Around the same time that Volkswagen was approving the plan to create defeat devices to cheat on emissions testing, the company was at the center of a major scandal. In 2005, it was revealed that VW’s personnel head, Peter Hartz had maintained a secret slush fund that lavished junkets, luxury hotel stays, and even prostitutes on VW executives and worker’s council leaders. At one Audi workers council meeting, the entire top floor of a Hanover brothel was rented out for the executives. A single union leader, Klaus Volkert, received more than $3.7 million in illicit perks and payments.
VW’s and ethical problems in their home country persist to this day. Twice in 2017, Volkswagen was forced by regulators to recall cars that continue to employ “defeat devices” intended to cheat on emissions tests. In July, German authorities demanded a recall of 3-liter Porsche Cayenne SUVs, because they were found to contain a “warm up mode” that helped the vehicles comply with emissions testing. In December, Volkswagen was forced to recall the Touareg, which included both a defeat device and an additional device that illegally restricted the use of AdBlue, the chemical additive that helps to reduce Nitrous Oxide emissions.