New Legislation Could Imprison Execs Who Withhold Safety Info

new legislation could imprison execsExecutives who knowingly conceal product defects that pose a threat to the public would face prison time under new legislation to be introduced in the U.S. Senate.

Sens. Richard Blumenthal, D-Conn., and Bob Casey, D-Pa., will introduce the Hide No Harm Act of 2014, which would make it a crime for corporate officers to knowingly conceal a product defect or corporate action that “poses a danger of death or serious physical injury to consumers and workers,” according to a joint statement from the senators. Executives who do so would face up to five years in prison and potential fines, according to the statement.

The legislation comes in response to the General Motors ignition switch scandal, where some GM employees in 2004 learned that ignition switches used in Chevrolet Cobalts, Saturn Ions, and other GM vehicles were defective but failed to issue recalls for the defect for a decade. The switches have been linked to at least 13 deaths.

GM CEO Mary Barra, top GM lawyer Michael Millikin, Delphi Automotive CEO Rodney O’Neal and others are set to testify about the company’s handling of the recalls before a Senate Commerce, Science and Transportation subcommittee. Sen. Claire McCaskill, D-Mo., who chairs the Senate’s Consumer Protection Subcommittee, will lead the hearing, which will also probe the company’s independent investigation into the matter led by former U.S. Attorney Anton Valukas and the role of GM’s legal department in its handling of the ignition switch crisis.

Blumenthal and Casey will be joined by executives from consumer advocacy groups at a press conference about the Hide No Harm Act.

The bill is one of several that have been introduced recently in response to the GM ignition switch crisis, including one introduced by Blumenthal in May that would remove the $35 million cap on fines that the National Highway Traffic Safety Administration can impose on automakers who fail to report vehicle defects fast enough and another by Sen. Jay Rockefeller, D-W.Va., in June that would give NHTSA the power to order defective vehicles off the road and boost funding for the nation’s auto safety watchdog.

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