May 8, 2007
Bush Nominee for Product Safety Agency Was Top Lobbyist for Industry Group That Pressed to Weaken Key Safeguards
More Than 80 Percent of Safety Fines Were Imposed Under Rules CPSC Weakened With Support of Baroody’s Association; His Members, Partners Paid More Than Half
WASHINGTON, D.C. – Michael Baroody, President Bush’s nominee to chair the nation’s consumer safety watchdog agency, was the top lobbyist for the country’s most powerful industry trade association when the group supported weakening guidelines for reporting information about dangerous products.
According to a report released today by Public Citizen, the requirements that the National Association of Manufacturers (NAM) and its allies sought to weaken had been responsible for more than 80 percent of the fines issued by the Consumer Product Safety Commission (CPSC) over the past decade. NAM’s members and its coalition partners were responsible for paying more than half of those fines. The report’s findings underscore the inappropriateness of Bush’s choice of Baroody, a career lobbyist for the manufacturing industry, to chair the agency that is charged with protecting consumers from unsafe products.
The CPSC is tasked with protecting the public – and especially children – from serious injury or death and monitors more than 15,000 types of consumer products. Reports about product hazards are mandated by the Consumer Product Safety Act, one of the key laws governing the CPSC’s role in protecting consumer safety. With Baroody serving as its executive director for lobbying efforts, NAM supported a move to weaken agency protocols that dictate when companies – including NAM members – must immediately report information about potentially hazardous product defects. The changes NAM successfully pressed for could affect the agency’s ability to issue timely decisions to recall dangerous products.
“As head of the CPSC, Baroody would be in charge of administering the weakened disclosure guidance his industry association sought, presenting a serious and unavoidable conflict of interest,” said Public Citizen President Joan Claybrook. “Under his authority, consumer and public safety would be at risk, while the companies he represented for years would save millions in future fines.”
In 2006, despite a long history of manufacturer defiance and cover-ups of reporting violations, the CPSC proposed watering down the Substantial Product Hazard reporting guidelines. Its proposal added additional criteria to the test for determining if a product is both defective and potentially dangerous, and allowed companies new wiggle room in deciding whether to report unsafe products to the CPSC. The new guidelines will likely benefit manufacturers and reduce public notice of safety risks.
Public Citizen’s analysis shows that weakening the rules had enormous financial benefits for NAM and its manufacturer members at the expense of consumer safety. Alleged violations of reporting guidelines were responsible for about $32.9 million of $39.6 million in civil fines collected by the CPSC since 1997. NAM members and affiliates accounted for more than half of those payments, totaling $18 million. Five of those companies alone paid a combined $10 million for allegedly violating reporting guidelines.
The following companies – all members of NAM or coalition partners – were some of the most egregious violators of the reporting guidance, resulting in record fines and injury and death to consumers, particularly small children:
Graco Children’s Products Inc., which manufactures cribs, strollers and other items, 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. Six babies died from strangulation or falls in the company’s swings. Others suffered skull fractures, concussions, lacerations or broken bones from falls after handles failed in several models of its carriers and car seats.
Fisher-Price Inc. has been cited twice by the CPSC since 2001 and paid fines totaling more than $2 million for unreported problems in the toy manufacturer’s Little People Animal Sounds Farm, which had pieces susceptible to coming loose that could be inhaled by children if they put it in their mouths. Another toy, the company’s Power Wheels mini-cars, was prone to burning children when the cars overheated or short-circuited. The company did not report more than 100 fires linked to the toys, including fires that caused damage to 22 houses and garages. Mini-cars also did not always stop appropriately, resulting in crashes and injuries.
Dorel U.S.A Inc. was assessed about $1.9 million in penalties by the CPSC 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.
General Electric Inc. paid $1 million in penalties in 2002 for failing to report that several models of its dishwashers were prone to overheating and catching fire. The CPSC charged GE with knowing about more than 100 incidents involving the dishwashers, including nearly 50 fires, between 1992 and 1998. GE’s vice chairman is on NAM’s board of directors.
In light of the magnitude of these companies’ offenses, a coalition of consumer safety groups and experts opposed the reporting guidance changes. Consumers Union, U.S. PIRG, the Consumer Federation of America and Kids in Danger raised concerns in June 2006 that the proposal NAM lobbied for would cloud the interpretation of the law rather than provide clarity and would violate the basic tenet of the existing guidelines, which was “report if in doubt.”
Catherine Downs, the former deputy director for recalls in the CPSC’s Office of Compliance, argued that the changes 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,” and warned the CPSC not to adopt them. Under Baroody, NAM was vocal in its support of the weakened rules. The CPSC approved the changes in July 2006.
“While Baroody was at its helm, NAM had a record of unrelenting hostility to the safety of consumers, including small children,” said Laura MacCleery, director of Public Citizen’s Congress Watch division. “Baroody should not be confirmed to lead a safety agency that has such a vital role in protecting American families.”