Reclaim Democracy!

“Sunset Commission” Hands Dangerous Level of Power to President

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Hand-picked panel would wield power to eliminate disfavored federal agencies unless overridden by Congress

By Osha Gray Davidson
First published by Rolling Stone magazine, May 5, 2005 edition

Editor’s note: As we post this article on April 25, we have not had the opportunity to verify whether the proposed commission is truly as unaccountable and powerful a tool for the president as this article suggests. While government agencies certainly should be required to justify their programs and existence periodically, a panel representing only the chief executive would be antithetical to our Constitution’s republican structure of government. 

If you’ve got something to hide in Washington, the best place to bury it is in the federal budget. The spending plan that President Bush submitted to Congress this year contains 2,000 pages that outline funding to safeguard the environment, protect workers from injury and death, crack down on securities fraud and ensure the safety of prescription drugs. But almost unnoticed in the budget, tucked away in a single paragraph, is a provision that could make every one of those protections a thing of the past.

The proposal, spelled out in three short sentences, would give the president the power to appoint an eight-member panel called the “Sunset Commission,” which would systematically review federal programs every ten years and decide whether they should be eliminated. Any programs that are not “producing results,” in the eyes of the commission, would “automatically terminate unless the Congress took action to continue them.”

The administration portrays the commission as a well-intentioned effort to make sure that federal agencies are actually doing their job. “We just think it makes sense,” says Clay Johnson, deputy director for management at the Office of Management and Budget, which crafted the provision. “The goal isn’t to get rid of a program — it’s to make it work better.”

In practice, however, the commission would enable the Bush administration to achieve what Ronald Reagan only dreamed of: the end of government regulation as we know it. With a simple vote of five commissioners — many of them likely to be lobbyists and executives from major corporations currently subject to federal oversight — the president could terminate any program or agency he dislikes. No more Environmental Protection Agency. No more Food and Drug Administration. No more Securities and Exchange Commission.

“Ronald Reagan once observed, ‘The closest thing to immortality on this earth is a federal government program,’ ” says Rep. Kevin Brady, a Republican from Texas who has been working for the past nine years to establish a sunset commission. “We need it to clear out the deadwood.”

Without many of those programs, however, American consumers, workers and investors would be left to the mercy of business. “This is potentially devastating,” says Wesley Warren, who served as a senior OMB official in the Clinton administration. “In short order, this could knock out protections that have been built up over a generation.”

Others note that the provision goes beyond anything attempted by conservatives in the past. “When you look at this,” says Marchant Wentworth, a lobbyist for the Union of Concerned Scientists, “it’s almost like the Reagan administration was a trial run.”

The man behind the sunset commission is Clay Johnson, the most influential member of Bush’s inner circle whom you’ve never heard of. The two Texans have been close friends since 1961, when they met as fifteen-year-olds at Andover prep school and later roomed together for four years at Yale. When Bush was elected governor of Texas in 1994, he put the buddy he calls “Big Man” — Johnson is six feet four — in charge of all state appointments. Johnson, a former executive at Neiman Marcus and Frito-Lay, refers to Americans as “customers” and is partial to Chamber of Commerce bromides such as “We’re in the results business.” He is also partial to giving corporate lobbyists a direct role in gutting regulatory protections. One of his first acts in Texas was to remove all three members of the state environmental-protection commission and replace them with a former Monsanto executive, an official with the Texas Beef Council and a lawyer for the oil industry. Overnight, a commission widely respected for its impartiality became a “revolving door between the industry lobby and government,” says Jim Marston, the senior attorney in Texas for the nonprofit organization Environmental Defense.

Johnson continued his anti-regulatory efforts in the early days of the Bush presidency, when he helped place industry champions in positions throughout the government. As director of OMB, an obscure but powerful arm of the White House, he has implemented a “Program Assessment Rating Tool” to evaluate federal programs and cut funding to those that are “not getting results.” In reality, though, Johnson uses PART to slash government efforts that don’t fit the administration’s political agenda. This year’s budget eliminates twenty percent of the programs that were rated most effective, including efforts to improve the environment and education, and increases funding for programs that received the lowest possible rating — including an attempt to reduce the number of poor people claiming a low-income tax credit.

The evaluations “are based on the whims of White House budget bean counters,” says Gary Bass, executive director of the nonpartisan OMB Watch. “These are meaningless numbers that do nothing but back up preordained political conclusions.”

The Sunset Commission would go even further. The panel — which will likely be composed of “experts in management issues,” according to one senior OMB official — will enable the administration to terminate entire government programs that protect citizens against injury and death. Consider what America might look like if Reagan had wielded such an anti-regulatory ax twenty years ago. Abolishing the EPA would have increased air pollution, causing tens of thousands of children to develop chronic respiratory diseases. Terminating the National Highway Traffic Safety Administration would have eliminated many protections we now take for granted — including air bags, child safety seats and automatic seat belts. And getting rid of the Occupational Safety and Health Administration would have forestalled workplace regulations that have prevented illnesses among millions of farmworkers.

Even if such regulations remain on the books, eliminating entire agencies would leave no one to enforce them. “And if there’s no cop on the beat, who’s going to follow the law?” says J. Robert Shull, senior policy analyst at OMB Watch.

The first hint of Bush’s plan to create a commission surfaced only weeks after he won re-election last November. At an economic conference convened by Treasury Secretary John Snow, one panel member made the case for inserting a sunset provision into existing regulations. Such a move would “shift the burden of proof onto the regulations and require us to demonstrate that they’re still needed,” said Susan Dudley, director of regulatory studies at the Mercatus Center, a free-market think tank based in Washington, D.C.

It’s fitting that the first public mention of Bush’s plan came from Mercatus. The center’s “regulatory studies program” was founded by Wendy Gramm, the wife of former Texas Sen. Phil Gramm and the woman Reagan called “my favorite economist.” As a senior official at OMB under the Gipper, Gramm fought hard to eliminate federal regulations. Her most notorious victory came in 1992 when, as chair of the U.S. Commodity Futures Trading Commission, she pushed through a measure exempting companies that trade in energy derivatives from regulation, following an intense lobbying campaign by Enron. Gramm resigned from the commission and accepted a seat on the Enron board of directors, where she was paid $1.85 million and received donations from the company to support Mercatus. Enron, meanwhile, used its exemption from federal oversight to engage in its infamous accounting fraud that destroyed the company and bankrupted investors.

But such dangers of eliminating regulations have done nothing to slow Bush’s drive for a sunset commission. Given its political gains last November, the administration is optimistic about winning approval in Congress. “The stars and the planets are aligned,” Johnson recently declared, citing the solid Republican majority in Congress and the need to curb the soaring federal deficit.

But there may be a stumbling block. The commission not only threatens the environment and public health — it would also violate the constitutional separation of power between Congress and the executive branch, enabling the president to dismantle programs created by lawmakers. “Under the administration’s proposal, Congress would relinquish its constitutional power to legislate,” says Rep. Henry Waxman, a Democrat from California who has been the commission’s most vocal opponent. “Power would be consolidated in the executive branch, and the legislative role would be emasculated.”

Republicans already have a plan to counter such concerns. Under a bill expected to be introduced soon, the power to appoint the commission would be given to Congress rather than to the president — simply transferring the authority from Bush to his GOP allies on the Hill. And if the commission is challenged in court, the administration is likely to drag out the fight until it has firmly established a conservative majority on the Supreme Court.

Either way, opponents consider the commission a serious threat. “The end result,” says Waxman, “would be a field day for corporate lobbyists.”

© 2005 Rolling Stone

Supreme Court Rules Against Immunity for Dow Chemical

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Bush Administration filed brief asking Court to protect pesticide companies and deny compensation to victimized farmers.

By David G. Savage
First published by the L.A Times, April 28, 2005

 Editor’s note: This article is a classic example of how our regulatory agencies often are protecting giant corporations, not citizens (or small businesses). The issue is rarely spelled out so clearly as in this case.

The Time’s headline read: Supreme Court rules against the White House’s pro-business reading of a 1972 law. A fine letter to the Times’ editor by Jennifer Rockne — director of the American Independent Business Alliance — follows the article, pointing out the misleading, but common use of the label “pro-business.”

The makers of pesticides and weedkillers can be sued and forced to pay damages if their products cause harm, the Supreme Court ruled Wednesday, rejecting the view of the Bush administration and reversing a series of lower courts.

The 7-2 ruling permits lawsuits by farmers whose crops are damaged by pesticides, as well as suits by consumers who are hurt by bug sprays.

In its first ruling on the scope of the 1972 federal law regulating pesticides and related chemicals, the justices said the requirement that chemical companies submit their products for approval by the Environmental Protection Agency did not “give pesticide manufacturers virtual immunity” from being sued if those products proved to be harmful to people, plants or animals.

Wednesday’s ruling restores the law to what it had been before the 1990s.

During most of the 20th century, Americans who were hurt or killed by toxic chemicals could sue the maker of the product in state court. But more recently, lawyers for the chemical industry convinced courts in much of the nation, including California , that the federal law regulating the pesticides barred such lawsuits in state courts.

Four years ago, the Bush administration adopted this pro-industry position, saying that once a pesticide or weedkiller had won EPA approval, it had a federal shield against being sued – even if the product did not work as advertised.

The case of 29 Texas peanut farmers illustrated the issue. Five years ago, they were persuaded by agents of Dow Chemical Co. to try Strongarm, a powerful, newly approved weedkiller. The farmers say Strongarm killed not just their weeds, but also their peanut plants.

“They just plain withered away,” said Ronnie Love, 63, who said he applied Strongarm to 150 acres when he seeded his fields that spring. Despite a summer of heavy watering, the peanut plants were stunted and failed to produce a crop, he said.

Love and the other farmers say Dow reneged on a promise to compensate them for millions of dollars in crop losses. They notified the company that they intended to sue in a Texas court under the terms of the state’s consumer protection law, which allows suits for products that are defective or are deceptively marketed.

But before they could file their claims, lawyers for Dow went to a U.S. district court in Lubbock and asserted it was shielded from such suits.

A federal judge agreed with Dow and dismissed the farmers’ suit. And the U.S. 5th Circuit Court of Appeals in New Orleans agreed as well, saying federal law that regulates pesticides preempts or bars lawsuits in a state court. The California Supreme Court handed down a similar ruling five years ago.

But the Supreme Court took up the case of the peanut farmers – Bates vs. Dow AgroSciences – and ruled Wednesday that the lower courts were wrong to throw out such claims.

Justice John Paul Stevens noted that the EPA did not test products to see if they were effective. It simply relies on information supplied by the manufacturer.

After the peanut crops in Texas failed, Dow changed Strongarm’s product label to say the weedkiller should not be used in regions with high-alkaline soils, which are common in Texas and Oklahoma .

The company did not acknowledge liability for the earlier damage.

Stevens described the 1972 law as an effort by Congress to impose greater regulation on “poisonous substances.” Converting it into a shield against lawsuits would “create not only financial risks for consumers, but risks that affect their safety and environment as well,” he said.

“This is a huge win for farmers, and I think it will have a big impact in the agriculture industry,” said David C. Frederick, the Washington lawyer who represented the peanut farmers. “Pesticide makers and farmers have to work together. And if something goes wrong with a pesticide, the farmers deserve to be compensated. Now the courthouse door is open to them again after being closed for the past 15 years.”

Patti Goldman, a lawyer in Seattle for the environmental group Earthjustice, said the ruling would help consumers and workers harmed by pesticides.

She and other lawyers cited cases of children sickened by pesticides that had drifted from fields into residential areas and that of a young man who died after riding a horse that had been sprayed with a pesticide. Recently, such lawsuits had been dismissed prior to a trial.

Wednesday’s ruling does not mean the plaintiffs will always win, the lawyers said, noting that they would have to prove the product was defectively made or inadequately tested to prevail in court.

“This just means that people will be allowed to sue for compensation when they are harmed by a pesticide,” Goldman said. “The court recognized that these [EPA-approved] labels are written by the manufacturers.”

The Bush administration, the chemical industry and other business groups joined the case on the side of Dow Chemical Co., arguing that the court should erect a barrier to such lawsuits.

“This is a complete loss and a big disappointment,” said Steve Bokat, general counsel for the U.S. Chamber of Commerce. “Our concern is that this gives an opening for the plaintiffs’ bar to bring more tort claims against large companies.”

In his opinion, Stevens pointed out that the Clinton administration believed that the federal pesticide registration law did not shield manufacturers from all lawsuits. The Bush administration reversed course in 2001 and said the law as originally written did block such claims.

Stevens called the new interpretation “particularly dubious” and not entitled to much deference from the high court. Chief Justice William H. Rehnquist and Justices Sandra Day O’Connor, Anthony M. Kennedy, David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer joined the court’s opinion.

Justices Clarence Thomas and Antonin Scalia dissented in part, criticizing the court for “tipping the scales in favor of the states and against the federal government” by allowing lawsuits in state courts.

© 2005 Los Angeles Times

 

To the Editor,

Re “Lawsuits Over Pesticides, Herbicides Allowed” (Nation, 4/28), your subhead reads, “Supreme Court rules against the White House’s pro-business reading of a 1972 law.” Yet as the story makes clear, there’s nothing inherently “pro-business” about the Bush Administration’s advocacy on behalf of the chemical industry — it’s favoring Dow Chemical and other giant pesticide companies at the expense of small farming businesses.

I’m not nitpicking a single headline choice, but pointing out a persistent misrepresentation conveyed by using “pro-business” to describe policies that favor the most politically powerful corporations, often to the detriment of America’s small businesses.

In the future, please avoid the overly broad term “business interests” in favor of identifying which business interests benefit and any that are harmed by particular actions or proposals.

Jennifer Rockne
The writer directs the American Independent Business Alliance

 

Asbestos Corporations Use Sham Bankruptcies to Evade Accountability

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By Jeff Milchen and Stuart Levit
First Published in The American Prospect, April 6, 2005

It’s hard for many Montanans not to feel outrage when we hear President Bush speak of “frivolous asbestos lawsuits” causing business bankruptcies. We know how the WR Grace & Co. used accounting trickery to “go bankrupt,” and thereby avoid fully compensating more than 1,000 Lincoln County residents who had been exposed to deadly asbestos dust.

But WR Grace is not an isolated example. Many of the several dozen business bankruptcies — touted as the tragic results of “runaway lawsuits” — are examples of corporate planning to shield assets from victims rather than a function of being “broke” in any traditional sense.

For example, WR Grace CEO Paul J. Norris made $5 million last year. Not bad for a company in the midst of Chapter 11 bankruptcy reorganization. Many other top executives in “bankrupt” asbestos corporations have seen lucrative bonuses or salary increases.

To be sure, people who have not been hurt have taken advantage of some companies with no culpability for asbestos deaths (typically small businesses that simply resold products containing asbestos). Relatively few of the 6,000 businesses that have defended or settled asbestos claims should bear responsibility for criminal actions and victim compensation, and it would be unjust to ignore that many small-business owners have also become victims of corporations like WR Grace.

Such economic harm, however, pales when compared with the events at WR Grace’s Libby, Montana, mine, where it knowingly exposed thousands of workers and area residents to tremolite, a particularly lethal form of asbestos, while managers lied to employees, residents, and government health officers and regulators about the danger.

The main product of the Libby plant was vermiculite, a mineral valuable for insulation, potting soil, vehicle’s brake pads, and other products. The vermiculite in Libby, however was naturally intermingled with the deadly asbestos.

Asbestos was once widely used for insulation and other applications because of its light, fine, fire-resistant fibers. But when inhaled, those fibers can lodge permanently in lungs, causing scarring of the lung lining. This process gradually chokes off breathing and often causes lung cancer.

In 1994, Congress passed a law permitting bankruptcy protection for companies with asbestos liability. This effectively made bankruptcy the most sensible response for many corporations facing asbestos claims.

But the Bush administration seems intent on recasting the perpetrators as victims by focusing attention on the costs of asbestos litigation to corporations.

Already, the U.S. Senate passed a bill to divert many of the largest class-action lawsuits from state courts into the federal court system. Though not inherently bad, the law also limits the kinds of claims that can be made, which effectively denies some victims the chance to be heard at all — a radical change from current and historic law. The Bush administration has pushed for absurdly low limits on noneconomic damages in civil lawsuits that would be incapable of deterring illegal or negligent actions by multibillion-dollar corporations like WR Grace.

Further, capping asbestos liability is irresponsible because the scope of damages is not yet known. Despite being banned in most industrialized nations, asbestos-bearing products, including many vehicle brakes, still are imported to the United States.

WR Grace executives knew tremolite caused lung disease and cancer from the day Grace acquired the Zonolite Company and its Libby mine in 1963. We know this because Zonolite memos dating from the mid-1950s discussed the dangers of exposing workers to asbestos.

Internal documents — many unearthed only as a result of civil lawsuits — revealed unmistakably that WR Grace executives knew and discussed harm to their workers and the community, but concealed the deadly problem from them and from government officials A company letter to its insurer in 1967 reported that WR Grace “did indeed have a severe problem,” with workers’ health and “might expect a good many claims involving asbestos.”

A subsequent memo from 1976 noted, “Our major [worker health] problem is death from respiratory cancer. This is no surprise.”

Yet WR Grace denied employees adequate respirators, protective clothes, or a reasonable opportunity to clean themselves at the mine and processing plant. Plant managers even gave away contaminated materials for public use, including mine tailings to build a local school’s running track. Grace managers also knew that, at one point, up to 5,000 pounds of asbestos was being released from the plant into Lincoln County’s air every day.

Nearly 200 Libby residents [as of spring 2005], most of whom never worked at the mine, have died from asbestos-caused lung disease. An estimated 1,200 more in Lincoln County are sick with asbestos-related lung disease.

While WR Grace delayed taking any action to protect workers, once they began dying, it wasted little time protecting shareholder assets from the inevitable lawsuits. Between 1988 and 1998, WR Grace executives “eliminated” more than three-quarters of the company’s $6 billion in assets by redistributing them to legally separate entities with no liability to compensate victims or creditors. WR Grace filed for bankruptcy in 2001, after most of its former assets had been removed.

Among other companies using bankruptcy as a shield is Halliburton, which faces $4.3 billion in pending asbestos claims through its KBR subsidiary. In March 2005, its Web site boasted “Chapter 11 is very good for our investors.” According to Halliburton, nobody goes out of business, business operations don’t change, and bankruptcy allows to it to “cleanse the company” of its asbestos liabilities and keep the company strong.

Senate Majority Leader Bill Frist is among those who blame asbestos litigation for “forcing” Owens Corning into bankruptcy in 2000, and subsequent layoffs at its Granville, Ohio, facility were touted as evidence of litigation’s pernicious effects. However, many jobs terminated were in Owens Corning’s litigation department, not manufacturing or industry. Oh, yes, CEO David T. Brown took home $3.8 million in 2004.

While the congressional majority has erected formidable barriers to prevent individuals from escaping debts via bankruptcy, some proposed asbestos reforms would make it easier and cheaper for corporations to do the same.

Because of the latency period for asbestosis (anywhere from seven to 30 years), many researchers believe that fatalities in the United States won’t peak for another decade. The greatest potential harm from asbestos reform is that those individuals exposed to asbestos who have not yet, but almost surely will, develop asbestosis or cancer will be denied medical care and compensation.

To achieve just asbestos litigation reform that will compensate victims without generating unnecessary business and legal costs requires us to first understand the damage and corporate culpability. So far, we are largely in the dark.

Stuart Levit is an attorney and a former mine-reclamation specialist for the state of Montana. Milchen founded Reclaim Democracy! This article was first published by American Prospect.

© 2005 ReclaimDemocracy.org

Updates:

  • June, 2005: the state of New Jersey sued Grace and two of its executives for allegedly lying about asbestos contamination at its Hamilton, NJ vermiculite processing facility. The complaint is here (26 pp pdf from scan).
  • Sept, 2005: WR Grace attorneys have petitioned U.S. District Judge Donald W. Molloy to move the trial of the corporation on conspiracy, Clean Air Act violations, and other criminal charges –scheduled to begin Sept 11, 2006 — out of Montana. The petition claims jurors likely will be predisposed to find WR Grace guilty after years of press coverage about the corporation’s actions in Libby. Full story here.

Other useful sources:

U.S. Baby Death Rates Exceeds Cuba, Beijing

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More attention must be paid to the subtle tragedy of U.S. health care

By Nicholas Kristof 

First published by the New York Times, Jan 12, 2005

Here’s a wrenching fact: If the U.S. had an infant mortality rate as good as Cuba’s, we would save an additional 2,212 American babies a year.
Yes, Cuba’s. Babies are less likely to survive in America, with a health care system that we think is the best in the world, than in impoverished and autocratic Cuba. According to the latest C.I.A. World Factbook, Cuba is one of 41 countries that have better infant mortality rates than the U.S.Here’s a wrenching fact: If the U.S. had an infant mortality rate as good as Cuba’s, we would save an additional 2,212 American babies a year.

Even more troubling, the rate in the U.S. has worsened recently.

In every year since 1958, America’s infant mortality rate improved, or at least held steady. But in 2002, it got worse: 7 babies died for each thousand live births, while that rate was 6.8 deaths the year before.

Those numbers, buried in a recent report from the Centers for Disease Control and Prevention, didn’t get much attention. But they are part of a pattern of recent statistics dribbling out of the federal government suggesting that for those on the bottom in America, life in our new Gilded Age is getting crueler.

“America’s children are at greater risk than they’ve been in for at least a decade,” said Dr. Irwin Redlener, associate dean at the Mailman School of Public Health at Columbia University and president of the Children’s Health Fund. “The rising rate of infant mortality is an early warning that we’re headed in the wrong direction, with no relief in sight.”

It’s too early to know just what to make of the increase in infant mortality in 2002 for American babies. Reliable data for 2003 and 2004 are not out yet. Sandy Smith of the Centers for Disease Control says that the statisticians are pretty sure there was not a further deterioration in 2003, but that it’s too soon to know whether there was an improvement or just a leveling off at the higher rate.

Singapore has the best infant mortality rate in the world: 2.3 babies die before the age of 1 for every 1,000 live births. Sweden, Japan and Iceland all have a rate that is less than half of ours.

If we had a rate as good as Singapore’s, we would save 18,900 babies each year. Or to put it another way, our policy failures in Iraq may be killing Americans at a rate of about 800 a year, but our health care failures at home are resulting in incomparably more deaths – of infants. And their mothers, because women are 70 percent more likely to die in childbirth in America than in Europe.

Of course, deaths in maternity wards occur one by one, and don’t generate the national attention, grief and alarm of an explosion in Falluja or a tsunami in Sri Lanka. But they are far more frequent: every day, on average, 77 babies die in the U.S. and one woman dies in childbirth.

Bolstering public health isn’t as dramatic as spending $300 million for a single F/A-22 Raptor fighter jet, but it can be a far more efficient way of protecting Americans.

For example, during World War II, the employment boom meant that many poor Americans enjoyed regular health care for the first time. So even though 405,000 Americans died in the war, life expectancy in the U.S. actually increased between 1940 and 1945, rising three years for whites and five years for blacks.

True, infant mortality and many other American health problems are largely intertwined with poverty, and experience suggests that neither the left nor the right has easy solutions for intractable poverty. But some of the steps the government is now taking or talking about – like cutting back further on entitlements, particularly those giving children access to health care – would aggravate the situation. Last year, a study by the Institute of Medicine, a branch of the National Academy of Sciences, estimated that the lack of health insurance coverage causes 18,000 unnecessary deaths a year.

As readers know, I complain regularly about the Chinese government’s brutality in imprisoning dissidents, Christians and, lately, Zhao Yan, a New York Times colleague in Beijing. Yet for all their ruthlessness, China’s dictators have managed to drive down the infant mortality rate in Beijing to 4.6 per thousand; in contrast, New York City’s rate is 6.5.

We should celebrate this freedom that we enjoy in America – by complaining about and working to address pockets of poverty and failures in our health care system. It’s simply unacceptable that the average baby is less likely to survive in the U.S. than in Beijing or Havana.

© 2005 New York Times

Creekstone Farms Slaughtered by USDA

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By Jonathan Turley
First published by the Los Angeles Times, April 20, 2004

Creekstone Farms is a little slaughterhouse in Kansas with an idea that would have had Adam Smith’s mouth watering. Faced with consumers who remain skittish over mad cow disease – especially in Japan – Creekstone decided that all its beef would be tested for mad cow, a radical departure from the random testing done by other companies. It was a case study in free-market meatpacking entrepreneurship. That is, until the Bush administration’s Department of Agriculture blocked the enterprise, apparently at the behest of Creekstone’s competitors.

According to the Washington Post, Creekstone invested $500,000 to build the first mad cow testing lab in a U.S. slaughterhouse and hired chemists and biologists to staff the operation. The only thing it needed was testing kits. That’s where the company ran into trouble. By law, the Department of Agriculture controls the sale of the kits, and it refused to sell Creekstone enough to test all of its cows. The USDA said that allowing even a small meatpacking company like Creekstone to test every cow it slaughtered would undermine the agency’s official position that random testing was scientifically adequate to assure safety.

What it didn’t say was that the rest of the meatpacking industry was adamantly opposed to such testing, which is expensive, and had no desire to compete with Creekstone’s fully certified beef. “If testing is allowed at Creekstone . ,” the president of the National Cattlemen’s Beef Assn. told the Post, “we think it would become the international standard and the domestic standard, too.”

The Agriculture Department’s Creekstone decision reveals the best thinking of Soviet central planning: The government shoots the innovator to preserve market stability. Though President Bush invokes free-market principles when it comes to industry downsizing, “outsourcing” jobs, media mergers and energy deregulation, those principles apparently have their limits when a company seeks to become an industry leader in consumer protection.

Located in the small town of Arkansas City, Creekstone is a model operation in an industry that often seems medieval. It traces the origins of its high-quality Black Angus beef to reduce the use of animals that have been given antibiotics. It pays high wages, employs humane slaughtering techniques (they make for better-tasting beef) and maintains a slow enough production line to guarantee worker safety and to ensure that animals are dead before they are butchered. Although the largest U.S. meatpacking companies have fought regulations that would force such practices, Creekstone – which has been in business since 1995 – has proved that some consumers will pay more for such corporate policies and the premium product that results.

The appearance of mad cow disease in the U.S. herd hit Creekstone’s small operation hard. Much of its market was in Japan, where all cows are tested for the disease and where U.S. beef is banned because American meatpackers don’t follow the same policy. So Creekstone’s chief operating officer, Bill Fielding, announced that he would voluntarily test the 300,000 cows his company slaughters annually, to satisfy customers willing to pay the cost. Absent the test, Fielding says Creekstone may face bankruptcy and have to lay off its 790 workers.

The Department of Agriculture seems to have only one purpose in preventing Creekstone from testing – appeasing the big slaughterhouses. The USDA has a long history of doing the bidding of the meatpacking industry at the expense of the public. Indeed, in many academic studies, the department is presented as a textbook example of the problem of “agency capture,” wherein an agency becomes so identified with the companies it regulates that it becomes an extension of those companies.

The allegations of agency capture have been magnified in the Bush administration, in which former industry executives hold key regulatory positions – Agriculture Secretary Ann M. Veneman has a chief of staff who was the head lobbyist for the National Cattlemen’s Beef Assn. and a senior advisor who was the association’s associate director for food policy.

When mad cow disease appeared in the United States, the department again took the industry line and resisted calls for added testing. Only after worldwide criticism did it reluctantly make such modest rule changes as requiring slaughterhouses to discard “downed” animals – cows so sick that they had to be dragged into slaughterhouses to be butchered. Most Americans were surprised to learn that the department had ever allowed such animals into the food supply in the first place.

The administration may be correct that testing every animal in the U.S. is unnecessary and not cost-effective. But why not let Creekstone find out what the market will bear? The position of the administration is an affront to anyone who believes in the free market. It’s as if the Department of Transportation refused to allow Volvo to add air bags just to keep the pressure off other carmakers.

Congress should step in and end the department’s monopoly over testing kits. It should also call for the removal of the officials involved in the decision.

As for the self-described free-marketeers in the Bush administration, Creekstone Farms may not offer them an appealing meal but at least it doesn’t come with a heaping side order of hypocrisy.

Jonathan Turley is a law professor at George Washington Law School.

© 2004 LA Times

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USDA Captured by Corporate Meatpackers

USDA and Beef Industry Giants Fight Small Producer Wanting to Ensure Safe Meat

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Beef firm faces perplexing resistance to mad cow tests

By USA Today editorial staff 
First published by the USA Today, March, 26, 2004

Creekstone Farms Premium Beef is a small producer of high-quality beef in Kansas. But it’s making a big point about mad cow disease. It wants to privately test all of the cattle it slaughters for the illness, which can cause a fatal brain disease in humans who eat infected meat. The way Creekstone Farms sees it, 100% testing would reassure U.S customers. The company also says it is talking with Japan about restarting exports there, where total testing is required.

But the firm has run into surprising obstacles: from the federal government, which has pledged to do everything possible to detect the disease, and from the meat industry, which has scrambled to keep consumer confidence since December. That’s when the first U.S. case of mad cow was found in a Washington cow imported from Canada.

Their reasoning is as confounding as government foot-dragging over approving private testing. And it ill-serves confused customers who are looking for stronger assurances that the meat they buy is safe.

The U.S. Department of Agriculture (USDA) currently does not allow such private testing for mad cow disease. And it claims that a new government testing system it approved this month is perfectly adequate. More than 10 times the number of cattle will be tested for mad cow under the new system, but the government still will be testing less than 1% of the 37 million cattle slaughtered in the U.S. each year. That falls far short of the 100% testing Creekstone Farms is proposing and Japan provides.

Other beef producers complain that Creekstone Farms’ 100% testing plans would set an expensive precedent. They worry that consumers might be misled into thinking an untested cut of beef isn’t safe. But food producers ranging from organic growers to free-range farmers already market their products based on the idea that food produced in healthier ways or with added safeguards is worth paying for. Creekstone Farms’ proposal taps into the same logic.

Other beef producers and the USDA say going beyond the new system is unnecessary. But hundreds of seemingly healthy cattle in Europe have tested positive for mad cow disease.

Rather than blocks on private efforts to strengthen beef testing, what’s really needed are tougher test regimens for all U.S. cattle. U.S. consumer advocates say this requires testing all cattle over 20 months, since current tests can’t detect the long-incubating disease in younger cattle.

In contrast, the new U.S. system will test up to 268,000 cattle over a period of 18 months, including all that appear sick plus a random sample of about 20,000 others.

Americans are willing to fund a higher level of reassurance. A January poll by the Consumers Union showed that 95% of adults would pay 10 cents more a pound for tested beef. Testing every slaughtered cow would cost about six cents per pound.

Scientists are developing promising, inexpensive mad cow tests, including a simple blood test. Until they are perfected, letting Creekstone Farms carry out full testing under USDA oversight not only seems reasonable, it also could provide an important measure of the usefulness of 100% testing.

© 2004 USA Today

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