Congress Should Reject Nomination of Michael Baroody for Safety Agency

Baroody at NAM When It Backed Change in CPSC Rules to Conceal
Dangerous Products

President Bush has made a stunningly inappropriate choice in nominating Michael Baroody to chair the Consumer Product Safety Commission (CPSC). Baroody is the executive vice president of the National Association of Manufacturers (NAM) and oversees all of its advocacy efforts.[1] Last year, NAM and its allies successfully pressed the CPSC to weaken the sharpest enforcement tool in its arsenal – a safeguard that requires companies to disclose hazardous products – showing that a clear conflict-of-interest afflicts Baroody's nomination.[2]

NAM's motive for weakening the safeguards? Money. An analysis by Public Citizen shows that the rule has netted more than 80 percent of the agency's fines since 1997 – and NAM members and affiliates have accounted for more than half of those payments.[3]The new guidance, which was finally issued in July 2006, will allow future manufacturing defects and safety hazards to go unreported if a manufacturer determines that they meet any of several newly created exceptions. The guidance will undoubtedly save companies money and reduce public notice of safety risks. If confirmed, Baroody would administer the safeguards that NAM helped to change – presenting a clear conflict-of-interest.

The CPSC guards the public against serious injury or death from more than 15,000 types of consumer products.[4]The safeguards that NAM helped weaken dictate when companies – including NAM members – must immediately report information about potentially hazardous product defects. The safeguards also had the added purpose of producing timely decisions to recall dangerous products.

NAM and other industry groups and companies lauded the new rules, which they said provided greater clarity to reporting requirements.[5]But the CPSC's changes actually made the requirements blurrier – providing companies with excuses not to report faulty products. The changes will almost certainly reduce the number of reports, resulting in more deaths and injuries due to defective products.

CPSC Fines Against NAM-Affiliated Organizations for Reporting Violations

Firm

NAM Affiliation

Year

Fine (link to CPSC)

Graco

Member of the Juvenile Products Manufacturers Association (JPMA).[6]

2005

$4,000,000

Cosco (subsidiary of Dorel U.S.A.)

Member of the Juvenile Products Manufacturers Association (JPMA).

2001

$1,300,000

Fisher-Price

Member of the Board of the Juvenile Products Manufacturers Association (JPMA).

2001

$1,100,000

Brunswick

Member of the National Marine Manufacturers Association (NMMA) and of NAM's Coalition for the Future of Manufacturing.[7]

2003

$1,000,000

General Electric

NAM Board of Directors.

2002

$1,000,000

Fisher-Price

Member of the Board of the Juvenile Products Manufacturers Association (JPMA).

2007

$975,000

Lane Company

Member of the American Home Furnishings Alliance(AHFA).[8]

2001

$900,000

Honeywell

Member of the Association of Home Appliance Manufacturers (AHAM).[9]

2001

$800,000

Hoover

Member of the International Housewares Association (IHA).[10]

2007

$750,000

Wal-Mart

Member of the International Housewares Association (IHA).

2003

$750,000

L.L. Bean

Member of the Apparel and Footwear Association (AAFA).[11]

2000

$750,000

Tropitone Furniture

Member of the American Home Furnishings Alliance (AHFA).

2001

$750,000

Acuity Brands

NAM Board of Directors.

2006

$700,000

Sears, Roebuck and Co.

Member of the International Housewares Association (IHA).

2004

$500,000

Safety 1st (subsidiary of Dorel U.S.A.)

Member of the Juvenile Products Manufacturers Association (JPMA).

2001

$450,000

Galoob Toys (subsidiary of Hasbro)

Member of the Board of Directors of the Toy Industry Association (TIA).[12]

2000

$400,000

Hasbro

Member of the Board of Directors of the Toy Industry Association (TIA).

2000

$400,000

Nexgrill

Member of the Hearth, Patio and Barbecue Association (HPBA).[13]

2007

$300,000

Aroma Housewares

Member of the International Housewares Association (IHA).

2002

$300,000

Baby's Dream Furniture

Member of the Juvenile Products Manufacturers Association (JPMA).

2000

$200,000

Safety 1st (subsidiary of Dorel U.S.A.)

Member of the Juvenile Products Manufacturers Association (JPMA).

1998

$175,000

Peg Perego

Member of the Juvenile Products Manufacturers Association (JPMA).

2002

$150,000

Battat

Member of the Toy Industry Association (TIA).

2004

$125,000

NuTone

Member of the Association of Home Appliance Manufacturers (AHAM).

1998

$110,000

West Bend

Member of the Association of Home Appliance Manufacturers (AHAM).

2006

$100,000

Royal Sovereign

Member of the Association of Home Appliance Manufacturers (AHAM).

1998

$20,000

Total

 

 

$18,005,000

Sources: Public Citizen analysis of CPSC fines, NAM's Web site, companies' Web sites and associations' Web sites.

Disclosure Is CPSC's Best Tool for Safety

The CPSC has collected $39.6 million in civil fines since 1997.[14] Public Citizen's analysis shows that the rules that NAM sought to change – called the Substantial Product Hazard reporting guidelines – are solely responsible for the bulk of that total – about $32.9 million. The reports on hazards are mandated by Section 15(b) of the Consumer Product Safety Act, one of the key laws governing the CPSC's role in protecting consumer safety.

Companies that are either members of NAM or its affiliated associations have paid more than half of the civil fines – totaling $18 million – for alleged violations of the reporting requirements. Five of those companies alone have paid out a combined $10 million.

These companies include:

  • Graco Children's Products Inc., which manufactures cribs, strollers and other items. The company paid a record $4 million penalty in 2005, settling CPSC's charges that it failed to report information about possible defects in more than 12 million of its products from 1991 to 2002.[15] Six babies died from strangulation or falls in the company's swings.[16] Others suffered skull fractures, concussions, lacerations, or broken bones from falls after handles failed in several models of its carriers and car seats.[17] The company has a seat on the board of directors of the Juvenile Products Manufacturers Association (JPMA), one of roughly 65 manufacturing associations and companies regulated by the CPSC that are members of NAM's CPSC Coalition.[18]
  • Fisher-Price Inc. This well-known toy manufacturer has been cited twice by the CPSC since 2001, paying fines totaling more than $2 million.[19] This year, the company, also a member of the JPMA's board, was cited for unreported problems in its Little People Animal Sounds Farm.[20] Part of the toy, a metal nail fastener, was susceptible to coming loose and could be inhaled by children if they put it in their mouths. In one incident, a 14-month-old boy needed emergency surgery after he inhaled the fastener into his lungs. In the second citation, the CPSC charged that another toy, the company's Power Wheels mini-cars, could burn children when the cars overheated or short-circuited.[21] Also, the cars didn't always stop appropriately, resulting in crashes. The company did not report more than 100 fires linked to the toys, including fires that damaged 22 houses and garages.
  • Dorel U.S.A. Inc. The CPSC has assessed this JPMA member about $1.9 million in penalties since 1998, mostly for allegedly withholding information about defects in its products that caused numerous serious injuries and, in the case of its cribs, killed two children.[22]Prior to the deaths of each child, an 8-month-old who was strangled between slats of a misassembled side rail and an 11-month-old whose neck was trapped after falling feet first through the slats of the mattress platform, the company received numerous reports from consumers about similar incidents. Reacting to those reports and complaints about defects in other products – including some models of strollers, car seat carriers and high chairs – the company made several changes to its products but did not report the defects to the CPSC.
  • General Electric Inc. CPSC levied $1 million in penalties against this conglomerate in 2002 for failing to report that several models of its dishwashers were prone to overheating and even catching fire.[23] The CPSC charged GE with knowing about more than 100 incidents involving the dishwashers, including nearly 50 fires, between 1992 and 1998. The company finally informed the CPSC of the problems in November 1998. GE is closely tied to NAM; its vice chairman is on NAM's board of directors.[24]

Public Citizen's analysis excluded incidents in which companies were accused of transgressing the reporting requirements and of engaging in other alleged violations as well, making it impossible to separate reporting fines from those resulting from other charges. For example, Black & Decker paid the CPSC $575,000 in 1999.[25] The fine settled CPSC charges that the company both failed to report fires connected with its toasters and that it also concealed documents from the CPSC during the agency's subsequent investigation. Black & Decker is a member of the Association of Home Appliance Manufacturers, part of NAM's CPSC Coalition.[26]

NAM and its Allies Pressed Agency to Adopt the Weaker Regulations

In 2006, against this backdrop of manufacturer defiance and cover-ups, the CPSC actually proposed watering down the reporting guidelines.[27]Its proposal added additional criteria to the test for determining if a product is both defective and potentially dangerous, and therefore warrants disclosure to the agency. The proposal would allow companies new wiggle room in deciding whether to report dangerous products to the CPSC, even when manufacturers are aware of harm to consumers from a product.

The proposal allowed companies to escape from reporting responsibilities under several new conditions that would redefine what constitutes a defect in a product. These included cases in which dangers are obvious to users, warning labels may be effective, incidents involving the products are the result of consumer misuse, and incidents involving consumer misuse could be predicted. The proposed guidelines also permitted less reporting of dangers in products that follow mandatory or voluntary industry standards or are near the end of their effective lifespans. The proposed guidelines granted companies far more leeway in determining whether a report to the CPSC is required.

NAM and other industry representatives submitted a flood of comments gushing about the proposal.[28] In support of the new guidelines, NAM wrote that it believed they would “provide more clarity to product manufacturers ... in deciding if reporting is necessary.” “It is difficult for manufacturers, especially small businesses, to determine when reporting and corrective action is necessary,” NAM's David Asselin wrote in NAM's comment letter to the CPSC.[29] Asselin is the head of NAM's Council of Manufacturing Associations, which includes the CPSC Coalition.[30]

Another industry commenter to the proposal, the Association of Home Appliance Manufacturers (AHAM) is a member of NAM's CPSC Coalition and is represented on the board of directors of NAM's Council of Manufacturing Associations.[31] AHAM complained to the CPSC that the existing guidelines were “not clear and obvious from the statutory text.”[32] Other parties and companies affiliated with NAM weighed in as well, including GE and the counsel for both the JPMA and the Toy Industry Association, Frederick Locker. Locker recently testified on NAM's behalf before the Senate on reauthorization of the CPSC.[33]

Consumer Groups and an Ex-CPSC Official Opposed the Proposed Rule Change

Several consumer safety groups and experts disagreed strongly with the industry's arguments. A coalition of consumer groups challenged assertions by NAM, AHAM and others that the rule changes were necessary. Consumers Union, U.S. PIRG, the Consumer Federation of America and Kids in Danger raised concerns that the proposal would, “cloud the interpretation of the law” rather than provide clarity. The groups also pointed out that more clarity was clearly not needed because the existing guidelines included the basic tenet, “report if in doubt.”[34]

Catherine Downs, the former deputy director for recalls in the CPSC's Office of Compliance, argued that the proposal would not provide additional guidance, but, at best, could “only weaken the protection that is offered to the consumer.” Drawing on her experience with the CPSC, she criticized the proposed revisions as “not only unnecessary but potentially dangerous,” warning the CPSC not to adopt them.[35]

Reviewing the proposed factors for determining defects, Downs found reasons to question all of them. She found a proposal to judge risks based on the adequacy of existing warnings and instructions particularly troubling. She noted that many products originate in foreign countries and are crafted and packaged by non-English speakers. “Warnings and instructions are often barely understandable for assembling a product, let alone making it clear that the product may present a risk of injury,” she wrote in her comments to the CPSC.[36]

The consumer groups also complained that another factor – possible consumer misuse – was simply an excuse that is frequently trotted out by industry to dodge blame for harmful products. Allowing the change could therefore eviscerate manufacturers' incentives to anticipate the harmful uses of products, and “may very well diminish the safety of products,” the groups wrote.[37]

For example, Dorel has been fined three times for allegedly failing to report possible defects in its products, including cribs in which two babies died. Since 1998, the company has received $1.9 million in fines, mostly in 2001.[38] Company officials sought to shift the blame onto consumers in some of the reported cases of defects, saying that the products were assembled incorrectly.[39]Ann Brown, the CPSC chairwoman at the time, told reporters that the company was “absolutely wrong to blame the consumers.” Instead, she blamed the company for failing to properly test all of its products.

The National Association of State Fire Marshals (NASFM), which includes the most senior fire officials in the United States, also questioned the idea that manufacturers' compliance with voluntary and mandatory safety standards is a viable excuse for failure to report dangerous defects.

NASFM cited examples of several types of sprinklers that were recalled in 1998 and 1999. The recalled sprinklers met then-existing industry standards, and in one case, even met a revised industry standard. The group stressed that “not all standards can be said to address all hazards.”[40]In closing, it questioned whether the manufacturer of a potentially dangerous product that complies with an existing but inadequate standard should be excused from reporting warning signs.

The consumer and safety groups also highlighted CPSC's own concerns about the significant amount of underreporting of hazardous products that occurred under the stricter reporting requirements .

The revised rules were adopted in July 2006, with only minor wording revisions.[41]

Congress Should Not Appoint Baroody to Chair the CPSC

Michael Baroody has spent years at the heart of the industry trade association that lobbied the CPSC to weaken consumer safety rules, including the one on disclosure of known safety defects described above. NAM's record is one of unrelenting hostility to the safety of consumers, including small children. Baroody should not be confirmed to lead a safety agency that has a vital role in protecting American families.

Endnotes


[1] NAM - Biography of Michael E. Baroody. (Available at www.nam.org/s_nam/sec_leadership_detail.asp?CID=202659&DID=237938, downloaded on March 15, 2007.)

[2] Substantial Product Hazard Reports, 71 Fed. Reg. 42028 (July 25, 2006), Final Rule. (Available at www.cpsc.gov/BUSINFO/frnotices/fr06/E611758.pdf.)

[3] Public Citizen analysis of CPSC civil penalties, 1997-2007. (Penalties available at www.cpsc.gov/cgi-bin/civfy.aspx and www.cpsc.gov/cgi-bin/civfirm.aspx.)

[4] CPSC Overview. (Available at www.cpsc.gov/about/about.html.)

[5] Comments on Substantial Product Hazard Reports, Proposed Revision to Interpretative Rule, June 27, 2006. (Available at www.cpsc.gov/library/foia/foia06/pubcom/hazrpt.pdf.)

[6]JPMA is part of NAM's CPSC Coalition.

[7]NMMA is a member of NAM's Council of Manufacturing Associations.

[8]AHFA is part of NAM's Council of Manufacturing Associations.

[9]AHAM is part of NAM's CPSC Coalition and is represented on the board of NAM's Council of Manufacturing Associations.

[10]IHA is a member of NAM's Council of Manufacturing Associations.

[11]AAFA is part of NAM's Council of Manufacturing Associations.

[12]TIA is part of NAM's CPSC Coalition.

[13]HPBA is a member of NAM's Council of Manufacturing Associations.

[14]Public Citizen analysis of CPSC civil penalties, 1997-2007.  

[15] “Record Civil Penalty Levied Against Graco Children's Products,” CPSC, Release # 05-138, March 22, 2005. (Available at www.cpsc.gov/cpscpub/prerel/prhtml05/05138.html.)

[16] “CPSC, Graco Announce Recall of Infant Swings,” CPSC, Release # 00-098, July 29, 2002. (Available at www.cpsc.gov/CPSCPUB/PREREL/prhtml00/00098.html.)

[17] “CPSC, NHTSA and Century Announce Recall of Infant Car Seats/Carriers,” CPSC, Release # 01-012, Sept. 26, 2003. (Available at www.cpsc.gov/CPSCPUB/PREREL/PRHTML01/01012.html.)

[18] Juvenile Products Manufacturers Association, “2006-2007 Board of Directors,” downloaded on April 24, 2007. (Available at www.jpma.org/index2.cfm?section=About_JPMA&content=Board.) and Testimony of Frederick Locker, Esq. Hearing on CPSC Reauthorization Before the U.S. Senate Committee on Commerce, Science and Transportation, Subcommittee on Consumer Affairs, Insurance and Automotive Safety, March 21, 2007. (Available at commerce.senate.gov/public/index.cfm?FuseAction=Hearings.Testimony&Hearing_ID=1836&Witness_ID=6554.)

[19] Public Citizen analysis of CPSC civil penalties, 1997-2007. (Penalties available at www.cpsc.gov/cgi-bin/civfy.aspx and www.cpsc.gov/cgi-bin/civfirm.aspx.)

[20] Juvenile Products Manufacturers Association, “2006-2007 Board of Directors,” downloaded on April 24, 2007. (Available at www.jpma.org/index2.cfm?section=About_JPMA&content=Board.) and “Fisher-Price Fined $975,000 for Failing to Report a Serious Choking, Aspiration Hazard with a Popular Children's Toy,” CPSC, Release #07-119, March 1, 2007. (Available at www.cpsc.gov/cpscpub/prerel/prhtml07/07119.html.)

[21] “CPSC Fines Fisher-Price $1.1 Million for Not Reporting Defective Power Wheels,” CPSC, Release # 01-167, June 7, 2001. (Available at www.cpsc.gov/cpscpub/prerel/prhtml01/01167.html.)

[22] Juvenile Products Manufacturers Association, “Contact Manufacturers.” (Available at www.jpma.org/index2.cfm?section=Directory&content=Manufacturers#CF, downloaded on April 24, 2007.) and “CPSC Fines Cosco/Safety 1st $1.75 Million for Failing to Report Product Defects,” CPSC, Release # 01-119, April 4, 2001. (Available at www.cpsc.gov/cpscpub/prerel/prhtml01/01119.html.) and Public Citizen analysis of CPSC civil penalties, 1997-2007. (Penalties available at www.cpsc.gov/cgi-bin/civfy.aspx and www.cpsc.gov/cgi-bin/civfirm.aspx.)

[23] “GE Agrees to Pay $1,000,000 Fine for Delay in Reporting Product Defect to CPSC,” CPSC, Release # 02-225, Aug. 8, 2002. (Available at www.cpsc.gov/cpscpub/prerel/prhtml02/02225.html.)

[24] NAM - NAM Board of Directors. (Available at namissvr.nam.org/namissvr/namboardofdirectors.aspx, downloaded on April 24, 2007.)

[25] “Black & Decker Agrees to Pay Civil Penalty of $575,000 for Failing to Report Toaster Defect to CPSC,” CPSC, Release # 00-043, Dec. 30, 1999. (Available at www.cpsc.gov/cpscpub/prerel/prhtml00/00043.html.)

[26] Association of Home Appliance Manufacturers, “Contact Information: Black & Decker Corporation.” (Available at www.aham.org/ht/d/OrganizationDetails/i/2746, downloaded on April 24, 2007.)

[27] Substantial Product Hazard Reports, 71 Fed. Reg. 30350 (May 26, 2006), Proposed revision to interpretative rule. (Available at www.cpsc.gov/BUSINFO/frnotices/fr06/substantialhazard.pdf.)

[28] Comments on Substantial Product Hazard Reports, Proposed Revision to Interpretative Rule, June 27, 2006. (Available at www.cpsc.gov/library/foia/foia06/pubcom/hazrpt.pdf.)

[29] Comments on Substantial Product Hazard Reports, Proposed Revision to Interpretative Rule, June 27, 2006. (Available at www.cpsc.gov/library/foia/foia06/pubcom/hazrpt.pdf.)

[30] Comments on Substantial Product Hazard Reports, Proposed Revision to Interpretative Rule, June 27, 2006. (Available at www.cpsc.gov/library/foia/foia06/pubcom/hazrpt.pdf.)

[31] NAM – Council of Manufacturing Associations – 2007 Board of Directors. (Available at www.nam.org/s_nam/bin.asp?CID=48&DID=235824&DOC=FILE.PDF, downloaded on April 24, 2007.) and Comments on Substantial Product Hazard Reports, Proposed Revision to Interpretative Rule, June 27, 2006. (Available at www.cpsc.gov/library/foia/foia06/pubcom/hazrpt.pdf.)

[32] Comments on Substantial Product Hazard Reports, Proposed Revision to Interpretative Rule, June 27, 2006. (Available at www.cpsc.gov/library/foia/foia06/pubcom/hazrpt.pdf.)

[33] Testimony of Frederick Locker, Esq. Hearing on CPSC Reauthorization Before the U.S. Senate Committee on Commerce, Science and Transportation, Subcommittee on Consumer Affairs, Insurance and Automotive Safety, March 21, 2007. (Available at commerce.senate.gov/public/index.cfm?FuseAction=Hearings.Testimony&Hearing_ID=1836&Witness_ID=6554.)

[34] Comments on Substantial Product Hazard Reports, Proposed Revision to Interpretative Rule, June 27, 2006. (Available at www.cpsc.gov/library/foia/foia06/pubcom/hazrpt.pdf.)

[35] Comments on Substantial Product Hazard Reports, Proposed Revision to Interpretative Rule, June 27, 2006. (Available at www.cpsc.gov/library/foia/foia06/pubcom/hazrpt.pdf.)

[36] Comments on Substantial Product Hazard Reports, Proposed Revision to Interpretative Rule, June 27, 2006. (Available at www.cpsc.gov/library/foia/foia06/pubcom/hazrpt.pdf.)

[37] Comments on Substantial Product Hazard Reports, Proposed Revision to Interpretative Rule, June 27, 2006. (Available at www.cpsc.gov/library/foia/foia06/pubcom/hazrpt.pdf.)

[38] Public Citizen analysis of CPSC civil penalties, 1997-2007. (Penalties available at www.cpsc.gov/cgi-bin/civfy.aspx and www.cpsc.gov/cgi-bin/civfirm.aspx.)

[39] Julian E. Barnes, “Baby Product Maker to Pay $1.75 Million Safety Fine,” New York Times, April 5, 2001.

[40] Comments on Substantial Product Hazard Reports, Proposed Revision to Interpretative Rule, June 27, 2006. (Available at www.cpsc.gov/library/foia/foia06/pubcom/hazrpt.pdf.)

[41] Substantial Product Hazard Reports, 71 Fed. Reg. 42028 (July 25, 2006), Final Rule. (Available at www.cpsc.gov/BUSINFO/frnotices/fr06/E611758.pdf.)