Senators Introducing Bill Making It A Crime For Companies (Like GM) To Cover Up Dangerous Defects

GM has spent the year in trouble: their massive recall has come with a slew of investigations, fines, congressional hearings, and lawsuits. But the company has been able to claim incompetence and avoid other potential penalties. Now, two U.S. senators are introducing a bill that will make it much more difficult for the top brass at companies that don’t report lethal errors to plead stupid in the future.

The Hide No Harm Act of 2014 will be introduced tomorrow by Senators Richard Blumenthal of Connecticut and Bob Casey of Pennsylvania. The bill addresses top-level company executives who don’t take action when they have reason to believe that their product can be dangerous.

Specifically, the bill requires corporate officers who learn of a potentially fatal defect in their product to “as soon as practicable and not later than 24 hours after acquiring such knowledge, verbally inform an appropriate Federal agency of the serious danger” and to follow it up with a written report within 15 days. The penalty for not meeting those reporting deadlines is a fine, up to five years of jail time, or both.

The bill also protects employees who do inform federal agencies of safety issues against retaliation from their employers. In other words, if a company officer tells NHTSA that her company’s car has a safety defect, the board or CEO can’t immediately turn around and fire her for doing so.

Jail time is the “stick” half of the bill, but there’s also a “carrot” incentive in there: the bill would also protect a corporate officer from criminal liability if the relevant federal agencies and other individuals (like car owners) were notified of issues in a timely manner.

GM has now recalled more cars in the first six months of 2014 than has sold, total, since 2007. Several million of those have been for a defect in the ignition switch that was discovered as early as 2001 but not changed until this year. At least 13 people have died in accidents related to the issue.

GM has been under fire from investigators and lawmakers over the decade-long delay between first learning of a potential problem and finally taking action.

In May the National Highway Traffic Safety Administration (NHTSA) issued GM a $35 million fine for the delays, the maximum amount allowable.

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  1. CzarChasm says:

    I have not actually read this bill, but somehow, do not think they would ever be able to get charges to stick with a vague “have reason to believe that their product can be dangerous.”