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Tire cases haunt Ford, Bridgestone

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U.S. attorney begins probe by grand jury

March 13, 2003
BY JOCELYN PARKER
DETROIT FREE PRESS BUSINESS WRITER

Just when Ford Motor Co. and Bridgestone/Firestone thought the tire recall controversy was behind them, an aggressive U.S. attorney is heading an investigation that could bring it to the forefront again.

The person spearheading the latest probe, Miriam Miquelon, is known for tackling corporate and white-collar crimes. She has ordered several sources -- including at least one plaintiffs' lawyer and a safety advocacy group -- to turn over documents that could build a case against one or both of the companies.

The U.S. grand jury probe apparently involves failures of Firestone tires equipped on Ford Explorer sport-utility vehicles. The probe could lead to fines or criminal charges for Bridgestone/Firestone and Ford. The focus of the grand jury remains a mystery. Grand jury probes are usually kept secret and witnesses involved also tend to remain quiet. A spokesman for Miquelon wouldn't confirm or deny whether there's an investigation.

But observers say the mere fact that Miquelon is tackling the investigation could mean trouble for Ford and Bridgestone/Firestone.

"This is exactly the kind of case Miriam would sink her teeth into," says Michael Coffield, a Chicago attorney who knows Miquelon. "She knows a lot about price fixing, fraud and product liability cases against big corporations."

Miquelon, who became U.S. attorney for the southern Illinois district last year, has a reputation for being tough and tenacious, especially when it comes to fighting corporate scandals and white-collar crimes.

She is best known for her successful prosecution of gambling boss Thomas Venezia and his politically prominent Belleville, Ill., attorney Amiel Cueto. She also pursued one the largest consumer fraud cases in the nation's history in the prosecution of battery maker Exide Corp., which sold defective batteries to consumers. The company agreed to pay a multimillion-dollar fine.

Miquelon's no-nonsense nature, however, almost cost her the U.S. attorney job. Her confirmation as U.S. attorney was delayed for months because Illinois Democratic Sen. Richard Durbin wouldn't give his approval due to concerns about her work and temperament. He later gave his approval.

Statements sought
Details of the investigation, which first surfaced last month, remain sketchy, but a letter obtained by Bloomberg News says the documents Miquelon wants relate to "an official criminal investigation of a suspected federal offense." A subpoena Bloomberg also obtained requested documents from lawyers suing Bridgestone and Ford as well as testimony from eight others. They include Sanjay Govindjee, a consultant Bridgestone hired to investigate tire defects and Judy Sullivan, a purchasing agent for Ford.

The subpoena also demands sworn statements from John Lampe, Bridgestone's chief executive, and participation from the U.S. Postal Inspection Service.

Joan Claybrook, president of consumer advocacy group Public Citizen, told the Free Press that the U.S. attorney contacted her last fall regarding materials for the probe. Claybrook said she sent thousands of pages of documents from congressional hearings involving Ford and Firestone.

"She (Miquelon) asked me if she could come and search the office, so I just told her I would send her the entire file," Claybrook said.

A plaintiffs' lawyer familiar with the investigation also said he received a "couple subpoenas" for materials in recent months.

According to media reports, another witness, Alan Hogan, a former tiremaker for a Firestone plant in North Carolina, recently told the grand jury that he and his co-workers were forced to use substandard materials to make tires during the 1990s. Legal experts say there are several possible reasons for the probe:


The involvement of the postal inspector suggests that the grand jury could be exploring mail fraud. Something as simple as a tire coupon for 20 percent off could spark the charge if that promotion didn't disclose tire defects possibly known to Firestone, says Christopher Bebel, a Houston attorney who worked for the Securities and Exchange Commission. The charge would require that only one piece of mail be delivered in the southern Illinois district.

The grand jury might also be trying to find out whether top executives of Ford and Bridgestone lied to Congress and regulators about the problems with the tires.

Plaintiffs' lawyers might also have new evidence that could bring charges even though the case is nearly three years old. "Plaintiffs' lawyers are always working on discovery issues for their cases, and they might have come upon some data and studies that contradict the testimony of Bridgestone/Firestone executives," Bebel said.
Notably, Miquelon's district does not include the now-closed Decatur, Ill., plant blamed for producing many of the faulty tires. People close to Miquelon say that she will pursue high-profile corporate cases, no matter where the alleged improprieties took place.

Any criminal convictions would likely provide substantial leverage for lawyers pursing personal injury suits against Firestone or Ford, experts say.

Bridgestone/Firestone has recalled millions of Firestone Wilderness tires over the last 2 1/2 years, and Ford has paid to replace millions more. The tires have been linked to 271 deaths and more than 700 injuries.

Ford and Firestone said they have been honest and forthright with the government. Both companies said they have not been contacted about the probe.

"We stand behind the information we provided to federal officials," said Dan MacDonald, a spokesman for Bridgestone/Firestone.
 
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