A top Volkswagen AG official on Tuesday defended the German automaker's reform efforts in the aftermath of the emissions cheating scandal, a month after the company's independent compliance monitor faulted executives for not pushing harder to recast the corporate culture.

Hiltrud Werner, Volkswagen's head of integrity and legal affairs, said the company has been troubled and puzzled by how long the emissions fraud carried on before coming to light. Speaking at a conference in Washington, Werner, formerly Volkswagen's chief auditor, said the company is ”already making extremely good progress” at developing a speak-up culture.

“But we are not yet where we want to be,” she said.

Werner's appearance at the conference, hosted by Compliance Week, came at a trying time for Volkswagen as it tries to rebound from its $2.8 billion criminal fine last year for rigging diesel-powered vehicles to cheat on government emissions tests.

The U.S. Justice Department has charged Volkswagen's former chief executive, Martin Winterkorn, with conspiring to cover up the diesel emissions cheating. And last month, the German newspaper Bild am Sonntag revealed that Volkswagen's compliance monitor, Larry Thompson, had prepared a progress report that faulted the company for failing to hold executives accountable and for taking insufficient steps to turn around its culture. Thompson, according to a New York Times report, also urged Volkswagen to create a better internal whistleblower program.

Larry Thompson

When asked about the report, Werner said Volkswagen has, in some cases, gotten out ahead of Thompson and his monitoring team. Thompson, a former deputy U.S. attorney general in the George W. Bush administration, is of counsel to Atlanta's Finch McCranie.

“In many areas, we don't want to wait for the recommendation of the monitor. We have to find the right answers, which projects have to be kicked off ourselves, and get ahead of the monitor in some of the areas and then discuss with the team of the monitor whether these are the right things with the right priorities,” Werner said Tuesday.

Werner said that, while many U.S. companies have experience with them, compliance monitorships are “not so common in Europe.” The company and Thompson's team, she added, have both “made a tremendous effort to build up a constructive relationship.”

“We are really grateful that we got someone extremely experienced. Larry Thompson is highly valued inside the company for the broad experience that he brings to the company. And yes, we do have a lot to do. There are a number of areas that Larry Thompson and his team helped us to put more emphasis on,” she said.

Werner was elevated to head of integrity and legal affairs in February 2017, a month after the automaker reached a $4.3 billion plea deal that included paying the $2.8 billion criminal penalty. She also serves on Volkswagen's management board. By creating a board position for integrity and legal affairs, she said, Volkswagen sent “an extremely strong signal to our employees that we see this function now on a different level.”

Volkswagen, she said, has also opened more channels for employees to report concerns and has praised staff for filing reports.

“I can say that the number of tip-offs that we got, the number of reports, has already doubled in the last year, which is a good sign,” she said.

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