Industries Paid for Top Regulators’ Travel
Elizabeth Williamson, The Washington Post
Two Heads of Product Safety Agency Accepted Trips From Manufacturer Groups
The chief of the Consumer Product Safety Commission and her predecessor have taken dozens of trips at the expense of the toy, appliance and children's furniture industries and others they regulate, according to internal records obtained by The Washington Post. Some of the trips were sponsored by lobbying groups and lawyers representing the makers of products linked to consumer hazards.
The records document nearly 30 trips since 2002 by the agency's acting chairman, Nancy Nord, and the previous chairman, Hal Stratton, that were paid for in full or in part by trade associations or manufacturers of products ranging from space heaters to disinfectants. The airfares, hotels and meals totaled nearly $60,000, and the destinations included China, Spain, San Francisco, New Orleans and a golf resort on Hilton Head Island, S.C.
Notable among the trips — commonly described by officials as "gift travel" — was an 11-day visit to China and Hong Kong in 2004 by Stratton, then chairman. The $11,000 trip was paid for by the American Fireworks Standards Laboratory, an industry group based in an office suite in Bethesda whose only laboratories are in Asia.
The CPSC says that at the time, the group had no pending regulatory requests. But since then the fireworks group has urged the commission to adopt its safety standards, an idea that is still pending, according to an organization newsletter.
Consumer groups and lawmakers intensified their criticism of the CPSC this summer after several highly publicized recalls of Chinese-made toys that contained hazardous levels of lead. Critics have long charged that the agency has become too close to regulated industries, opting for "voluntary" standards and repeatedly choosing not to take legal action against businesses that refuse to recall dangerous products.
Government-wide travel regulations state that officials from agencies such as the CPSC should not accept money for travel from nonfederal sources if the payments "would cause a reasonable person . . . to question the integrity of agency programs or operations."
But CPSC officials defend the industry-paid trips as a way for the agency to be in contact with manufacturing officials and hear their concerns despite a limited travel budget. Commission spokeswoman Julie Vallese said the agency's counsel and its ethics officers conducted "a full conflict-of-interest analysis" of the trips and stand behind their decisions.
"The mission of the agency and the benefits to consumer safety are two factors that are taken into consideration in approving gift travel," she said. Reports of the trips are submitted to the Office of Government Ethics, she added.
Several ethics experts and lawyers say the two administrators' travel records, some of which they reviewed at the request of The Post, suggest a conflict of interest.
"This is a blatant violation of the ethics code," said Craig Holman, an expert on governmental ethics law for the nonprofit consumer advocacy group Public Citizen. The rules allow nonfederal sources to pay for trips, "but not if you're a private party with business pending before the agency," he said.
The agency's travel patterns during the Bush administration, detailed in internal agency documents, differ from those of the Clinton era. Ann Brown, who served as chairman from 1994 to 2001, traveled only at the expense of the agency or of media organizations that sponsored appearances where she announced product recalls, according to the documents provided.
"We hated to have an industry pay for our staff for anything," said Pam Gilbert, a lawyer who was executive director of the agency under Brown.
The records show that Nord and Stratton repeatedly accepted gift travel for events from industries subject to CPSC enforcement. In February 2006, the Toy Industry Association provided Nord with rail fare, two nights in a hotel, meals — and even $51 to pay her Union Station parking bill — to attend the American International Toy Fair in New York, one of the industry's biggest product exhibitions.
Joan Lawrence, the association's vice president who oversees toy safety, said that "I have heard some enforcement officials say that they consider attending vital" because "they are able to see new products before they hit retail shelves" and suggest safety improvements. She added that "approximately 50 percent of the CPSC budget is used for children's products."
But Lawrence could not say why, given the importance of the event and the industry, the agency did not pay for its own travel. "If they came up with the money, that's okay," she said. "The educational component, of course, is our priority, and that's why we pay for the chairman."
Vallese, the CPSC spokeswoman, said Nord gave two speeches at the meeting, toured "new toy exhibits," watched "product demonstrations" and participated in "product safety discussions."
In a presentation to a trade group of product regulators and manufacturers last year, Nord said the agency was "working aggressively" to limit deaths from residential fires and carbon monoxide poisoning, according to an account published on the group's Web site. She noted that "fuel-fired heating equipment" is linked to more than 300 deaths a year.
Makers of that equipment are represented by the Gas Appliance Manufacturers Association, for which Stratton, Nord's predecessor, was a guest speaker at two annual meetings. In 2003 Stratton spoke at the group's meeting on Hilton Head Island in South Carolina. In 2005, he spoke at its annual meeting in Orlando.
The meetings drew more than 300 manufacturers' representatives and spouses for seminars, a dinner dance and golf. While the association's manufacturers are regulated by three other government agencies, its vice president, Joseph Mattingly, said he could not recall paying for any attendees from those agencies.
Stratton said: "My view was we needed to engage industries and not only tell them what we expected but also to learn what they were thinking. . . . You can't do that sitting in the ivory tower at the CPSC."
The records also detail several trips that were paid for by lawyers who represent manufacturers in product liability lawsuits.
In February, for example, Nord accepted more than $2,000 in travel and accommodations from the Defense Research Institute to attend its meeting in New Orleans on "product litigation trends," according to her report. The institute is made up of more than 20,000 corporate defense lawyers. In 2004, Stratton attended the group's meeting in Barcelona, at a cost to the group of $915 for his hotel room.
"They are the biggest government agency that would have impact on the stuff that we do," said Steve Coronado, a former chairman of the group's product liability committee, which has 3,000 members. "They've been very cordial and accommodating and gracious," he said of the agency's past three chiefs.
Coronado said that Nord was the group's main presenter in New Orleans and that she briefed 1,000 lawyers about "what their processes and procedures are, rules and regulations changes." He added: "I don't think it was a very politically oriented presentation." A CPSC spokesman did not respond to a request for direct comment by Nord on this trip and others.
Coronado said Brown, the Clinton-era agency chairman, also spoke to the group. But agency records of her non-CPSC-financed travel do not list that trip, suggesting that it was not paid for by the lawyers group. Gilbert, the former CPSC executive director, called DRI's contribution toward Stratton's hotel bill in Spain "amazing."
Stratton said the group "wanted to know where the CPSC was going on various product issues, and they wanted to know what the companies [the lawyers represented] could expect, what the government was thinking in regard to their issues." He said lawyers who sue companies over product-related injuries never invited him to speak.
Stratton gave a general defense of his more than 25 trips, which included a trip to China that the Toy Industry Association paid $8,000 to help finance. "Everybody wants to see the chairman," he said. The fireworks group that paid for a separate China trip did not respond to an e-mailed request for comment about its contacts with the CPSC.
Some say the commission's approach to gift travel points to a Bush administration philosophy that favors engaging corporations in policymaking that affects them. "This administration apparently has taken the position that speaking and appearing before the regulated community, even where there are enforcement matters pending, does not create the appearance of a conflict," said Kenneth Gross, an ethics lawyer at Skadden, Arps.
"These are difficult and subjective lines to be drawn," he said. "Prior administrations have drawn that line in a different place."
Nord was a corporate lawyer at Eastman Kodak before her appointment. Stratton led Lawyers for Bush in his home state of New Mexico during the president's 2000 campaign and co-founded the Rio Grande Foundation, which advocates limited government and supports free-market economic principles.
The CPSC did not immediately agree to a request to review copies of internal documents related to several trips or its internal gift-travel regulations. But the records document a pattern of travel that varies from the stated habits of top officials at four other regulatory agencies.
The Securities and Exchange Commission, for example, "does not accept host-paid travel reimbursements or in-kind payments from any organization regulated by the agency," said spokesman John Heine. Food and Drug Administration rules likewise do not permit outside travel payments from regulated companies, organizations "engaged in any lobbying activities" or those that receive "more than ten percent of their income from a corporate source," among other restrictions.
The Federal Communications Commission bans travel paid for by regulated companies or others with business before the agency, for officials from division heads upward, according to spokesman Clyde Ensslin.
F. Gary Davis, who helped establish the Office of Government Ethics in 1978 and served as its general counsel and deputy director until 2000, said the government-wide regulations were imposed "to ensure that there is no appearance of impropriety when you're dealing with a prohibited source." He said that it is conceivable that some of the CPSC's industry-sponsored trips were justified but that in those cases, the agency should be prepared to make its decision-making records available.