The chairman of the Consumer Product Safety Commission and two top agency officials dined privately with lawyers representing retailers and manufacturers the night before holding a public meeting on new guidelines for how companies should report potential hazards to the government.
Dining behind the mirrored, closed doors in the private Blue Room at the trendy Ceiba restaurant on Monday night, CPSC Chairman Harold D. Stratton, compliance chief John Gibson "Gib" Mullan and general counsel Page C. Faulk chatted with members of ALFA International, formerly known as the America Law Firm Association.
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Mullan, speaking for the commission, said the dinner was a social occasion to meet the out-of-town attorneys who had come to Washington for the agency's Tuesday meeting. It was just "a courtesy dinner" to get the know the people "who have knowledge and experience on product safety issues," he said. Nothing substantive was discussed, and the meeting conformed with agency public-disclosure requirements, he said.
The dinner drew criticism from consumer advocates who said the agency should have placed notice of the dinner on its public calendar, particularly given the timing of the event.
Sally Greenberg, senior product safety counsel for Consumers Union, said that even if the agency was abiding by its public-notice rules, "the right thing to do, the ethical thing to do, is put this kind of gathering on the public record."
"When you have a group of lawyers meeting with the commission on the following day, on commission business, that [dinner] goes simply beyond a social gathering, and the public should know," she said after learning of the event from a Washington Post reporter.
Many of the corporate attorneys were in Washington for a hearing to discuss whether recent hazard-reporting guidelines developed for Wal-Mart Stores Inc. should be extended industry-wide -- an idea put forward by Mullan and favored by Greenberg and other consumer advocates. The proposal "could be a positive thing for CPSC" because it could help speed up recalls, she said.
The commission's public-meeting policy says that the agency should notify the public in advance of any meetings held or attended by agency personnel and involving substantial interests. That could include any issue likely to be subject to a regulatory or policy decision by the commission; however, such meetings are exempt if they are trivial or related to general discussions of existing rules and policies. When there is no opportunity to give advance notice, the rules say, special approval is needed by the general counsel, and notice of the meeting may be published after the fact.
Mullan said commission rules didn't require that the dinner be posted to the agency's public calendar because it was only a social occasion. But even if the diners had talked of the proposed guidelines, that would have involved general discussion of existing laws, rules and regulations, which are exempt from the advance-notice rules, he said.
Stratton's decision to attend the dinner drew mixed reactions.
"There are no rules limiting the people the commission is allowed to socialize with, but the question is, when does socializing cross the line to substantive issues? And are there relationships being formed that could potentially be even more persuasive to the outcome?" said Rachel Weintraub, assistant general counsel of Consumer Federation of America.
But Charles A. Samuels, a Washington lawyer who represents the Association of Home Appliance Manufacturers, said the undisclosed dinner did not bother him. "This chairman is extremely accessible. He'll meet with anyone, anytime. So I wouldn't worry," said Samuels, who learned of the dinner from a reporter.
Mullan said the law association paid for the dinner. Most meals cost between $40 and $60 per person, according to Amy Allworth, Ceiba's director of sales. It was a "last-minute booking" for a table set for 20, she said.
Mullan said Stratton intended to reimburse the group for the meals, even though he didn't need to because it could be considered a "justifiable gift" to the agency for furthering its mission.
The guidelines being discussed by the commission are patterned after a recent agency agreement with Wal-Mart, which for years had battled the agency over which product safety hazards it needed to report.
In April 2003, Wal-Mart agreed to pay a $750,000 civil penalty to resolve a lawsuit alleging that it had failed to report 29 injuries -- including fractured vertebrae and herniated discs -- after consumers had tried out exercise machines in its stores. As part of the settlement, Wal-Mart agreed to forward all incidents to the agency -- an agreement that led to a haystack of reports, with many having nothing to do with safety or products the agency regulated.
As a result, the agency and Wal-Mart developed a more selective plan for listing incidents that the CSPC considers serious. Between Oct. 1, when the agreement took effect, and the end of January, the company sent in weekly reports that highlighted 371 particular problems. That in turn has triggered 113 investigations by the CPSC.
The agency now wants other retailers to follow suit. While retailers and manufacturers applaud the effort to clarify reporting rules, some are concerned that the agency will now be asking for more data than is legally required.
"Manufacturers and retailers are not going to be happy about providing more information than they have to," said Debra Rade, a Chicago attorney who represents retailers and manufacturers.
