Consumers Union Calls On California Attorney General to Investigate Whether Criminal Charges Should be Filed Against Bridgestone/Firestone & Ford.

Business/News Editors

SAN FRANCISCO--(BUSINESS WIRE)--Sept. 19, 2000

Company Executives May Have Violated California's Corporate

Criminal Liability Act if They Failed to Notify State Officials Once

They Learned About Tire Defects

Consumers Union, the non-profit publisher of Consumer Reports, called on California Attorney General Bill Lockyer today to investigate whether executives of Bridgestone/Firestone and Ford violated a California law by failing to alert state officials about dangerous tire defects in a timely manner. Under California's Corporate Criminal Liability Act, managers of businesses, including officers and executives, can face criminal prosecution for concealing dangers in products or workplace settings that could put consumers or workers at risk of death or injury if they fail to notify state officials within fifteen days of learning of the defects.

"This case once again reminds us of the need for greater accountability when corporations knowingly sell dangerous, defective products to consumers," said Harry Snyder, Senior Advocate for Consumers Union's West Coast Regional Office. "If company officials at Bridgestone/Firestone or Ford knew of the serious concealed dangers in these tires and failed to properly notify California officials about them, then they should face criminal prosecution."

On August 9, Bridgestone/Firestone announced the recall of its P235/75R15 Firestone ATX, ATX II, and Wilderness AT tires. The tires have been recalled because of tread separations that have been blamed for dozens of fatal crashes. Officials at both companies have maintained that they were not aware of the scope of the tire defects until shortly before they announced the recall. However, evidence is mounting that officials at Bridgestone/Firestone and Ford may have been aware of these dangerous defects long before the tire recall was announced.

For example, news accounts have indicated that Congressional investigators have internal documents obtained from Firestone detailing the company's damage and injury claims showing a high incidence of tire failure as early as 1997. Similarly, it has been reported that congressional investigators believe that Ford may have ignored trends in its own warranty data, which showed that the company had received claims for hundreds of defective tires between 1991 and 2000.

Furthermore, Ford's 1999 recalls of Firestone tires sold on Ford Explorers in 16 countries abroad were not reported to the National Highway Traffic Safety Administration, even though they were similar to tires sold on Explorers in the United States. While companies are not legally required under federal law to notify NHTSA regarding recalls in foreign countries, the companies may have been required to report this information to California state officials under the Corporate Criminal Liability Act. Since 1992, there have been as many as 50 to 100 lawsuits related to the Firestone tires subject to the current recall. Many of these lawsuits were settled with secrecy orders in place, with the effect that critical safety information may have been kept from the public.

Consumers Union was instrumental in creating the California Corporate Criminal Liability statute, which was signed into law by then-Governor George Deukmejian in 1990. California is the only state with a law that requires individuals within corporations to report known, hidden dangers in the products or workplaces under their management. Under the statute, failure to notify the California Division of Occupational Safety and Health Agency in the Department of Industrial Relations (Cal-OSHA) could be a felony.

The Firestone tire recall has prompted calls by lawmakers in Congress for a federal statute that would subject corporations and their executives to criminal prosecution if they failed to notify regulators of known product dangers. On September 7, Senator Arlen Specter (R-PA) introduced a bill that would impose federal criminal penalties on the employees of any corporation who knowingly and recklessly introduce a defective product into interstate commerce.

"Lawmakers in Washington are seeking to enact the very criminal liability that California has had on the books for nearly a decade," said Elisa Odabashian, Senior Program Manager at Consumers Union's West Coast Regional Office. "Corporate executives need to know that they may face jail time and financial penalties for failing to properly notify California officials about dangerous product defects."

A copy of Consumers Union's letter to Attorney General Bill Lockyer urging him to investigate possible violations of the Corporate Criminal Liability Act by Bridgestone/Firestone and Ford is available online at www.consumersunion.org or by calling 415-431-6747.

Consumers Union, publisher of Consumer Reports, is an independent, nonprofit testing and information organization, serving only the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition, and other consumer concerns. Since 1936, our mission has been to test products, inform the public, and protect the consumers.