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Consumer Product Safety Chief’s Travel Under Scrutiny

November 2, 2007 at 6:15 PM EST
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RAY SUAREZ: Now, protecting consumers from faulty products. Jeffrey Brown has that.

JEFFREY BROWN: The spate of product recalls in recent months — many on items made in China — has increased scrutiny on the agency charged with protecting consumers, the Consumer Product Safety Commission.

This week, a Senate panel approved measures to give the commission more resources and new power. The House is working on similar legislation. But the commission is saying “Thanks, but no thanks,” rejecting many of the new proposals.

In a separate development, the Washington Post reported today that industries regulated by the commission have paid for travel — nearly 30 trips in all — by current Commission Chair Nancy Nord and her predecessor, Hal Stratton.

We explore all this now, beginning with Representative Diana DeGette, Democrat from Colorado, and vice chair of the House Energy and Commerce Committee.

Well, Congresswoman DeGette, first, define the problem that you see at the commission.

REP. DIANA DEGETTE (D), Colorado: Well, the problem with the Consumer Product Safety Commission, they were formed in the 1970s. They had 800 employees and a robust budget.

And in the years since then, our economy has changed drastically, so we have toys coming in from China, many, many more imports. And many of those imports, like children’s toys, are contaminated with lead.

At the same time, the Consumer Product Safety Commission’s number of employees has dropped almost by 50 percent. And in real dollars, their budget has shrunk, too. For example, even though toy recalls mostly due to lead increased dramatically in the last five years, the CPSC has only one toy inspector for the entire agency.

And so many of us, Senator Pryor, Congresswoman Rosa DeLauro and myself, have introduced legislation both beefing up the powers of the Consumer Product Safety Commission and also giving them more funding, the funding they desperately need, given the shifting market.

JEFFREY BROWN: Are you suggesting that it is a question of resources, or is there also the implication that the will is not there?

REP. DIANA DEGETTE: Well, clearly in the statements of Chairman Nord this last couple of weeks, we are deeply disturbed by the fact that she has said that she doesn’t think her agency needs any more resources.

You’ve got more products coming in from overseas. You’ve got a huge spike in recalls, which is very concerning, because, of course, only a fraction of those people who bought the products will return them. And you have the head of the agency saying, “Oh, well, this is no big deal, and we don’t want the money.” So a number of us, starting with Speaker Pelosi, have called for her resignation.

JEFFREY BROWN: Do you believe generally that products are less safe today? And if so, why? What’s the culprit?

REP. DIANA DEGETTE: Well, I think that there is a greater risk — for example, lead in children’s toys — than there may have been, because of shifts in the market. In the 1970s, when the Consumer Product Safety Commission was formed, most of the toys were produced domestically. Now they’re coming in from China and other places in the world, and they have unacceptably high lead levels. Just this last week, we had a recall for Halloween vampire teeth, which children were using.

This is one thing the parents of America really think that the federal government should be keeping their children safe from these contaminated products. I think a large culprit is the nature of the markets and where we’re getting our products from and, also, the fact that we have, certainly in the last five or six years, really reduced our diligence in overseeing the manufacturers and what they’re doing.

The implication of recalls

Rep. Diana DeGette
D-Colo.
When these toys are recalled, what that's showing is the manufacturer has found contamination after the toys were disseminated on the market. ... A very small percentage of the products actually come back. I think it's less than 10 percent.

JEFFREY BROWN: One view of this, though, because we've discussed this on our program before, with some of these recalls, is that the fact that the recalls are taking place suggests that the system, in a sense, is working.

REP. DIANA DEGETTE: Actually, that's not true, because you hate to have a recall. When these toys are recalled, what that's showing is the manufacturer has found contamination after the toys were disseminated on the market. And once you have a recall like this, a very small percentage of the products actually come back. I think it's less than 10 percent.

So, for example, the vampire teeth, which have been contaminated by lead, there are still millions of sets of those teeth out there. What you really want to do is have robust enforcement and tracking systems so that the contamination is found before the product gets on the market and has to be recalled.

JEFFREY BROWN: So you mentioned some of the changes that you'd like to push forward. Tell us more. What specific changes do you think need to be made that you're pushing in Congress right now?

REP. DIANA DEGETTE: Well, the bill that Congresswoman DeLauro and I have sponsored, the SAFE Act, has a number of positions, including banning lead in children's toys, giving mandatory recall authority to the Consumer Product Safety Commission, direct mandatory recall authority. We believe that would not only help get the products back, but it would also cause the manufacturers to pay a lot more attention before it comes out.

We establish a tracking system so you can track where these products go. And we beef up the civil and criminal penalties, and we also increase resources to the Consumer Product Safety Commission.

JEFFREY BROWN: And let me, just to move to the other side, the other thing we reported and the Washington Post reported today, that we cited, was the story of the travel. What's your response to that?

REP. DIANA DEGETTE: I am appalled by these revelations of travel. And I should note that Commissioner Nord's predecessor, Ann Brown, never traveled on these gift travel trips by the industry. That is a blatant conflict of interest, to have the commissioner traveling on the, really, the dole of the manufacturers.

And at the same time the recalls have gone up so much, the commissioner herself has taken 30 trips. In Congress, we've banned this kind of thing because it's an apparent and a real conflict of interest. I think that's even more reason why she should step down, frankly.

JEFFREY BROWN: And, finally, let me just ask you, looking forward here, do you see any -- what are the prospects of getting some legislation passed?

REP. DIANA DEGETTE: I think, given the recent disturbing spike in recalls, I think the prospects for legislation are good. Last week, the Senate committee passed Senator Pryor's bill.

Next week, my committee, the Energy and Commerce Committee, is taking up legislation introduced yesterday by the committee. And we will also be considering some of the provisions in Congresswoman DeLauro's and my bill. Of note, I do intend to introduce an amendment next week in our committee markup to ban this kind of privately funded travel by the agency.

JEFFREY BROWN: All right, Congresswoman Diana DeGette, thank you very much.

REP. DIANA DEGETTE: It's great being with you.

Nord's response to scrutiny

Nancy Nord
U.S. Consumer Product Safety Commission
I have no intention of resigning. ... Frankly, if a public official cannot speak openly, candidly and honestly to Congress about the impact of legislation, than that's a really, really troubling situation.

JEFFREY BROWN: And now we have a response. I'm joined by Nancy Nord, the acting chair of the Consumer Product Safety Commission.

Welcome.

NANCY NORD, U.S. Consumer Product Safety Commission: Thank you.

JEFFREY BROWN: Why don't I start with the most dramatic, what she had to say, to call for your resignation. What's your response?

NANCY NORD: Well, I have no intention of resigning. Apparently my sin, if you will, was writing a letter to Senators Inouye and Pryor outlining what I liked in the bill that was before the Senate this week and what concerns I had about the legislation.

Frankly, if a public official cannot speak openly, candidly and honestly to Congress about the impact of legislation, than that's a really, really troubling situation. I've got to have the ability to talk honestly to members of Congress about the impact of the legislation on the agency, and that's what I did.

JEFFREY BROWN: So what is wrong? I mean, on the face of it, you have many more recalls. Congress says, "OK, we want to give you more money. We want to give you more staff. We want to give you more power." And on the face of it, it looks like you're saying, "No."

NANCY NORD: Well, I welcome change. And, indeed, I've proposed changes to our statute. I sent up no less than 40 statutory changes this past summer, and I'd like the Congress to move on them.

But the change that we've got to have is change that is going to be constructive, workable, and is going to help the agency do its job. My concerns with the Senate bill is that it includes a number of requirements for undertaking activities that are really outside our core mission.

For example, it has us mediating employer and employee disputes in whistleblower cases. It has us implementing or enforcing intellectual property rights violations in some instances. It has us certifying laboratories.

I want to make sure that we are focusing on our core mission. I want to make sure that we have got the authorities and the enforcement tools that we need to protect consumers.

The other concern I have is this legislation puts a number of new requirements on us. And, Jeffrey, it doesn't fund those new requirements. We are to undertake no less than 10 new rule makings immediately upon passage of this legislation. And show me the money. It isn't there.

Resources for the products agency

Nancy Nord
U.S. Consumer Product Safety Commission
It is time for Congress to look at our statutes and to modernize our statutes. ... And I look forward to working with Congress to make sure that our statutes meet the challenges that we have in today's world.

JEFFREY BROWN: Well, but do you say that, "OK, give us more money"? I mean, just a very simple thing, staffing. My understanding from reading is that this agency has less than half the number of staff than it had in 1973 when it was founded.

NANCY NORD: That's right.

JEFFREY BROWN: So do you have enough people or not? Do you welcome more staff or not?

NANCY NORD: I have said repeatedly that I would welcome more resources. Please, I would love to have more resources. And I've said that on a number of occasions. I've said it to Congress, and I've said it in other fora.

JEFFREY BROWN: Do you feel that you, as you are now, are you currently able to police the marketplace adequately?

NANCY NORD: The CPSC does a very good job with the resources it has. We are a very small agency. We're tough. We're tenacious.

But the way Congress set us up was to write safety standards and then enforce them. And the way we enforce them is through recalls and through imposing monetary penalties on the violators. Those are the tools that Congress gave us.

I think it is time for Congress to look at our statutes and to modernize our statutes. And I have said that repeatedly. I've made suggestions as to authorities that would be very useful for us to have. And I look forward to working with Congress to make sure that our statutes meet the challenges that we have in today's world.

JEFFREY BROWN: Well, for example, you heard the congresswoman talk about a mandatory recall power.

NANCY NORD: Well, we do have mandatory authority to impose recalls.

JEFFREY BROWN: But she's saying you're not using it enough, so she's trying to write in ways where you would use it more.

Defending agency travel

NANCY NORD: Well, she is also complaining about the number of recalls we're doing. Recalls are a sign that the agency is doing its job. Recalls are one of our enforcement tools. And we do, do recalls every day. When we see a problem in the marketplace, we take steps to correct it. And the recall authority is one of the tools we have.

JEFFREY BROWN: Why don't I ask you -- I'll ask you the same question I asked her, about how you see the world. Do the recalls suggest that the system is working or that we have a big problem on our hands and a growing problem?

NANCY NORD: Well, again, we do not have the authority to put fences up at our borders, and inspect, and police, and pre-market certify the billions of products that come into this country.

Instead, the way Congress created our authorities is to tell us to write safety standards, which we do, and then enforce those standards by recalling products that do not comply with those standards. So the recall tool is just a very, very critical tool for us to use to police the marketplace.

JEFFREY BROWN: And, finally, what is your response on the subject of the report of the gift -- it's called gift travel. Does it not look as though you are too close to these industries that you're regulating if you are flying on their tab?

NANCY NORD: Well, again, first of all, the congresswoman was incorrect when she said I took 30 trips. That's not what the Washington Post story said, and that's never been alleged.

But, nevertheless, we have got a travel policy in place that's been in place for the last 14 years, and it is adhered to scrupulously. We look to see that there's no conflict of interest, and we look to see that there is no appearance of conflict of interest.

Every travel request is run through our general counsel's office. But at the end of the day, our small agency, with its limited budget, needs to go out and talk to our constituencies to make sure that they understand their obligations.

I've been criticized for going up to New York for a day to make speeches at the toy industry meeting. That was a wonderful forum to talk to toy importers about their obligations under the statute. That is a meeting that CPSC officials have been going to since the agency was started.

So my trip to Toy Fair was in the normal course of business. It was reviewed by the agency general counsel. It was signed off on.

However, having said all that, I take allegations of unethical behavior incredibly serious. I want to make sure that our travel regulations are adequate. I've asked the Office of Government Ethics to take a look at what we're doing and come back to me and tell me if they've got any problems.

If we've got problems, we'll correct them. But at this point, our agency needs to be talking to our constituencies to make sure that they understand their obligations under the law.

JEFFREY BROWN: And so, briefly, looking forward here, are you going to continue this practice? Or are you going to wait for this ruling from the Ethics Committee?

NANCY NORD: Well, I would hope that they would look at this very, very quickly.

JEFFREY BROWN: OK. Nancy Nord, thank you very much.

NANCY NORD: Thank you.