By Jeff Bennett And Siobhan Hughes 

The National Highway Traffic Safety Administration should have known a faulty General Motors Co. ignition switch was cutting off power to air bags in its vehicles as early as 2007 but either overlooked evidence or failed to grasp it, according to a congressional report.

The House Energy and Commerce Committee report criticizes auto-safety regulators and GM for failing to take action on the safety defect linked to at least 19 deaths. That number is expected to increase.

While GM was chided for not taking the appropriate measures, the harshest criticism fell on NHTSA for not holding itself to the same standard of accountability of those it regulates, according to the report. It allowed an investigation of crashes involving GM cars to continue for years without pinpointing the problem.

"NHTSA was actively trying to find the ball," NHTSA Deputy Administrator David Friedman said during testimony before a Senate subcommittee Tuesday. "General Motors was actively trying to hide the ball." He cited as an example that GM had policies "not to mention the word defect in order to shield information from NHTSA."

The report and Senate subcommittee hearing came as GM continues to deal with the fallout from recalling 2.6 million Chevrolet Cobalt, Saturn Ion and other older cars earlier this year for a problem first discovered almost 11 years earlier. Jarring or putting too much weight on the ignition key can cause the switch to slip from "run" to "accessory," thereby cutting power to electronic steering and air-bag deployment.

GM said it is the company's focus is to ensure the situation doesn't happen again.

"One of our most important goals is to put our customers' safety and peace of mind at the core of everything we do," the auto maker said in a statement. "We support the role that NHTSA and Congress play in achieving that goal."

Senators Claire McCaskill (D., Mo.), Dean Heller (R-Nevada) and Bill Nelson (D-Fla.) called on the White House and President Barack Obama to fill the NHTSA administrator job on a permanent basis.

Mr. Friedman was the acting NHTSA administrator but his time in the position expired. He reverted to the prior role of deputy administrator. Mr. Friedman, who testified during the hearing, called on the senators to provide the agency with more resources to do its job. It also wants more authority and the ability to level higher fines against auto makers than its current $35 million maximum.

Senators, however, blamed NHTSA for being "asleep" on the GM situation calling it the "NHTSA snooze." Mr. Friedman said the agency is putting processes in place to ensure data are compiled in one area and crash investigators are always present in meetings where the agency is discussing vehicle problems with auto makers.

According to the report's findings, the regulatory agency tended to deflect blame and "get bogged down" in specific issues. The report also said NHTSA diverts staff from their normal responsibilities and collects a vast amount of data that is disjointed and not shared across the entire agency.

Perhaps more surprising, the report questions whether NHTSA has a "fundamental understanding" of how air-bag systems work. NHTSA's lack of understanding in air-bag technology is a common theme that has emerged from the GM switch issue. Earlier this year, the safety agency reached out to all auto manufacturers asking them to explain how their systems work.

"Key investigators at NHTSA lacked a fundamental understanding of how advanced air bag systems functioned," according to the report. "Assessments of potential defects, therefore, were based on investigators' knowledge of previous generation air bag systems."

Mr. Friedman said GM never informed the agency that it had specific information showing air bags in older model cars were designed to turn off when the ignition switch was moved from "run" to "accessory."

The agency's biggest failure, according to the report, lies with the NHTSA's handling of a Chevrolet Cobalt crash in Wisconsin in 2006. A subsequent investigation by a Wisconsin state trooper revealed that the vehicle's ignition switch was in the "accessory" position. The state trooper located a technical service bulletin--generated by GM--that suggested the vehicle's ignition could inadvertently turn off.

The trooper's own February 2007 crash analysis determined the likely cause of the non-deployment of the frontal air bags was tied to the vehicle's ignition being in the "accessory" position, something the safety agency didn't grasp for years.

"Investigators did not recall any agency discussions regarding the details of these reports, including the suggested link between the ignition switch and air bag deployment," according to the report. "The agency, instead, focused on the circumstances of the crash based on outdated perceptions of how air bag systems functioned. This contributed to the years of delay in identifying this defect."

"It is tragic that the evidence was staring NHTSA in the face and the agency didn't identify the warnings," said Rep. Fred Upton, (R., Mich.), committee chairman, in a statement. "NHTSA exists not just to process what the company finds, but to dig deeper. They failed."

The agency was also faulted for not making any changes to its internal structure while GM has taken many steps including hiring a safety chief and intensifying its reporting process when a vehicle problem and potential recall is discovered.

"Five months later, there is no evidence, at least publicly, that anything has changed at the agency," according to the report. "No one has been held accountable and no substantial changes have been made. NHTSA and its employees admit they made mistakes but the lack of urgency in identifying and resolving those shortcomings raises questions about the agency's commitment to learning from this recall."

The report concluded that the tragedy must serve as a reminder that safety is a collective responsibility. "GM, as a company, lost sight of this and thus failed to identify a defect that was staring them in the face for over a decade. This was not isolated to one individual, division or team. GM suffered from a culture of complacency," the report said.

"NHTSA also lacked the focus and rigor expected of a federal safety regulator. The agency's repeated failure to identify, let alone explore, the potential defect theory related to the ignition switch--even after it was spelled out in a report the agency commissioned--is inexcusable."

Write to Jeff Bennett at jeff.bennett@wsj.com and Siobhan Hughes at siobhan.hughes@wsj.com

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