The Rape of H.R. 10835

...Chamber of Commerce, which made it known that it, like the White House, had finally found a con- sumer bill it could support...

...The Chamber's members were in- structed to urge their Senators and Representatives to oppose the CPA and develop instead "the right kind of Federal agency—an Office of Consum- er Affairs in the Executive Office of the President which will represent con- sumers' interests and coordinate the nearly 1,000 consumer-related activ- ities of Federal agencies...

...It was a major victory for the White House and the corporations—one they could not have achieved without the active or passive help of the House Democratic leadership, labor and con- sumer lobbyists afraid to affront Holi- field, and members of Congress too timid to tangle with a committee chair- man...

...As Rosenthal offered his strengthening amendments, a majority of the Dem- ocrats voted against their chairman on every roll call...

...Rosenthal found it "regrettable that the leadership didn't show leadership" by openly calling for support of the Moorhead amendment...

...Then the staff advised the White House and industry groups —but not members of the Committee —that it was writing a new bill—the bill that was to become H.R...

...At the White House, the Committee worked not with Mrs...

...In Holifield's case, he added, "there's no conceivable reason for what he's doing except a trade-off...

...Four—Guaranteeing fairness and completeness in the release of all in- formation about consumer products— including a right of fair comment prior to publication and a right to retraction for inaccurate data received...

...Today he has done his part to do in the little consumer...

...This man is trying to influence legislation...

...The Food and Drug Admini- istration would still succumb to the pressures exerted by food and drug manufacturers...

...Mills has been doing in the little taxpayer...

...Mail—much of it paraphrased only slightly, if at all, from trade association propaganda, be- gan pouring into the House and Sen- ate offices...

...The amount, Rosenthal contended, was "thoroughly inadequate," and would leave the CPA with fewer lawyers than are on the payroll of any one of the major Washington law firms specializ- ing in pursuing industry interests before Government agencies...

...He sure did a job on the America consumer," said Nader, who had spe] the day outside the Committee roor buttonholing members on their wi in and out...

...And the Nixon Administra- tion, which had never before seen any merit in the measure, suddenly found it had a bill it could live with...

...As the House debate on the Consum- er Protection Act approached, Rosen- thal, Nader, and their allies mounted an intensive drive to rally support for a stronger bill...

...The Consumer Federation of America, which draws much of its financial sup- port from unions, similarly withheld its help...

...The only way to turn the situatior around is a massive public intervention here in Washington," Rosenthal mused...

...As written now, this bill itself is a consumer fraud," Nader charged...

...At just about that time, strange things started happening to the Consumer Protection Act...

...His first official act was to disband Rosenthal's special consumer subcommittee...

...The Government Operations Committee approved the bill by an overwhelming vote of thirty- one to four...

...Anyone reading those headlines will be well advised to check his pockets and make sure his wallet is still there...

...The White House, unfortunately, has acted as an annex to the U.S...

...Furthermore, the report proposed a budget authorization of only $5.4 mil- lion for the CPA's first full year of op- erations—a figure that had never been discussed in the Committee...

...Two—Preventing unfair access to confidential business data and trade secrets, by placing limitations on the use of the agency's information gath- ering powers...

...Dwyer wrote, "I believe the staff may have gone beyond its charge to make 'technical' corrections and, in- stead, inserted policy changes...

...Nader, testifying before the special subcommittee, pro- posed an alternative that proved per- suasive...

...In a February 24 consumer message to Congress, the President had promised to submit his own proposal ror "effective representation of con- sumer interests in the regulatory proc- ess," but no such plan ever came from the White House...

...In a week of acrimonious subcom- mittee sessions, Holifield successfully beat back every major effort to strengthen the bill...

...The controversy over H.R...

...A state- ment issued September 28 in the name of Virginia H. Knauer, the President's special assistant for consumer affairs, called it "a balanced and responsible proposal...

...It also sounded "real good" to the U.S...

...In a round of visits to Holifield and other Committee Democrats, Nader argued that by destroying the CPA and betraying the consumer, the Democrats were depriving themselves of a poten- tially powerful campaign issue for 1972...

...It was very painful for me to vote against a bill that Ralph Nader and I conceived," Rosenthal said later that evening...

...He called the conduct of the unions and the Con- sumer Federation "disgraceful...

...The proj- ect has long been close to the heart of Holifield, the patriarch of the Joint Atomic Energy Committee...

...By a remarkable coincidence, mem- bers of the Government Operations Committee received scores of commu- nications from businessmen in their home districts proposing precisely those "improvements" in precisely those words...

...This building has a moat around it as wide as the Mississippi River...

...henceforth, consumer matters would be handled by his own subcommittee on legislation and military operations...

...In the Ninety-first Congress, with the new consumer movement—"Na- derism"—riding high, it seemed possi- ble that the time for enactment of leg- islation was at hand...

...I have to discharge my responsi- bilities as a chairman and a legislator...

...On the othe side, the influence of business is enor mous...

...Nader's method of opposition," the chairman charged, "is to continuously make derogatory charges against any person of prominence that comes with- in his rifle sights...

...10835—a report which, in violation of the Government Operations Commit- tee's own rules, had not been submit- ted to members of the Committee for approval...

...Nader was more blunt, charging that "the White House has assumed a strong role behind the scenes, disciplining Republican mem- bers and holding out carrots to some Democratic members...

...The CPA would therefore be barred from an ef- fective role in the vast majority of cases involving a problem that claims the lives of some 900 children a year...

...In a polite, private let- ter to the chairman, Committee mem- ber Mrs...

...Ros- enthal called it "a sheep in wolf's cloth- ing...

...10835 by 344 votes to 44 on Oc- tober 14, after beating back a heroic effort to strengthen the legislation...

...Rosen- thal enlisted Nader in a round of in- tensive lobbying with members of the Committee...

...He was trying to say that after ten years of persistent labor to create an effec- tive consumer agency within the Fed- eral Government, he had ended up voting in the Committee against his own bill—what was left of it...

...When the Ninety-second Congress convened this year, the Government Operations Committee had a new chairman—Chet Holifield, a Cold War "liberal" of the old school, best known for his tight rein over the Joint Atom- ic Energy Committee...

...Chamber of Commen but, if enacted into law, it will do a jc for the American consumer...

...A Department of Consumer Affairs, he contended, would preserve all the defects of the present regulatory structure...

...Those who have frequent busi- ness on Capitol Hill are rarely eager to antagonize a powerful committee chairman...

...The Nixon Administration told the Committee it did not favor creation of a. CPA...

...The Justice Depart- ment's anti-trust division would still approve mergers in restraint of trade...

...Dwyer, voted with him most of the time, though she absented herself one day to help open a new shopping center in her New Jer- sey district...

...The chairman, whose florid features and massive white eyebrows are uniquely suited to manifestations of in- dignation, rejected the charge "in its entirety," declaring, "There's been no pressure brought to bear on me by the White House in any way...

...That's all...

...Only 231 complaints were settled formally in the same period...

...Still, he regarded it as no mean achievement that thirty House votes could have turned the tide in "a showdown be- tween Richard Nixon and Ralph Na- der...

...Nader, who had helped draft the original Consumer Protection Act, who had tirelessly lobbied for it and described it as "the most important consumer legislation ever," declared that the bill produced by the Commit- tee had reduced what was intended to be a "consumer's voice" in the Govern- ment to a "consumer's squeak...

...The answer, Na- der said, was not to establish a Cabinet department housing all of these inad- equate bureaucratic structures under one roof, but to create an independent Consumer Protection Agency (CPA) with powers of its own and authority to intervene in the consumer's behalf before the regulatory agencies and in the courts...

...It shows how easily the people can be—and are—betrayed by those who are supposedly accountable to them...

...Three—Disallowing public release of confidential business data...

...He's going for the strongest possible bill...

...The regulatory agencies would still be regularly co-opted by those they were supposed to regulate...

...Even the U.S...

...10835 would be quite strong enough without it...

...The Rules Committee, however, found the bill to its liking, and ap- proved it by a vote of 13 to 0. "I did not support the last bill but this one sounds real good to me," said Repre- sentative James H. Quillen, Tennessee Republican...

...In other respects, however, the CPA would retain broad powers to in- tervene before Federal agencies and the courts in most matters affecting con- sumers, and to ask the agencies to initi- ate consumer proceedings...

...Holifield came to the Government Operations meeting on September 27 armed with the proxies of several cro- nies who did not bother to attend...

...This new agency is an inde- pendent Consumer Protection Agency which Congress, at this very moment, is on the verge of creating...

...If I've ever been lobbied, I've been lobbied by this man...

...Still, between the proxies and the Republicans, every amendment was defeated—some by votes of eighteen to eighteen, soi more decisively...

...Three—The Civil Aeronautics Board instituted or completed 1,800 informal complaints against air carriers for vio- lation of the law in fiscal 1971...

...The Chairman, however, was ada- mant...

...They have the force and mo- mentum to take control of every issue...

...Today, when he had to stand up and be counted, he gave his support to the White House and the Chamber of Com- merce...

...Its chief sponsor, Repre- sentative William S. Moorhead, Penn- sylvania Democrat, told the House: "The vote on this amendment will be the test of the sincerity of the commit- ments which all of us have made to the 200 million consumers...

...He was, i fact, furious, but his anger was not d rected primarily at Holifield...

...Among the most debilitating changes were these: • The CPA was stripped of its authority to intervene in preliminary Federal agency investigations and in- formal actions, which are often the crucial stages in proceedings affecting consumers...

...The CPA was barred from par- ticipation in adjudicatory proceedings involving "primarily" a "fine, penalty, or forfeiture...

...The} simply know how to take full ad van tage of Washington's power structure They know the strengths and weak- nesses of Congressmen, and make long- term investments in some members...

...Dear Busi- ness Leader," began a letter dated July 30, 1970, from Chamber President F. Ritter Shumway, "By this time next year, your most closely guarded compa- ny and trade secrets could be seized from your files by a new government agency and published for your compe- tition, labor unions, and all the world to see...

...In three days of House debate, at- tention focused on the strengthening amendment...

...The House of Representatives passed H.R...

...The Senate, which still has senti- ment for enacting a strong consumer protection law, is likely to defer action in the wake of the House vote...

...In a day- long closed session of the House Com- mittee on Government Operations, Rosenthal had witnessed what might be called an act of statutory rape—the brutal seduction of H.R...

...of Michigan, and Bella Abzug of New York—voted agair the ravished bill...

...There were even reports that they had attempted to persuade Holifield to modify his position...

...To Ben Rosenthal, it proved agai] that "on consumer legislation, you star out in a vacuum...

...Enclosed were specimen letters "A," "B," and "C" designed, respec- tively, for Senators, Representatives, and members of the House Rules Com- mittee...

...Con- gressional precedents suggest that when the differences between House and Sen- ate measures are resolved in confer- ence, the House version prevails...

...As Congress rushed toward adjourn- ment, the question was whether the Rules Committee would clear the bill for House floor action...

...The Holifield-Rosenthal-Dwyer bill would have curtailed the CPA's author- ity to issue its own subpenas and to conduct and publicize its own product tests...

...Industry spokesmen were as adamantly opposed as ever...

...When House debate on the bill opened October 12, he declared: "I can't worry about the headlines, the misrepresentations, the fabrications, the downright lies that have been put out by various half-baked columnists and others...

...Nader blamed the fiasco first of all on Mills's turnabout...

...10835, and that would effectively gut the powers of the CPA...

...The pressure, in fact, had been considerably less than might have been expected, for some of the allies that Nader had been counting on deserted him in the crunch...

...Not everyone, however, was unhap- py with the Committee's work on H.R...

...A year later, in the Ninetieth Congress, the bill was introduced again with some seventy co-sponsors...

...And one of Nader aides added, "The labor people juj weren't around...

...It demonstrates the enduring power of the special interests in what some have called "the age of the consumer," and the feebleness of the reformers...

...Government Operations Chair- man Chet Holifield, the California Democrat who had presided over what Rosenthal called the "defanging" of the bill, proclaimed the result to be "landmark legislation" that would usher in "a new era in consumer pro- tection...

...The net effect of these and other restrictions, Nader concluded, was to diminish the agency's potential effec- tiveness by about ninety per cent...

...Still, a substantial (and bipartisan) majority of the Committee seemed committed to the Consumer Protection Act, and Chairman Holifield an- nounced he would produce a strong bill...

...A few days later, ap- pearing before the Rules Committee in behalf of what he called his "middle- of-the-road bill," Holifield complained : "Nader thinks he is a member of Con- gress...

...By 1966 he had about three dozen co-sponsors...

...Special drafting assistance was provided by Roger C. Cram ton, chairman of the Administrative Con- ference of the United States, a Federal agency responsible for seeking im- provements in the regulatory process, who later insisted that he had lent his expertise as an individual, not as a rep- resentative of the Administration...

...some of the allies that Nader had been counting on deserted him in the crunch" It was time for the industry lobbies —such major organizations as the Chamber of Commerce of the United States, the Retail Federation of Amer- ica, the Grocery Manufacturers Asso- ciation, and their affiliates—to swing into action, and they did...

...Still, the morning newspapers of September 27 —the day the full Committee was to finish its work on the Consumer Pro- tection Act—carried a hint of another remarkable coincidence...

...Furthermore, he asserted that compro- mises were necessary to ensure passage of the legislation—an argument em- phatically rejected by Nader and Rosenthal...

...The members faithfully carried out their marching orders...

...The AFL-CIO remained "neutral" on the amendment, and the Consumer Federation passed the word to waver- ing members that H.R...

...The Consumer Protection Act, weak- ened somewhat to gain support in the Rules Committee, was reintroduced by Holifield, Rosenthal, and the Commit- tee's senior Republican, Representa- tive Florence P. Dwyer of New Jersey...

...To John Conyers, the black Cor gressman from Detroit, the rape c H.R...

...This place is so remote from the peo- ple...

...Rosenthal, meanwhile, had discov- ered that the already enfeebled CPA had been further attenuated by the legislative report accompanying H.R...

...Knauer, the President's consumer adviser, but with Peter M. Flanigan, the Presidential aide charged with primary responsibil- ity for the Administration's liaison with industry...

...With three co-sponsors, he introduced his first consumer depart- ment bill in 1963...

...We're teasing the people to think we've cre- ated this effective machinery and then have denied it the opportunity to be used...

...There is no organizec political support, no effective lobby unless you count the flabby efforts o the unions and the CFA...

...Two—All disciplinary actions con- ducted by the U.S...

...The bill that emerged from the subcommittee, Rosenthal said on September 23, "would not permit the Agency to be truly effective...

...It now seems probable that some time next year newspaper headlines will proclaim that President Nixon has signed into law "a landmark" Consum- er Protection Act...

...This agency could have an enormous impact on the operations, labor negotiations, prices and profits of all businesses, even those only indirectly involved in the consumer market...

...If this institution is left to its own devices, you can be sure the legis- lation it produces will serve the special interests...

...Businessmen are sophisticated ir the use of the political process...

...President Nix- on, en route to his rendezvous with Emperor Hirohito in Alaska, had stopped off at the Atomic Energy Commission's works in Hanford, Washington, to announce he would seek authorization for a second fast breeder nuclear reactor at a cost of sev- eral hundred million dollars...

...Some corporations dis- played more initiative...

...In Nader's view, the new bill was "decisively unacceptable be- cause they have made the CPA a wob- bly, narrow-focused, reactionary agen- cy, instead of a vigorous, full-focused petitioner and advocate for consumer justice...

...Holifield," Biemiller said...

...ERWIN KNOLL is Washington Editor of The Progressive...

...On December 1 the Senate passed a version slightly stronger than the House bill, seventy-four to four...

...Department of Ag- riculture under the Meat and Poultry Inspection Acts against adulterated food and unsanitary processing plants are accomplished informally, and would therefore be beyond the purview of the CPA...

...Shumway concluded: "Please act as though your own business is endangered by this leg- islation...

...10835 ERWIN KNOLL "A fter ten years...

...Chamber of Commerce in leading the anti-consumer forces which succeeded in weakening this vital legislation...

...For four years," he said, "Mr...

...Holifield expressed satisfaction th the Committee had avoided creating "super-agency"—one that would "j on fishing expeditions, dominate tl work of other Government agencie and become an instrument of regul tion rather than advocacy...

...And those who may have had doubts about it should now be able to recog- nize that I can stand the heat and will stay in the kitchen...

...He also had his own special consumer sub- committee in the Government Oper- ations Committee, and managed for the first time to hold hearings on the bill, though it did not get past that stage...

...He offered these exam- ples to show how the proposed Agency had been debilitated: One—In 1970, the Federal Trade Commission disposed of more than 250 flammability cases by the use of infor- mal settlements and only twenty-five through formal adjudication...

...The U.S...

...Rosenthal's bill had 100 co-sponsors...

...Chamber of Commerce pro- posed four amendments designed to "improve" the bill: "One—Permitting the Consumer Protection Agency to participate in Federal agency proceedings more as a 'witness' than as a full fledged 'party' with right of appeal to the courts...

...But the history of the bill to date is a case study in the pitfalls and problems that beset public- interest legislation...

...Rosenthal, elected to Congress in 1962 by a liberal, consumer-oriented constituency in the New York borough of Queens, espoused Kefauver's idea and became its principal supporter in the House...

...In defining the CPA's pow- ers, Rosenthal claimed, the report had created a "legislative history" which could eventually be used to challenge the agency's activities in the courts...

...10835 was evidence that "nothin can be done up here until we begii to analyze the two-party no-choic system...

...The amendment lost, 218 to 160, and on final passage Rosenthal voted, as he had in committee, against what once had been his bill...

...House Speaker Carl Albert of Okla- homa and Majority Leader Hale Boggs of Louisiana also assured Nader that they favored a stronger bill than had been produced by the Committee...

...When members were finally per- mitted to see the new draft, those who had backed the original CPA proposal were dismayed...

...When the Holifield subcommittee met behind closed doors on September 20, the chairman launched into a thirty-minute tirade against Nader and others who had tried to "pressure" him...

...On October 7, Nader triumphantly an- nounced to a meeting of the House's liberal Democratic Study Group that Chairman Wilbur Mills of the Ways and Means Committee, regarded by many as the most powerful member of the House, had pledged support for the amendment...

...He felt that no bill at all would be prefer- able to the feeble measure now before the Committee...

...As he emerged on Monday evening, September 27, from Room 2154 of the Rayburn House Office Building, Rep- resentative Benjamin S. Rosenthal, New York Democrat, could not find words to finish his sentence...

...10835 erupted into headlines on October 2 when Holifield, in a press interview, accused Nader of McCarthyite tactics...

...On final passag Rosenthal and three other Democn —John C Culver of Iowa, John Co yers Jr...

...There is still a chance—a long shot chance—that a meaningful protection bill will emerge from the Senate, which probably will not consider the legisla- tion until next year...

...Crowell Collier and Macmillan, Inc., whose encyclo- pedia sales techniques have been a fre- quent target of consumer complaints, dispatched a memorandum on Sep- tember 8, 1970, to all of its officers and those of its subsidiaries, warning that the CPA "would have vast pow- ers...

...The potential tie-breaker, Representative Richard Boiling, Missouri Democrat, a frequent and articulate critic of the House's archaic and autocratic rules and an announced supporter of the consumer bill, was away on vacation in the French West Indies...

...It was, he said, a "technical reorganization...

...Still, the Consumer Protection Act came within a hair's breadth—or, rath- er, within a Caribbean vacation—of passage last year...

...It is...

...Such a department, Kefauver argued, would focus atten- tion on consumer needs that were be- ing ignored because of countervailing pressures on the Government...

...will not satisfy Ralph N der or the U.S...

...Twenl million workers have been sold dow the river today purely and simply b( cause of the long-time friendship be tween Andy Biemiller and Chet Hoi field," he said...

...On December 2, while industry lobbyists swarmed outside the Rules Committee's cham- bers, the Committee killed the bill by a seven-seven tie vote...

...Acting on the chairman's instruc- tions, the Committee staff compiled a list of fifty-one possible changes in the bill, culled from the testimony of hear- ing witnesses...

...Nader, along with repre- sentatives of such organizations as Consumers Union and the Consumer Federation of America, helped Rosen- thal draft a new bill—the Consumer Protection Act...

...Holifield insisted that the new bill was merely a "tentative draft...

...And Mills, who ultimately voted against the amendment, allowed Holifield to tell the House that his position had been "misrepresented...

...I have full confidence in Mr...

...When hear- ings were held this spring, organized labor and consumer groups gave the bill strong support...

...Andrew J. Biemil- ler, legislative director for the AFL- CIO (and himself a former Congress- man) politely declined Nader's re- quest for intercession with Holifield and other Committee Democrats who would have been hard-pressed to spurn a labor appeal...

...But Al- bert and Boggs, though they ultimately voted for the amendment, never trans- lated their private assurances to Nader into open support on the House floor...

...The rest of the blame, Nader said, belonged to the AFL-CIO...

...Just as he had previously insisted that no stronger bill could possibly clear the Rules Com- mittee, Holifield now maintained that no more effective measure could be en- acted into law...

...a deceptive practice...

...Four—The majority of recalls under the Pure Food and Drug Act, as well as much enforcement of the Truth-in- Lending and Fair Packaging and Label- ing laws, are the result of informal ne- gotiations and settlements...

...The bi he added...

...I am writing to you to ex- press my views on this measure and to urge you not to issue a rule for it to go to the floor," said letter "C") Wil- liam W. Rayner, vice president of Crowell Collier, advised his fellow ex- ecutives to "feel free to modify the wording of the specimen letters so they do not appear cmass produced.' " To make sure that the mail went out, he asked for carbons...

...It was introduced in the House with about 130 co-sponsors...

...It now had 170 co-sponsors, and favor- able House action seemed assured...

...Travel Service, he pointed out, has a higher budget than that proposed for the CPA...

...The White House apparently har- bored no hard feelings: This summer it gave Holifield a special treat—a ride to California as the President's guest on Air Force One (now called The Spirit of '76...

...The story goes back to 1960, when the late Senator Estes Kefauver, Ten- nessee Democrat, proposed creation of a Department of Consumer Affairs, a Cabinet-level agency that would house under one roof the varied and far- flung regulatory agencies of the Fed- eral Government...

...Most of the Repub- licans, including Mrs...

...As the chairman had pr< dieted, he was not satisfied...

...By compromising some goals, they persuaded seventeen mem- bers of the Government Operations Committee, including the ranking Dem- ocrat under Holifield, Representative Jack Brooks of Texas, to sponsor a sim- ple, fifteen-line amendment that would have remedied, at least in part, the two fatal defects—exclusion of the CPA from "informal" agency proceedings and from those cases "primarily" in- volving a fine, penalty, or forfeiture...

...10835, the Consumer Protection Act of 1971...