WASHINGTON – The government accused Toyota of hiding a "dangerous defect" and proposed a record $16.4 million fine on Monday for failing to quickly alert regulators to safety problems in gas pedals on popular models such as the Camry and Corolla.

The proposed fine, announced Monday by Transportation Secretary Ray LaHood, is the most the government could levy for the sticking gas pedals that have led Toyota to recall millions of vehicles. There could be further penalties under continuing federal investigations. The Japanese automaker faces private lawsuits seeking many millions more.

Toyota Motor Corp. has recalled more than 6 million vehicles in the U.S., and more than 8 million worldwide, because of acceleration problems in multiple models and braking issues in the Prius hybrid.

Documents obtained from the automaker show that Toyota knew of the problem with the sticking gas pedals in late September but did not issue a recall until late January, LaHood said. The sticking pedals involved 2.3 million vehicles.

"We now have proof that Toyota failed to live up to its legal obligations," LaHood said in a statement. "Worse yet, they knowingly hid a dangerous defect for months from U.S. officials and did not take action to protect millions of drivers and their families."

For those reasons, LaHood said, the government is seeking a fine of $16.375 million, the maximum penalty possible. That dwarfs the previous record: In 2004, General Motors paid a $1 million fine for responding too slowly on a recall of nearly 600,000 vehicles over windshield wiper failure.

How Toyota decides to respond to the fines could pose a dilemma for the automaker. The company faces 138 potential class-action lawsuits over falling vehicle values and nearly 100 personal injury and wrongful death cases in federal courts nationwide. If Toyota pays the fines, the admission could hurt it in courtrooms. But battling the government over the penalties could undermine the automaker's attempts to move on from the recalls.

"It may be easier to pay it than to let this keep dragging on and drawing more attention to themselves," said Jessica Caldwell, a senior analyst with auto research site Edmunds.com.

Toyota did not say whether it would pay the fine. The automaker has two weeks to accept or contest the penalty.

"While we have not yet received their letter, we understand that NHTSA has taken a position on this recall," the company said in a statement, a reference to the National Highway Transportation Safety Administration. "We have already taken a number of important steps to improve our communications with regulators and customers on safety-related matters as part of our strengthened overall commitment to quality assurance."

The company noted that it has appointed a new chief quality officer for North America and has given its North American office a greater role in making safety-related decisions.

Under federal law, automakers must notify NHTSA within five days of determining that a safety defect exists and promptly conduct a recall.

The Transportation Department said the fine it is seeking is specifically tied to the sticking pedal defect and Toyota could face additional penalties if warranted by investigations.

The government has linked 52 deaths to crashes allegedly caused by accelerator problems in Toyotas. The recalls have led to congressional hearings, a criminal investigation by federal prosecutors, dozens of lawsuits and an intense review by the Transportation Department.

Toyota has attributed the problem to sticking gas pedals and accelerators that can become jammed in floor mats. Dealers have fixed 1.7 million vehicles under recall so far. The sticky accelerator pedal recall involves the 2007-2010 Camry, 2009-10 Corolla, 2009-10 Matrix, 2005-10 Avalon, the 2010 Highlander and 2007-10 Tundra.

Consumer groups have suggested electronics could be the culprit, and dozens of Toyota owners who had their cars fixed in the recall have complained of more problems with their vehicles surging forward unexpectedly. Toyota says it has found no evidence of an electrical problem.

Reviews of some recent high-profile crashes in San Diego and suburban New York have failed to find either mechanical or electronic problems. In the New York case, a police investigation found that the driver, not the car, was to blame.

Following the recalls, the Transportation Department demanded in February that Toyota turn over documents detailing when and how it learned of the problems with sticking accelerators and with floor mats trapping gas pedals.

NHTSA said documents provided by Toyota showed the automaker had known about the sticky pedal defect since at least Sept. 29, 2009, when it issued repair procedures to distributors in 31 European countries and Canada to address complaints of sticking pedals, sudden increases in engine RPM and sudden vehicle acceleration.

The government said the documents also show that Toyota knew that owners in the United States had experienced the same problems. Toyota has provided NHTSA with more than 70,000 pages of documents during the investigation.

Toyota official: 'We need to come clean'

WASHINGTON – Five days before Toyota announced a massive recall, a U.S. public relations executive at the automaker warned colleagues in an internal e-mail: "We need to come clean" about accelerator problems, according to documents obtained by The Associated Press on Wednesday.

"We are not protecting our customers by keeping this quiet," wrote Irv Miller, group vice president for environment and public affairs. "The time to hide on this one is over."

The recently retired Miller wrote the e-mail on Jan. 16, 2010, as Toyota officials were on their way to Washington to discuss the problems with federal regulators. On Jan. 21, Toyota announced it would recall 2.3 million vehicles to address sticking pedals in six vehicle models.

The e-mail reveals deep concerns within the company's leadership that Toyota wasn't dealing with the safety problems effectively and could damage the automaker's sterling reputation for producing safe and reliable vehicles.

The company already had announced a recall of more than 4 million vehicles in the U.S. in late September 2009 to replace gas pedals that could get stuck in floor mats and cause sudden acceleration.

The documents show that Toyota's European division, at the same time, told its distributors it was "identifying a production improvement and repair procedure to address complaints by customers in those countries of sticking accelerator pedals, sudden rpm increase and/or sudden vehicle acceleration" not caused by floor mats.

"We better just hope that they can get NHTSA (National Highway Traffic Safety Administration) to work with us in coming (up) with a workable solution that does not put us out of business," Miller wrote.

The e-mail was addressed to Katsuhiko Koganei, executive coordinator for corporate communications for Toyota Motor Sales U.S.A. Inc.

"I hate to break this to you but WE HAVE A tendency for MECHANICAL failure in accelerator pedals of a certain manufacturer on certain models," Miller's e-mail began with several words in capital letters.

In a memo earlier that day, Koganei wrote Mike Michels, vice president of external communications, "Now I talked with you on the phone, we should not mention about the mechanical failures of acc. pedal because we have not clarified the real cause of the sticking acc pedal formally, and the remedy for the matter has not been confirmed."

Koganei further wrote that Toyota executives were concerned that news of the mechanical failures "might raise another uneasiness of customers."

The subject line said the e-mail was in regard to a draft statement to respond to an ABC News story.

Toyota, in a statement, said it "does not comment on internal company communications" and declined comment on Miller's e-mail. But the automaker said: "We have publicly acknowledged on several occasions that the company did a poor job of communicating during the period preceding our recent recalls."

"We have subsequently taken a number of important steps to improve our communications with regulators and customers on safety-related matters to ensure that this does not happen again," Toyota said, adding that it appointed a chief quality officer for North America and a greater role in the region for making safety-related decisions.

Miller, reached by phone at his home in Los Angeles, said he had no comment. His retirement was announced by Toyota on Dec. 16 and his retirement was effective Feb. 1.

The Transportation Department has assessed a record $16.4 million fine on Toyota for failing to alert the U.S. government to the safety problems about the sticking accelerator pedals quickly enough. Transportation Secretary Ray LaHood said Tuesday that Toyota made a "huge mistake" by not disclosing the safety problems sooner.

Concerns about sticking gas pedals and complaints from Toyota owners in the U.S. were rising at the end of 2009, according to documents obtained by the AP.

Distributors throughout Europe and in Russia, Georgia, Kazakhstan, Turkey and Israel received the technical information.

In mid-January, Toyota held internal meetings "to discuss status of production changes and to prepare for meetings with NHTSA" on Jan. 19, according to the timeline. Two days later, Toyota announced it would recall 2.3 million vehicles to address the sticking pedals.

The documents obtained by the AP were among 70,000 pages of papers turned over to government investigators.

Toyota has recalled more than 6 million vehicles in the U.S. and a total of more than 8 million worldwide because of acceleration problems in multiple models and braking issues in the Prius hybrid.

The Japanese automaker was still weighing its options Wednesday about whether to accept or contest the fine. It has also been named in 138 potential class-action lawsuits over falling vehicle values and nearly 100 personal injury and wrongful death cases in federal courts.

the defect and shortcoming for toyota, was no requiring a basic IQ test before all purchases of their vehicles.


funny how worldwide, there has not been one issue of sudden acceleration.
all the cases seem to be in the US.
not even canada has had a case.

See below:

And you know this how? I know of several possible cases in Canada that have been reported in the Canadian press...

Cheers

My question is after the floor mat issue they said that there was also a mechnical issue that no one can replicate. The 2 most resent ones were both seen as driver error or someone looking to make a quick buck. It has gone so far now as to have NASA look in to the computer of the acc. to see what they find. So again how can the gov. fine toyota if their own traffic safety board can not find without a doupt the problem?

It is my understanding that Toyota is being fined for violating US law that required them to report safety issues within FIVE DAYS.
According to a number of published reports, Toyota's own internal documents have proven that Toyota delayed telling the US regulators for a number of MONTHS about the gas pedal issues.

IMHO, it is too bad that the amount of the fines is limited by law.
The $16 million dollar fine is simply not enough to even get Toyota's attention.
Now a more sizable fine would be another story. Hmmmm, maybe say $100 million fine. That would be poetic justice given the Toyota presentation where executives boasted they saved $100 million by getting US regulators to agree on the floor mat (ie cheaper) recall.

Oh well, based on a NY Times story this morning is seems that the US Regulators may be considering additional fines against Toyota. Stay tuned.