Long before use of "defeat device" software in diesel cars was uncovered by independent researchers, Volkswagen withheld information about a potential emissions issue from U.S. regulators.

While the use of emissions-cheating software in nearly 600,000 cars sold in the U.S. was a major act of deception, it apparently wasn't the first time VW kept regulators in the dark.

In 2004, U.S. environmental-compliance employees alerted VW's German headquarters to the need to report a defect in an emissions-related part.

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But German executives told them not to.

The defect was deleted from a report to California regulators, according to internal Volkswagen documents obtained in December by The Wall Street Journal (subscription required).

More than a decade ago, dozens of gasoline-powered Audi vehicles with turbocharged engines began showing up at dealers with a broken sensor, according to a report by the paper published in December.

2012 Volkswagen Passat TDI Six-Month Road Test

2012 Volkswagen Passat TDI Six-Month Road Test

The part--called an exhaust-gas temperature sensor, or EGT--could potentially affect a car's emissions.

U.S. regulations require carmakers to file reports when a certain number of defects are noted on emissions-related components.

So an employee in VW's U.S. emissions-compliance office included the sensor on a draft report to California regulators.

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But then an Audi official in Germany named Bernhard Grossman reportedly told Norbert Krause--the U.S. employee's supervisor--to "delete the EGT."

"The EGT is out," Krause is said to have responded two days later. Both men claim they don't remember the exchange.

VW Group officials in Germany seemed to be of the opinion that the EGT was not an emissions-related component.



The sensor warns a car's control computer when exhaust-gas temperatures get high enough to damage turbochargers.

Computers are typically programmed to cool the exhaust by increasing the amount of fuel mixed with air going into the engine.

This can increase emissions compared to the default settings for air-fuel mixture.

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Because of this, the EGT should be considered an auxiliary emissions-control device, an EPA spokeswoman told The Wall Street Journal.

When asked in November what her reaction would be to discovering the omission of this part, Mary Nichols--head of the California Air Resources Board--said it would be a "huge issue."

At the same time, Volkswagen did not even mention the EGT in its applications to certify the affected cars for sale between model years 2001 and 2004.

CARB emissions-testing equipment video screencap

CARB emissions-testing equipment video screencap

If regulators decide to pursue the matter, the omission of faulty EGT sensors from the 2004 report could constitute yet another reporting issue for VW alongside the ongoing diesel-emissions scandal.

The company could reportedly face penalties of up to $37,500 per car. Since the issue affects 3,900 cars, that could bring a maximum fine to more than $140 million.

These penalties usually have a five-year statute of limitations, but authorities have been known to consider similar cases to be ongoing violations--which would mean the five-year clock doesn't start until the time authorities become aware of the issue.


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