Toyota accused of 'withholding documents'

Toyota immediately denied the charge from Democratic Representative Edolphus Towns, chairman of the House Committee on Oversight and Government Reform, that its actions betrayed "a systematic disregard for the law."

On Friday, Towns cited documents obtained from a former Toyota in-house lawyer, Dimitrios Biller, as giving "evidence" of improper behavior including "routine violation of court discovery orders in litigation."

"People injured in crashes involving Toyota vehicles may have been injured a second time when Toyota failed to produce relevant evidence in court," Towns said in a blunt letter to Toyota Motor North America president and chief executive Yoshimi Inaba.

"Moreover, this also raises very serious questions as to whether Toyota has also withheld substantial, relevant information from NHTSA," said Towns, referring to the US National Highway Traffic Safety Administration.

Toyota has been under fire since January over a rash of defects that have prompted the recall of millions of vehicles and plunged the world's largest carmaker into crisis.

In particular, the sudden acceleration problem found in some Toyota cars has gone unchecked for years, ultimately leading Toyota to issue nearly 10 million recall notices and temporarily halt sales of eight models.

At least 34 deaths have been blamed on sudden acceleration in Toyota vehicles, according to complaints filed with NHTSA, which the agency said is more than all other automakers combined.

Toyota spokeswoman Cindy Knight said in a statement that "it is not uncommon" for corporations in litigation "to object to certain demands for documents made in litigation."

"Consistent with that philosophy, we take appropriate steps to maintain the confidentiality of competitive business information and trade secrets. We are confident that we have acted appropriately," she said.

Towns cited internal memoranda by Biller, especially one dated September 1, 2005, in which the attorney warns that Toyota has withheld electronic documents it should have provided, or "produced", to plaintiffs' attorneys.

"Clearly, this information should have been produced in litigation before today," Biller, who defended Toyota in "rollover" cases as a top lawyer for the company from April 2003 to September 2007, said in the document.

Toyota "is clearly not producing all of the relevant information/documents in its possession," said Biller, warning that "we need to start preserving, collecting and producing e-mails and electronic discovery."

Towns demanded an explanation from Inaba, who testified before the committee on Wednesday and was due before a Senate committee next week.

Knight said Toyota looked forward to addressing Towns's concerns.

Toyota could be in hot water if it is found to have improperly withheld documents, said Jacob Frenkel, a former US Securities and Exchange Commission enforcement lawyer and federal prosecutor who now defends white collar crimes.

"Any misconduct, misrepresentations and obstructive acts relating to information about problems with Toyota products absolutely are going to be scrutinized by US federal criminal prosecutors," said Frenkel.

"The congressional panel cannot sanction for misconduct in a court of law, but the judge certainly can," he warned.

However, some Japanese analysts, while acknowledging problems in Toyota's handling of its recall, said they thought Congress had been too opportunistic in its pursuit of a solution.

"It does seem that emotions are a factor at these hearings," said Masahiro Fukuda, manager of Fourin Inc., a research company specializing in the auto industry.

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