Industries turn to Bracewell lobbyists to scuttle product safety rules
Editor's note: Story was updated April 12. See clarification at end of the story.
Posted with permission from Fairwarning.org:
Justin Miller was 16 when he took his first ride on a recreational off-highway vehicle, or ROV. He came home missing a hand.
The powerful 1,100-pound machine tipped over and landed on the Northridge, California, teen, mangling his hand so severely that seven surgeries couldn’t save it.
At the time of the accident in 2008, similar reports of gruesome injuries and deaths were piling up at the Consumer Product Safety Commission. Staff engineers spent years developing a safety standard meant to reduce deadly rollovers by improving the stability of ROVs. But in 2015, as the commission neared a final vote to adopt the standard, off-road vehicle makers persuaded Congress to block it.
Representing the industry were lobbyists from Bracewell LLP, a big law and lobbying firm that has specialized in helping product makers thwart rulemaking by the CPSC. One after another, industries have turned to Bracewell to fight unwanted federal standards, and they have not been disappointed. Along with the ROV rule, Bracewell and its clients in recent years have sidelined mandatory standards aimed at keeping toddlers from being strangled by window blind cords; avoiding carbon monoxide poisoning deaths from portable generators; and preventing thousands of finger amputations by table saws.
Bracewell is not the only advocate for product makers, and there’s no magic in what it does. Baked into the CPSC’s governing statute are daunting constraints on rulemaking that make it not so hard to tie the agency in knots. And while the CPSC is an independent agency, the Trump administration’s anti-regulatory crusade and a recent political re-alignment have also made it easier to hold off safety rules.
The five-member commission, which by law can have at most three members affiliated with one party, recently switched to a 3-to-2 Republican majority. Ann Marie Buerkle, the acting chair and Trump nominee for the permanent job, is a former GOP House member who critics say rarely, if ever, opposes industry positions. Bracewell and its clients have used these circumstances to full advantage.
”Whenever consumer protection is being stopped, Bracewell’s in the middle of it,” says Marietta Robinson, a CPSC commissioner from 2013 until last June. “They’re on the opposite side of things I’ve spent my career doing,” said Rachel Weintraub, legislative director and general counsel for the nonprofit Consumer Federation of America.
They have succeeded through a three-pronged approach — first, by challenging proposed rules on technical or legal grounds, but when lobbying the CPSC isn’t enough, seeking help from Congress to block agency action. They have also exploited the agency’s cumbersome procedures to play for time and preempt federal rules with voluntary standards that are often less stringent and harder to enforce.
Heading the firm’s CPSC practice is Ed Krenik, 54, formerly a member of the George W. Bush administration and an aide to three GOP members of Congress. Described as affable and cagey, Krenik is a Minnesota native with “the Midwest understated and pleasant way of interacting,” says Elliot F. Kaye, a commissioner and formerly the CPSC chairman.
“He knows the Hill well, and he understands that you get 30 seconds with a frazzled staff member or a member of Congress, and you have to implant in their brain in that 30 seconds one or two persuasive points,” Kaye says. “He’s very good at understanding what those pressure points are in a non-threatening way, and also at picking the members that are the right targets.”
“A lobbyist’s lobbyist”
The Bracewell lobbyists are based in a glass office tower near Dupont Circle. Called the Policy Resolution Group, they are part of the 370-lawyer Bracewell firm, which is headquartered in Houston and serves a roster of big clients, including oil and gas and utility companies.
The firm was called Bracewell and Giuliani for about a decade when Rudolph Giuliani, the former New York mayor and pugnacious defender of President Trump, was its best-known partner. In 2015 and 2016, the pro-Trump super PAC Make America Number 1 paid Bracewell and Giuliani $336,000 in legal fees, according to data from the Federal Election Commission. But since Giuliani left the firm in 2016, it appears all traces of him have been wiped clean. A Bracewell history, running nearly 1,000 words on the firm’s website, never once mentions his name.
Krenik, who came to the firm in 2003, was described in a Bracewell podcast as “a lobbyist’s lobbyist.” He “knows who’s making the decisions and he knows the type of arguments that matter to them,” the host said. “And particularly when it comes to budget and federal spending, he knows the process like the back of his hand.”
”I’m proud of the Bracewell/PRG’s work on behalf of our clients on consumer product safety issues,” Krenik said in a written statement to FairWarning. “I’m particularly proud of the work that we have done to develop and implement numerous safety standards that have been mutually beneficial to consumers and the regulated community.”
Previously, Krenik was an aide to three Republican lawmakers, and the EPA’s associate administrator of congressional affairs during the George W. Bush administration. A low-grade flap ensued in 2003 when Krenik and another senior EPA official departed for Bracewell. The EPA had just weakened a key anti-pollution measure called the New Source Review rule, a victory for coal-fired utilities. Then, as now, Bracewell’s top lobbying client was the Electric Reliability Coordinating Council, a powerful utility industry trade group. Krenik told The Washington Post he had no involvement in the decision to change the rule.
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Among significant clients with business before the CPSC, off-road vehicle manufacturers over the years have paid Bracewell more than $3.7 million according to data from the non-profit Center for Responsive Politics. Other clients have included window blind manufacturers, who have paid Bracewell $1.9 million. The firm has taken in more than $1.46 million from the Power Tool Institute, which represents makers of table saws; and $610,000 from portable generator manufacturers.
Dwarfed in size
With oversight of some 15,000 consumer products–just about everything but guns, tobacco, autos and drugs–the CPSC still is among the smallest of regulatory agencies, and dwarfed in size by many industries it regulates. It was established by Congress in 1972 to “protect the public against unreasonable risks of injuries and death associated with consumer products.” It provides consumer education, monitors recalls, and can impose stiff fines against companies failing to promptly report defective products.
It is also supposed to set safety standards to address product hazards. But that power was sharply limited in the early 1980s, when President Reagan launched an assault on government regulation, and his budget director, David Stockman, targeted the CPSC for extinction. Ultimately, the agency survived while suffering deep cutbacks. In the compromise that spared the agency, Congress put it in something of a rulemaking straitjacket.
A series of cumbersome procedural requirements gave business opponents powerful leverage, creating what commissioner Robert Adler has called “paralysis by analysis.” Before developing safety rules for a specific product, the agency first has to try to work with industry on voluntary standards. Mandatory rules can be passed only if the agency can show that voluntary standards aren’t effective in reducing the hazard, or that there is substantial noncompliance.
While generally favoring mandatory rules–for the obvious reason that they can be enforced–safety advocates acknowledge that voluntary standards can work if they are strong enough, because industries committed to making safer products can move faster than the government. And Krenik argues that “voluntary standards” is something of a misnomer, because there is strong pressure to comply. “If you want to sell your products in the U.S., retailers insist upon products that meet safety standards,” he says.
But industry groups have also used the voluntary standards process to game the system. It’s possible for them to wait … and wait … and wait, literally for years, while the agency staff plods forward in developing a safety standard. Then, when it appears the commission is really going to act, they can rev up the voluntary standards process to bring rule-making to a halt. Kaye says industry in some cases has put up “tremendous resistance” and dragged its feet before finally “doing what we knew they could have done years ago.”
Consider the way Bracewell and its clients drove the ROV standard into a ditch.
ROVs rumbled into the market in the early 2000s as an alternative to the traditional off-roading favorites, all-terrain vehicles, or ATVs. Unlike ATVs, which riders straddle like motorcycles, ROVs are more Jeep-like in appearance, with steering wheels, bench seating and seat belts.
Body count declines
Early on, the Yamaha Rhino–the model Justin Miller was riding when he lost his hand–was the category leader. Following scores of reports of deaths and catastrophic injuries, Yamaha negotiated an agreement with the CPSC to make repairs to improve the Rhino’s stability and handling. The measures seemed to work and the body count declined. Buoyed by that success, CPSC engineers began developing a safety standard for all ROVs.
An industry group, the Recreational Off-Highway Vehicle Association, had adopted a voluntary standard. But according to CPSC officials, it failed to address the most critical safety problems, stability and handling. By 2015, when commissioners were nearing a final vote on the proposed rule, there had been more than 460 ROV deaths and thousands of severe injuries. Democrats formed the majority, and they were tired of waiting for the industry to act.
So Bracewell and Polaris Industries, by then the top ROV producer, turned to Congress to run interference. Shrewdly casting themselves as defenders of engineering and science, they claimed the CPSC rule was technically flawed and could actually increase the risk of deadly crashes. They got Senators Dean Heller, Republican from Nevada, and Joe Manchin, Democrat from West Virginia–No. 1 among the states in off-road deaths per capita–to sponsor legislation to block action by the CPSC. The bill barred the agency from moving ahead until the National Academy of Sciences could investigate the disputed engineering issues.
“For someone like myself, who lives in a rural state,” Heller, who lost his seat in November’s election, said at a hearing, “you can imagine the push back that we’re seeing from the industry itself.”
The academy study would cost up to $1 million, yet the bill did not include a penny to fund it. The CPSC would have to pay for the study out of its own slender budget, which all involved knew wasn’t going to happen.
Ultimately, agency engineers worked with the industry to strengthen their voluntary standard. They won some key concessions but, lacking leverage, were unable to get other important upgrades. “With both our hands and feet tied, and tape over our mouths, our staff had to work with industry to essentially beg for anything they would give us on a voluntary standard,” Robinson, the ex-commissioner, told FairWarning in an email. “Our staff was forced to accept it as ‘better than nothing’ which has become the new bar.”
An insidious hazard
Bracewell and its clients took a different tack in scuttling a federal standard for portable generators. This time, they had a powerful ally at the helm of the CPSC.
Portable generators are immensely useful when a hurricane or other disaster knocks out the electric grid. But they also pose an insidious danger by emitting carbon monoxide (CO) gas–colorless, odorless and deadly. According to one calculation, these devices can spew about 450 times as much CO as an idling car.
From 2005 through 2016, according to CPSC data, generator exhaust killed 849 people and sickened many thousands more, with an unknown number suffering brain damage. Many victims had improperly run generators inside a home. Other times, a generator placed on a porch or in a garage wafted CO fumes into the dwelling through a window or vent. Within a few days of Hurricane Irma in September 2017, a dozen CO deaths from portable generators were reported in Florida.
The CPSC began investigating in 2002, and required warnings on generators starting in 2007. To most safety experts, warnings alone are just a bit better than nothing–and no substitute for taking human error out of the equation by designing safer products. So agency engineers continued examining possible safety features, such as engines that emit less CO, or sensors that would trigger automatic shutoffs when CO builds up too high.
The manufacturers, who blamed product misuse, thought warning labels should suffice. They said neither lower-emitting engines nor automatic shutoffs could eliminate tragedies caused by their customers’ mistakes. In a February, 2007 letter to the commission, lawyers for leading producers, including Briggs & Stratton and American Honda Motor Co., said requiring such features “would be premature at this time,” and could ”create a false sense of security, leading consumers to believe that no further precautions are necessary.”
As an example of what she said was the industry’s unwillingness to act, Robinson, the former commissioner, said that when she met with industry representatives in 2015, they rejected the idea of providing longer cords so generators could be used a safe distance from a house. (That may sound like “a logical solution,” Krenik said, but “in some cases the consumer does not want a long cord,” and ”the longer the cord, the less effective the generator is.”).
Then in 2016, one manufacturer, Techtronics Industries Company Limited, broke ranks and stunned its rivals by announcing it would introduce a generator emitting less carbon monoxide. By confirming this was technically and financially possible, it was a game changer. That fall, commissioners voted 4-1 to adopt a notice of proposed rulemaking, an important step toward requiring lower emitting generators.
To halt the march toward a mandatory rule, the industry had to do something. The Portable Generator Manufacturers ‘Association, a trade group, began working to revise its voluntary standard to include automatic shutoffs in new models. CPSC engineers had seen automatic shutoffs as a less effective option than cutting CO emissions. But it was cheaper than redesigning the engines, and it looked good to the industry now.
Of the five commissioners, only one–Ann Marie Buerkle–had voted against proceeding with the mandatory standard. But she was about to take the helm. In that position, records show, she appeared to coordinate with industry members to push their agenda.Buerkle began her professional career as a nurse and later became a lawyer. Before her appointment to the commission in 2013, she was a one-term member of Congress, elected with Tea Party support from a district in upstate New York. As a commissioner, she has displayed an unshakable faith in industry goodwill, and strong reluctance to push companies to move any further or faster than they want. At a Senate committee hearing in September 2017, she called voluntary standards ”the quintessential safety way to go, and the process that we should be following.” She reminded senators that “Congress directed us to pursue voluntary standards when they will adequately address the hazard.”‘
Colleagues describe Buerkle as gracious and highly likable. She is “an incredibly lovely human being,” says Kaye, the former chairman. “We just have massive philosophical differences when it comes to consumer safety.”
Buerkle, in describing her approach, told FairWarning: “My door is always open. I have weekly calls with consumer groups… I feel like I work for the American people, and whether you are an industry, a consumer group, a publication, you should have access to me,” she said.
“However people perceive me, that’s their issue not mine.”
Buerkle replaced Kaye as acting chair within weeks of President Trump’s inauguration, and he nominated her as permanent chairman in July 2017. (She had not been confirmed when Congress adjourned in December, but Trump re-submitted her nomination to the new Congress in January.)
For ammunition against the portable generator rule, Bracewell lawyer Jeffrey R. Holmstead– previously the EPA’s assistant administrator for air and radiation–produced a legal analysis asserting that the CPSC was “clearly incorrect” in thinking it could restrict CO emissions. Only the EPA had that authority, he said. The trouble was, Buerkle seemed to be alone in finding the argument persuasive. It gained little traction with the other commissioners and the legal staff.
So Bracewell decided to engage the EPA. Bracewell lobbyists alerted the agency to what they described in an email as ”a potential turf battle … brewing between EPA and the CPSC.” On April 4, 2017, Krenik brought the president of Portable Generator Manufacturers’ Association, Greg Wischstadt, to a meeting at EPA headquarters with a senior aide to then-administrator Scott Pruitt. “We talked through the jurisdictional issue under the Clean Air Act,” Krenik said, “and then … asked them if they were so inclined to weigh in.”
Pruitt, who had been running the EPA for just a few weeks and was moving fast to ease regulations on industry, came up big for the PGMA. In a letter to Buerkle, he asserted the EPA’s authority to regulate CO emissions. When Pruitt aide Mandy Gunasekara forwarded Krenik the letter, he emailed back: “Can you also send to ABuerkle@cpsc.gov She would like to get it from EPA address.”
Buerkle responded in a letter to Pruitt that the EPA ”undoubtedly has the authority to regulate” CO emissions. ”EPA’s primacy in this area is one reason I voted against our proposed rule,” she wrote. The letters and emails were previously reported by ProPublica and The Washington Post.
At the time, Democratic appointees still were in the majority at CPSC, so there remained a chance that a federal standard might pass. In consultation with Bracewell, GOP Congressmen Jim Sensenbrenner and Sean Duffy–both from Wisconsin districts that are home to generator manufacturers–submitted a budget rider to delay CPSC action until the industry could complete revisions to its voluntary standard. The rider did not pass, but became moot as the PGMA moved quickly to finalize its standard.
Still, another risk loomed. Underwriters Laboratories (UL), the testing and certification firm, had convened its own task force to develop a voluntary standard. The UL proposal called for both lower CO emissions and automatic shutoffs because, as UL put it, ”both safeguards are important steps to help improve portable generator safety.”
Since some retailers might prefer to stock generators meeting the UL standard, it could take sales away from manufacturers who only complied with the PGMA standard.
In an email exchange with Buerkle, made public here for the first time, Wischstadt, the PGMA president, complained that a CPSC engineer who was a member of the UL task force appeared to be advocating that other members support the UL proposal.
Buerkle seemed sympathetic. She told Wischstadt that she would be “addressing the issue within the Agency regarding staff’s very narrow approach to a solution to this problem.” She added: “If there is anything more that you might think of and/or I can assist with, please let me know.
Soon after, Buerkle put forward the name of an industry official for a key job at the agency. Patricia Hanz, a senior attorney with Briggs & Stratton and a vice president of PGMA, had long fought CPSC regulation, and was a co-signer of the 2007 letter opposing new safety requirements. In October, 2017, she became the CPSC’s general counsel with the approval of a majority of commissioners. Hanz has recused herself from any involvement in the issue. “As soon as the word ‘portable generators’ is mentioned she leaves the room,” Buerkle said. ”I have no qualms at all about her ethics.”
That same month, commissioners Robinson and Kaye sent a letter to major retailers, urging them to stock generators with new safety features that would soon be coming out. Robinson forwarded a draft of the letter to Buerkle, hoping she would sign. Buerkle declined, but let Wischstadt know what Robinson was up to.
“I am going to forward you a letter that Commissioner Robinson wants to send out,” her email to Wischstadt said. “I am attempting to discourage her…I will share with Ed as well,” she wrote, apparently referring to Krenik.
[Buerkle said that in the end she didn’t share the Robinson-Kaye letter because she did not receive a final copy before the letter was sent to retailers. Questioned about this April 9 at a House oversight hearing, Buerkle said, “No letter was ever provided to PGMA, and that’s very important.” Joe Martyak, communications director for CPSC, affirmed after the hearing that Buerkle did not share either Robinson’s draft “nor a final copy of the letter.”]
Still hoping to defeat the proposed UL standard, PGMA sought help from an unusual quarter. Commissioner Joseph Mohorovic left in October, 2017, to work for Dentons, a big law and lobbying firm. A year earlier, Mohorovic had been one of the four commissioners voting to advance a requirement of lower emitting engines. Now the PGMA retained him to contact UL panel members to urge no votes. Ethics rules would have barred Mohorovic from lobbying the CPSC, but a guidance letter provided by agency ethics officials confirmed his right to lobby UL.
Nonetheless, his efforts failed. The UL standard got the necessary votes and was approved in January, 2018.
Last April, commissioners Robinson, Kaye and Adler sent a second appeal to retailers to stock generators with new safety features.
Soon after, Senators Richard Blumenthal (D-Connecticut) and Bill Nelson (D-Florida), sent a testy letter to Buerkle, requesting an update on portable generators and ”your justification for refusing to sign” the letters to retailers.
The adoption of two voluntary standards has put the mandatory rule on the back burner, probably forever. It could be revived only if proof emerges that the voluntary standards aren’t effective, or manufacturers aren’t complying.
”We are going to begin to see, I think, a decrease in the deaths,” Buerkle told FairWarning, so this is a ”good news” story.
“I don’t think it’s a good news story for the families who had to experience all these deaths and injuries in the years that we should have been moving more quickly, and were being stonewalled by industry,” said Kaye. ”I think you’d have to ask those families if it’s a good news story.”
“It’s clear that “self-regulation is coming back in the consumer product area, even though self-regulation has had so many disastrous effects throughout history,” Robinson remarked at a commission hearing before she left the agency. Last June, after Robinson’s term expired, Republican appointee Dana Baiocco, took her place. Baiocco had been a partner at the corporate law firm Jones Day, where, among things, she had defended Yamaha in Rhino wrongful death cases.
Each year, the commission adopts an operating plan with goals for the next 12 months. The plan for fiscal 2019 lowered the priority for several rulemaking activities. Consumer and health groups fired off a letter to Buerkle and her colleagues. ”The overall shift is unmistakable,” it said. ”The CPSC is planning to retreat on mandatory safety standards activities in several areas…We understand the importance of the voluntary standards process… however the development of mandatory standards is fundamental to the CPSC’s safety mission.”
Clarification: The original version of this story quoted an email from acting Chairman Buerkle to the head of the Portable Generator Manufacturers’ Assn., stating that she would be forwarding him a letter drafted by a fellow commissioner. It did not include her assertion, now added above, that in the end she did not share the letter because she did not receive a final copy before it was sent out. Questioned about this on April 9 at a House oversight hearing, Buerkle said: “No letter was ever provided to PGMA.”