WASHINGTON — General Motors’ top lawyer came under withering attack from senators Thursday at a hearing investigating the automaker’s failure to recall millions of defective small cars for more than a decade.
Sen. Claire McCaskill, D-Mo., chairwoman of the commerce subcommittee on consumer protection, wasted little time before questioning the actions of Michael P. Millikin, GM’s general counsel.
Noting that he had been warned several times of potential liability related to the defective switch, which GM has linked to 13 deaths, McCaskill expressed disbelief that he had not been dismissed.
“I don’t get how you and Lucy Clark Dougherty still have your jobs,” McCaskill said to Millikin, referring to GM’s general counsel for North America. “This is either gross negligence or gross incompetence on the part of a lawyer. The fact that he can say ‘I don’t know.’”
McCaskill turned to GM’s chief executive, Mary T. Barra, who also testified at the hearing, and asked her directly why he was not among those employees who have been dismissed.
“I respectfully disagree,” Barra said. She added that Millikin is a person of “high integrity” and blamed systemic problems within the legal department. She said there were “very senior lawyers who had this information and didn’t bring it forward who are no longer with the company,” but that she did not intend to dismiss Millikin.
McCaskill said the company’s internal report should have been enough for GM to have already taken that action.
Millikin repeatedly stated that he first learned of the defect the first week of February.
“I wish I had known about it earlier, because I know I would have acted,” he said.
The company’s legal staff fought ignition lawsuits for years despite knowing that company engineers and investigators were aware of safety problems and related accidents. In her opening remarks, McCaskill said “the culture of lawyering up and Whac-A-Mole” at the Detroit automaker “killed innocent customers of General Motors.”
“The failure of this legal department is stunning,” McCaskill concluded.
Several senators also focused on how forthright GM was in its disclosures with the National Highway Traffic Safety Administration. Referring to a report in The New York Times that GM refused to answer certain death investigation letters sent by the agency, Sen. Barbara Boxer, D-Calif., said it showed that GM was trying to hide something.
“I consider it a cover-up when a manufacturer does not respond fully and accurately to NHTSA about what it knows about deaths in its vehicles,” she said. “This wasn’t some casual memo.”
Millikin said he did not know about the practice before this week, saying it was “news to me” when he read the report in The Times.
Barra told the panel that GM would not treat such inquiries that way today, which drew a rebuke from the California senator.
“You can’t just say now, now, and forget the past,” Boxer said. “Because people died.”
Before Millikin and Barra testified, compensation expert Kenneth R. Feinberg told lawmakers that GM had set no limits on what it would pay to people who were injured or killed in cars equipped with defective ignition switches.
In his first appearance before lawmakers since being hired by GM, Feinberg said he was committed to a swift and thorough process to compensate victims.
“We are authorized to pay as much money as is required,” Feinberg testified.
The automaker has said it expects that the number of deaths associated from the switch defect would rise from the 13 it has acknowledged. The switches were prone to turn off, which would cut the engine and disable crucial systems like power steering and brakes, and the air bags.
(BEGIN OPTIONAL TRIM.)
“We will do everything in our power to make sure this never happens again,” Barra said in her opening testimony.
She also said GM was intent on compensating victims quickly and was giving Feinberg full latitude to determine the payments to those involved.
“We are committed to treating each of them with compassion, decency and fairness,” Barra said.
But Sen. Richard Blumenthal, D-Conn., noted that GM had been unwilling to waive the protection from private litigation it received for any accident that occurred before the company emerged from bankruptcy protection in July 2009. For victims who do not accept the compensation offer under Feinberg’s plan, they will need to ask the courts to overturn that waiver granted under bankruptcy reorganization.
Blumenthal also brought up the case of Candice Anderson, a Texas woman who survived the November 2004 crash that killed her boyfriend, Gene Erickson. Anderson, who had been driving with a small amount of Xanax in her system, faced a manslaughter charge for the accident. She pleaded guilty to criminally negligent homicide in October 2007, five months after GM had internally investigated her crash and ruled itself responsible, according to Valukas’ report.
Blumenthal called Anderson’s conviction “a perversion of the justice process,” adding that “GM allowed an innocent person to be convicted of a crime.”
He asked Millikin and Barra to contact Rick Perry, governor of Texas, to urge that Anderson’s conviction be overturned. Both declined to do so; Barra indicated that she could submit “evidence to support” Anderson’s vindication, but she did not think it appropriate to advocate for it.
The district attorney who prosecuted Anderson, Leslie Poynter Dixon, wrote to Perry this week requesting Anderson’s record be cleared. “Unbeknownst to Ms. Anderson or my office, there were issues, regarding her 2004 Saturn Ion. These issues were known to General Motors at the time of Ms. Anderson’s prosecution, but were never brought to her, mine or my office’s attention by GM,” the letter read.
(END OPTIONAL TRIM.)
Before the hearing, some of the victims’ families held a news conference, many holding pictures of their dead or injured loved ones as they called for GM to be held responsible.
Jay and Gerri Gass of Tennessee, the parents of Lara Gass, who died in March when her Saturn Ion stalled and crashed, wept as they held her picture.
“I haven’t had any good mornings since she passed away,” Jay Gass said.
Gass said what troubled him most was that many of GM’s recalled cars remained on the road. He called them dangerous to occupants and other drivers.
“These cars are on the streets today,” he said. “These are Scud missiles that could go uncontrolled in front of you.”
He said he recently stopped at a gas station and noticed a woman in an Ion, with a mass of keys on her key ring. She hadn’t realized the danger.
“You don’t know anything about anything.”