CPSIA - My Answer to Sean Oberle on Resale Shops and Tenenbaum

Some of you may have been following the recent debate in the Product Safety Letter (PSL) on the CPSC's noxious Resale Roundup program. A wave of unfavorable media coverage has dogged the new CPSC initiative, noting the risk of high fines and the unwelcome intrusion of federal regulators into an innocent American ritual, the garage sale. A highly-publicized Fox News piece apparently triggered a response by CPSC Chairman Inez Tenenbaum in PSL on October 3 entitled "Garage Sales and CPSC -- Sorting the Facts from the Myths". In this piece, Ms. Tenenbaum promised not to fine garage sale operators, and chose to emphasize the CPSC's noble goal of ending the resale of recalled products.

Next, Rob Wilson of Challenge and Fun, Inc., a Massachusetts-based toy company, published an Op-Ed in PSL on October 9 entitled "Consumer Confusion Comes From CPSC Guidance, Not the Media" in which he noted that the fear Ms. Tenenbaum sought to calm came not from media reports but instead from CPSC policy. In particular, he pointed out the impractical and confusing advice given in the CPSC's own CPSC Handbook for Resale Stores and Product Resellers. Mr. Wilson closed with the following observation: "Chairman Tenenbaum vowed at her Senate confirmation hearing to bring a common sense approach to CPSIA implementation. We are still waiting for signs of common sense from the agency regarding CPSIA." Ah, that "common sense" thing again!

Sean Oberle, owner, publisher and editor of PSL, replied to Mr. Wilson in his own publication on October 13 in an editorial entitled "Clarity and Accuracy -- CPSC, the Media and Garage Sales" in which he defended Ms. Tenenbaum on the grounds that her limited statement did not constitute a comprehensive summary of her feelings or actions on the CPSIA. It's a remarkable piece, I hope you will read it. [In his editorial, Mr. Oberle makes the following observation: "a quick search of the blogosphere and other new-media sites finds more pieces running the gamut from mild warnings to doomsday predictions" - hmmm.] Interestingly, Mr. Oberle stresses his "neutrality" and "defense of accuracy and clarity" THREE TIMES. Draw your own conclusions.

Well, I sent Mr. Oberle MY Op-Ed reply to the debate he not only published but contributed to. Suffice it to say, he turned me down. I am publishing the Op-Ed here for your review and consideration. I would be interested in your thoughts.

I think it is critical to reflect on this rebuff and to delve into its deeper meaning. [My ego can take it, btw.] The Product Safety Letter (along with BNA) was cited by John "Gib" Mullan (Assistant Executive Director, Office of Compliance and Field Operations, CPSC) as the definitive source for information on safety issues at last February's ICPHSO meeting. An august publication, apparently. Yet, what does a stilted debate in PSL's pages signify? Only Mr. Oberle can say for sure. My article asks Ms. Tenenbaum to be accountable for the actions of the CPSC in implementing the defective CPSIA. Mr. Oberle has already publicly stated his neutrality on agency issues several times. [Quoting from Hamlet, "The lady doth protest too much, methinks."] What's going on here?

The American way of life is frankly dependent on our Constitutionally-guaranteed freedom of speech. The foundation of the visionary American system of a free media is its INDEPENDENCE. What if the media organs we depend on lose their independence? What if fear of retribution or a possible chilling in access to information challenges editorial decisions? In thinking about the end of the debate about the CPSC's Resale Roundup in PSL, these questions resonate. I hope this is not the Obama Revolution we have all been hearing about.

My Op-Ed for your reading pleasure:

Tenenbaum Silence on CPSIA Speaks Volumes

Sean Oberle notes that CPSC Chairman Inez Tenenbaum in her recent PSL article “Garage Sales and CPSC -- Sorting the Facts from the Myths," chose to rebut sensational media reports on the CPSC’s new Resale Roundup initiative with reassurances about the limited purpose of the program and not to address other CPSIA issues. Mr. Oberle contends that it is unfair to characterize Ms. Tenenbaum’s response to Fox News as an indication of her indifference to those other dilemmas. Perhaps that may be true, but isn’t Ms. Tenenbaum’s silence on the messy aspects of the CPSIA also a serious issue worthy of note? That is precisely the problem today – a lack of accountability for CPSC inaction on the myriad issues under the CPSIA.

It is important to recognize that the controversy over Resale Roundup was created in part by the CPSC itself. The Fox News article quotes Ms. Tenenbaum: "Those who resell recalled children's products are not only breaking the law, they are putting children's lives at risk. Resale stores should make safety their business and check for recalled products and hazards to children." In an August 20 article, McClatchy Washington Bureau writes: "Scott Wolfson, a spokesman for the agency, said it wouldn't be dispatching bureaucratic storm troopers into private homes to see whether people were selling recalled products from their garages, yards or churches. ‘We’re not looking to come across as being heavy-handed,' he said. 'We want to make sure that everybody knows what the rules of engagement are to help spur greater compliance, so that enforcement becomes less of an issue. But we're still going to enforce.'"

This is scary stuff. It is hard to take comfort in the CPSC Chairman’s soothing words in light of such tough talk. After all, didn’t NY Attorney General Eliot Spitzer secretly inspect resale shops in 2003 and then release names and addresses to the media? Interestingly, Spitzer was joined by some of the same consumer advocates who are behind the CPSIA. The CPSC has the same power to embarrass.

Even having reassured the public about the penalty policy in its Resale Roundup initiative, Ms. Tenenbaum fails to account for the negative consequences of her vigorous publicity campaign. As the Kalamazoo Gazette noted on September 30, “The [West Michigan] Salvation Army does not have thousands of dollars to spend on lead-testing equipment, so anything that looks suspicious — plastic toys, painted toys, toys with magnets or small parts, toys made in China — is pitched, said Robert Pierce, director of operations for the Salvation Army stores. Only about 20 percent of donations to the Salvation Army — compared to about one-third before the law — make it onto the store floor.” The CPSC’s tough talk on enforcement is having a chilling effect on the business community – and that cost must be weighed when regulators get “tough”. These terrible costs cannot be justified by the Resale Roundup’s meager accomplishments.

By emphasizing strict compliance and enforcement, the CPSC strikes a tone designed to appeal to those behind the new law. But in taking this position, the Chairman undermines her other messages of openness and partnership. In her speech of August 1 at the APEC Conference in Singapore, Ms. Tenenbaum stated: “My regulatory philosophy embraces open dialogue, information sharing with all stakeholders, and a commitment to finding mutual interests.” In her June 16 confirmation hearing testimony, Ms. Tenenbaum wrote: “While emphasizing the life-saving mission of the Commission, I will also ensure that industry knows that their views will be heard and considered.” Ms. Tenenbaum’s strident tone of firm enforcement erodes the trust she apparently sought to build with the business community in the early days of her administration.

Ms. Tenenbaum’s recasting of the Resale Roundup should not be judged in a vacuum. First, the CPSC seems to be embracing a strict liability enforcement policy on the strictures of the CPSIA. Just last week, the CPSC announced a recall of 40 inflatable toy baseball bats for violation of the controversial phthalates ban. You can hold 40 uninflated bats in one hand. Earlier, Target was fined $600,000 for lead-in-paint violations that occurred three years ago despite the fact that it had obtained passing test reports, had no actual knowledge of the problem, was increasing its safety vigilance at the time and voluntarily turned itself in to the CPSC. The Target settlement agreement (signed by the CPSC) deemed Target’s QC procedures “reasonable” and noted that it had “satisfied the standard of care” – yet Target was whacked with a huge penalty. We in the business community judge the CPSC by its actions, not its talk. These recent CPSC actions suggest that there is much to fear nowadays, notwithstanding Ms. Tenenbaum’s assurances to the contrary.

Second, the CPSC is still sitting on literally thousands of unanswered questions from the business community but is making no attempt to slow the CPSIA implementation process until these issues can be addressed. Some of these questions are more than a year old. Is that fair? Should this inactivity inspire confidence in a business community subject to the prospect of Target-style penalties? Finally, it is notable that the CPSIA phthalates testing standard has not been completed, exactly zero labs have been certified to perform phthalate tests since the August 14, 2008 passage of the CPSIA and the long-awaited component testing rule (noted as an urgent need by then-Acting Chairman Nancy Nord on January 30) is still unpublished even in draft form. Is this the right environment for a “trust me” message?

Chairman Tenenbaum's message of vigorous but “friendly” enforcement may make a good sound bite, but the Chairman has yet to show any desire to make the agency anything more than Congress' police force. The agency previously played a critical role in setting safety priorities, assessing risks and interpreting the law. This discretion was removed by CPSIA. The Chairman can show she is a leader by providing an honest assessment to Congress of the problems with CPSIA and mapping out the necessary changes. Ironically, none of this is about safety – it’s about a law that just doesn’t work. The torturous process of implementation of this law is causing corporate casualties every day. These disasters can only be avoided by doing the hard work now. An accountable Chairman Tenenbaum will be an effective Chairman Tenenbaum.

Rick Woldenberg is chairman of Learning Resources Inc. and the Alliance for Children’s Product Safety.