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Oversight chair accuses Toyota of withholding court documents, keeping secret 'Books of Knowledge'

UPDATED with Toyota response at 11:39 p.m.

Rep. Ed Towns (D-N.Y.), chairman of the House Oversight and Government Reform committee -- which heard testimony from Toyota President Akio Toyoda earlier this week -- accused the company of withholding documents that they were legally required to turn over in liability lawsuits.

The documents came from former top U.S. Toyota lawyer Dimitrios Biller, who is locked in a legal war with Toyota. Biller says he is a whistleblower and has documents that prove that Toyota refused to hand over documents that could have harmed the company in cases in which customers were suing Toyota because of accidents.

This marks only the latest PR blow against the embattled Japanese auto giant, which seemed to weather the Capitol Hill grilling pretty well.

“In sum, the Biller documents indicate a systematic disregard for the law and routine violation of court discovery orders in litigation," Towns said in a statement. "People injured in crashes involving Toyota vehicles may have been injured a second time when Toyota failed to produce relevant evidence in court. Moreover, this also raises very serious questions as to whether Toyota has also withheld substantial, relevant information from NHTSA.”

Click here to read the documents (if they're still up on the site), which give a fascinating -- if torturous -- account of what a personal-injury settlement looks like, as Toyota comes to a settlement figure with a woman who became a quadriplegic following a rollover crash in her Toyota.

Biller was a lawyer in Toyota's product liability group from 2003 to 2007 and defended the company in large liability cases. Quoting from Towns's statement:

"Included in the documents is a memo, authored by Biller to his superiors at Toyota, noting that Toyota has failed to produce any emails or other electronic records in response to discovery orders. Additionally, the [Oversight and Government Reform] committee has found multiple references to secret 'Books of Knowledge' that were kept in electronic form, in which Toyota engineers kept their design and testing data across all vehicle lines and for all vehicle parts. The committee now has evidence that Toyota entered into multi-million dollar settlements in tort cases where they feared that the plaintiff’s lawyer was getting close to discovering the existence of the 'Books of Knowledge.' "

Books of Knowledge! Wow! This sounds like a Nicolas Cage mystery-thriller! "National Treasure: Books of Knowledge."

(Before we all get carried away, the "Books of Knowledge" may be nothing more nefarious than proprietary information and design specifications that Toyota wanted to prevent from falling into the hands of rivals.)

The committee has asked Toyota North America President Yoshimi Inaba to respond to these accusations by March 12.

UPDATED:

Here's Toyota's response:

"Toyota takes its legal obligations seriously and strives to maintain the highest professional and ethical standards in its legal and regulatory practices. It is not uncommon, however, for companies 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 with respect to product liability litigation and our discovery practices and look forward to addressing Chairman Towns' concerns."

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By Frank Ahrens  |  February 26, 2010; 11:39 PM ET
Categories:  Congress , Corporations , The Ticker  | Tags: Akio Toyoda, Ed Towns, Toyota, Toyota problems, Yoshimi Inaba, toyota congressional hearings  
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Comments


Of course they keep secret books, that is how Japanese execs pay for their Japanese school girl mistresses. They all do it.

Posted by: screwjob2 | February 26, 2010 4:26 PM | Report abuse

It's foolish of us to expect that Toyota will police itself.Toyota has known of these problems since 2003.Seven tears and (39) American deaths later,Toyota is still playing a game of hide and seek.We need to stop all shipments of Toyota's cars into this country until our Government can insure Americans that this problem is solved.We dont want to hear it from Toyota because toyota has proven,they cant be trusted and profit is before live and safety.LET US SEE THE PICTURES OF THE CHILDERN TOYOTA KILLED IN THE NAME OF PROFIT.toyota said it self that $100,000,000 profit was made by them letting this problem presist.Now Toyota will try to settle out of coutry for less than $50,000 a person.Is that a fair price for a life in America? I dont think so.

Posted by: apez54 | February 26, 2010 4:51 PM | Report abuse

My Avalon drives like a beaut...

Posted by: lingering_lead | February 26, 2010 4:58 PM | Report abuse

People really should refresh their memories on the Ford Pinto/Ford Products ....

http://en.wikipedia.org/wiki/Ford_Pinto#Safety_problems_and_scandal

Posted by: James10 | February 26, 2010 5:08 PM | Report abuse

the best that Toyota is going to come up with as an excuse is "books of knowledge" is a translation term, and the data is inextricibly bound to propriatary design stuff by some ancient rule of organization.

that's the best case as I see it. the other side is quite obviously indefensable.

this soap opera is not going away, and Ford, GM, Honda, and Hyundai are going to lunch well on the former Toyota market.

Posted by: swschrad | February 26, 2010 5:09 PM | Report abuse

The U.S. Congress has a conflict of interest as the US government owns Toyota's main US competitor, Government Motors (GM).

Toyota's worst car is better than GM's best car.

Posted by: Bitter_Bill | February 26, 2010 5:33 PM | Report abuse

Every car Toyota makes is it's worst car.Toyota has killed #9 American people.That's more than Ford GM And Chsyler combined.Toyota also benefit from the American Government.Remember cash for cluckers? Toyota benefit from it the most.Now it's time to end Toyota's little game.Some jail time is in order for those 39 deaths.All I have to say is DONT DROP THE SOAP.

Posted by: apez54 | February 26, 2010 5:49 PM | Report abuse

the headline reads, "Toyota accused of secret "books".

and?

bush and his admin were accused of secret "memos" which led to an illegal war killing hundreds of thousands of people.

and our messiah said he won't pursue any of them or the authors of even more secret "memos" approving illegal torture.

isn't this country grand?

Posted by: AuthoritativeAuthoritarian | February 26, 2010 5:56 PM | Report abuse

So shouldn't we also asking the same questions of the NHSTA ? Or more to the point, exactly why is it that they exist ?

Posted by: jralger | February 26, 2010 6:04 PM | Report abuse

I was told by an Asian co-worker that they most Asian businesses always keep two sets of books...the one for government auditors and the other one for deals they don't want them to know about. Tax evasion is the reason.

Posted by: Pstacy | February 26, 2010 6:38 PM | Report abuse

This could be a fantastic break for the U.S. auto industry. One would think that all the years from say, 1970 - present, American auto companies have learned how to deal with product defect cases, especially in those where lives were lost. The Japanese Toyota culture, may not have been savvy to such matters, and Japanese corporations in general have a history of being paranoid and certainly, secretive.
If these allegations are run down as true, it's possible American auto companies will have a legitimate opening to ensnare market share Toyota has held recently. If American auto companies can begin to break out, and away, with good deals designed to lure American car buyers to their show rooms, the result might be a legitimate, home grown opportunity to sell cars.
Once American auto companies and auto workers are rehired, the economy will begin to improve, and do so on the energy of a legitimate production increase: American buyers purchasing American cars, and if the trends show that American autos and trucks are now competitive, how great would that be?
It might be, in fact, a long needed break for we Americans. That would be great, and we sure need something of that nature. No economic trend dependent on China. Sales of American cars rather than foreign autos. An improvement in our balance of trade. An improvement, therefore, in our deficit.
We can always hope for this break.
America's overdo, I'd say.

Posted by: zennheadd | February 26, 2010 6:43 PM | Report abuse

Weather it is Toyota cars or plastic baby food containers. Japanese companies should not hide the truth. This is how great companies go under. If true Toyota should be criminally indicted. I have no doubt that they had secret books.

What about Japanese companies requiring their Japanese expats located in the US to kick back part of their pay secretly back to Japan. It seems to be common place.

Posted by: txengr | February 26, 2010 6:44 PM | Report abuse

they must be listening and watching CHARLIE RANGEL and the rest of the crooked democrats.

Posted by: SISSD1 | February 26, 2010 6:56 PM | Report abuse

Remember that most politicians were lawyers before they became politicians. I believe they developed their ability to lie while still practicing law and then really refined these techniques while running for public office. Once they became elected politicians they earned their PhD's in the art of advanced lie generation. There's nothing coming from our nations Capitol that I any longer believe! And most politicians only know enough to their chauffeur where to take them and absolutely nothing about automobiles.

Posted by: 312capri | February 26, 2010 7:01 PM | Report abuse

@lingering_lead, this Avalon suddenly accelerated last December and ended up in a pond, killing the four people riding in it- http://www.dallasnews.com/sharedcontent/dws/news/localnews/stories/122709dnmetsouthlakecrash.1c521e58.html

Posted by: hairguy01 | February 26, 2010 7:58 PM | Report abuse

Seems foolish to claim that the U.S. government has a conflict of interest. Now if you want to say that THIS administration won't go easy on Toyota because it's non-union I won't argue with that. Of course if you think that's awful, you should have the honesty to examine why NHTSA, USDA, FDA & FAA have all failed to stop major problems on their watch - let's call it a regulatory gutting by Cheney & Bush.

Toyota & Honda were scarred by the Jap -bashing of the 1980s and have very carefully created vested interests across the U.S. to raise the cost of that type of behavior. Honda makes more cars in Ohio than GM does, but did not expand further in Ohio because there was more value to going to another state and to make two more Senators have to consider them a key home state employer.

Fact is, the Japanese car companies have adjusted and made significant contributions to the U.S. economy as they have increased market share.

Now as for Hyundai....buying one of them is about as good for the country as shooting your neighbor. The Korean government massively subsidized them in the mid 1990s and they were basically paid to put a plant down South in this country.

Buy what's good for America - that could be Honda, Ford, Toyota or GM, but don't buy Korean cars that suck money out of the country.

Posted by: ohiomc | February 27, 2010 5:21 PM | Report abuse

Finance Minister Pranab Mukherjee presented the Union Budget 2010-11 in parliament on Friday. Has he lived up to the expectations of the taxpayers? Is it a populist Budget? Will it also help India to grow? To find out read on..

Highlights...

* FM prunes tax rates:
Income up to Rs 1.6 lakh - nil Income above Rs 1.6 lakh and up to Rs 5 lakh - 10 per cent
Income above Rs 5 lakh and up to Rs 8 lakh - 20 per cent
Income above Rs 8 lakh - 30 per cent.
* Income Tax department ready with two-page Saral-2 return forms for individual salaried assesses.
* New tax rates would offer relief to 60 per cent of tax-payers.
* Government's net borrowing to be Rs 3,45,010 crore for 2010-11.
* Additional deduction of Rs 20,000 allowed on long term infrastructure bonds for income tax payers; this is above Rs one lakh on saving instruments allowed already.
* A unique identity symbol would be provided to the Indian Rupee in line with US Dollar, British Pound Sterling, Euro and Japanese Yen.
* Fiscal deficit seen at 4.8 per cent and 4.1 per cent in 2011-12 and 2012-13 respectively.
* Total expenditure pegged at Rs 11.8 lakh crore, an increase of 8.6 per cent.
* Gross tax receipts pegged at Rs 7,46,656 crore for 2010-11, non-tax revenues at Rs 1,48,118 crore.
* FM appeals to "misguided elements" (left wing extremists) to eschew violence and join the mainstream.
* Planning Commission to prepare integrated action plan for Naxal-affected areas.
* Defence allocation pegged at Rs 1,47,344 crore in 2010-11 against Rs 1,41,703 crore in the previous year. Of this, capital expenditure would account for Rs 60,000 crore.
* Fiscal deficit pegged at 6.9 per cent in 2009-10 as against 7.8 per cent in the previous fiscal.
* Finance Minister to continue giving cash subsidy for fuel and fertiliser instead of previous practice of bonds.
* Non-plan expenditure pegged at Rs 37,392 crore and Plan expenditure at Rs 7,35,657 crore in budget estimates. 15 per cent increase in plan expenditure and six per cent in non-plan expenditure. Indian stock market Indian stock market

Posted by: stockprondia123 | February 28, 2010 9:33 AM | Report abuse

Finance Minister Pranab Mukherjee presented the Union Budget 2010-11 in parliament on Friday. Has he lived up to the expectations of the taxpayers? Is it a populist Budget? Will it also help India to grow? To find out read on..

Highlights...

* FM prunes tax rates:
Income up to Rs 1.6 lakh - nil Income above Rs 1.6 lakh and up to Rs 5 lakh - 10 per cent
Income above Rs 5 lakh and up to Rs 8 lakh - 20 per cent
Income above Rs 8 lakh - 30 per cent.
* Income Tax department ready with two-page Saral-2 return forms for individual salaried assesses.
* New tax rates would offer relief to 60 per cent of tax-payers.
* Government's net borrowing to be Rs 3,45,010 crore for 2010-11.
* Additional deduction of Rs 20,000 allowed on long term infrastructure bonds for income tax payers; this is above Rs one lakh on saving instruments allowed already.
* A unique identity symbol would be provided to the Indian Rupee in line with US Dollar, British Pound Sterling, Euro and Japanese Yen.
* Fiscal deficit seen at 4.8 per cent and 4.1 per cent in 2011-12 and 2012-13 respectively.
* Total expenditure pegged at Rs 11.8 lakh crore, an increase of 8.6 per cent.
* Gross tax receipts pegged at Rs 7,46,656 crore for 2010-11, non-tax revenues at Rs 1,48,118 crore.
* FM appeals to "misguided elements" (left wing extremists) to eschew violence and join the mainstream.
* Planning Commission to prepare integrated action plan for Naxal-affected areas.
* Defence allocation pegged at Rs 1,47,344 crore in 2010-11 against Rs 1,41,703 crore in the previous year. Of this, capital expenditure would account for Rs 60,000 crore.
* Fiscal deficit pegged at 6.9 per cent in 2009-10 as against 7.8 per cent in the previous fiscal.
* Finance Minister to continue giving cash subsidy for fuel and fertiliser instead of previous practice of bonds.
* Non-plan expenditure pegged at Rs 37,392 crore and Plan expenditure at Rs 7,35,657 crore in budget estimates. 15 per cent increase in plan expenditure and six per cent in non-plan expenditure.

stockproindia.com

Posted by: stockprondia123 | February 28, 2010 9:34 AM | Report abuse

I had long put out of my mind the fact that my 1981 Toyota Corolla had a 'sticking accelerator' problem. Fortunately, it had stick shift and I became adept at throwing it into neutral, getting to the shoulder of the road quickly, opening the hood and manually 'un-sticking' the throttling mechanism. Of course, since the problem was random, the 2 garages I used for service could not reproduce the problem, and the base problem was never diagnosed.
Does anyone know how far back this problem first appeared? Really?

Posted by: katydid2 | March 5, 2010 10:35 AM | Report abuse

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