Strengthening of Consumer Agency Opposed by Its Boss

By Stephen Labaton
The New York Times

Tuesday 30 October 2007

Washington - The top official for consumer product safety has asked Congress in recent days to reject legislation that would strengthen the agency that polices thousands of consumer goods, from toys to tools.

On the eve of an important Senate committee meeting to consider the legislation, Nancy A. Nord, the acting chairman of the Consumer Product Safety Commission, has asked lawmakers in two letters not to approve the bulk of legislation that would increase the agency's authority, double its budget and sharply increase its dwindling staff.

Ms. Nord opposes provisions that would increase the maximum penalties for safety violations and make it easier for the government to make public reports of faulty products, protect industry whistleblowers and prosecute executives of companies that willfully violate laws.

The measure is an effort to buttress an agency that has been under siege because of a raft of tainted and dangerous products manufactured both domestically and abroad. In the last two months alone, more than 13 million toys have been recalled after tests indicated lead levels of almost 200 times the safety ceiling.

Ms. Nord's opposition to key elements of the legislation is consistent with the broadly deregulatory approach of the Bush administration. In a variety of areas, from antitrust to trucking and worker safety, officials appointed by President Bush have sought to reduce the role of regulation and government in the marketplace.

Tony Fratto, a White House spokesman, said that Ms. Nord had not coordinated with the administration to kill the legislation. But he said that the White House shared many of her concerns and that Allan Hubbard, President Bush's top economic adviser at the White House, was preparing to send a letter to Congress "that is probably even more forceful than Ms. Nord's."

The Senate Commerce Committee is set to vote on Tuesday on the legislation, which is sponsored by Senator Daniel K. Inouye, the Hawaii Democrat who heads the committee, and Senator Mark Pryor, the Arkansas Democrat who heads the consumer affairs subcommittee.

It would more than double the agency's budget, to $141 million, over the next seven years, raise staffing levels by about 20 percent, and give the commission broad new powers to police the marketplace. It would raise the cap on the maximum penalties, to $100 million, from $1.8 million.

Ms. Nord, who before joining the agency had been a lawyer at Eastman Kodak and an official at the United States Chamber of Commerce, criticized the measure in letters sent late last week and this afternoon to the Democratic leaders of the committee. She was critical, for instance, of a provision to ban lead from all toys. She said that the proposal to raise the potential penalty to $100 million "may have the undesired consequence of firms, as a precautionary measure, flooding the agency with virtually every consumer complaint and incident."

She opposed making it easier to bring criminal prosecutions of companies that knowingly sell defective products and also criticized a measure that would make it easier for the commission to publicly disclose reports of faulty products.

While manufacturers had agreed on another provision that would give independent company laboratories the authority to test products and certify their safety, Ms. Nord said she objected to the provision and preferred that the legislation give the commission the authority to defer to the work of the laboratories, should it choose to.

Some of Ms. Nord's complaints were similar to the ones that business groups and manufacturers have raised, including that the legislation would be unnecessarily burdensome. But in other areas, such as whistleblower protection for company employees, her complaints went beyond those of industry.

While companies generally have not objected to giving protection to whistleblowers in the industries regulated by the commission, for example, she said it would "dramatically drain the limited resources of the commission, to the direct detriment of public safety."

While Ms. Nord said she supports the committee's efforts in general, she issued a more modest proposal than the one under consideration in the Senate. It would, among other things, increase the maximum amount of civil penalties to $10 million, create incentives for companies to quickly halt sales of recalled products, and give the government the authority to seize assets of a company found to have violated criminal safety laws.

Senator Pryor said Ms. Nord's objections to the measure surprised him.

"It's hard for me to know if it's just ideological or she is just expressing the wishes of the administration," Mr. Pryor said. "Either way it comes to the same conclusion and that is that they say they want more resources, but they are very reluctant to accept those resources."

Consumer advocates also said they were stunned by Ms. Nord's letter.

"It was remarkable to send a letter like that to a committee, when you're in dire straits and you need increased funding and you've acknowledged that," said Ellen Bloom, director of federal policy at Consumers Union.

The agency has suffered from a steady decline in its budget and staffing in recent years. Its staff is about 420, about half its size in the 1980s. It has only one fulltime employee to test toys. And 15 inspectors are assigned to police all foreign imports of consumer products under the agency's supervision, a marketplace that last year was valued at $614 billion.

Through an agency spokesman, Ms. Nord declined to discuss her opposition to the legislation.

Ms. Nord's letter was challenged by the sole Democrat at the commission, Thomas H. Moore. In a letter last week, Mr. Moore told the lawmakers that he generally supported the legislation for being "strongly pro-consumer."

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