Lawmakers Say GM Probes to Continue

By Dow Jones Business News, 
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WASHINGTON--Lawmakers on Thursday accepted a much-awaited General Motors Co. report on a troubled recall of cars with ignition-switch defects with a stern message for the auto maker: Don't think that is the end of it.

The internal report, from former U.S. prosecutor Anton Valukas, found that nobody at the company took responsibility for the defect, which has been linked to 54 crashes and at least 13 deaths, when complaints flowed in from customers, dealers and employees. Mr. Valukas criticized GM engineers, lawyers and investigators, but found that no one at the highest levels of the company could be blamed because the problem was never brought to their attention.

"It seems like the best report money can buy," Sen. Richard Blumenthal (D., Conn.) said. "It absolves upper management, denies deliberate wrongdoing, and dismisses corporate culpability."

Lawmakers noted that the most important investigation is being done by the Justice Department, which earlier this year flexed its muscle when it used a novel legal approach to hit Toyota Motor Corp. with a record $1.2 billion penalty for misleading customers about safety problems.

Meanwhile, lawmakers were likely to continue to use their ability to "name and shame," as Mr. Blumenthal put it, as a powerful tool. He used the bully pulpit on Thursday to counter what he described as a GM public-relations campaign surrounding the release of the report, saying that "one of the gaps in this investigation is the failure to establish credibly that there was no coverup."

Key committee chairmen also indicated that they were planning new hearings this summer, and would seek further testimony from GM Chief Executive Mary Barra and from Mr. Valukas.

In terms of legislation, Congress can wield its greatest authority over auto safety regulators. On Thursday, the Senate Appropriations Committee approved a spending bill that would beef up funding for the National Highway Traffic Safety Administration's office of defects investigation, in particular for a computer system with greater power to analyze and sift through data the regulator receives from car companies.

Senate Democrats said they would continue to push for new laws to discourage courts from sealing settlements with car companies and to force auto makers to turn over more information and require regulators to make more of that data public. But any efforts face low odds given the short, packed legislative calendar and partisanship in Congress.

When Ms. Barra testified on Capitol Hill in April, she deflected questions by saying she would wait for the results of Mr. Valukas's report. The challenge for Ms. Barra when she returns to Capitol Hill in as soon as this month will be how to handle questions from lawmakers skeptical that the GM-commissioned report tells the whole story.

"I won't be letting GM leadership, or federal regulators, escape accountability for these tragedies," said Sen. Claire McCaskill (D., Mo.), the chairman of the Senate Commerce Committee's consumer-protection subcommittee, who in April accused GM of having a "culture of coverup" and bluntly told Ms. Barra that an ignition-switch engineer had lied during a deposition in a case brought by the family of a Georgia woman killed in a crash of her Cobalt. That engineer, Raymond DeGiorgio, is among 15 people who GM disclosed Thursday that it had fired.

As she did before appearing on Capitol Hill in April, Ms. Barra launched a charm offensive on Thursday, calling lawmakers in the morning and detailing how defective cars remained on the road because the company didn't connect the dots between a defective ignition switch and the failure of the air bags to deploy, according to one lawmaker who spoke with her.

"Whether that is actually the case is now Congress' responsibility to verify," said Sen. Dean Heller of Nevada, the top Republican on the Senate Commerce Committee's consumer protection subcommittee. He said the panel would "continue to be holding all those involved accountable, including GM and federal regulators, and ensuring these deadly mistakes are not repeated."

The chairman of the committee whose investigators are poring over one million documents from GM indicated that he wasn't yet satisfied either. "The conclusion of GM's internal investigation marks an important milestone, but our investigation continues as many questions remain for both the company and NHTSA," said House Energy and Commerce Committee Chairman Fred Upton (R., Mich.) in a statement.

Write to Siobhan Hughes at siobhan.hughes@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


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