Thursday, June 11, 2009

CPSIA - Nancy Cowles Attacks Me in Roll Call!

What a nice compliment, I have been publicly attacked by name by a consumer advocate! In the wake of my my June 1 Op-Ed in Roll Call in which I documented the limited scale of lead-in-paint recalls in 2007/8 and dared to make the self-evident claim that our company does not make "toxic toys", Nancy Cowles, Executive Director of Kids in Danger, responded by tearing me apart in Roll Call on June 8. Talk about "don't kill the messenger"!

While I resent the personal nature of Ms. Cowles' article and its misrepresentations about me as a person and as a businessperson, I am not surprised. The fear mongering attack dogs amongst the consumer advocates have been out and about for some time. In this space, we have faced "Joe Consumer" from, pointed out errors and misrepresentations in the Consumers Union blog, dealt with twisted facts by Jan Schakowsky and the like. The really aggravating part about this is that these folks can seemingly say whatever they want and not be held accountable. [That goes double for politicians - consider the galling fact that Rep. Jan Schakowsky has actually given a public address in which she personally attacked me by name and questioned whether I had kids! That's the kind of political "leadership" we are enjoying these days.] Who can challenge the saintly consumer advocate after all? With their purity of spirit and unquestioned good intentions, how can we doubt them? Thus, when they speak, they get the last word. By definition, they claim the higher ground and gaze down upon the rest of us.

Ms. Cowles' essay provides us with an opportunity to examine who, exactly, has the higher ground. For that, we must be thankful. Please consider the following:

a. Ms. Cowles states: "Rick Woldenberg objects to the need to test children’s products for chemicals and other hazardous materials banned under the Consumer Product Safety Improvement Act. . . ." I have NEVER said that testing is objectionable. Our company has tested its products aggressively for two decades. As I have stated publicly, we have had ONE recall in 25 years for 130 pieces (out of an estimated 1,000,000,000 units sold) and recovered ALL of them. I assert that this excellent safety record could not be accidental, but instead is the by-product of a concerted and organized effort to behave responsibly. The issue with the new law is NOT that testing is required but instead that a LOT of wasteful and purposeless testing is required. We cannot afford to waste our limited resources on useless testing. Testing for lead-in-substrate is an absolute waste of money. Insoluble lead-in-substrate has not been demonstrated to cause injury. See for example my analysis of ATVs and pens. The health issue is in lead-in-paint and leaded jewelry - in other words, soluble lead. That's it for lead health issues in children's products. I have consistently taken this position. Testing for lead-in-paint is an old standard and an appropriate precaution for any responsible manufacturer. We have always done it and never objected to it. I have long conceded that this kind of testing is a good idea, and further, is a good response to the outbreak of recalls in 2007/8.

Likewise, the cost of testing for phthalates far exceeds its value. I am not going to touch the issues relating to the ban on phthalates in this essay. I have written about it several times and am generally skeptical about its true value to consumers. To spend a fortune on testing for phthalates is ridiculous on two levels. First of all, phthalates are simply NOT a hazard unless you are chewing on the product for a longgggg time. [Remember, lead and phthalates are not radioactive - you have to ingest them to be affected, not just touch them or be near them.] This scratches most products off the list. Second, elimination of phthalates from products does not demand testing each individual item - effective elimination of phthalates depends on good supply chain control. I STRONGLY object to testing every item for phthalates but taking reasonable steps to assure that your supply chain is free of phthalates is not a problem. We can do that for little money. The premise of the CPSIA is that consumers will only feel safe if surrounded by stacks of testing reports reaching the sky - yet the experiences of 2007/8 in which large companies with well-known heavy investments in testing failed to keep defective products off the market (e.g., RC2, Mattel and RoseArt/Mega Blocks) suggests otherwise.

Ms. Cowles, you have misrepresented my position.

b. Ms. Cowles states: "Mr. Woldenberg states, “I don’t make ‘toxic toys,’” and we fervently hope that he is right." Is this fair? The implication of this remark is that she, and YOU, have good reason to doubt me and our company. In other words, our integrity is at issue here - which is shocking, frankly. What good is achieving our long record for safety if consumer attack dogs can freely take this kind of groundless pot shot? Ms. Cowles' commercial denigration is quite damaging to our reputation - and may be actionable. I wonder if Ms. Cowles is familiar with libel laws.

Ms. Cowles goes on to incorrectly state that testing was never required. In practical effect, that statement is simply naive and incorrect. The market has imposed testing requirements for a long time - this is not just our experience, either. First, major domestic customers in many industries have required a broad suite of safety tests for many years. We provide these test reports as a courtesy (and as a by-product of our internal safety practices). [N.b., this is one reason why the challenge to our integrity is so grating - our industry is not comprised of ogres but instead people just like you, concerned about kids and safety and being a responsible corporate citizen. It is convenient for people like Ms. Cowles to tar everyone in the children's product industry with the same brush - this furthers their objectives and allows them to skirt the facts.] Second, as a company selling into Europe (we sell into more than 80 countries worldwide), we have long tested for compliance with EN71, the EU's toy safety regulation. We also test against standards in many other countries. Thus, everything in our line is routinely tested for many things, lead and other heavy metals included, and has been for a long time. The integration of the U.S. economy with the world economy makes this testing practice common in the children's product industry. Sorry, Ms. Cowles, you are WRONG.

c. Ms. Cowles states: "He implies that 'consumer groups' have some nefarious goal of putting innocent toy companies out of business." Wrong. I have never made the absurd claim that any consumer advocate wants to put anyone out of business. Instead, I have claimed that consumer groups don't understand business issues and that their rigid position on safety WILL put many companies out of business. She confuses intent (cause) with effect. The effect is that businesses will die and products will be withdrawn from the market. It is her intention to have this ridiculous law enforced. She and her consumer advocate cohorts are responsible, whether they intended this effect or not.

d. Apparently, Ms. Cowles does not understand the law she so fervently supports. She likewise does not understand the prior law. Her ignorance on this topic is not unique. Ms. Cowles states: "In support of his claims, Mr. Woldenberg references the numbers of recalls for lead paint and points out that there were no recalls for phthalates. In fact, the CPSC did not have the authority to recall a product for phthalates, no matter how dangerous it was to our children’s health."

This is rich. Ms. Cowles is wrong - and in a funny way, she is also technically right. Let's look at the law. The prior law CLEARLY permitted recalls for phthalates. Under the Federal Hazardous Substances Act, the term "hazardous substance" includes "Any substance or mixture of substances which (i) is toxic" [Sec. 2(f)(1)(A)]. Under Section 2(g), "toxic" is defined as "any substance (other than a radioactive substance) which has the capacity to produce personal injury or illness to man through ingestion, inhalation, or absorption through any body surface." The FHSA defines a "banned hazardous substance" as "any toy, or other article intended for use by children, which is a hazardous substance, or which bears or contains a hazardous substance in such manner as to be susceptible of access by a child to whom such toy or other article is entrusted" [Section 2(q)(1)(A)] Under Section 4(a), the FHSA bans the sale of banned hazardous substances: "The following acts and the causing thereof are hereby prohibited: (a) The introduction or delivery for introduction into interstate commerce of any misbranded hazardous substance or banned hazardous substance." Thus, the prior law gave the CPSC the authority to recall anything that is considered toxic. Her statement is wrong.

And her statement is somehow RIGHT, too. How so? Well, as has been previously documented, the CPSC investigated phthalates and concluded that they were not hazardous in toys. Having reached the conclusion that phthalates weren't toxic, the agency actually lacked the authority to recall products containing phthalates. They also can't recall other products that are not toxic, like Wonder Bread or tap water or library books. In this way, Ms. Cowles is technically correct. Congratulations for hitting the target accidentally!

e. Ms. Cowles follows up her legal analysis of phthalates with an equally incorrect reading of the exemption process: "And for those products that may contain lead in a form that would not harm children, the CPSC has been given the authority to exempt products from the lead-limit rules — but only after manufacturers show that the products will not negatively impact children." Of course, this is flat out wrong. This subject has been beaten to death - it is in virtually every statement by the Commissioners after they refuse exemptions for innocent and safe products like pens, ATVs and bikes. If you don't recall this point, please reread Section 101(b)(1) in the CPSIA. The only exceptions allowed are for products that will not pass even one atom of lead into the body. The Commission has seemingly stopped issuing stays without a "competing safety consideration", so I would not hold out much hope for relief under this provision unless an unusual situation arises like ATVs. With advocates like Ms. Cowles promoting the false notion that the law provides common sense flexibility, false comfort is possible. More likely, the CPSC will be forced to continue to violate the Constitution and compensate for the stubborn refusal of Congress to repair this amazing flaw in the law.

f. Ms. Cowles takes one last swipe at me and other vocal members of the children's product industry: "Mr. Woldenberg and his allies in the industry should stop hindering progress and let the CPSC do its job." I don't know whether to laugh or cry over this one. I fail to grasp the basis for this accusation. We are hindering the CPSC by doing what? Expressing our views? Explaining the impact of the law? Explaining the flaws in the law? Demanding that the CPSC follow the law (including the Constitution), not just the convenient parts? Defending our integrity and the safety of our products? Defending the future of our markets? Defending the right of children to learn in schools? Daring to disagree with Kids In Danger and other consumer advocate luminaries?

The incivility of the attacks of Nancy Cowles should stand as a beacon for everyone contesting this awful law. Ms. Cowles thoughtfully drafted a document exposing her ignorance of the law, the products she irrationally fears and the market itself. The demagoguery is obvious.

Readers, please don't forget whose country this is. It does not belong to Nancy Cowles alone. If the message of her essay does not represent your vision of America, it's time to stand up. Don't let fear mongering set the tone for our country. We are capable of marginalizing ourselves and our country's ability to compete - or rising above the nonsense. Take back your country before it's too late!


jen said...

Great points Rick. It is unfortunate that the consumer groups don’t listen to what the actual problems are with law and instead attack– if you are big you are bad and if you are small you don’t understand or the big bad company has convinced us to fight this law. I also found this information recently… Among “allied advocates”, there’s Elizabeth Hitchcock, the public health advocate for the federation of state Public Interest Research Groups, who is quite dismissive of the cries of small makers going under: “Complaints about job losses in the small-business sector are usually a mask for the interests of large firms”, Hitchcock said.

This is another offensive and perplexing perspective from the consumer group since when I explained my situation with the law to my senator’s office they told me the following:

"you are right that the CPSIA imposes costs on businesses, and because of economies of scale it’s the smaller businesses that will feel these costs more acutely. This is part of a larger calculation that it’s worth the costs to shift from the old system of post-market
correction (once a dangerous product is out in the market and leads to sick kids, recalls, lawsuits, etc.) to a new system of pre-market testing and certification (instead of just assuming products are safe and paying the price for false assumptions)."

But my product already meets global standards that are far below the lead limits of the CPSIA. They are essentially telling me just in case lead appeared after the previous certification, I need to test again and again and again. They go on to say:

"But I also understand your frustration: you know that the products you make are safe and that they are not the products targeted by the CPSIA and CPSC, yet they are included in the scope of the new law. I suspect this is because it is very difficult to write exceptions or exclusions for small businesses without opening the doors to abuse…”

"I agree with you that the CPSIA means more costs for small business – because it means more costs for all businesses as part of the cost of moving to a pre-market rather than post-market correction system. But I think we will have to agree to disagree on whether the CPSIA gives the CPSC enough authority and flexibility to implement the new
requirements in a way that accommodates the disproportionate impact to small businesses."

The consumer groups think I am a front for large businesses because I have an actual valid argument with the law but my Senator says I will feel the pain of the law more acutely because I am small. What a joke.

Vivian Zabel said...

When I contacted the senators from my state, one said he is fighting the CPSIA, and one, after my very vocal objection to the law, sent me a form letter stating how proud she was to vote for and support the CPSIA.

The problem is acerbated by those who will not listen or try to understand. They are so focused on what they want they don't even acknowledge there might be another valid stand.

Lucky Pebble said...

Rick. It's so frustrating that some people already have made up their minds and refuse to let those pesky facts confuse them. Great posts as always.

cmmjaime said...

I was so angry when I read her comments, and then couldn't find any place to comment on them, which made me madder!

I especially liked this comment: "Mr. Woldenberg and his allies in the industry should stop hindering progress and let the CPSC do its job." If she substituted Congress for "Mr. Woldenberg and his allies", she would have been accurate.

Ms. Cowles, Congress is hindering the progress with the CPSIA. And the likes of you are enabling them.

I am a Mom first and a small businesswoman second, and the CPSIA is WRONG!!!

Anonymous said...

It is unfortunate that Ms. Cowles and her allies do not see how dangerous this is for their cause and for children. It is turning supporters of "child safety" laws against any future legislation.

Ms. Cowles related to me via email that "although it was no consolation, I could re-open my children's resale store in 5 years because the items would all be safe to sell". Never mind the 3 year lease AND the fact that I'm not actually selling products that have ever harmed a soul.

No, Nancy that isn't much consolation for a hardworking entrepreneurial mother who believes that a business that actually helps real people shouldn't be shut down for no good reason.

This leads me again to wonder if it is just cause or actual intent.

Perhaps Ms. Cowles doesn't feel that our government should be representative of the the actual people, not just what she wants. We should just be quiet and go away.