John German didn’t expect to discover that Volkswagen had cheated deliberately and repeatedly on emission tests for its diesel-powered cars. “We expected to find good vehicles–we absolutely did,” he admits with an embarrassed grin.

Modern diesel cars are very fuel-efficient and, according to government tests, produce very little air pollution. Yet in Europe, where half the cars sold are diesels, the air is still dirtier than it should be, especially in London and other big cities. To emissions experts like German, that suggested that diesels pollute more in the real world than they do in government labs.

“It’s been known in Europe for five or ten years that diesels had high NOx [oxides of nitrogen] emissions in use,” says German, a U-M physics grad who works from his Ann Arbor home for the International Council on Clean Transportation. A European coworker, Peter Mock, suggested they try to find out just how high.

ICCT’s primary function is to assist government regulators worldwide. “We bring them data, analyses, and information,” German says. It’s the kind of wonky outfit where even a physicist might feel undereducated–“two-thirds of the people have PhDs, and I’m sitting here with my bachelor’s!”–but German has done his time in the emissions trenches: “I spent about a decade each in Chrysler, EPA, and Honda.”

Ironically, German says, he and Mock decided to test cars in the U.S. instead of Europe because “we thought the vehicles would be clean here.” The federal Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) set the strictest pollution standards in the world and have the legal power and technical expertise to enforce them. So they expected to find that diesel cars sold in the U.S. had low real-world emissions. They would then “take the data back to Europe and say, ‘Why can’t you do it here?'”

But the cars Volkswagen promoted as “clean diesels” turned out to be incredibly dirty. On the road, a Passat put out five to twenty times more NOx than it did in the lab. VW’s Jetta, the best-selling diesel car in America, emitted fifteen to thirty-five times the legal limit–as much as an 80,000-pound semi.

In September, the EPA announced the recall of nearly half a million Volkswagens sold in the U.S. since 2009. And that was just a fraction of the eleven million diesel vehicles that, the company now admits, were designed to game emissions tests.

Earlier this year, VW passed Toyota to claim the title of the world’s largest carmaker. But as “Dieselgate” broke, the company’s stock plummeted. CEO Martin Winterkorn quit, and VW announced it would set aside more than $7 billion for potential fines and repair costs.

Even that may be too little: Bloomberg Businessweek recently estimated the company’s potential liability at $28 billion. Leonardo DiCaprio reportedly has already optioned a yet-to-be-written book on the scandal.

German pulls up at the Observer’s west-side office in a twenty-year-old Honda station wagon. He’s lost track of the number of times he’s been interviewed since the EPA announcement but says it has to be more than 100. Boyish at sixty-three despite his gray hair, he appears amazed at his sudden fame.

Until recently, he explains, emissions-test equipment was so heavy that it could be used only in laboratories, like the vast EPA facility on Plymouth Rd. Though portable systems are now available, ICCT doesn’t have its own, so it put the project out for bid. West Virginia University’s Center for Alternative Fuels, Engines and Emissions won. For $50,000, the school agreed to provide both the three-hundred-pound machine and a team of grad students to run it.

They did the tests in California, where CARB let them use its lab for baseline tests. ICCT rented the cars. They chose VW’s Jetta because it’s so popular, and its Passat because it uses a different emissions control system and they wanted to see how it compared. They also wanted to test an upscale SUV, settling for a BMW X5 because no one in California rented Mercedes SUV diesels.

All three cars passed the baseline tests, on dynamometers at CARB’s lab. Then they went out into the real world. “We had five routes: three urban routes in L.A., San Diego, and San Francisco, a highway route, and one where they drove up into the mountains and back,” says German.

The cars weren’t driven by professionals but by WVU students. “Probably the reason they got the bid,” laughs German.

The VWs’ test results weren’t so funny. The West Virginia crew “thought their equipment had gone bad,” German says. “They kept checking and couldn’t find anything wrong. Then they put the X5 on [the test equipment], and the emissions immediately dropped down to very low levels.”

The ICCT is a think tank, not an enforcement agency. They did what they always do: “We published a report and turned over the data to CARB and the EPA,” German says. “We also sent a courtesy copy to VW two days ahead of the general release. They thanked me for sending the information.”

That was in May 2014. Last December, the EPA announced that VW had agreed to recall every diesel sold in the U.S. since 2009 to reprogram the cars’ computers.

Incredibly, the fix didn’t solve the problem. “This is the thing that I just don’t understand,” says German. “CARB and EPA gave VW a chance to fix it. Sure, there would have been recalls and some kind of fine. But VW said, ‘We’re going to call our vehicles in, recalibrate the computers, and solve the problem.’ Then in May, CARB got some of the [recalibrated] vehicles and did their own testing. The emissions are better, but they’re still high. What the heck’s going on here?!”

The ICCT researchers could only ask that question–it took CARB and the EPA to answer it. According to press accounts, Volkswagen made excuses for months. It finally admitted wrongdoing only when the EPA refused to certify its 2016 diesels for sale.

“There’s software inside the computer that has two sets of engine calibrations,” German explains. Emissions-lab tests are so standardized that the software can determine from the car’s behavior whether or not it’s being tested. “When it’s on the test it uses one set of calibrations,” German says, “and when it’s not on the test it uses the second set of calibrations.”

The cheating didn’t improve the cars’ EPA mileage. “The fuel economy numbers that go on the label are done on the official test,” German points out. “That means the emission control systems were working.” His theory is that the company did it for “customer satisfaction.” Since the emissions systems were fully operational only during the test, the cars could be cheaper and needed less maintenance. Unlike other diesels, VW’s small cars–the Jetta, Golf, and New Beetle–didn’t inject urea into their exhaust to reduce NOx emissions. That saved the company money up front, and owners the hassle and cost of refilling the systems.

VW has now essentially admitted that was a fraud: its future small diesels will use urea injection. The Passat, which already had a urea-injection system, will get a better one.

“It was really stupid,” German says. “But the part that really got me was they had the chance to fix it, and they didn’t do it. They continued to flat-out lie to the agencies! They tried to get away with it. Thinking that they wouldn’t go out and check, it’s beyond my comprehension.”

Who made those decisions? “The engineers can get pressured, but no engineer is going to go off on their own and do this,” German replies. “It has to be something that they’re told to do. It could have been a mid-level manager who said we got these targets we’ve got to meet and I don’t care how you do it. [But it] could have gone much, much higher.”

In addition to being CEO of the Volkswagen group (which also includes Audi, Bentley, and Porsche), Winterkorn oversaw research and development. But German doesn’t think his resignation necessarily means that the decision came from the top. “Europe’s different from the U.S. In Europe they have this old-fashioned belief that the person at the top is responsible –whether they knew or not!”

The environmental impact is enormous–though much worse outside the U.S. “Fortunately in the U.S., diesel car sales are less than one percent of overall car sales,” says German. In Europe, “this is a huge, huge air pollution health problem.”

After the California test, ICCT spot-checked diesel cars in Europe as well. As expected, the Jetta was the worst polluter there, too–but the Passat was not the second-worst. German won’t say what company made the car that was worse, but observes that high real-world emissions alone don’t necessarily reflect fraud. “We’ve seen other vehicles in Europe that are ten, fifteen times the [European] standard,” he says. “But you don’t know if it’s a poor design” that can pass the emissions test just because it’s less demanding than real-world driving.

It’s not that Europe’s emission rules are bad, German says. “It’s just that nobody enforces them. The standards are set by the European Commission, but they have no enforcement powers. They have this agreement where every country will accept certification from any other country so manufacturers go shopping: who’s going to be the easiest?

“It’s a completely different legal situation in the U.S.,” German continues. “The Clean Air Act not only gives EPA and CARB the authority, it mandates things they have to do.”

Though the EPA wasn’t the agency that caught Volkswagen, German praises his former employer’s follow-up.

“Europe’s known about this for ten years,” he says. “They’ve got a lot more data than we have, and what have they done?

“EPA and CARB get one piece of concrete information, and they dig into it until they find out what’s going on. The system here works. This system here is good.”

German is unsure how deep the damage to VW will go. “Look at the previous scandals: the GM ignition scandal and the Toyota unintended acceleration scandal. These things had a huge impact in the first year but were pretty much forgotten in two or three years.

“What may make this one different [is that it] was deliberate. If you look at the GM ignitions, it’s clear that this one engineer was trying to cover up what they did. But they didn’t do it deliberately to begin with, and they thought it would work OK.

“This one was completely deliberate. VW’s been selling diesels under the heading of ‘clean diesel,’ and that’s what’s getting people upset.”

As VW’s reputation fell, ICCT’s rose. But so far, at least, fame has not meant fortune. “We get most of our funding from foundations,” German explains. “They give money to projects,” not to the organizations directly. “We need to be able to say, ‘Here’s a new project that can take advantage of this situation [to improve real-world emissions].’ We are trying to write that up and go out and get more funding.”

The deluge of interview requests is not helping that effort. “I can’t get any work done!” German says. “I’ve done nothing the last three weeks but talk to media.”

At least he hasn’t had to talk to another very interested group: “One of the things my boss has been very specific about is that you cannot talk to private investors and hedge funds wanting advice because it has the appearance of a conflict of interests.”

So no trading in VW stock, then. And no bonus for having uncovered the biggest emissions scandal in the history of the auto industry?

“Not a dime,” he smiles.