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Ex-VW exec accused of stealing GM secrets

A former senior executive at General Motors has been indicted, accused of defrauding the automaker by taking boxes of its confidential documents with him when he jumped to a top job at Volkswagen in 1993. The indictment, announced Monday, revives one of the most celebrated cases in recent years involving accusations of industrial espionage.

The six-count indictment by a federal grand jury here accuses Jose Ignacio Lopez de Arriortua, GM's former vice president for worldwide purchasing, of wire fraud and the interstate transportation of stolen property. The Justice Department asserted that Lopez copied extensive GM computer files on auto parts costs and future car models and took them to VW when he took the top purchasing job there.

Lopez's longtime lawyer, Plato Cacheris, said Lopez denied breaking any American laws but would not come to the United States to defend himself. And while the Justice Department said Monday that it would seek Lopez's extradition from Spain, Cacheris said Spain's extradition treaty with the United States did not allow Spanish citizens such as Lopez to be extradited against their will.

"This is a case that is a waste of time and money; he will never be tried," Cacheris said.

The State Department and the Spanish Embassy had no comment Monday evening on how or whether the extradition treaty might apply to Lopez. Many such treaties limit the extradition of a country's own citizens to stand trial, particularly on charges of nonviolent crimes, for which countries' laws may differ considerably.

Lopez left Volkswagen three years ago and has been working ever since as an auto consultant in Bilbao, the industrial center of Spain's economically depressed Basque region. Lopez has tried with little success to start his own auto company in his Basque hometown of Amorebieta, partly as a way to reduce unemployment.

Soon after Lopez's surprise resignation and departure to Volkswagen in March 1993, GM executives became concerned about the large volume of confidential documents which he and his assistants had requested in the four preceding months. GM ended up suing VW, accusing it of having used the documents. VW settled the civil case in January 1997, agreeing to pay GM $100-million but not admitting any wrongdoing; Lopez had resigned from VW two months earlier.

German prosecutors also had filed charges against Lopez accusing him of having stolen GM documents. They dropped the charges in July 1998 after he agreed to make charitable contributions totaling 400,000 marks, worth $224,000 at the time.

GM cautiously welcomed the announcement of the indictment. VW officials did not return calls requesting comment.

In Monday's announcement, the Justice Department revealed that the grand jury had returned the indictment in October under seal. The Justice Department did not reveal why the indictment was unsealed Monday, other than to note that a formal extradition request would soon be made to Spain.

Lopez wrung somewhat lower prices from the thousands of companies around the world that sell the auto parts from which GM assembles its cars.

The legal wrangling has centered on whether he took GM's prices to VW, which would have allowed VW to compare what it was paying the same suppliers for the same or similar parts and then demand lower prices in every case in which GM had negotiated a better deal.

Lopez tried to persuade General Motors to build a low-cost factory in the Basque region at which suppliers would play an unusually large role, sometimes sending their employees to help install parts at the assembly line. He went to VW when GM rejected the idea, but VW ended up not building a factory in the region, either.