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Madame Chair Nichols and Esteemed Committee Members:

“The Cycle 1 CA ZEV Investment Plan lays out a business investment,
not a penalty payment plan[.]” (Electrify America, on behalf of
Volkswagen, Supplement to the California ZEV Investment Plan /
Cycle 1, at 2 (Jun. 29, 2017)).

What is this ZEV Investment Plan if it is not a penalty and where
does ARB’s authority to enter into it stem from? Is this a
mitigation action? Is it a supplemental environmental project? Is
this even equitable and fair? I would argue, and I believe the Law
Reviews of the World will agree in the near future, that this—in
its current form—qualifies as none of the above.

I urge the Board and its Commissioners not to approve this
self-dealing, anti-competitive settlement simply. Just because it
allegedly resolves and addresses the liability and culpability of
the greatest intentional fraud ever carried out on a global scale,
does not make it true.

The audacity and brazenness that is evidenced in just the first two
paragraphs of this Supplemental Filing is absurd and shows just how
little respect Volkswagen has for the rule of law, the spirit of
this Consent Decree as approved by the Ninth Circuit, and
traditional notions of fair competition, equity, and justice. We
should NEVER back down from seeking unfettered justice against
those who wilfully harm our environment and intentionally defraud
our fellow Californians simply because the violator is a massive
corporation from a foreign nation able to hire the largest, most
powerful law firms. We have alternative remedies available to us,
and we should continue pursuing them until the final Settlement—in
its entirety—is fair and equitable to both American citizens and
corporations, which this ZEV Investment Plan is anything but. If we
permit this ZEV Investment Plan, what is to prevent VW from then
going forward and creating subsidiaries to similarly funnel all of
the Appendix D funds back to itself?

While portions of the Volkswagen 2.0-Liter Consent Decree,
including the vehicle buyback provisions, are clearly permissible
mitigation actions, it appears those activities funded under
Appendixes C and D to the Consent Decree could—or should—be, for
all intents and purposes, Supplemental Environmental Projects
(SEP). Yet, Volkswagen’s self-dealing via the funneling of all
funds through its wholly-owned subsidiary, Electrify America, are
in contravention of all available guidance issued by US EPA and
CARB regarding SEPs. (Cal. Air Res. Bd., Final Draft, Supplemental
Environmental Projects Policy (Oct. 17, 2016)). No other violator
in the State of California has been permitted to benefit from its
own SEP since the inception of these programs after the Dynegy
(EVgo) Settlement. Additionally, based upon the final civil
penalties levied by CARB, the ZEV Investment Plan exceeds the
permitted 50% maximum allocation of a civil penalty toward an SEP
that California law would otherwise permit after Jan. 1, 2017.
Thus, this cannot and does not qualify as an SEP—which is even
riskier for California, its environment, citizens, and industry.

If this ZEV Investment cannot qualify as an SEP, then I believe the
remaining source of authority for this type of action is a very
slippery slope in that it will preclude all of these activities
targeted under Appendixes C and D from being used as SEPs in the
future by any other violators in the State of California. If
Appendixes C and D are to be considered mitigation actions instead
of Supplemental Environmental Projects, then the Board risks
precluding—rather, it is affirmatively precluding—nearly all
sustainable transportation projects from being performed as SEPs in
the future. A mitigation action is one “the government believes a
court could order as injunctive relief”, whereas an SEP is a
voluntary project which otherwise “cannot be secured outside the
settlement context.” (U.S. Envtl. Prot. Agency, Memorandum,
Securing Mitigation as Injunctive Relief in Certain Civil
Enforcement Settlements (2nd edition) (Nov. 14, 2012). Available at
https://www.epa.gov/sites/production/files/2016-8/documents/2ndeditionsecuringmitigationemo.pdf).
Therefore, any activity authorized under this Consent Decree, which
is in and of itself a form of injunctive relief, cannot be used in
the future as an SEP because it has now been proven to be
obtainable through injunctive relief as ordered by the Courts in
the 9th Circuit. Beware the precedent you are amending and setting
by permitting this ZEV Investment Plan to be approved in its
current form.

Also of importance, Volkswagen should not be able to utilize this
settlement for the tax-deductible establishment of a wholly-owned
national electric vehicle charging network. Especially not when
they have the audacity to claim this “is not a penalty [. . .]” in
the introduction of this supplemental filing. What will ARB do when
it becomes clear through tax records that this document is chock
full of perjury and deceit—that VW is indeed claiming this as a
penalty for beneficial tax purposes? Do not permit this blatant
perjury to go unmet, and please disclose who permitted this
outlandish statement of impunity to be included in this
Supplemental Filing so that we, the interested public, may submit
proper complaints to the relevant State Bar Association(s), if
appropriate.

I’m not even going to dive deeply into how unfair and prejudicial
this ZEV Investment Plan is to Hydrogen Fuel Cell technologies as
well as the heavy-duty sector in its entirety by VW forcing them
all to squabble over the limited Appendix D funds—I believe and
hope other commentators will cover that in depth. VW’s
anti-competitive business judgment/decision to avoid committing
funding for installing even a single hydrogen fueling station under
the CA ZEV Investment Plan, to wit during any of the 3 phases, is
contrary to the goals of this Consent Decree and California’s own
policy directives and environmental goals. Additionally, forcing
all light-duty hydrogen refueling stations, each costing $1-million
or more, to share funding with the heavy-duty sector severely
limits the maximum reductions in NOx and other criteria pollutants
which are the true aim of Appendix D and most achievable in the
heavy-duty sector.

You are the California Air Resources Board. You, as employees and
Commissioners, represent one of the most powerful governmental
agencies in the world. Do not back down, do not give in, and do not
give up. This ZEV Investment Plan is inequitable, unfair, unjust,
and straight up lies and deceit coming from a company that has
repeatedly shown its proclivity and preference for fraud and
anti-competitive behavior. Do not forget what they did and the lies
they continued to spew long after their fraud was revealed. If you
permit this ZEV Investment Plan to proceed in its current form then
the precedent this sets will de-fang the Board for future
enforcement efforts. Any self-reporting violator in California from
here on out will be able to laugh in your face as they point to
this ZEV Investment Plan and say, “Thanks for the tax-deductible
investment in my own company’s future business model”—and that’s
assuming the Courts let you enforce SEPs after this chicanery.
Alternatively, any efforts to promote sustainable transportation
through an SEP in California could henceforth be challenged on the
basis they are precluded as potential forms of injunctive relief,
which is a strong tactic that entrenched oil majors and OEMs will
happily use against you and their zero-emission competition. I know
there is a reason CARB, US EPA, and VW avoided calling any portions
of the Consent Decree an “SEP” or a “mitigation action”, but now
that VW has admitted on the record that this is “not a penalty”,
you must ask yourselves: What is this? That answer is far from
justice and it may indeed be the unwitting and unforeseen death
knell for CARB’s environmental protection and enforcement efforts.


Signed,

A Concerned Californian
Submitted Anonymously to Avoid Potential Prejudice and Retaliation