A deal has been reached between Toyota and the Justice Department for $1.2 billion to settle a four-year criminal investigation into whether the company misled investigators and the public about a sudden-acceleration defect. The reported settlement is among the largest ever paid by an automaker to settle an inquiry. The deal is subject to judicial review before it can be approved and implemented.
The settlement included something unusual – an admission of wrongdoing by the company. According to the agreement, Toyota’s public statements and regulatory reporting about safety issues will be overseen by an independent monitor for the next three years to ensure compliance with all applicable regulations. The settlement agreement also includes a deferred prosecution agreement. This allows federal prosecutors to file criminal charges against the company, but dismiss them after three years if the problems are resolved.
Eric H. Holder Jr., the United States attorney general, said in the announcement of the deal that Toyota “intentionally concealed information and misled the public.” He continued on to say, “Toyota’s conduct was shameful,” and that “other car companies should not repeat Toyota’s mistake,” indicating that they would face prosecution as well. Preet Bharara, the United States attorney in Manhattan who led the investigation of Toyota said, “The entire auto industry should take notice.”
The unintended acceleration problems in the Toyota vehicles has already cost the automaker billions of dollars. Over the past few years, recalls were issued for nearly 9.4 million Toyota vehicles over sticky accelerator pedals and floor mats that could cause those pedals to become stuck. The sudden-acceleration defect has been blamed for many deaths and significant injuries.
The settlement with Toyota could provide a template for the authorities pursuing a similar case against General Motors. The G.M. vehicles have been linked to a defect that reportedly caused the vehicles to shut down unexpectedly. At one point during the news conference, Mr. Bharara slipped up and said “General Motors” instead of “Toyota.” This prompted awkward facial expressions from government officials, including Mr. Holder and the transportation secretary, Anthony R. Foxx.