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US: Investigative Report: U.S. ships unsafe products

by Russell CarolloSacramento Bee
September 9th, 2007

Ten days ago, the Consumer Product Safety Commission announced another in a series of well-publicized recalls of Chinese-made goods: children's art sets containing crayons, markers, pastels, pencils, water colors -- and lead -- distributed by Toys "R" Us.


"Consumers should immediately take the products away from children," warned a news release from the federal government's watchdog for thousands of household items. "The CPSC is committed to protecting consumers and families."
But 13 months earlier, in July 2006, the CPSC, without a press release or corresponding media attention, authorized a Los Angeles company to export to Venezuela 16,520 art sets that violated the same CPSC standard protecting children from dangerous art supplies. The following month, the agency authorized a Miami company to export to Jamaica 5,184 sets of wax crayons that also violated the standard.

Though recalls coordinated by the CPSC of Chinese-made goods have made headlines recently, for decades the federal agency has allowed American-based companies to export products deemed unsafe here.

Those products can present an even greater danger in a country that has only a handful of government employees devoted to consumer protection, said R. David Pittle, a former acting CPSC chairman who spent 22 years as a senior vice president for Consumers Union.

"If the United States doesn't have very many inspectors, how many do you think there are in Honduras or Jamaica or Trinidad or Bulgaria?" Pittle asked.

Using the CPSC's database of exports of non-approved products and hundreds of pages of documents obtained through the federal Freedom of Information Act, The Bee found that between October 1993 and September 2006, the CPSC received 1,031 requests from companies to export products the agency had found unsafe for American consumers. The CPSC approved 991 of those requests, or 96 percent.

Agency spokesman Scott Wolfson said the CPSC is simply following export notification law "as Congress spelled it out for us." But CPSC Commissioner Thomas Moore strongly objected to the policy.

"Our agency, through our governing statues, cannot claim much moral superiority over the Chinese, or any other foreign country, when it comes to our own export policy," Moore said in a list of his legislative proposals submitted to Congress in July. "Our export policy is based on a desire to see U.S. manufacturers be able to compete in foreign countries in terms of price and marketability, not safety.

"... It is somewhat hypocritical of us to berate any other country for not requiring their manufacturers to abide by the myriad U.S. mandatory and voluntary product safety standards."

The CPSC database did not identify how many of the approved exports were products made outside the United States that simply were returned to their manufacturers and how many made here or elsewhere were actually exported for sale in other countries. The data also represent just a portion of all products violating CPSC standards exported from the United States to other countries.

Under current law, companies have to seek CPSC approval when they export products that violate mandatory standards or bans. But only about 13 percent of CPSC standards are mandatory.

The agency is under a congressional mandate to first pursue voluntary standards, which lack the force of law, and companies exporting products that violate voluntary standards are not required to notify CPSC before exporting.

The largest number of requests to the CPSC to export banned goods came from California companies, which accounted for about one-third, or 338, of the total during the period reviewed by The Bee. The vast majority of the California requests came from the Los Angeles area.
One Stop Customs Brokers of Los Angeles, the company that applied to ship the art materials to Venezuela for another Los Angeles company, Kico Toys, told The Bee that the materials had landed in California by mistake. Customs broker Randy Tang said officials with Kico Toys told him the art sets should have gone directly from China to Venezuela.

Days before the Kico Toys request, Tang's company applied to CPSC on behalf of S H Toys Inc. of Los Angeles to ship 15,120 banned toy trains, buses and other toys to the Caribbean. The CPSC agreed and notified the Embassy of Grenada, but Tang said those toys never were exported.

At S H Toys, a woman who identified herself as the owner and would give only her first name, Lisa, said her company decided not to ship the toys because of safety concerns. Incorporation documents identify the company's owner/president as Lisa Tran.

At least 18 of the export requests reviewed by The Bee were from the San Francisco Bay Area, and one company, All That Glitters, once located on Second Street in San Francisco, accounted for eight of those.

On April 12, 1996, a CPSC news release announced that All That Glitters Inc. was the target of the government's first criminal prosecution of corporate officers under the federal Flammable Fabrics Act. The release said company owners David and Gail Daly had pleaded guilty in U.S. District Court to a criminal charge of willfully violating federal law and violating CPSC flammability safety requirements.

The company was accused of selling chiffon skirts, blouses and scarves that did not meet standards protecting the public from "highly flammable wearing apparel," according to the release.

"Mr. and Mrs. Daly's willful misconduct placed consumers at risk from serious burn injuries," then-CPSC Chairwoman Ann Brown was quoted as saying. "These guilty pleas underscore our tough stance against any individuals who ignore their safety obligations."

Still, before and after the Dalys' guilty pleas, the CPSC approved four requests by All That Glitters to export scarves and other clothing, which, according to CPSC, violated the same American flammability standards. Letters seeking permission to export to Romania, Brazil and Panama were signed by company owner David Daly.

The CPSC approved four other requests by the company in 1994 and 1995, but detailed records of those were not available.

Reached on Thursday, Gail Daly said she and her husband started exporting the clothing after the CPSC investigation began in late 1994 or early 1995. The investigation, which eventually forced the company to close in 1998, started when a disgruntled former employee reported them, Daly said.

"That was why we were looking for other places to send them because we couldn't sell them in the United States," she said. "I don't think they (CPSC) care what goes to other countries."

CPSC approved one of the All That Glitters requests, to ship 693 of the scarves from San Francisco to Rio de Janeiro, Brazil, just two months before announcing the guilty pleas. It approved the export of 15,170 rayon chiffon dresses, skirts, blouses and scarves to Zona Libre Colon, Panama, more than a year after it announced the pleas.

Shipment of 1,500 scarves and other pieces of clothing made in India and bound for Bucharest, Romania, was approved in October 1995, and two months later shipment of more than 20,000 scarves and pieces of clothing was approved for Bahia, Brazil.

Among the 4 percent of export requests denied were several destined for Canada or Mexico. CPSC records show that the agency was concerned the banned products could cross the borders and re-enter the United States and that the agency approves exports to Canada and Mexico only when the products are being returned to the manufacturer.

"We're very concerned about them coming back over the border into the country," said Wolfson, the CPSC spokesman.

On Sept. 7, 2005, Great Lakes Products Inc., of Indianapolis filed two requests to ship products containing isobutyl nitrite, used as a fragrance in such things as room odorizers. CPSC denied the shipment to Canada, but approved the request to ship between 14,400 and 28,800 bottles of room odorant containing the same banned chemical to the Czech Republic.


Isobutyl nitrite, used in inhalers known as "poppers" to enhance sexual arousal, was banned in the United States in 1988 following allegations of medical side effects, including the spread of AIDS.

Attorney Walt Sanders, a vice president for a Washington-area lobbying firm who spoke on behalf of Great Lakes Products, said the products were produced in the United States for export.

"If Great Lakes wants to sell these products to any country in the world that will accept these products, they're free to do so, as long as they don't sell them in the United States," Sanders said.

Consumer experts consider America's policy of exporting products it doesn't want sold here bad public relations. But attempts to end the practice have been met with resistance.

Pittle, the former CPSC acting chairman, said he tried unsuccessfully to get the commission to prevent the export of non-approved products.

"To me it's like a no-brainer that the children of the consumers in another country will feel the pain of a dangerous product just like they would here in the United States, so I don't think it's OK to dump this stuff in another country," said Pittle, who also served as a CPSC commissioner from 1973 to 1982. "Small parts with toys that can lodge in kids' throat. I think that's probably universal no matter where you go. It's global."

Robert S. Alder, a legal adviser to CPSC commissioners and now a professor of entrepreneurship at the University of North Carolina, Chapel Hill, suggested the agency's export policy could end up harming American trade.

"Twenty-five years from now when Romania or some of these other countries have really turned up their economies and they're sort of looking to see where they want to do business," he said, "are they really going to be that interested in doing business with a country that was dumping stuff in their countries that would not have been safe to sell in the United States?"




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