As a society, we have a tendency to separate major corporations and the executives who work for them. This is especially true in matters of foreign corporations, where the unethical behavior of directors or managers is, at best a hazy fog. Not so fast. The tides are shifting and it should stand 
as a warning to executives of foreign that unethical behavior will be more aggressively prosecuted. Volkswagen has been on the leading edge of this discussion related to their unethical behavior.
We have been carefully following the emissions cover-up at Volkswagen and up until recently the executives responsible for the unethical behavior have been kept off the stage. Just days ago, prosecutors at the Department of Justice charged six executives who worked in product development and engine development of VW have been charged. The charges against the six executives include wire fraud, violation of the Clean Air Act and obstruction of justice.
“Volkswagen knew of these problems,” said Attorney General Loretta E. Lynch. “When regulators expressed concerns, Volkswagen obfuscated.” They intentionally lied.
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Volkswagen Ethics: The Federal government reacts
The government has been accused of being very soft on corporate crime; that companies have essentially bought and bribed their way out of consequences. As a result, the Attorney General’s office has had a shift in focus to the prosecution of specific company officials.
Andrew McCabe, the deputy director of the Federal Bureau of Investigation, said:
“This case is a great example of the fact that no corporation is too big, no corporation is too global, and no person is beyond the law.”
To prove their point, the Justice Department has published the names of the violators and is bringing charges. They are seen as conspirators against the United States in terms of intentionally polluting our environment and defrauding our populace. Interestingly, while Germany does not normally allow extradition, one of those charged was on vacation in Florida when the charges came down. He was arrested at the Miami Airport before boarding a plane back to Germany.
Every Volkswagen executive charged knew that the cars were programmed to deceive agencies such as the California Air Resources Board and the Environmental Protection Agency. For the sake of this ethical discussion it is important to note that none of them were part of the Volkswagen management board. Volkswagen intentionally has a layer of insulation protecting upper management.
The Volkswagen executives who were charged intentionally destroyed documents and emails that could have pointed investigators to the development of the software that essentially “lied” to mechanics and environmental regulators.
What this means for corporations
We have recently seen situations where executives of small to mid-sized companies lied to prosecutors in order to protect upper management – and were caught. When perjury takes place, fines and even jail sentences may be doled out, especially if the crime caused serious financial damage or affected the health and well-being of consumers.
The action against Volkswagen takes the legal ramifications of “covering up” to a whole new level. An employee could be a mid-level manager of a multi-billion dollar, foreign-based conglomerate, covering for another manager who in turn was covering for a key executive, and all of them could take the fall.
Theoretically, it could be possible for an executive who is making $80,000 a year to receive a bigger penalty than someone making ten times that amount plus benefits! Ethically, when a cover-up begins, everyone in that chain of command will get penalized. There is little sympathy for an underling who knowingly shreds damaging papers for the vice president.
This leads us, again, to the strong need for corporations to train employees in terms of ethical behavior. As the Volkswagen example shows us, the higher-level managers are being charged while the directors at the highest levels remain relatively unscathed. There is never a good outcome for protecting unethical behavior by employing more unethical behavior.
The problem is that lower-level employees (and understandably so) are often intimidated by those above them. Ethics training can often gird an employee in terms of doing the right thing. It is a concept that translates in any language.
