German prosecutors have recorded calls between VW bigwigs talking dieselgate

It's barely possible to believe how poorly Volkswagen continues to handle dieselgate. Depending on which day you catch the news, the German carmaker embodies the corporate venality of "Michael Clayton," the comic blundering of the Coen Brothers' "Burn After Reading," and the every-man-for-himself vengeance of "Reservoir Dogs." Today is Tarantino day, with news that German prosecutors have recordings of phone calls between former Audi and Porsche development boss Wolfgang Hatz, ex-Volkswagen Group executive Matthias Müller, and current Porsche executives Oliver Blume and Michael Steiner.

Hatz made the calls to the trio in November 2015, two months after Volkswagen admitted its diesel-particulate sins to the U.S. Environmental Protection Agency. Hatz was still employed at the time, and in his company car. Who recorded the calls? His wife.

Hatz and his missus apparently saw the storm coming and started stacking defenses early. Hatz's wife, who can be heard encouraging Hatz during at least one call, sent the recordings to Hatz's attorney from her mobile phone. According to a Google translation of the German newspaper Handelsblatt's report, she included the note, "Here is a very long, but quite informative conversation on the current situation with useful formulations."

The report in Handelsblatt said that in Germany it is generally "not allowed" to record a conversation and pass it on to a third party. We don't know how the authorities will handle this matter, since prosecutors found the recordings in e-mail attachments on Mrs. Hatz's mobile phone.

Remember, when the diesel scandal broke, VW spent months saying that only a small number of low-level personnel were behind it, and all of the higher-ups had been blindsided. Ex-CEO Martin Winterkorn claimed to be "stunned that misconduct on such a scale was possible in the Volkswagen Group." Winterkorn successor Matthias Müller said, "according to current information, a few developers interfered in the engine management." Former VW USA honcho Michael Horn told a congressional committee that "a couple of software engineers" programmed the software for reasons no one could understand.

In the recorded conversations, Hatz apparently called Müller to find out how VW planned to treat him. Müller supposedly responded, "I don't want to deceive you; I can't do anything against the decision of the Volkswagen supervisory board." Hatz, who was Porsche's R&D boss at the time, reportedly said that the emissions-cheating software was some "crap" from the Group and that he'd done nothing wrong. Müller apparently consoled Hatz to strengthen his nerve, but also said, "I'm really trying to get you out," but that if his — Müller's — name came up anywhere, "then it is difficult."

Hatz called Oliver Blume with the same concern. According to Handelsblatt's wording via Google Translate, Blume said "There will be 'politics,'" and that VW Group overlords "have no ass in their pants."

Hatz called Michael Steiner, who had been Hatz's deputy. Four days before Hatz's wife recorded the phone calls, Müller appointed Steiner compliance commissioner, the job description to "include conducting talks with all regulatory and compliance authorities globally on all vehicle regulatory matters on behalf of the Volkswagen Group."

Hatz appears to have called Steiner more than once, with one of the calls lasting 35 minutes. Both men knew what was going on, Handelsblatt saying "the men mutually encouraged each other" in the lengthy conversation — Hatz blaming the VW Group and saying Audi got caught in an "unfortunate condition," Steiner responding to say the software was "programmed so foolishly." On top of that, at one point Steiner supposedly tells Hatz, "Well, we did not try to fool [the U.S. EPA] for a second time."

When Hatz's wife sent the Steiner call to the attorney, she allegedly added, "Mr. Steiner is the deputy of Wolfgang and the official enlightener of the diesel thing." Six months later, when Hatz quit VW in May 2016 with a 12-million-euro package predicated on having "committed no breaches of duty," VW promoted Steiner to Hatz's job. We quoted Steiner a couple of times in our recent 2020 Porsche 911 Deep Dive.

German authorities arrested Hatz in September 2017, and he remained in jail until June 2018. He's been out since then after paying three million euros for bail, and denies having done anything wrong. If prosecutors can use the recordings in court, another new chapter could open that will swallow even more VW execs. We hope the German version of Hollywood is taking notes.