Jones Day's Munich office
Jones Day’s Munich office ()

Jones Day, a secretive firm with close ties to the current U.S. president, saw its offices in Germany raided Wednesday by local prosecutors investigating its client, Volkswagen AG.

The move by prosecutors in Munich, which came two days before German Chancellor Angela Merkel was due to arrive in the U.S. for a meeting with President Donald Trump, was called “unacceptable” and a “clear violation of legal principles” in a statement by Volkswagen.

Jones Day has been handling an internal investigation for Volkswagen into an emissions software scandal that led the German auto giant to reach a $15.3 billion settlement last year to resolve consumer class actions. Volkswagen agreed earlier this year to pay $4.3 billion in civil and criminal penalties in an agreement with the U.S. Department of Justice.

In February, Volkswagen agreed to pay another $1.2 billion to settle a few remaining claims and a suit brought by the Federal Trade Commission involving 75,000 3.0-liter diesel engine vehicles. (Many of those vehicles can be found in empty stadium parking lots and old military bases around the U.S.) Vehicle pollution-related issues have already cost Volkswagen at least $22 billion and the automaker’s tally is expected to rise.

German prosecutors have been conducting an investigation into whether certain Volkswagen executives were responsible for the emissions disaster at the company. A summary of Jones Day’s findings has been provided by Volkswagen to the Justice Department, but has yet to be released publicly. Reuters reported that Jones Day’s probe found instances of wrongdoing by certain Volkswagen executives but exonerated members of the Wolfsburg, Germany-based company’s management board. (One of those board members, attorney Hans Michel Piëch, spoke with German news magazine Der Spiegel last year about how Volkswagen can recover.)

In January, Volkswagen’s top emissions compliance officer, Oliver Schmidt, and five other corporate executives were indicted as the company—advised by Sullivan & Cromwell, Steptoe & Johnson and Magic Circle firm Freshfields Bruckhaus Deringer—agreed to plead guilty to three U.S. felonies related to cheating on emissions regulations. Later that month, Volkswagen’s top compliance chief, former German judge Christine Hohmann-Dennhardt, abruptly left the company with a $12.8 million exit package, according to news reports.

German legal publication Juve reported that several German firms—such as Brehm & v. Moers, Eckstein & Kollegen, Haver & Mailänder and Krause & Kollegen—have been retained by executives of Volkswagen’s Audi unit as a result of the investigation by German authorities. Volkswagen’s general counsel is Manfred Doess.

German prosecutors searching Jones Day’s Munich office did so the same day that Audi’s headquarters was also searched, according to German newspaper Handelsblatt, which first had news of the raids. While Jones Day’s internal investigation for Volkswagen is not yet complete, the paper reported in January that the company had decided against publicly releasing the firm’s findings amid concerns that doing so could strengthen the legal case of investors and customers pursuing emissions-related claims, many of them in Europe.

Two media representatives for Jones Day in the U.S. and Europe did not return requests for comment. Besides its office in Munich, the firm has outposts in Düsseldorf and Frankfurt. Germany’s laws on attorney-client privilege are more maleable than in the U.S. or U.K., according to an analysis by British firm Simmons & Simmons. Nonetheless, Volkswagen did not mince words in its statement.

“In our opinion the search of a law firm mandated by a company contravenes the principles of the code of criminal procedure,” Volkswagen said.

The search of a law firm’s offices by government authorities, while unusual, is not without precedent. The American Lawyer reported in 2009 on the Moscow offices of DLA Piper and White & Case being raided by officials from Russia’s interior ministry as part of an investigation into the development of a hotel in the city.

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