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article imageFaulty ignitions: Senator says GM needs victims fund

By AFP     Mar 24, 2014 in Business

A US lawmaker urged the Justice Department Monday to make General Motors create a fund for victims of accidents involving faulty ignitions, arguing that the automaker "criminally deceived" the public.

Senator Richard Blumenthal sent a sharply worded letter to Attorney General Eric Holder saying the leading US automaker willingly concealed information about ignition switch defects linked to 12 deaths.

He revealed that the Justice Department has launched a criminal investigation into the "flagrant illegality of GM's concealment" -- a probe which could open the door to criminal prosecution.

Blumenthal expressed worry that GM may be shielded from legal responsibility for events prior to its 2009 government-assisted bankruptcy reorganization.

"Given the crucial role the United States government played in creation of the current General Motors Corporation, I believe the federal government has a moral, if not legal, obligation to take all necessary steps to protect innocent consumers," he wrote to Holder.

"Their deliberate concealment caused continuing death and damage, and it constituted a fraud on the bankruptcy court that approved its reorganization," he added.

"It also criminally deceived the United States government and the public."

The letter comes on the heels of a civil lawsuit filed late last week against GM on behalf of families of two teens who died in a 2006 crash of a Chevrolet Cobalt, and a survivor of the crash, which was tied to the ignition defect.

Blumenthal, who is on the Senate's transportation subcommittee on consumer protection, urged Justice authorities to intervene in such cases to oppose "any action by GM to deny responsibility" for the defect-related crashes.

GM's own documentation shows that company officials were aware of problems with the ignitions from as early as 2001.

Since then GM and US safety regulators have received hundreds of complaints that cars were shutting off seemingly spontaneously while in motion, with the result that air bags did not deploy in a number of accidents.

Blumenthal's letter precedes what will be closely watched congressional testimony next week from GM chief executive Mary Barra.

She is expected to be grilled by lawmakers over why it took GM until last month to recall 1.6 million vehicles in North America over the ignition problem.

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