CPRBlog Archives
[ Prev ] [ Next ]

The GAO’s Scathing Report on the SBA Office of Advocacy: 15 Big Revelations

As I noted here last week, the Government Accountability Office (GAO) published a report that delivered a scathing review of the Small Business Administration’s (SBA) Office of Advocacy.  The GAO report’s general objective was to assess whether and to what extent the SBA Office of Advocacy is fulfilling its core mission of serving as a “voice for small businesses within the federal government,” and accordingly looked at two of its most important activities for carrying out that core mission: sponsoring small business-centered economic research and participating in individual rulemakings that have a significant impact on small business interests.

In contrast to most GAO reports—which are conspicuous for avoiding controversy and their dry, moderate tone—this one offered some uncharacteristically strong criticisms of the SBA Office of Advocacy.  For example, after rejecting the SBA Office of Advocacy’s feeble excuses for not taking any steps to verify the quality of information contained in a series of controversial studies on regulatory costs that the agency had sponsored, the GAO report opined, “We acknowledge that these reports may not necessarily be representative of all Advocacy’s research efforts, but not substantiating the quality of the information in even one study could call into question the credibility of Advocacy’s research program.”  (See page 15.)  Elsewhere, the GAO report took the SBA Office of Advocacy to task for its complete failure to document their roundtable discussions, noting that this failure made it “difficult to determine the extent to which small businesses and related entities were represented at these events.”  (See page 18.)

If the GAO seems frustrated, it’s for good reason.  Their review of the SBA Office of Advocacy’s activities produced the following 15 disturbing revelations:

Full text

CPR’s Persistent Watchdogging of Embattled SBA Office of Advocacy Prompts Scathing GAO Report

Earlier today, the Government Accountability Office (GAO) published a scathing report, criticizing the regulatory work and research conducted by the Small Business Administration’s (SBA) Office of Advocacy.  For the past several years, CPR has worked to bring much-needed attention from policymakers, the press, and the public interest community to the SBA Office of Advocacy, which has long leveraged its powerful position in the rulemaking process to oppose stronger safeguards necessary for protecting people and the environment.  Critically, as CPR’s work reveals, the beneficiaries of the SBA Office of Advocacy’s interventions have been large corporations and trade groups, to the detriment of the small businesses they are actually supposed to be helping.

The report, Office of Advocacy Needs to Improve Controls over Research, Regulatory, and Workforce Planning Activities, was conducted in response to a request for a review of “Advocacy’s activities” from the Subcommittee on Financial Services and General Government within the Senate Committee on Appropriations.  The report notes that the subcommittee’s request was made because “[q]uestions have recently been raised about Advocacy's efforts to represent small businesses in regulatory activities and some of its research on small business issues.”

Full text

CPR Scholars Support 'Hide no Harm' Bill to Hold Corporate Officers Accountable for Negligence

New legislation introduced by Senator Blumenthal (D-CT) and co-sponsored by Sens. Bob Casey (D-Pa.) and Tom Harkin (D-Iowa) would ensure that corporate executives who knowingly market life-threatening products or continue unsafe business practices are held criminally responsible when people die or are injured.  

Under the Hide No Harm Act, key corporate managers will be required by law to report serious dangers to relevant government agencies, employees and affected members of the public.

CPR Member Scholars wrote in support of the bill to Senators in a letter last month.

According to the letter:

The recent General Motors (GM) ignition switch scandal vividly illustrates the catastrophic consequences that can result when corporations fail to disclose the known dangers associated with their harmful business activities.   The now highly profitable auto manufacturer—$3.8 billion last year alone—determined that the estimated $2.3-million-fix for the problem ($0.90 fix for 2.6 million cars total) was just too costly to undertake.  Instead, GM concealed the problem for more than a decade as part a concerted campaign that included repeatedly lying to its customers, the media, and the National Highway Traffic Safety Administration (NHTSA), the federal agency charged with overseeing car safety.  All the while, GM’s customers continued to climb into cars that the company knew were not safe.  GM admits that 13 people died in crashes caused by the faulty switch.

Similar to GM, other companies appear to have prioritized profits ahead of public wellbeing in this manner.  The available evidence indicates that in 2007 and 2008 Peanut Corporation of America knew its peanut paste had tested positive for salmonella, but shipped it out anyway, ultimately killing 9 and sickening 714.   Similarly, government-led investigations suggest that the New England Compounding Center—the compounding pharmacy that sold fungal-contaminated medication leading to the 2012 meningitis outbreak that killed 64 people and sickened at least 751 others in 20 states—knew that it was not taking adequate precautions to ensure that the drugs it produced and packaged were safe.

It is within Congress’s power to ensure that corporations are properly held accountable for putting the public at unnecessary risk by failing to disclose the dangers of the business activities.  As morally reprehensible as this behavior is, corporations face strong economic incentives to leave their customers and workers in the dark.  Too many corporations will continue to act according to those incentives, unless Congress enacts some form of legislation that makes the costs of not warning the public too great to ignore.

The letter concludes:

If enacted, this bill would strongly discourage most companies from taking unreasonable risks with the lives and safety of their customers and workers.  For those scofflaw companies who decide to keep the public in the dark anyway, the bill would provide a critical avenue for obtaining some measure of justice for those who harmed or killed as a result of those companies’ failure to warn.

We urge that you make it a top priority to enact legislation that would address the ongoing crisis of corporations failing to disclose to the public the dangers associated with their business activities, and in particular consider Senator Blumenthal’s Hide No Harm Act.

Full text

Citizen Enforcement: Preventing Sediment Pollution One Construction Site at a Time

I will never look at a construction site the same way again.

Certain types of pollution—mostly sediment, nitrogen, and phosphorus—run into the Chesapeake Bay and fuel algal blooms, creating dead zones where crabs, oysters and other Bay life cannot survive. Indeed, the Chesapeake is on track to have an above-average dead zone this year.

Construction sites are a major source of sediment runoff. When mud washes from a single construction site, it can damage three miles of downstream waters. Recovery can take up to a century. Maryland has rules that construction companies are supposed to follow to minimize runoff. These rules pay off: For every dollar spent keeping mud onsite, taxpayers save $100 or more in damages avoided.

That’s why I spent last Wednesday driving around Baltimore with four others checking to see whether constructions sites were following the rules.

I learned that the most effective measure to prevent runoff is to quickly get disturbed soil under a dense blanket of straw mulch, then grass. Other measures, like the black fences you see at most construction sites, can't keep enough mud on the site to prevent pollution. Simply put, exposed soil equals pollution. Whenever you see exposed soil on a construction site, pollution will occur come the next rain. 

Full text

Give Them an Inch … And They’ll Take Twenty Years

The Environmental Protection Agency (EPA) has gone to exceeding lengths to defer to states’ efforts to bring their water quality standards into the twenty-first century.  But the state of Washington has shown the perils of this deferential posture, if the goals of the Clean Water Act (CWA) are ever to be reached for our nation’s waters.  After months and years of delay, Governor Jay Inslee held a press conference this week to unveil his long-awaited plan for updating Washington’s water quality standards for toxic contaminants – standards currently premised on a fish consumption rate (FCR) derived from a 40-year-old survey of human exposure. 

Inslee’s grand plan? 

Take one step forward, two (or so) steps backward … and appeal to EPA for yet more time.

Full text

USDA Submits Poultry Rule to OMB: The Facts

Yesterday, USDA submitted its draft final rule on poultry slaughter “modernization” to OMB for formal review.  This rule, as regular readers of CPR Blog will remember, would remove USDA inspectors from poultry slaughtering facilities, transfer some of their food safety and quality control duties to plant employees, and allow the plants to increase their line speeds to an astonishing 175 birds per minute.  On top of that, the rule allows each plant to develop its own testing protocols for E. coli, salmonella, campylobacter and other food-safety concerns.  It’s the foxes guarding the henhouse, for sure.

Along with many of our allies in the worker health and safety and food safety communities, we have been urging USDA since early 2012 to go back to the drawing board with this ill-advised rule.  USDA published its proposed rule in January 2012 without consulting with its inspection advisory committee, without holding public meetings to solicit other stakeholders’ views, and – especially galling – without seeking input from OSHA.

In the two and a half years since USDA proposed the rule, we’ve seen a steady stream of bad news for the proponents of the rule:

  • April 2013: NIOSH releases an interim Health Hazard Evaluation (HHE) report on a poultry slaughter facility that was attempting to get special permission to adopt the “modernized” inspection scheme before the final rule goes into effect.  Interim HHE reports rarely surface publicly, but this one had such striking results that its release was inevitable.  Among other findings, NIOSH discovered that 42 percent of worker-participants had evidence of carpal tunnel syndrome and 41 percent of worker-participants worked in jobs above industry standards for hand activity and force.

  • April 2013: Kimberly Kindy, writing in the Washington Post, highlights the tragic story of a USDA inspector who died of kidney and lung failure potentially linked to the chemical brew that was used to disinfect chicken at the plant where he worked.  Plants are likely to increase the use of these chemicals if the rule goes forward.

  • September 2013: GAO criticizes USDA for failing to thoroughly evaluate the performance of pilot projects that USDA had initiated to test the validity of its “modernization” proposal.  In its characteristically dry tone, GAO concluded: “USDA may not have assurance that its evaluation of the pilot project at young chicken plants provides the information necessary to support the proposed rule…”

  • October 2013: Kimberly Kindy, writing in the Washington Post, highlights the potential for increased animal abuse problems if poultry slaughter facilities increase their line speeds as the rule would allow.

  • March 2014: NIOSH releases its final HHE report on the facility described above, noting an “alarming prevalence” of carpal tunnel syndrome among workers in the plant and cautioning that “increasing the number of birds processed per worker may result in an even higher prevalence of carpal tunnel syndrome than seen in this NIOSH evaluation.”

  • April 2014: The NIOSH final report led to an “interagency throwdown,” in which USDA officials tried to downplay the findings only to have their claims repudiated by NIOSH’s Director, Dr. John Howard, who called USDA’s spin-attempt “misleading.”

For workers and consumers, this rule presents huge risks.  USDA has been operating in a black box since proposing the rule in early 2012, so it is unclear what changes might have been made to answer the concerns raised by the public interest community and other government agencies.  OMB should send this rule back to USDA with a “return letter” that instructs the agency to at least release the draft publicly, if not start from scratch.

Full text

Department of Agriculture Sends Misguided Fiasco of a Poultry Processing Rule to the White House

The U.S. Department of Agriculture (USDA) sent its benighted poultry processing rule to the White House for final review.  The millions of consumers who eat undercooked chicken at their peril and the beleaguered workers in these dank, overcrowded, and dangerous plants can only hope the President’s people come to their senses over there and kill this misguided fiasco. 

Ordinarily, we would have hoped that Department of Labor secretary Tom Perez would have put his foot down before USDA proceeded with the final rule, but after months of pleas from the National Council of La Raza, African American labor advocates, trade unions, and consumer groups across the spectrum, he has remained aloof.  Apparently, the economic needs of multi-billion dollar poultry processing companies that have brought us salmonella outbreak after salmonella outbreak will once again trump the needs of the consumers and workers, especially Hispanic and African American workers who, if they are lucky, manage to avoid cutting themselves too often on crowded assembly lines only to succumb to crippling ergonomic injuries a few years down the road.

USDA claims that the rule will “modernize” the food safety system with respect to poultry grown and slaughtered in the U.S.  This claim has got to be one of the greatest misrepresentations launched by the government so far this year.  Instead, the rule makes a pair of very bad changes that benefit an industry undeserving of the public’s trust:  (1) it pulls hundreds of federal inspectors off the line at poultry plants so they won’t be able to check birds for feces, blood, and feathers and (2) it allows chicken producers like Foster Farms, Perdue, and Pilgrim’s Pride to speed the line up from 50-70 birds/minute to 175—or close to three birds every second.

In place, the rule imposes two laughable substitutes.  The first is self-regulation by the chicken companies.  USDA doesn’t tell the companies what to test, how often to test, or what to do with test results, but rather leaves it up to each plant’s managers to decide whether consumers and workers will be at too much “risk.”  Second, workers paid subsistence wages would assume the inspector’s responsibilities, but the rule doesn’t require any training on how they might approach that critical job. At three birds a second, and with the added job of hanging and processing the carcasses as they whip by, the idea that workers can do anything other than get hurt worse is quite remarkable.

 

Full text

CPR President Rena Steinzor Testifies at House Hearing on Federal vs. State Environmental Policy and Constitutional Considerations

Today, CPR President Rena Steinzor testifes at a House Energy and Commerce Subcommittee on the Environment and the Economy Hearing entitled, "Constitutional Considerations: States vs. Federal Environmental Implementation Policy."

According to her testimony:

As I understand the situation, the Subcommittee’s leadership called this hearing in part to explore the contradiction between the notion that legislation to reauthorize the Toxics Substances Control Act (TSCA) should preempt any state authority to regulate chemical products with the notion that the federal government should depend on the states to regulate coal ash and has no role to play in protecting the public from such threats. 

These positions are a dichotomy if there ever was one. The contradictory ideas that the federal government must dominate the field in one area but that the state government should be exclusively in control in another seems irreconcilable as a matter of principle. 

Of course, as a practical matter, these irreconcilable positions have consistent pragmatic outcomes: they help big business. The chemical industry feels much more confident about its ability to browbeat the Environmental Protection Agency (EPA) into quiescence under the weak provisions of the TSCA legislation under discussion, so long as proactive states like California are knocked out of the equation. The electric power industry is much happier submitting to state regulators, who, as the recent spill in North Carolina clearly illustrates, have done almost nothing to control the severe hazards of improper coal ash disposal than it would be dealing with EPA’s more stringent regulatory proposals. Or, in other words, states should prevail as long as they aren’t doing much to gore the ox of big business. Once they get started down the road to regulate more stringently, however, the federal government must step in to halt a “patchwork” of overly aggressive regulation. 

This debate has been going on, in one iteration or another, for decades. Congress has grappled with it, the Supreme Court has grappled with it, the states have participated in the debate, as has the Executive Branch, and out of all this intense debate have come two fundamental principles well-recognized by mainstream constitutional scholars: 

One. The wide range of federal programs dealing with health, safety, and the environment are grounded appropriately in the Commerce Clause. While the Supreme Court has imposed some limits on federal authority, they do not apply to the structure of the federal environmental law. 

Two. A coherent set of eminently reasonable principles defines the cooperative partnership that prevails in the health, safety, and environmental area, and I urge the subcommittee to return to these principles in allocating responsibility to federal and state governments. 

To read her testimony in full, click here.

Full text

CPR Issue Alert: EPA Raps Chesapeake Bay States for their Weak Restoration Commitments

Pennsylvania, the source of nearly half of the nitrogen that makes its way into the Chesapeake Bay, is falling dangerously behind in controlling the pollutant. Delaware is dragging its feet on issuing pollution-control permits to industrial animal farms and wastewater treatment plants. Maryland has fallen behind on reissuing expired stormwater permits and is not on track to meet that sector’s pollution-reduction goals.

These are some of the findings of a series of reports the Environmental Protection Agency (EPA) issued late last week. EPA assessed the progress the seven jurisdictions within the Bay watershed—Delaware, Maryland, New York, Pennsylvania, Virginia, West Virginia, and Washington, D.C.—were making toward meeting the Chesapeake Bay Total Maximum Daily Load (TMDL), a sort of “pollution diet” that is at the heart of the federally led plan to restore the Chesapeake Bay by 2025.

Along with the reports, EPA announced that it would create consequences for states that are falling behind. It will immediately increase its oversight of Pennsylvania’s agriculture sector and has proposed increasing oversight of specific sectors in Delaware, Maryland, and Virginia unless the states meet certain conditions. EPA also threatened to withhold grant money in Delaware, Maryland, Pennsylvania, and Virginia unless deadlines are met.

CPR’s newest Issue Alert, co-authored by Rena Steinzor and me, breaks down each jurisdiction’s progress and challenges in meeting the TMDL’s deadlines. In the Alert, we applaud EPA for demonstrating its willingness to take action against lagging jurisdictions.

 

Full text

NLRB gets an earful on its “joint employer” definition

A coalition of occupational health and safety experts submitted an amicus brief to the National Labor Relations Board (NLRB) last Thursday, urging the Board to reconsider its restrictive definition of “joint employer” for purposes of collective bargaining.  It’s a critical issue for workers as more and more are getting jobs through temp firms, staffing agencies, and other complex employment relationships.  The workers who got your last-minute Father’s Day gift from the Amazon warehouse to your front door, for instance, don’t all get paychecks from Amazon, but they all operate at “Prime” speed because Amazon demands it.

From a health and safety perspective, it’s important that laws like the National Labor Relations Act (NLRA) and the Occupational Safety and Health Act (OSH Act) are interpreted broadly because the remedial purposes of those statutes – to ensure all workers can collectively bargain for better working conditions and to ensure that all workers are provided safe jobs – are best achieved when all of the employers with a connection to the job are at the table.

Full text