Feds Investigate GM Lawyers for Potential Criminal Liability

Aug 22, 2014 10:30 AM EDT | Jordan Ecarma

General Motors has had a difficult year with millions of vehicle recalls and multiple investigations from federal regulators--and the beleaguered automaker isn't in the clear yet.

A source familiar with the Justice Department investigation related to GM's ignition switch problems has revealed that GM lawyers were present at key meetings to discuss problems in the vehicles, Reuters reported.  

The automaker has already agreed to pay a $35 million federal fine for delaying the recall of 2.6 million small cars that had faulty ignition switches that could turn off the engine while the car was moving. The issue has been connected with at least 54 crashes and 13 deaths.

The investigation, which is still in an early stage, involves prosecutors examining whether or not GM's legal department hid evidence about the problematic ignition switches from regulators.

Federal prosecutors are looking into more than one area for potential criminal liability, the Wall Street Journal reported.

In the wake of the devastating recall, GM has fired 15 employees, some of which were lower-level lawyers.

Federal prosecutors have begun examining the legal department for criminal liability; however, "criminal cases against in-house lawyers are rare and difficult to prove," according to the Journal.

"You would need strong evidence," said Carl Tobias, a professor at University of Richmond School of Law, as quoted by the Journal. "You'd have to show they knew the vehicle was defective, it posed serious risks, and [they] didn't do anything anyways."

During hearings this summer, lawmakers demanded to know why General Counsel Michael Millikin, GM's top lawyer, didn't lose his job.

According to an internal report, Millikin was not aware of the mounting lawsuits related to ignition switch problems since his approval was not required for GM settlements below a $5 million threshold.

Millikin said in a July hearing that he will personally review all cases that involve a death or major injury before a settlement.

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