basis of one internal presentation is wrong.”

The safety act, which Congress passed in 1966, limits fines for safety violations to $16 million.

“A prison term, no matter how small, is the best way to get the attention of a corporate executive,” said Mr. Ditlow, commenting on the grand jury’s criminal probe. “A fine is like water off a duck’s back.”


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