November 4, 2007

Toy Junkets

The Washington Post reported on Friday that the past two leaders of the Consumer Product Safety Commission have traveled extensively on the dime of the industry they regulate. Working from FOIA requests, Elizabeth Williamson discovered nearly $60,000 worth of junkets provided to acting chair Nancy Nord and her predecessor Hal Stratton from 30 trips to places like Hong Kong and a golf resort in Hilton Head (via the Political Machine):

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.

Regulatory agencies accepting gift travel from companies and trade associations they regulate present a rather obvious conflict of interest. As Williamson points out, other regulatory agencies such as the SEC and the FCC specifically forbid such arrangements. Common sense would dictate that such gifts would appear to be a transparent form of bribery, covered by the same thin veneer used by politicans of "field investigations".

The appearance of impropriety grows when one considers that regulatory agencies such as the CPSC act in both judicial and executive manners. Those regulated find limited recourse through the courts, which give great leeway to such agencies in enforcing regulations. Buttering up regulators with golfing vacations could tilt the regulators into prioritizing their time differently -- which then creates a competitive market for such industry-financed junkets. After all, who wants to come in last in such a competition?

Of course, this revelation comes at a particularly bad time for the CPSC. Chinese-made goods with poisonous paint and safety violations have flooded the American market this year, leading to massive recalls. Did these manufacturers and distributors believe that they could sneak these goods past a CPSC regulatory regime tamed by their cozy connections and free travel? One may not be related to the other, but it certainly calls into question the integrity of the CPSC and the perhaps-coincidental debacle in childrens' consumer goods.

That's why ethics standards have to be enforced. If the American public has to deal with these regulatory agencies with almost-unbridled executive and judicial powers, then they have to operate with the highest levels of integrity. The CPSC apparently failed that test, and the Bush administration should take action to restore confidence in the agency immediately.


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