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Recall Hearing Targets GM Legal Staff

Thu, 07/17/2014 - 11:04am
Marcy Gordon, AP Business Writer

WASHINGTON (AP) -- Lawmakers on Thursday demanded General Motors fire its chief lawyer and open its compensation plan to more potential victims as a Senate subcommittee delved deeper into deadly recalls.

Sen. Claire McCaskill, D-Mo., who chairs the subcommittee, praised GM CEO Mary Barra, saying she "has stepped up and with courage and conviction has confronted the problem head on and the corporate culture that caused it."

But McCaskill said GM's corporate counsel, Michael Milliken, should be fired based on the conclusions of an internal report by outside attorney Anton Valukas. The report found that GM's legal staff acted too slowly to share details of settlements it was making and didn't tell engineers or top executives about mounting problems with ignition switches.

"How in the world, in the aftermath of this report, did Michael Milliken keep his job?" McCaskill asked.

Milliken was seated next to Barra as McCaskill spoke. Barra defended him as a man of "tremendously high integrity."

In his prepared testimony, Milliken said he only learned about the ignition switch problems in February and acted quickly once he did.

"We had lawyers at GM who didn't do their jobs, didn't do what was expected of them. Those lawyers are no longer with the company," Milliken said.

GM recalled 2.6 million small cars beginning in February because their ignition switches can fall out of the "run" position, causing the engines to stall and shutting off the air bags, power steering and other critical functions.

GM has admitted that it knew about the faulty switches for more than a decade before recalling the cars. The recall has led to an unprecedented safety review within the company, which has since issued 54 separate recalls for 29 million vehicles.

Compensation expert Kenneth Feinberg is administering a plan for victims' families, and will begin taking claims Aug. 1. Feinberg was the first to testify Thursday.

Sen. Richard Blumenthal, D-Conn., asked Feinberg if the compensation plan should be expanded to cover victims of other recalls, specifically a June 30 recall of 8.2 million older large cars with ignition key defects.

But Feinberg said it's not up to him which vehicles to include.

Blumenthal added that he believes an ongoing Justice Department investigation will find evidence of "cover-up, concealment, deceit and even fraud" among GM's legal team.

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