GM Ignition Switch Recall Hearing Live Blog: CEO Mary Barra, NHTSA Official David Friedman Appear Before Senate Committee

GM CEO Mary Barra
GM CEO Mary Barra answers questions from the Senate Commerce, Science and Transportation Committee's Subcommittee on Consumer Protection, Product Safety, and Insurance. Senate Commerce, Science and Transportation Committee

UPDATE 1:55 P.M. EDT: One of the most dramatic moments at Wednesday's hearing came when Sen. Claire McCaskill, D-Mo., said that "a culture of cover-up" exists at GM. She said this culture caused the engineer to deliver false testimony about what he knew about a defective ignition switch. 

"It might have been the 'Old GM' that started sweeping this defect under the rug 10 years ago. Even under the 'New GM' banner, the company waited nine months to take action after being confronted with specific evidence of this egregious violation of public trust," the Missouri senator said.

UPDATE 12:59 p.m. EDT: Scovel wouldn't say whether the inspector general's office is conducting a criminal investigation into GM in response to a question from Blumenthal.

"I can't confirm or deny that a criminal investigation is under way," he said. 

UPDATE 12:39 p.m. EDT: David Friedman, acting administrator of the National Transportation Highway Safety Administration, and U.S. Department of Transportation Inspector General Calvin Scovel III are now testifying before the subcommittee.

Sen. Claire McCaskill, D-Mo., pointed out that fines for lying or withholding information to the NHTSA are capped at $35 million.

'Is that really a deterrent to companies like General Motors?" she asked.

Friedman responded that the $35 million is the maximum allowed by law, and that his agency supports increasing the maximum fine to $300 million.

UPDATE 12:18 p.m. EDT: Sen. Kelly Ayotte, R-N.H., noted that the independent investigator hired by GM, Anton Valukas, is also being paid by the company. But Barra said she believes the investigation will have integrity.

"I certainly know he is not going to compromise his reputation for General Motors," Barra said of Valukas, a former federal prosecutor who also looked into the collapse of Lehman Brothers.

UPDATE 11:46 a.m. EDT: A number of senators have referred to the corporate culture at GM, suggesting that the company has a history of not being forthcoming with customers about defects to vehicles.

"I'm concerned by virtue of what we learned, is there [is] a corporate culture and since you're the new sheriff in town, you'll have to get into that culture," Sen. Bill Nelson, D-Fla., said to Barra, who was named CEO in January.

Sen. Ed Markey, D-Mass., said he has legislation that would improve an early warning system for car defects. The bill requires companies to disclose safety information and creates a database of consumer complaints so the public is aware about potential safety issues. When Barra was asked if GM would endorse the legislation, she would only say that the bill is being mulled over by the company.

"I am very troubled that you are not willing to commit ending this culture of secrecy at General Motors," Markey said. "This is the moment now for you to say more than that you're sorry."

Sen. Richard Blumenthal, D-Conn., said it's "incontrovertible" that GM knew about the safety issues with a number of models, including Chevy Cobalts and Saturn Ions, much earlier than January, when the recalls were first announced. The senator said he also believed GM concealed the problems from the public and when it filed for bankruptcy in 2009.

Sen. Marco Rubio, R-Fla., asked Barra, who held a number of high-level positions with GM over the years, whether the company had a culture of discouraging bad news.

"I think the culture wasn't always welcoming of bad news," she said. "It wasn't always welcomed as what it should've been."

Rubio asked Barra if she knew who or what group at GM decided not to disclose the flaws with the ignition switches and to correct the defects in a timely matter. Barra pointed to an independent investigation that is looking into the matter, and said GM's leadership will "take steps," including possible firings, if it's found that such information was not disclosed.  

Original story:

General Motors (NYSE:GM) CEO Mary Barra is on Capitol Hill on Wednesday for a second consecutive day of hearings as Congress investigates the recent recall affecting 2 million GM vehicles. The issue that led to the recall is believed to have led to 13 deaths.

Barra appeared Tuesday before the House Energy and Commerce Subcommittee on Oversight and Investigations.

A subcommittee of the Senate Commerce, Science and Transportation committee is questioning the GM CEO on Wednesday. You can catch a live stream of the hearing here.

Follow this live blog for coverage of the hearing. 

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