Magazine report on CPSC failures ignites controversy.

The Consumer Product Safety Commission (CPSC) is not doing enough to protect U.S. consumers from dangerous and defective products or to prevent banned products from being shipped abroad, according to a recent investigative report published in Consumer Reports. (Hazard in Aisle 5, CONSUMER REE, Nov 9004, at 12.)

The magazine, published by the product-safety advocacy group Consumers Union, called on Congress to increase the CPSC's budget and regulatory power.

The report was based on a review of decades of government records and visits to more than a dozen stores in five states. "Potentially lethal products"--including defective extension cords and toys that can choke, cut, or poison young children--are finding their way to store shelves here and abroad, investigators found. They cited a weakened regulatory system as the primary cause.

The CPSC challenged the report as false and misleading, taking specific aim at the investigators' finding that 48 of the toys they bought violated mandatory or voluntary safety standards.

In a letter to Consumers Union President James Guest, CPSC Executive Director Patricia Semple wrote, "Based on information obtained from you, [CPSC] staff experts have concluded that at least 34 of the toys on your list do not violate any CPSC standard. Another two of the listed products were already recalled by [the] CPSC some months before your publication. For the remaining products, there still is not enough information to make a definitive determination as to whether they violate any CPSC standard."

The magazine's editors defended the report in a written reply to Semple. "We continue to stand by the facts, conclusions, and recommendations in this article," wrote Managing Editor Kimberly Kleman and Director of Consumer Sciences Geoffrey Martin.

"The report never claimed, as your letter suggests, that all 48 toys violated federal mandatory safety standards. Your criticism on this point is not valid and represents a misreading of our findings. Specifically, it is our judgment that 9 of the 48 toys violate mandatory safety standards. The rest violate voluntary safety standards. All, we believe, are hazardous products that found their way on to store shelves," Kleman and Martin wrote.

After combing through the CPSC's records and databases, reviewing ship manifests, and interviewing regulators, inspectors, and safety, experts, Consumer Reports investigators found "a host of contradictory policies and practices that hobble consumer protection":

* Inconsistent federal action. For example, in 2002, U.S. customs agents seized 10,000 switchblade knives that looked like cigarette lighters; a similar one had been found in the wreckage of a plane used in the September 11 terrorist attacks. But in 2003, customs agents and CPSC officials allowed 995 of the knife-lighters to be exported to the United Arab Emirates.

* Regulators' reluctance to exercise power. Investigators noted that the CPSC rarely destroys dangerous products, while private product-safety companies like Underwriters Laboratories "marshall all legal authority necessary to seize and destroy counterfeits."

* A lack of transparency in the CPSC's actions. The agency often withholds information, sometimes for years, about suspected unsafe products until it issues a public recall.

* Regulatory actions that endanger foreign consumers. Investigators found the CPSC had approved "shipments of dangerous cribs, toys, electrical cords, Christmas tree lights, beds, and clothing to several countries."

Consumer demand for cheap products, America's shift from a net exporter to the world's largest importer, and an erosion of the CPSC's staff and budget have combined in recent decades to make it easier for dangerous products to reach store shelves here or to be exported to other countries, the report said. Investigators found that "CPSC recalls, detained shipments, and other enforcement actions [were] down 35 percent from 2001 to 2003."

Semple refuted this statement as well, writing to Guest that the number of products recalled in 2004 exceeded the number for 2001. "The CPSC imposed $4.2 million in civil penalties in 2004. That is the third-highest annual civil-penalty amount ill the agency's 30-year history," she wrote.

Kleman and Martin countered that the report's claim about declining enforcement actions was based in part on recall figures through mid-July 2004, which, at the time, stood at 98 fewer than the fiscal year total claimed by the CPSC. "Our published statement on this issue stands," wrote Kleman and Martin.

Moreover, they said, "our statement is based on all CPSC enforcement actions, not just one component.... Further, the longer-term trend, from 1993 to 2003, shows an even steeper decline."

Late last year, the agency issued a press release claiming it had won a significant court victory upholding one of its "most potent weapons: the requirement for companies to report dangers and defects with consumer products to the government in a timely manner."

The decision, from the Ninth Circuit Court of Appeals, held that a company commits a separate offense when it fails to tell the CPSC about each unit of a potentially harmful product that it has sold or distributed. Consequently, the court found, a juicer manufacturer should have reported not only the 23 juicers that it knew had shattered when consumers used them, "but [also] the 30,000 to 40,000 juicers in the stream of commerce that might well pose an unreasonable risk of serious injury to consumers." (United States v. Mirama Enters., Inc., 387 F.3d 983 (9th Cir. 2004).)

"No court has ever addressed [the] CPSC's reporting requirement," said Chairman Hal Stratton. "The court agreed with [the] CPSC that companies must tell us about potentially dangerous products even before they are found to be defective and that companies are liable for reporting every product they sell that poses a danger to consumers."

To stem the tide of unsafe products in the marketplace, the Consumer Reports investigators said Congress should increase the CPSC's budget and staff, ban the export of recalled products, and amend the Consumer Product Safety Act to allow the agency to tell the public about products that violate safety standards before first getting the manufacturers' consent.