Unlimited Fines Sought for Car Safety Violations
The Clinton administration will ask Congress today for authority to levy unlimited civil fines on auto makers and suppliers that fail to report safety problems to government regulators.
An administration official said the request will be part of a reform package that Transportation Secretary Rodney Slater will present at a hearing before Sen. John McCain (R-Ariz.). The senator will seek quick passage of legislative changes to prevent a repeat of the Firestone tire debacle, an aide said.
The federal auto safety agency--the National Highway Traffic Safety Administration--may impose a fine of up to $925,000 for certain safety violations, including failure to report a defective product. Critics have long complained that the $925,000 maximum fine is insignificant for the multibillion-dollar auto industry. Indeed, Ford Motor Co. alone generates about $800,000 in profit per hour.
In March, Slater asked Congress to consider raising the maximum fine to $4 million. In light of the Firestone controversy, officials said the administration will propose that there be no limit on the amount of a fine NHTSA can impose.
Some consumer advocates said that raising the fine limit is not enough and that only the threat of criminal action will bring about a change in industry practices.
Meanwhile, amid sharply intensifying congressional scrutiny, the House Commerce Committee released about 1,000 pages of internal documents equally damaging to Bridgestone/Firestone Inc., Ford and the federal regulators who failed to heed early warnings about the safety problem. Firestone tire failures, mainly on Ford Explorers, have killed scores of people in accidents here and abroad.
And in another development, a spokesman for Rep. W.J. “Billy” Tauzin (R-La.)--who is leading the House probe--said investigators there are focusing on Ford’s recommendation that Firestone tires on its Explorer sport-utility vehicle be inflated to 26 pounds per square inch, a lower pressure than the 30 psi recommended by Firestone.
“Tire pressure is now the focus of our investigation,” said Ken Johnson, Tauzin’s spokesman. “We have asked both companies to supply us with test data on tires inflated to 26 psi. If we don’t get that, we’ll be knocking on their doors with a subpoena.”
At lower inflation pressures, tires experience more friction and heat, which could bring out any latent construction or design flaws that might cause the tire treads to come off. However, Ford has adamantly rejected speculation that its 26 psi recommendation--intended to enhance the stability of the Explorer--contributed to the source of the problem. For its part, Firestone has said that a range of 26 to 30 psi is acceptable.
“We have said all along that this is a tire issue, not a pressure issue,” said Ford spokesman Ken Zino, adding that Ford has already pledged to give House investigators any documents and test results relevant to the issue.
Many of the documents released Monday showed that under-inflation was a concern in an ongoing dialogue among Firestone and Ford experts as they tried to determine the cause of tire failures in the Middle East and in Venezuela. In that South American country, experts for both companies concluded that Ford should recommend a pressure of 30 psi, according to an August 1999 document.
“That raises a lot of questions,” Johnson said. Zino said he was not familiar with the document and could offer no immediate comment.
Transportation Secretary Slater’s testimony--in his first appearance before Congress on the tire safety controversy--is expected to reflect a noticeable chilling in relations between federal regulators and the auto industry.
In recent years, the government has let industry lead on important safety issues--for example, the development of side air bags. Official embarrassment over the tire safety problem may prompt an assertive government role.
Congressional hearings last week established that both Ford and Firestone knew of problems well before they were reported to federal safety agencies. Firestone voluntarily recalled some 6.5 million last month, amid a government investigation.
Slater is also expected to ask for a large increase in NHTSA’s enforcement budget and for several new reporting requirements, including a provision that auto makers inform NHTSA of any potential safety problems that surface in foreign countries.
Ford conducted recalls of Firestone tires on Explorers sold in Saudi Arabia and other Middle Eastern countries without informing the U.S. safety agency. The company had no legal obligation, but the lack of notification has angered administration and congressional officials.
Consumer groups called the administration’s proposal to lift the fine limit encouraging, but said it would do little to deter future violations.
They said the government must also enact criminal penalties for companies that withhold safety information. “If people think they’ll go to jail, it will change behavior and practices, especially of corporate executives,” said Joan Claybrook, president of Public Citizen, an advocacy group founded by Ralph Nader.
Clarence Ditlow, who heads the National Center for Auto Safety in Washington, said he was skeptical of giving NHTSA the power to levy heftier fines simply because the agency has never once fined a violator the maximum $925,000 penalty.
NHTSA leveled its largest penalty yet--$500,000--against Firestone after a 1978 recall of about 14 million Firestone 500 steel-belted radial tires that caused large numbers of deaths and injuries.
Last year, Ford agreed to pay NHTSA $425,000--the agency’s second-largest fine ever--to settle charges that it withheld information about a car-safety defect involving an ignition-switch problem that led to fires.
Meanwhile, the House Commerce Committee documents will give the public a glimpse of what lawmakers had in their thick briefing books at last week’s hearing. A committee spokesman said plans are being discussed to post the files on the Internet.
Among the disclosures:
* The 1998 State Farm Insurance Co. e-mail to NHTSA that failed to trigger a federal investigation of Firestone tire failures included information on two deaths and 11 injuries. Although State Farm deleted the identities of its customers from the e-mail, the accident descriptions contained detail of how the tires had failed, triggering rollover accidents.
The e-mail was sent to William Duckwitz, an official in NHTSA’s office of defects investigation. “He apparently received it, but he doesn’t recall it,” said a NHTSA spokesman. The agency declined to allow Duckwitz to be interviewed.
Duckwitz passed the e-mail on to a colleague, Stephen Beretzky, who tried to find similar information in NHTSA’s databases. When none emerged, the e-mail was forgotten until State Farm recently disclosed its existence. Samuel Boyden, the State Farm researcher who tried to warn NHTSA, later followed up by calling the agency with dozens of additional cases, which also failed to get its attention.
* An executive of a Ford dealer in Saudi Arabia angrily wrote the company in 1999 that tire failures were “beginning to become an epidemic.” John Garthwaite, national service director of Al Jazirah Vehicles, dismissed corporate efforts to blame the failures on rough local conditions as “a smoke screen.” Firestone, he said, was “clearly trying to distance [itself] from this issue. . . . We again [are] left out in the open without any means of getting answers.”
Ford ultimately began replacing Firestone tires on Explorers sold in Saudi Arabia and other Persian Gulf countries.
*
Times staff writer Davan Maharaj in Los Angeles contributed to this report.
