NEW YORK — Eric T. Schneiderman is pushing his way into the spotlight — again. Last month, the Justice Department announced a massive, $14.7 billion settlement with German carmaker Volkswagen for equipping millions of diesel vehicles with software designed to cheat emissions tests.
On Tuesday, the New York attorney general announced the state is filing its own lawsuit against the car company to recoup the cost of the environmental harm caused by the “defeat devices.”
In the 90-page lawsuit, the state argues Volkswagen’s conduct was more deliberate than previously understood. Texas and California already have filed similar suits, but Schneiderman’s office says it is taking a slightly different approach and offering more details about the company’s conduct that could give its case more heft.
During five years as New York’s chief prosecutor, Schneiderman often has emerged as an agitator, a label he appears to revel. During his first few months in office, he was lauded by consumer advocates for putting the break on a massive Justice Department settlement with the country’s large banks. The terms weren’t tough enough, Schneiderman argued. The New York Democrat is also investigating whether Exxon Mobil misled the public and investors about the risks of climate change, a move sought by environmentalists but that has earned him ire from some Republicans in Congress.
Then there is the matter of Trump University. Schneiderman sued the now-defunct university for fraud in 2013, alleging it took advantage of thousands of students. That earned Schneiderman the label of “sleazebag” from presumptive Republican presidential nominee Donald Trump. Not that Schneiderman minds.
Schneiderman often says he is compelled to pursue some cases, such as the Exxon lawsuit, by inaction in Washington. But there is also this: A desire to test boundaries. “I like trying things that no one has ever tried before,” Schneiderman said in an interview.
Of course, Schneiderman has a long way to go to match the star power of his predecessor, Andrew Cuomo, who is now the state’s governor, or the notoriety of Eliot Spitzer, who turned the office into a bully pulpit for railing against Wall Street before resigning in a prostitution scandal.
He also is occasionally scolded for mixing his job with politics, including by The New York Post which once called him an “ambitious, liberal New York pol.”
And, some public advocates have been disappointed Schneiderman hasn’t been able to hold any high-level Wall Street executives responsible for the financial crisis. Under his leadership, New York has collected billions from large banks for financial crisis-era misdeeds. But no bank officials have gone to prison or been personally held liable.
Earlier this year, for instance, Schneiderman announced settlements with Barclays and Credit Suisse over allegations that the banks misled customers who bought and sold securities through the banks’ private trading sites, known as “dark pools.”
The settlements were announced with great fanfare as the first major crack down on the growing industry. But, despite laying out a case that accused executives at both companies of bad behavior, none were individually charged.
That may be, partly, by design.
“I often say to the lawyers here that catching bad guys is good but changing systems so there are no more bad guys to catch is better,” Schneider said.
Far from the do-gooder image he has cultivated as attorney general, Schneiderman started by representing many of the same Wall Street figures he now prosecutes as a partner at a large New York law firm. Eventually, he turned to public interest law and spent several years in the New York Senate before setting his sights on the attorney general’s office in 2010.
He was almost immediately vaulted into the national spotlight, when President Barack Obama picked him to co-chair a task force looking into the sale of mortgage-backed securities during the financial crisis. It was the Obama administration’s big push to answer complaints that not enough had been done to hold bank and their executives responsible for the financial carnage that following the housing crisis. (Schneiderman was seated one row behind Michelle Obama during the 2012 State of the Union when President Obama announced the formation of the working group.)
But Schneiderman soon clashed with the Obama administration when he complained the settlements being reached with some of the big banks, including Bank of America, Citigroup, JPMorgan Chase and Wells Fargo, weren’t tough enough. He also has come under intense pressure from the Obama administration to drop his opposition to a wide-ranging state settlement with banks over dubious foreclosure practices.
Another member of the task group, Iowa Attorney General Tom Miller, said at the time that Schneiderman’s approach “simply doesn’t make sense, is unprecedented and is unacceptable.”
Ultimately the companies agreed to larger settlements but executives were spared prosecution.
It became apparent “we were going to be able to get the largest penalties that had ever been enacted in the history of the country” as part of the settlements, Schneiderman said. “But it also became apparent that it would be very difficult to get the individual liability I was hoping for.”
Now, Schneiderman is focusing on a new target. Volkswagen has been widely pilloried after admitting that 11 million of its vehicles worldwide included software that allowed the carmaker to cheat on emissions tests.
The lawsuit filed by Schneiderman and Massachusetts Attorney General Maura Healey argues the coverup was orchestrated and approved at the highest levels of the company. Pointing to internal Volkswagen documents and emails, the lawsuit argues that the fraud lasted more than a decade and included dozens of engineers. The lawsuit is also the first to directly connect Volkswagen’s chief executive, Matthias Muller, to the deception.
“These suits should serve as a siren in every corporate board room, that if any company engages in this type of calculated and systematic illegality, we will bring the full force of the law — and seek the stiffest possible sanctions — to protect our citizens,” Schneiderman said.
Volkswagen said in a statement that the allegations included in the lawsuit are not new and that it is still cooperating with federal officials. “It is regrettable that some states have decided to sue for environmental claims now, notwithstanding their prior support of this ongoing federal-state collaborative process,” the company said in a statement.