Senate bill removes cap on DOT fines against carmakers

Senate Democrats have introduced a bill that would remove the cap on civil fines that the Department of Transportation (DOT) can levy on automakers for safety violations.

Sens. Richard Blumenthal (D-Conn.), Edward J. Markey (D-Mass.) and Bill Nelson (D-Fla.) introduced S. 2398, the Automaker Accountability Act, on Thursday. Their bill is in response to General Motors’ (GM) failure to disclose an ignition switch safety defect.

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“Only meaningful penalties can cause automakers to avoid concealing defects that lead to injury and death,” Blumenthal said. “This legislation will ensure that penalties are commensurate with wrongdoing and are meaningful financial deterrents to mistakes and mismanagement harming consumers. GM’s lesson to Congress is that concealment can kill.”

Earlier this month, the DOT announced it would fine GM $35 million for the mishandling of the ignition defects that lawmakers say have resulted in at least 13 deaths.

The lawmakers said the $35 million fine — which is the maximum allowable fine under law — isn’t enough since it’s less than 0.1 percent of the $37.4 billion in net revenue that GM made in the first quarter of 2014.

“A penalty of $35 million is pocket change for a major auto manufacturer,” Markey said. “We can never put a price on the lives lost in auto accidents linked to safety defects but we can ensure that the price automakers pay after violating the law is a meaningful one relative to their profits."

Although DOT Secretary Anthony Foxx has asked Congress to raise the maximum cap from $35 million to $300 million, the Democratic senators said that still isn’t enough. Their bill lifts the cap completely and allows the DOT to determine the fine based on the severity of the violation.

“This is about accountability and responsibility,” Nelson said. “When the violations are egregious, the penalties should be severe.”

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