Chapter 5 Corporate Abuses, Consumer Power
“Facts are subversive.”
— I.F. Stone
At the Senate hearings looking into General Motors’ harassment of Nader, the future consumer crusader took an opportunity to reflect upon the nature of corporate power and consumer justice. “The requirement of a just social order,” Nader told the Senators, “is that responsibility shall lie where the power of decision rests. But the law has never caught up with the development of the large corporate unit. Deliberate acts emanate from the sprawling and indeterminable shelter of the corporate organization. Too often responsibility for an act is not imputable to those whose decision enables it to be set in motion.”
Over the past twenty years, one Nader advocacy group after another has tried to help the law catch up with the march of corporate abuses. Their method of operation has been disarmingly simple: Document harm, assign responsibility, propose alternatives, instigate reform. Like Nader’s original campaign against the Corvair, the groups he has spawned are scrappy underdogs, far outspent and outstaffed by industry trade groups. Yet two or three activists working with modest resources can often transform the political climate for a given issue and score important victories.
The late journalist I.F. Stone, another underdog known for his painstaking research and crusading investigations, once disclosed the secret of his success to an admirer — “Facts are subversive.” If the key documents, eyewitness accounts, official studies and other shreds of evidence can be marshalled together, the facts alone can pack quite a punch. That has been the outsider strategy of the Nader consumer groups — to “bootstrap” themselves into the policymaking process through the meticulous assemblage and tactical deployment of facts. It is also a prime reason why, as other, ideologically driven movements have waned and collapsed, the consumer movement has retained its vitality. It keeps its eye on the ball: documentable injustice, the culpable parties, the superior alternatives. In such circumstances, Nader is wont to quote philosopher Alfred North Whitehead: “Duty arises from our potential control over the course of events. Where attainable knowledge could have changed the issue, ignorance has the guilt of vice.”
Of the many Nader campaigns waged over the past twenty years, each represents a variation on the theme of citizen action seeking to make powerful institutions more accountable and responsive. Each advances a consumer-side critique of seller-side abuses, whether in banking, nuclear power, air travel or telephone service. This chapter looks at eight of the more significant consumer campaigns and the “attainable knowledge” they have sought to create and set into play.
1. Nuclear Power: A “Technological Vietnam”
In 1964, Ralph Nader had no reason to question that nuclear power was a clean, safe, cost-efficient technology. Then he attended a conference at the Oak Ridge National Laboratory. Over lunch, Nader began asking nuclear engineers some penetrating questions. “They couldn’t answer them, or the answers weren’t satisfactory,” Nader recalls. “‘What could happen if a system goes wrong?’ I asked. They avoided any such descriptions or said, ‘we’ve got defense in depth’ — and other jargon.”
In 1970, Nader’s skepticism of nuclear power ignited when he read about the October 1969 findings of John W. Gofman and Arthur R. Tamplin, two scientists whose work was funded by the Atomic Energy Commission (AEC), the government agency that later became the Nuclear Regulatory Commission (NRC). Risking the AEC’s wrath, the two men estimated that 16,000 more Americans would contract cancer or leukemia every year if the U.S. population were exposed to then-permissible doses of radiation emissions from nuclear power plants. To help get the word out and expose the AEC’s retribution against the two whistleblowers, Nader prevailed upon Senator Edmund Muskie to hold hearings, one of the first national inquiries into nuclear power safety.
Within a year, Nader became further convinced that nuclear power would become the nation’s “technological Vietnam.” This judgment was reinforced after he came to know MIT physics professor Henry Kendall and economist Dan Ford, two dogged critics of the AEC. When Nader’s interest in nuclear power became known to leaders of the nuclear power establishment, they chuckled self-confidently that Nader had finally gotten into an issue too late to do much; twenty-three nuclear plants were already operating and 70 more were on order.
Given the climate of the times, the nuclear establishment had reason to feel flush. Only a handful of isolated activists were challenging nuclear power plants in their communities, and there was virtually no nationally coordinated anti-nuclear effort. In 1972, however, the industry received a jolt when Friends of the Earth, the Union of Concerned Scientists and others forced the AEC to convene hearings to probe the safety of emergency core-cooling systems. The sessions exposed numerous safety shortcomings and brazen AEC duplicity in covering up them up.
While citizen opposition to nuclear power continued to mount, it remained diffused, with no national focal point. Seizing the moment, Nader, Joan Claybrook and Public Citizen convened Critical Mass ’74, the first national antinuclear conference. (In Nader’s wry reformulation of nuclear lingo, “critical mass” — the amount of a radioactive material needed to sustain a chain reaction at a constant rate — refers to the coming together of citizens in sufficient numbers to stop nuclear power.) The conference attracted 1,200 activists and gave new energy and vision to a movement that until then had been fragmented and increasingly discouraged. Conference-goers learned new citizen action tactics, drew inspiration from seeing themselves as a movement, and took home an activists’ manual that gave a new baseline of common knowledge for the safe energy movement. The nuclear industry, for its part, decided to send spies to the conference. Claybrook now laughs at their absurd impersonations: “They didn’t know what to wear, so they all wore jeans, all starched and new-looking, and you could spot them immediately.”
The conference proved so successful that, at the request of the conference attendees, Nader established the Public Citizen Critical Mass Energy Project in 1974 to give new institutional leadership to the movement. A followup Critical Mass conference in 1975 capitalized on the emerging woes of the nuclear industry: declining demand for electricity, financial troubles and a plummeting demand by utilities for new reactors (resulting in a complete cessation of orders by 1978 ).
Over the next decade, Critical Mass and its monthly newspaper, the Critical Mass Journal, became one of the leading national voices for the safe energy movement. Critical Mass’ chief mission has been to generate sound data and reports about the deficiencies of nuclear power and advantages of renewable energy alternatives (conservation, solar, hydro, and others), and then to publicize the facts to every possible forum — Congress, the Nuclear Regulatory Commission, the press, grassroots activists. One trademark Critical Mass research project is its annual report on nuclear power “mishaps.” Using the Freedom of Information Act to obtain hundreds of NRC documents, Critical Mass compiles the number and variety of malfunctions at the nation’s 110 nuclear reactors: accidents, near-accidents, emergency shutdowns and assorted instances of mismanagement. (In 1987, there were 2,940 nuclear power mishaps.)
Through persistent research, the anti-nuclear movement helped demonstrate just how fragile, complex, costly and unsafe nuclear power technology really is. “In 1974, a man with a 25-cent candle caused a fire [at a nuclear plant] and a $200 million shutdown,” Nader once pointed out. “The probability of this happening, based on the industry’s calculations, is about one in a trillion.” Nader and coauthor John Abbott detailed the manifold economic, safety and civil liberties problems with nuclear power in their 1977 book, The Menace of Atomic Power.
While industry leaders no longer proclaimed that nuclear power would be so plentiful that it would be “too cheap to meter,” it concocted new lies such as “no one has ever died from nuclear power,” “you’re more likely to be hit by a meteor than be hurt by a nuclear power accident,” and the fatuous claim by former AEC chairman Dixy Lee Ray that “a nuclear power plant is infinitely safer than eating, because 300 people choke to death on food every year.”
The 1978 near-catastrophe at the Three Mile Island nuclear plant — occurring just days after the release of Jane Fonda’s film, The China Syndrome, which conservatives had already blasted as fantasy — quickly turned the tide of public opinion. No longer a fringe cause carried on by hardy individualists, the safe energy movement gained new credibility and clout among mainstream Americans. A Critical Mass conference that year again convened activists, refocussing attention on the unattractive economics of nuclear power. Merely operating the baroque technology and ensuring minimal standards of safety was shown to be immensely expensive. How would the industry dispose of its highly radioactive wastes? No plans had been made. How would a region evacuate millions of residents in the event of a nuclear catastrophe? No plans had been made. How would nuclear plants guard against terrorist attack and incompetent plant operators? Precautions were grossly inadequate. How would the industry protect workers from excessive radiation exposure? Very poorly.
The anti-nuke movement raised these questions, and utilities and the nuclear industry fought back through lawless harassment of its opponents (including the Kerr-McGee employee, whistleblower Karen Silkwood), suppression of incriminating safety information, a massive pro-nuclear propaganda blitz, and attempts to exclude the public from participating in the nuclear plant licensing process. Characteristically, Nader places the struggle over nuclear power into a larger political context: “We must remember that the benefits of alternative energy do not accrue to the giant corporations that have a vested interest in highly capital-intensive technologies for hard-to-get-at energy resources under their exclusive control within a finite concept of supply. That’s what they want. That’s what gives them the power, the control, the ability to blackmail labor, the ability to blackmail government, in order to get what they want.”
Nuclear power’s longevity in the face of so many documented problems can be traced to its insulation from market forces and its heavy reliance on government subsidies. Up to 40 percent of the construction and operating costs of nuclear power plants are covered by direct government outlays and tax subsidies — a level of support many times higher than that for conservation, solar or even oil and coal. To force nuclear to compete fairly in the energy marketplace — and then crumble under the staggering costs — Critical Mass and its anti-nuclear allies have hammered away at the industry’s numerous protections.
One of the most unusual subsidies has been the Price-Anderson Act, which limits the industry’s financial liability in the event of an accident to $1.7 billion (before 1988, the limit was a mere $700 million). The government offers this liability protection to no other industry. If the nuclear industry had to shoulder the actual insurance costs for the risks of an accident, which could easily cause $30 billion in property damage alone, nuclear power would quickly be seen as the economic boondoggle it is. Despite a valiant effort to repeal Price-Anderson, the law was renewed in 1987.
Critical Mass has also helped orchestrate numerous state campaigns against another insidious subsidy, the “construction work in progress” charges that utilities levied on consumers to help finance pending construction projects. The subterfuge was a means for utilities to obtain capital without paying high interest rates to banks, and discouraged utilities from avoiding cost overruns.
In the early 1980s, as the plants built in the 1960s and 1970s grew old and brittle, a new cost loomed on the horizon: the permanent shutdown and dismantlement (or mothballing) of old plants, at a cost that can be as high as the initial construction costs. Since neither industry nor the government was addressing this issue, Critical Mass and Environmental Action issued a report in 1984 that prodded utility rate commissions to incorporate decommissioning costs into current utility rates. By forcing yet another hidden expense of nuclear power into the open, the already dismal economics of the technology were shown to be even worse. Since the early 1970s, in fact, plans for more than 100 reactors had been cancelled, largely because critics had been able to prove that the plants were not needed or were too expensive. As more regions see the huge liabilities of nuclear power, Critical Mass has helped coordinate citizen campaigns to shut them down, such as the voter referendum in June 1989 that closed the Rancho Seco plant in Sacramento.
One of Critical Mass’s greatest strengths is its staying power. With the help of the litigation arm of Public Citizen, Critical Mass has the ability to fight an issue in any necessary forum until victory is assured. One example is the group’s pioneering work in fighting an NRC proposal to allow low-level radioactive wastes to be dumped into the normal waste stream — which is to say, into landfills, incinerators and recycled products. By deregulating such wastes — officially dubbed “Below Regulatory Concern,” or BRC — the NRC hoped to ignore some 30 percent of the low-level wastes generated by nuclear power plants. The dumping would be almost wholly without oversight or enforcement. Since the NRC first proposed the BRC policy in 1986, Critical Mass has countered it at every opportunity — in regulatory proceedings, in the courts, and before Congress. By 1991, the NRC was checked in each forum, and the chances of the BRC policy going forward seemed much less likely.
A similar tenacity can be seen in Critical Mass’ efforts to pry loose incriminating documents from the NRC. Since 1984 the group has tried to obtain detailed reports about specific nuclear power plants prepared by the Institute for Nuclear Power Operations (INPO), an industry trade group. The INPO reports, which are submitted to the NRC and state public utility commissions, tend to be more frank about the actual problems of particular plants than official reports; making these documents public would not only reveal important technical and safety information but could cast light on the credibility of the NRC’s oversight of the industry. Critical Mass fought hard to obtain these documents for more than seven years. By late 1991 it appeared that the New York State Public Service Commission would decide (pending an industry appeal) to release INPO documents on four state nuclear power plants to Critical Mass. If made public, the documents will likely confirm an old truism, that official secrecy invariably leads to abuse of the public trust.
Critical Mass’s agenda has not been simply anti-nuclear; the group has also been one of the most forceful advocates for safer, more efficient, decentralized energy alternatives. Its most ambitious effort in this regard has been its Least-Cost Energy Initiative, launched in 1985, which seeks to require utilities to choose the least costly energy options when investing in new electrical capacity. Since conservation and renewable energy technologies (solar, wind, biomass, water) generally cost a fraction of new nuclear power or coal-fired plants, least-cost energy planning virtually assures that construction of new power plants is minimized if not totally eliminated. This in turn results in lower consumer utility bills — and a range of environmental and social benefits.
The safe energy movement has come a long way since 1970, when it was seen as kooky to worry about nuclear power. Now the industry’s mismanagement and negligent safety standards have caught up with it, fueling a steady economic decline and resolute public hostility. Nuclear power remains a risky, expensive fact of life for most regions of the nation. But by exposing the industry’s reckless design and construction habits, routine secrecy, scientific arrogance and anti-democratic zealotry, the safe energy movement has sped the decline of an inherently flawed energy source.
2. The Fight for Tax Justice
June 1970. Ralph Nader is standing amidst a circle of fourteen young recruits of the original Public Interest Research Group (unrelated to the later campus-based PIRGs). After explaining the array of issues that needed attention, Nader went around the circle asking each would-be Raider to choose an area of specialty.
Andy Spanogle chose banking. Jim Welch chose corporate accountability. When the Big Choice came to Tom Stanton, a 1970 graduate of Harvard Law School, he selected tax issues — a choice that would later cause President Nixon several political embarrassments and force many major corporations to stop feeding at the public trough. Stanton became one of the first citizen tax guerillas, ambushing Treasury Department officials and arming friendly Members of Congress with rigorous critiques of tax policy from the citizen perspective, a novel intellectual and political enterprise. “Ralph would give us the names of a few key people, invite us to read the Federal Register and Congressional Record every day,” Stanton recalls. “He gave us a desk, a telephone, a pad of paper — and off we went.”
Stanton’s first project, begun at Nader’s request, was to investigate the Domestic International Sales Corporation (DISC), a billion-dollar government tax exemption on business export profits that was intended to increase exports. The only problem: 96 percent of the exports subsidized by the program were already being exported, making DISC an unnecessary and expensive corporate give-away. After thorough investigation of the issue, Stanton gave testimony to Congress and received the first baptismal splash of publicity for the consumer movement’s tax reform activism. Feeding his tax analyses to sympathetic Senators and reporters, Stanton made the DISC program a hot issue and, while not defeating it, built PIRG’s credibility as a participant in tax policy.
A few months later, a weekend story in the now-defunct Washington Star reported that the Nixon administration would announce that on Monday the establishment of the Asset Depreciation Range System, a $4 billion dollar annual tax subsidy that would allow companies to accelerate the depreciation on their capital expenditures, ostensibly to encourage capital investment and boost productivity. The problem: Most of the benefits would go to companies that were already purchasing capital equipment without the subsidy’s inducement. Furthermore, the change in tax regulations was being announced without any formal hearings or public participation, as required by law.
Stanton spent a feverish Sunday pulling together the facts, called on other PIRG staffers throughout the night, and then went into federal court the next day with his associates seeking an injunction to stop the new program. Although the court declined Stanton’s request, reporters at the Treasury Department’s press conference quickly snapped up copies of his legal pleadings and made the issue front-page news. The challenge greatly embarrassed the Treasury Department, led to public hearings that brought further criticism, and ended up sending the issue to the Senate floor, where an attempt to eliminate the tax give-away lost by only two votes. The campaign was not for naught, however; the size of the tax break was cut by about 25 percent, or $1 billion annually.
The success of these first two tax forays led Nader to found the Public Citizen Tax Reform Research Group in January 1972, with Stanton as the first director. In coming years, Stanton and his new colleague, Bob Brandon (now vice president of Citizen Action), would refine their techniques of tax analysis, lobbying and press relations. One of their first targets was the so-called “members’ bills,” an arrangement whereby members of the House Ways and Means Committee were secretly polled by Wilbur Mills, the Committee’s powerful chairman, to see what special-interest tax breaks they would like for their favorite corporate friends. Mills’ hidden system of tax patronage was a boon for banks, airlines, California vineyards and other businesses, but it cost American taxpayers millions. By mobilizing public protests in Mills’ home state of Arkansas and organizing sympathetic Members of Congress to block the special bills, the Tax Group was able to save taxpayers a total of $240 million in wholly gratuitous tax breaks to businesses and infuriate Mills, who had not previously been challenged.
The increasing public scrutiny of the previously secretive legislative process for tax policy also led to procedural reforms. As a result of the Tax Group’s revelations, for example, committee chairmen have agreed that all narrowly tailored tax legislation must explicitly identify the intended individual beneficiaries. Although special interests always find clever new ways to insert self-serving tax provisions, the process is much cleaner and more open today, in part because of the many abuses disclosed by the Tax Group and their allies.
As the Tax Group racked up a series of victories, winning respect from legislators and reporters, it increased its clout, refined its expertise and began ambitious new projects. In 1972, the Tax Group started People & Taxes, the first periodical to demystify the tax system and explain how it was manipulated to win obscure subsidies for business and shift new burdens to the average citizen. By 1976, Stanton, Brandon and their associate, Jonathan Rowe (now a reporter for the Christian Science Monitor), had developed the field of citizen tax analysis sufficiently to publish Tax Politics: How They Make You Pay and What You Can Do About It. While now outdated in many respects, the book remains one of the most accessible, comprehensive dissections of the tax code and its inequities, and provides a how-to guide for citizen reformers.
With a staff that never exceeded more than two or three, the Tax Reform Research Group continued to poke holes in the cooked tax analyses served up by business and Congress. It agitated against the oil depletion allowance, a notorious underassessment of the oil industry’s tax obligations; exposed the hidden federal budget of often-unnecessary “tax expenditures” that benefit major corporations; and assailed the IRS’ abuse of ordinary taxpayers and small businesses while caving into major corporations represented by former senior bureaucrats of the IRS.
Occasionally, Nader would sponsor his own investigations, independent of the Tax Group, to explore new issues. One such effort was the 1979 report, “State Competition: Bidding for Business: Corporate Auctions and the Fifty Disunited States,” by Jerry Jacobs, which explained how states try to woo corporate investment by offering tax-free bonds to affluent corporations. All too often, the report found, the companies do not truly need the money and do not in fact make decisions about plant locations or expansions based on the subsidies.
In short, the bonds are a taxpayer ripoff.
Throughout the 1970s and 1980s, People & Taxes continued to offer some of the best independent critiques of the tax system, frequently digging up tax injustices that were later picked up by the mainstream press or investigated by congressional committees. Sometimes the stories in People & Taxes helped give new momentum to certain tax proposals, such as its advocacy for exempting the poor from taxes, which was eventually adopted in the 1986 tax reform package. As the heady idealism of the early 1970s gave way to the career-minded materialism of the late 1970s and 1980s, it became increasingly difficult for Public Citizen to find capable tax experts who could thrive in the hardy public interest working environment. Although that period saw several noteworthy directors — Robert Brandon, Robert McIntyre, Tyler Bridges, Jeff Drumtra — the Tax Group closed its doors in 1987, a victim more of circumstances than insufficient need.
Fortunately, there are other organizations and even daily newspaper journalists doing their own sophisticated tax analyses these days, and the prolific, enterprising McIntyre carries on new crusades for tax reform as director of the labor-backed Citizens for Tax Justice. (His report revealing that dozens of corporations had paid no taxes whatsoever in 1984 set off a furor that helped propel enactment of the landmark 1986 tax reforms.) Perhaps the best measure of the success of the Tax Reform Research Group is that its demise did not leave a gaping hole in national tax politics; its message and techniques had already been adopted by many others.
3. Consumers’ and Workers’ Rights
The ornate ballroom of the Mayflower Hotel in Washington, D.C., the swank site for countless business functions, hosted an unlikely gathering of burly truck drivers in October 1971. The master of ceremonies: Ralph Nader. The topic: truck safety.
The logic by which the consumer movement served as a catalyst for mobilizing truck drivers reveals much about its centrifugal tendencies: Findings in one area often trigger activism in another area — and still another. A 1970 Nader report criticizing the now-defunct Interstate Commerce Commission (ICC) had stumbled across serious problems with truck safety. Drivers were being forced to drive long hours without sleep or bathroom breaks, and to drive equipment they believed to be unsafe. Some 40 percent of truckers said in responses to questionnaires printed in trucking magazines that their trucks were unsafe.
The conference gave a new momentum to truck safety reform, and generated a pathbreaking book, Tractor Safety Report (James Williams, editor, 1971), which documented the varieties and extent of truck safety problems. But the conference’s most enduring legacy was the founding of a new Nader group, PROD, Professional Drivers Safety Council. Headed first by Joan Claybrook and since 1973 by attorney Arthur Fox, the 1,500-member group pressed the ICC and Transportation Department to issue more stringent safety rules for trucks and trucking practices.
If truck safety and government accountability were the initial reasons why Nader took an interest in rank-and-file truckers, he was also interested in spreading two watchwords of the consumer movement — democracy and accountability — to organized labor. Unions, like other large institutions in our society, are prone to abuse their power if there is no countervailing force keeping them honest. The law may say union members shall have free speech, the right to organize dissident factions without retaliation, the right to fair elections, and so forth. But as the consumer movement learned from its work, citizen rights can easily wither if there is no active citizenship. If a union becomes too bureaucratic, or if its leaders become corrupt and erect restrictive legal rules, union members are effectively denied their rights to shape the policies of their own union.
PROD made its first serious foray into union democracy in 1976, when it published an exhaustively documented expose of how the Teamster leaders systematically thwarted union democracy and wasted its members’ dues on lavish salaries and high living. The book, Teamster Democracy and Financial Responsibility, enraged the Teamster leadership and drew wide press attention. Even though only 6,000 truckers belonged to PROD by 1977 — compared to the Teamsters’ 2.1 million members — the group’s presence dramatically changed the legal and political climate within which the Teamsters operated. Because of PROD’s agitation, the Teamsters felt compelled to create a new health and safety department and union leaders began to hew more closely to the legal rules governing grievance procedures and union elections.
It was not long before most of PROD’s work concentrated chiefly on overthrowing “the buddy system where management and the union hatch their own deals and the real interests of the members involved are ignored,” as Fox told journalist Steven Brill. In 1977, Paul Alan Levy joined Fox at the Public Citizen Litigation Group to help pioneer litigation on behalf of union reformers. Union dissidents usually have trouble promoting democratic reforms because neither labor leaders nor business management wants to change the stable, sometimes cozy relationships that have developed. Dissidents often have trouble finding lawyers who will take their cases. And overcoming various substantive legal barriers makes it still more difficult for union reformers to prevail. With Fox’s legal work and activism, PROD helped give union reformers a fighting chance.
PROD no longer has any formal affiliation with Nader nor the consumer movement, and has merged with the Teamsters for a Democratic Union, a more ideological, grassroots dissident group. Yet Arthur Fox and Paul Alan Levy, both attorneys with the Public Citizen Litigation Group, remain two of the leading practitioners of union democracy litigation. Their advocacy is so special because it seeks to obtain major policy precedents in labor law through litigation, and does so on behalf of union reformers who often cannot find or afford top-notch legal representation. Union leaders are usually not very tolerant of rank-and-file groups seeking to express their own views to the union membership (on proposed collective bargaining proposals, for example) or to run their own candidates for union offices. Fox and Levy have gone to court in dozens of instances to challenge unfair procedures for ratifying union contracts, communicating with other union members and electing union officials. Although their work focussed initially on the Teamsters, Fox and Levy have now expanded to include litigation against half a dozen or more major labor organizations.
Besides union democracy, the consumer movement has consistently taken a strong interest in occupational safety and health, even when union leaders have shown scant interest. Again, the consumer-worker linkage is natural; the workplace environment often contains the very hazards that are transmitted to consumers and communities.
The official drive for better workplace protection began in January 1968 when President Johnson proposed a comprehensive occupational health and safety program. Much of the impetus for fulfilling this vision came from a tragic coal mine explosion in November 1968 that took 68 lives in Farmington, West Virginia. Nader, who had played a role in helping miners win compensation for black lung disease and better safety standards, seized the moment to help push through the Coal Mine Health and Safety Act of 1969.
The law helped fuel the movement for more sweeping workplace reforms, led by Nader, Congressman Philip Burton and other key legislators, and the steelworkers union and the Oil, Chemical and Atomic Workers union (but little support from the AFL-CIO). One influential document in the debate over the proposed new agency, the OSHA, was the Nader-sponsored report, Bitter Wages, by Joseph Page, a former Harvard Law classmate of Nader’s and now a law professor at Georgetown Law Center. Like so many other Nader reports of that time, Page’s book provided a concise history of corporate abuse, legal analysis, compelling anecdotes and a readable style. When the Occupational Safety and Health Act was finally enacted in 1970, over 14,000 workers were being killed and over two million disabled from industrial accidents each year.
Following the creation of OSHA, the new challenge became to make it work properly in the face of business hostility and weak-willed administrators. Public Citizen has been one of the most persistent and sophisticated proponents of occupational safety and health, petitioning for new OSHA standards and pushing for better enforcement of existing ones. Over the years, Dr. Sidney M. Wolfe and the Public Citizen Health Research Group (HRG) have helped push through OSHA standards to curb the cancer risks of a group of ten common carcinogens (1974); benzene, a potent and widely used industrial chemical (1978 and 1987); DBCP, a carcinogenic pesticide that endangers farmworkers (1978 ); and ethylene oxide, a carcinogenic gas used by thousands of hospital workers to sterilize medical equipment (1983); and formaldehyde, a carcinogenic substance used in countless industrial settings.
Public Citizen has also offered scientific and legal support to other major OSHA standards: the 1978 lead standard, which prevents lead-induced damage to the central nervous system among more than 800,000 workers; the 1983 rule curbing levels of cotton dust, a fine residue in textile mills that can cause byssinosis, or “brown lung” disease; the 1985 upgraded rule to limit exposure to asbestos, an insulation material that can cause respiratory diseases and cancer; and the 1987 grain dust standard that protects workers from the explosions and fires that have often torn apart grain elevators.
One of the most successful strategies for improving job health and safety is to empower workers to take action for themselves. With that in mind, the Health Research Group published A Worker’s Guide to Winning at the Occupational Safety and Health Review Commission, so that workers could argue their complaints more effectively against hostile employers. It also pushed hard for workers’ right to see their medical records, and for the OSHA “right to know” rules, which were issued in 1985 only after Public Citizen, in conjunction with the steelworkers’ union, sued the agency. Unfortunately, all too often during the Reagan years, OSHA would issue new standards only after Public Citizen had filed a petition. Then it would unreasonably delay action and, only with further prodding, issue the weakest possible standard that could survive a court challenge.
Beyond union democracy and occupational safety and health, the consumer movement has been a strong ally, and sometimes the leader, in other key labor issues such as plant closing notification legislation and stronger protections for whistleblowers. Just as other Nader books have celebrated the individual citizen trying hard to make a difference — Proudly We Hail (Kenneth Lasson, 1975) and Women Activists (Anne Witte Garland, 1988 ) — so The Workers (Kenneth Lasson, 1971) profiled nine workers in an attempt to communicate their hurts and hopes to a broader public.
If the consumer movement has often been a welcome friend to unions, it has also been a irritating critic on occasion. To the consternation of some unions, Dr. Wolfe published reports in 1976 and 1983 showing deficient leadership on health and safety issues among several major labor unions. And Congress Watch has parted company with labor in opposing the current system of campaign financing. The honest differences only serve to highlight the consumer movement’s overriding and independent commitment to democratic citizenship in the workplace and worker health and safety — even though this differs from the priorities the union leadership may have set.
4. Making the Automobile Safer
From 1899 when the first automobile death occurred until passage of the federal auto safety law in 1966, the safety of automobiles was essentially a matter for private, corporate decision-making. The results were sobering. Motor vehicle crashes had resulted in approximately two million peoples’ deaths and nearly 100 million injuries, a total three times the combat losses suffered by the United States in all wars. Had the unregulated automakers seen fit to design and engineer safer vehicles, a substantial number of those casualties could have been prevented.
This, of course, was one of the chief insights of Nader’s 1965 book, Unsafe at Any Speed and the indictment so bitterly resisted by Detroit. General Motors was so hostile to the most simple safety improvements that its president, Frederic G. Donner, told Congress in 1965 that turn signals and seat belts ought to remain optional features. GM even resisted installing seat belt anchorages and fittings as standard equipment, to allow individuals to install seat belts on their own.
Given this cavalier mentality, it is not surprising that a strong consumer demand for safety had trouble materializing. Due largely to the oligopolistic structure of the auto industry, consumers had little or no opportunity to purchase safety, even had they possessed information enabling them to express their preferences. The industry enjoyed a consumer Catch-22: the absence in the marketplace of safety alternatives kept consumers ignorant of such possibilities, and uninformed consumers could not demand reform. It was not surprising that the industry spent minuscule sums on research and testing of safety innovations. It was far more profitable to concentrate on superficial styling changes, “muscle car” features and psychosexual marketing campaigns.
The publication of Unsafe at Any Speed, GM’s investigation of Nader, the public apology at Senate hearings, and the 1966 auto and highway safety laws profoundly accelerated the pace of auto safety innovation. Now there was a formal governmental body, the National Highway Traffic Safety Administration (NHTSA), to assert federal leadership in auto and highway safety. The agency was empowered to set minimum, uniform safety performance standards for all motor vehicles, and to require automakers to notify owners whose cars contained safety-related defects. States, for their part, were given a new role to play in setting minimum safety standards for highway safety.
The first 30 safety standards, issued in 1967 and designed to improve a car’s crashworthiness and crash avoidance, were largely invisible to the untutored car buyer. They included such simple items as laminated windshields to absorb head impact energy and prevent heads and necks from being slashed; collapsible steering assemblies to cushion the trauma to the upper body; enhanced door locks to keep occupants from flying out of the car in a crash; seat anchorages to prevent bodies from smashing into the roof; and lap belts. Tire safety standards were also issued in 1967; shoulder harnesses in 1968; head restraints to prevent whiplash in 1969; side-impact protection standards in 1973; and new standards to protect fuel tanks from exploding in crashes went into effect in 1977. Automakers fought to eliminate or weaken virtually all these new safety improvements, but Nader, the Center for Auto Safety and individual engineers and bureaucrats helped push them through the regulatory process.
One of the most significant safety innovations instigated by Nader and the consumer movement was federal authority to force automakers to recall motor vehicles with potential safety defects. Before 1966, automakers occasionally conducted secret, ad hoc recalls for motorists who happened to bring in their cars for other reasons. Automakers considered the repairs “customer goodwill adjustments,” and made no mention of safety defects. Now, automakers are forced to formally inform each car owner by individual letter about recalls, and the agency began giving them wide publicity. In the Carter years, the agency instituted a toll-free hotline number (800-424-9393) to help car owners learn whether any vehicle or vehicle component had been recalled and issued consumer alerts. Since its creation, manufacturers have had to recall more than 100 million motor vehicles and components with potentially dangerous defects. Untold thousands of lives have been saved from such products as the Firestone 500 radial tire (prone to blowouts), the Ford Pinto (gas tanks that may explode in crashes, accelerators that may stick) and 1965-1969 Chevrolets (defective front engine mounts).
From 1977 to 1980, the art of promoting auto safety reached new heights when President Carter appointed long-time Nader associate Joan Claybrook to head the NHTSA. Claybrook greatly strengthened the agency’s research, upgraded the defects-investigation and recall program, and generated new consumer information (such as 35 mph crashworthiness tests, tire performance ratings and The Car Book, a consumer guidebook with comparative car data). Claybrook also revived a program to demonstrate the feasibility of new auto technologies, helping create a prototype vehicle suitable for mass production that can crash without inflicting injury in 50 mph frontal crashes while still being attractive, comfortable, affordable, fuel-efficient and low-polluting.
Under Claybrook, the NHTSA also issued standards to improve frontal crash protection through installation of air bags and automatic belts; to improve the damage resistance of bumpers; prevent tampering with odometers; extend steering column protections to vans and light trucks; and improve seat belt comfort and convenience, among others. The agency also took the lead in defending the 55 mph speed limit for safety and fuel-economy reasons; promoting state legislation for mandatory child safety seat use (which has dramatically cut child passenger fatalities); the passage or retention of state motorcycle helmet laws to help reduce the 4,500 deaths and 200,000 motorcycle injuries each year; and numerous programs to curb drunk driving.
By far the most important and hard-fought auto safety innovation achieved by Nader and the consumer movement is the automatic crash protection standard, which requires air bags or automatic seat belts in new cars. First proposed in 1969, the standard has been issued three times, revoked twice and subjected to the “regulatory equivalent of war,” in the words of the Supreme Court. One reason for the prolonged battle, explained The New York Times, is that “American auto makers, always ready to underestimate consumer sophistication and ever resentful of interference by Government, oppose air bags because they would give regulation a good name.” After relentless advocacy by Nader and Claybrook, often joined by key auto insurers, and numerous bouts of congressional action and court litigation, the standard was finally issued in 1984 to take full effect in 1990 models. One influential milestone was getting the Government Services Administration to use its purchasing power to request bids on 5,000 air bag-equipped cars for the government’s fleet — an order that Ford Motor Company won.
By itself, this crash protection standard is expected to save between 9,000 and 12,000 lives and 150,000 serious injuries a year.
By 1992, 126 car models were being sold with driver-side air bags, a number that is expected to swell as more automakers discover the marketing appeal of air bags, anti-lock brakes and other safety features. Air bags are expected to be virtually a standard auto feature by the 1994 model year.
Apart from the periodic auto safety crusades waged by Nader and Claybrook, the most aggressive institutional voice for auto safety is the Center for Auto Safety, headed by attorney and engineer Clarence Ditlow. (In 1972, the Center ended its formal ties to Nader and Consumers Union and became independent.) In scores of instances, the Center’s 13 staff members have instigated auto recalls, initiated class-action lawsuits against automakers and lobbied Congress for stiffer auto and highway safety protections. It works to identify likely defects and then publicizes the problem and pushes NHTSA to take action. Among its targets: Ford ambulances whose engines were catching on fire, power steering failures in GM cars, brake defects on Toyota Camrys, defective power windows in Jeep wagons that were strangling children, defective Ford Pinto gas tanks that could explode upon impact, and defective Firestone 500 radial tires that were linked to at least fifty deaths and several hundred injuries.
On behalf of consumers, the Center monitors the Federal Trade Commission’s enforcement of “lemon law” warranties and the Environmental Protection Agency’s leadership of the auto fuel efficiency and auto emissions programs. It provides technical assistance to product liability attorneys and auto safety information to its 11,000 members through its newsletter, The Lemon Times, and numerous books.
Although the success of auto safety reforms can be counted in statistics — over 100,000 lives saved and millions of injuries prevented since 1966 — some of the most profound transformations cannot be quantified. Consumers are now more knowledgeable about car safety, and the industry more often labors to sell safety features. Chrysler President Lee Iacocca, one of the most ardent foes of auto safety, now supports air bags and appears in full-page newspaper ads touting “The Car Buyer’s Bill of Rights.” The burgeoning publicity about auto safety — the advertisements, test crash videos, and consumer group agitation — has continued to fuel the momentum for further improvements. The new frontiers for motor vehicle safety will be improvements in the structural safety of cars, especially in side-impact, head-impact and rollover crashes; and design changes to make motor vehicles less dangerous to pedestrians.
The auto safety movement among consumers is also beginning to motivate insurance companies to pay more attention, with their formidable political and economic muscle, to loss prevention. It is far better to reduce their claims by advocating measures and enforceable standards to reduce fatalities, injuries and property damage on the highways than to take away the legal rights of victims to have their day in court.
A promising effort in this regard, Advocates for Highway and Auto Safety, was announced in October 1989 by a coalition of insurance companies, consumer groups, health care professionals, disability rights activists, and law enforcement officials. By bringing together the chief activists on the issue, Advocates greatly enhances the firepower that can be brought to bear on auto and highway safety issues. Funded at an annual level of $1.5 million by the participating insurance companies, Advocates is dedicated to petitioning for strong safety regulations, lobbying Congress, litigating in the courts when necessary, and educating the public and auto and highway safety. Joan Claybrook, president of Public Citizen, is co-director of the 24-member executive board.
Yet another sign of the expanding vitality of the auto safety movement is the founding in 1990 of CRASH, Citizens for Reliable and Safety Highways. The group’s chief target are unsafe trucks and trucking practices: multi-trailer trucks that exceed 65 feet, unsafe vehicle designs, poor maintenance practices, drug and alcohol abuse among drivers, and driver fatigue. With the same model of broad representation as Advocates, CRASH stunned the powerful transportation lobby in 1991 by pushing through federal legislation that prevents the further spread of “longer-combination vehicles” (LCVs) onto other highways. The group’s remarkable early success suggests the promise of coalitions that bring together consumer groups and industries that have an economic self-interest in improved safety.
5. Banking: Contrived Complexity, Cultivated Secrecy
It was only natural that one of Nader’s earliest targets for a consumer-side revolution would be the banking industry, custodian of billions of dollars of “other people’s money,” in Justice Brandeis’ phrase. Here was a classic instance of the supply-side aggregating the power held by individual consumers and using it to their detriment. To critique some of the industry’s most retrograde practices — needless secrecy, unfair credit practices, government subsidization, and red-lining (outright refusal to provide services to less desirable parts of a community) — Nader formed a study group in the summer of 1970 to examine one of the banking industry’s leading institutions, First National City Bank, now Citibank, then headed by the redoubtable Walter Wriston.
Historically, banks have described themselves as performing a “public trust” and as “servicing the community,” Nader wrote in his introduction to the 1973 book, Citibank, by attorneys David Leinsdorf and Donald Etra. “It’s time to examine the reality and implications of these pretensions.” The challenge facing consumers, said Nader, is to penetrate the “contrived complexity and cultivated secrecy about banks” in order to make them more accountable and responsive to depositors. “How can such massive accumulations of people’s money under highly centralized control be deconcentrated, subjected to fuller disclosure of operations and policy, and directed toward investments that serve the interests of the many instead of a few giant corporations? It is clear that neither the Securities and Exchange Commission nor the bank-indentured state bank regulatory agencies will address themselves to this question.” In a nutshell, this has been the battle cry for consumer activism against banks.
The Nader Citibank report, which even its target conceded was “painstakingly detailed,” was one of the first assessments of how well a major bank was serving consumers and its community. Jolted by the book’s charges, Citibank publicly issued a 97-page book response attempting to evade the evidence. But inside the bank, executives began a serious evaluation of its criticisms. The Nader Citibank report did not lead to a wholesale reform of the banking industry; it did shake a secretive, sequestered industry from its slumbers, and alerted Congress and the public to the significant stake that consumers have in banking law and regulation.
Since the Citibank report, consumer activism in banking has been driven by two key insights — that depository institutions are not subject to normal market discipline and therefore must be regulated for safety and soundness of purpose, and that federally insured depository institutions, given the government risk-subsidies they receive, should be required by law to meet certain public benefit standards.
As early as 1962, the Pennsylvania Senate Banking Committee had noted the “nefarious, unscrupulous and improper practices [that] exist in certain areas of consumer credit.” Banks could and did make it confusing to compare loan rates by using inconsistent methods to calculate the annual percentage rate of interest. They often stonewalled consumers trying to correct errors in their bills; denied consumers credit based on erroneous information in credit files; and denied credit to individuals based on extraneous factors such as race, religion, national origin, sex, marital status and age.
In the late 1960s and 1970s, Nader, his banking expert, Jonathan Brown, the Consumer Federation of America and others challenged these basic injustices and pushed Congress to enact a number of reforms. These included:
– the Truth in Lending Act of 1968, which required all banks to quote the annual percentage rate to any consumers seeking loans;
– the Fair Credit Reporting Act of 1970, which gives consumers the right to know what is in their credit files;
– the Fair Credit Billing Act of 1974, which mandates procedures for consumers to challenge incorrect billings; and
– the Equal Credit Opportunity Act of 1974 (and amended in 1976), which requires banks to extend credit purely on the basis of an applicant’s ability to repay, not on any other extraneous factors. (Not until June 1977 were most married women legally entitled to establish their own credit histories.)
Until the consumer movement agitated for change, banks and the industry’s regulatory institutions (Office of Comptroller of the Currency, Federal Reserve Board, Federal Deposit Insurance Corporation, among others) did not seriously consider consumer interests in their policymaking. By the mid-1970s, however, they had at least begun to monitor unfair and deceptive banking practices and to generate more banking data of interest to consumers (such as loan application data necessary to detect discriminatory lending policies).
Consumer advocates helped push through another wave of banking reforms in the late 1970s. The Fair Debt Collection Practices Act of 1977 protects debtors against abusive debt collection practices; the Right to Financial Privacy Act of 1978 limits government access to individual banking records; and the Community Reinvestment Act of 1977 requires banking agencies to make some effort to investigate citizen group claims of bank disinvestment in the local community. In the mid-1980s, when banks and finance companies sought to undermine bankruptcy law and impose draconian requirements on individuals who declare bankruptcy, lobbyists at Congress Watch helped defeat the measure.
Traditionally, commercial banks have not been interested in loaning money to help launch consumer cooperatives, both because it might offend some of their major corporate depositors (who would then have to compete with the coop) and because of an ideological antipathy to consumer-owned businesses. In 1978, however, Nader, John Brown and a coalition of groups, including Congress Watch, convinced Congress to create the National Consumer Cooperative Bank. As discussed in Chapter 2, the Bank represented a major breakthrough for consumers even though its later performance proved disappointing.
As banks rallied for deregulation and interstate banking in the mid-1980s, Congress Watch joined civil rights and senior citizen groups in proposing a major reform bill, “The Consumer Banking Act of 1985,” which addressed eight separate areas of unfair banking practices. Consumer lobbyists in 1989 were still pushing for a number of the bill’s provisions, including standard disclosure of bank fees and interest rates so that consumers can shop around; cheaper access to basic banking services for low-income persons; stronger community reinvestment strategies so that interstate banks do not simply siphon funds from one region and invest them in another; and the formation of standing Financial Consumer Boards (FICUBs), which can survey banks on fees and practices.
However, one significant consumer protection, won in 1987, was new limits on check holds. Before the law was passed, banks could hold checks for two weeks or more before depositors could withdraw their own funds. The artificial delay allowed banks to invest the withheld money and earn up to $800 million a year — at the expense and inconvenience of consumers. The new federal law requires banks to clear local checks within one day and out-of-town checks within three days.
Throughout the past twenty-five years, banking industry trade groups have resisted virtually all the consumer protection innovations mentioned above, claiming they would add needless costs and complexities. The sky has not fallen, however, and over time the more enlightened banks have realized that anticipating consumer needs is one of the best ways to enhance their competitiveness. Building greater public accountability into the structure of the banking industry does not come easily, however. There can be no better evidence of this than the savings and loan scandal, the biggest, most expensive instance of banking corruption in American history. While its ultimate cost is still unknown, the failure of hundreds of savings and loans is expected to cost taxpayers as much as $500 billion, or about $15,000 per American. (By comparison, the government’s loan guarantees to Chrysler in the 1970s amounted to “only” $1.5 billion.)
As Congress Watch Director Michael Waldman explains in his 1990 book, Who Robbed America? the seeds of this historic scandal were planted in the early 1980s, when a seemingly invincible Reagan administration pushed through a sweeping plan to deregulate S&Ls. Despite protests by consumer groups, the limits on how S&L bankers could spend and invest depositors’ money were stripped away, one by one. Wealthy depositors pumped billions of dollars into S&Ls, often in $100,000 blocks, knowing that their money would earn impressive yields with no risk of loss (because of federal deposit insurance). To attract such depositors, S&Ls paid high interest rates, which in turn could only be paid by S&L’s making high-risk investments in commercial real estate deals, junk bonds, and other questionable ventures. When the economy soured and the high-risk loans defaulted, the thrifts slipped into insolvency — leaving the federal government (i.e., taxpayers) to pay off the astronomical federally insured losses. Deposit insurance, intended to protect the nest eggs of the middle class, ended up protecting reckless bankers, scheming developers and affluent depositors: one of the most massive transfers of wealth in our history.
As the scandal unfolded and worsened, Congress Watch intervened to try to make the people who benefitted from the scandal (chiefly wealthy depositors and corporations) pay the lion’s share of the bailout. Working with Reps. Joseph Kennedy and Bruce Morrison, Congress Watch proposed a “pay as you go” bailout that would keep the ultimate cost of the scandal much lower, by reducing the interest to be paid over time. But the plan was scuttled by the Bush administration and a congressional leadership already in deep hock to the savings and loan industry, whose generous campaign contributions had performed their intended work.
Beyond fashioning a more just bailout plan, the remaining challenge is to rectify the basic political inequality between the debtor and creditor classes. The S&L scandal’s deepest origins can be traced to a corrupt political culture which disenfranchises ordinary citizens and consumers while giving free rein to banking industry. This disenfranchisement stems in no small part from the current campaign finance system, which gives monied special interests a preferred role in setting Congress’ legislative agenda. Between 1987 and 1990, for example, political action committees representing the banking industry had showered more than $3 million on members of the House Banking Committee. While dozens of banking lobbyists plied their influence in the back corridors of Congress — hosting receptions, issuing slick policy briefs, generating favorable P.R. — consumer groups in Washington had a total of six overworked lobbyists to cover all banking issues in 1989, none of whom had great depth in S&L issues. It should come as no surprise that the banking legislation which emerges from Congress emphatically favors the banking industry.
One measure of the depth of this corrupt culture and its utter shamelessness in the face of scandal can be seen in the pending Bush administration plan to deregulate commercial banks. In Yogi Berra’s memorable phrase, the legislation is “deja vu all over again.” At a time when many banks are facing losses and sliding into insolvency — exactly the situation of S&Ls in 1982 — the Bush administration wants to deregulate the industry and encourage weak banks to gamble their way out of their difficulty — all backed by taxpayer-insured federal funds.
To try to gain some degree of control over the banking industry’s lobbying juggernaut, Nader in the early 1980s proposed a new model by which consumers could begin to project a strong, united voice on banking issues. Drawing upon the success of his Citizen Utility Board idea, which monitors the performance and regulation of utilities, Nader proposed the creation of a voluntary, citizen-run Financial Consumers Association (FCA). The FCA would insert a flyer in the monthly statements of federally insured banks and S&Ls, asking depositors to join the group and contribute $5 or $10. The FCA would be democratically accountable to members, who would elect an FCA assembly and directors. In exchange for taxpayer-backed deposit insurance, financial institutions would be required to include the FCA insert in monthly mailings. FCA would have the mechanism to organize consumers, publish marketplace studies, file lawsuits, intervene with regulators, and lobby the legislature. “If Congress and the regulators had heard from consumers in such a powerfully organized fashion, and not just from the bankers, there wouldn’t be an S&L crisis,” Nader argues. To date, the FCA proposal has not been enacted into law.
In her clear-headed 1980 book, Banks Are Dangerous to Your Wealth, former Massachusetts Banking Commissioner Carol S. Greenwald outlined the challenge facing the consumer movement — to show how “our money is being transformed into someone else’s power.” Much has been accomplished since Nader first took on Citibank, but it will take far greater consumer vigilance in the 1990s to curb the proliferating abuses of the banking industry.
6. Protecting the Rights of Airline Passengers
Since 1971, the Aviation Consumer Action Project (ACAP) has provided an important check on the “love it or leave it” attitude of the airline industry. Lost luggage, deceptive advertising, aircraft and airport safety, anti-competitive practices: these are the sorts of problems that led Ralph Nader, attorney Reuben Robertson and international aviation expert K.G.J. Pillai to found ACAP. Although its staff has rarely exceeded several persons, the group has had a major impact in three key areas of commercial aviation — the economic regulation and, after 1978, deregulation of the airline industry; the safety of air transportation; and consumer protection of airline passengers.
In the early years, ACAP frequently promoted the consumer interest in fare-setting proceedings before the Civil Aeronautics Board (CAB). As the rickety, unfair system of regulation became clear, ACAP emerged as one of the leading advocates for deregulation of the airline industry. Although that goal was achieved, saving consumers $10 billion over the past 11 years, it has also been coupled with Reagan’s regulatory laxness on safety, the growth of the airline “hubs” at key airports and an abdication of antitrust enforcement at Reagan’s Justice Department. As a result of these and other failures of the implied government compact to contain the adverse side of the airline industry, deregulation has, over time, led to greater concentration and reduced competition. ACAP has been a constant critic of the unwarranted mergers within the industry which, by 1988, had resulted in eight airlines controlling 90 percent of domestic air traffic (down from fifteen carriers in 1984) and at six large hubs, a single carrier controlling 75 percent or more of the aircraft departures.
ACAP has also been a key advocate for a broad range of safety improvements for airline passengers. In order to reduce the risks to passengers from post-crash fires, which occur in 20 percent of the survivable crashes, ACAP has prevailed upon the Federal Aviation Administration (FAA) to require new fire safety precautions in airline cabins. ACAP’s activism has also helped persuade the FAA to require installation of sophisticated automatic altitude-reporting equipment to prevent midair collisions and installation of stronger airline seats to protect passengers better in the event of turbulence or a crash. Public Citizen and ACAP forced the FAA to require airlines to carry emergency medical kits on board, so that passengers stricken with heart attacks, seizures and other problems can be helped.
Finally, in an industry where complex fare structures and slick marketing ploys are so important, ACAP has pressed hard for consumer protection. One of its most celebrated fights occurred in 1972, one year after its founding, when Ralph Nader was bumped from a flight despite having a confirmed reservation. En route to a fundraiser for the Connecticut Citizen Action Group, he was forced to fly instead to Boston and drive to Hartford. Nader and ACAP sued the airlines for fraudulent misrepresentation (the airline had not honored its promise of a confirmed seat), and won the legal issue of deception while losing their claim for monetary damages. The case triggered an outpouring of public outrage against the airlines, however, and sent the CAB scurrying to issue regulations that would protect consumers from the “last-at-the-gate, first-bumped” rule. Now, largely as a result of Nader’s action, the airlines hold an “auction” among passengers to select volunteers to take the next flight out. Any passenger who is bumped, voluntarily or involuntarily, receives a cash benefit or free ticket as a reward.
Nader provided the catalytic spark for another airline industry reform that has come to be widely accepted — protection of non-smokers’ rights. In 1969, Nader petitioned for an outright ban on smoking on commercial aircraft; a fellow activist, John Banzhaf, asked for segregated sections for smokers, which the CAB first required in 1973. Over the next fifteen years, ACAP would continue to push for more restrictive rules on in-flight smoking. By 1988, Congress and the American people had come around to Nader’s original proposal and banned smoking on flights of less than two hours. The popularity of the rule proved so great that within a year Congress banned smoking on all domestic flights.
One reason for ACAP’s success is its ability to advocate the consumer perspective on airline issues with the same technical sophistication as the industry. In 1983, for example, the airlines tried to push through the “Montreal Protocols” treaty to limit their liability for passenger deaths from international flights to $75,000, even though their existing insurance provided three times the coverage at only 20 cents per 1,000 miles travelled. ACAP’s activism with Public Citizen helped defeat the treaty in the Senate, the first time in 23 years that a treaty had been rejected on the Senate floor.
In the summer of 1987, consumer complaints against the airlines were soaring as late arrivals reached all-time highs, flight schedules were unrealistically tight, and advertising became deceptive. “We were getting complaints from people who were calling at 7 a.m. in the morning on the day an ad appeared in the papers, yet couldn’t get a seat at the advertised rate,” said Con Hitchcock, the Public Citizen attorney who serves as legal director for ACAP. ACAP capitalized on the public outrage and helped push through new truth-in-scheduling and truth-in-advertising FAA rules.
On behalf of more than 245 million airline passengers, ACAP has provided a remarkably effective form of consumer representation on a shoestring budget. Financed primarily by sales of its $2 booklet, “Facts and Advice for Airline Passengers,” ACAP is the primary nonprofit consumer group that works full-time on consumer aviation issues.
Reclaiming the Television Wasteland, Harnessing the Telecommunications Revolution
“Television is one of the most powerful forces man has ever unleashed upon himself. The quality of human life may depend enormously upon our efforts to comprehend and control that force.” That succinct statement by Nicholas Johnson, the brash, public-spirited FCC Commissioner who served from 1966 to 1977, could easily serve as the manifesto of the media reform movement. Johnson did much to kick off this branch of citizen action with his popular 1967 book,How to Talk Back to Your Television Set, which offered one of the first comprehensive consumer critiques of broadcasting. It dissected the impact of TV ownership on its content, the quiet corporate censorship of programming and the lack of citizen access to the public airwaves. Equally important, the book suggested specific steps that citizens could take to “talk back to their TV.”
As a means toward that end, Thomas Hoving founded the National Citizens Committee for Broadcasting (NCCB) in 1967 to monitor industry practices and the FCC, protest deceptive advertising, and encourage citizens to use the administrative machinery of government to force reforms on the industry. The NCCB joined two other notable media reform efforts, Action for Children’s Television founded by Peggy Charren, and the United Church of Christ’s Office of Communication, headed by Everett Parker.
One persistent problem of the media reform movement has been to organize a large constituency and raise adequate funds. By 1976, these troubles threatened to put the NCCB out of existence. Troubled that one of the chief advocates for better television might go under, Nader took over leadership of NCCB in 1976 and wooed Sam Simon to head the reincarnated group. Simon, a former staffer of the first Public Interest Research Group and a former Senate aide, left his job as a $40,000-a-year Federal Trade Commission attorney to work for half as much promoting the consumer interest in television and a burgeoning new industry, telecommunications.
As the breakup of AT&T was proceeding, the NCCB quickly became an advocate for consumer choice and competition in long-distance telephone service. To reflect the group’s broader agenda, the NCCB was renamed the Telecommunications Research and Action Center (TRAC) in 1983, and quickly embarked upon a program to help consumers cope with the telecommunications revolution. To help consumers sort through the confusion of telephone deregulation, for example, TRAC published Reverse the Charges: How to Save Money on Your Phone Bill (Sam Simon and Joseph Waz, 1981 and 1983), a consumer guide that reached more than half a million phone users as a Book-of-the-Month Club premium. Along with the Consumer Federation of America, TRAC helped set up the Tele-Consumer Hotline, a toll-free 800 number which gives consumers factual comparative information on long-distance services.
In response to other telecommunications innovations, TRAC also published Phonewriting: A Consumer’s Guide to the New World of Electronic Information Services (1986). And to help citizens become involved in telecommunications policy-making, TRAC has published a monthly media reform newsletter, Access, and A Citizen’s Primer on the Fairness Doctrine, which advises citizens how to gain access to radio and television to respond to controversial, unbalanced opinions.
As resources permit, TRAC has frequently petitioned the FCC and gone to court on issues which are beyond the power of most individual consumers to pursue. One of its most significant lawsuits, for instance, was TRAC v. FCC, initiated as a 1978 petition to the FCC to recover $100 million in unjustified AT&T overcharges to consumers for the period of 1976 to 1978. After the FCC sat on the petition for five years without taking action, TRAC sued in federal court in 1983 and two years later eventually ordered rate reductions to recover the $100 million (along with some $10 million in accrued interest).
The intense consumer concern about the AT&T breakup and the new fees for basic telephone service helped swell TRAC’s membership to over 12,000 in the mid-1980s. But soon that traditional bane of the media reform movement — maintaining a dues-paying constituency — caught up with TRAC. A major mass mailing to attract new members failed, and TRAC has struggled with uncertain finances ever since. The problem, says Simon, is that promoting important procedural reforms — such as citizen access to the media — does not typically inspire as much grassroots fervor as content-based crusades such as those waged by the right-wing Accuracy in Media group.
Still, TRAC remains an active advocate for consumers. Most recently, Director David Wagenhausen filed a complaint with the FCC over the exorbitant rates charged by “alternative operator services” (AOS) that make long-distance connections for phones at hotels, restaurants and other public facilities. The AOS systems charge three to five times the normal AT&T rates and give a rebate to the proprietor of the phones — a scheme devised solely to bilk a captive market and which serves no genuine public interest or need.
Consumers and the Environment
Although the consumer and environmental movements each have their own agendas and traditions, they also share a great deal in common: concern for the public health, an understanding of Washington politics, expertise in regulatory affairs and litigation, an appreciation for citizen action. Apart from energy-related issues, Ralph Nader and the consumer movement have not developed an environmental agenda that is as broad and sustained as that of the leading environmental groups. Yet the consumer movement has played an instrumental and sometimes crucial role in many environmental crusades. In fact, some of the earliest Nader’s Raiders books helped frame public debate on major environmental issues and shape several landmark laws.
John C. Esposito’s The Vanishing Air (1970) was a devastating critique of the historic failures of federal air pollution control programs, particularly the Clean Air Act of 1967. The book helped prod Senator Edmund Muskie, then chairman of the Senate Subcommittee on Air and Water Pollution, to take bold leadership on environmental issues. As a presidential aspirant, Muskie wanted to make a credible claim to leadership on environmental issues. Yet he had been notably cool toward pushing real reform in 1967, saying, “The time has come to put aside the notion of air pollution as an adversary proceeding.” Vanishing Air exposed Muskie’s dismal record of delay and collusion with business interests, spurring him to champion the remarkably tough provisions of the Clean Air Act of 1970 that became the foundation for all subsequent air pollution law.
Another seminal Nader-sponsored environmental book was Water Wasteland, by David Zwick with Marcy Benstock. This book, too, provided a blistering critique of the failures of previous pollution control laws and enforcement. Within a week of the book’s April 1971 release, the EPA announced it was taking action in several pending environmental controversies. Within two months, Senator Muskie’s subcommittee began work on a complete overhaul of federal water pollution control law, which — with strong lobbying by environmentalists as well — resulted in the October 1972 passage of the Clean Water Act, another cornerstone of modern environmental law. (Zwick went on to become director of the Nader-backed Clean Water Action Project; Benstock later became a leader in the successful fight against Westway, the massive highway proposed for the west side of Manhattan.)
In the early 1970s, besides participating heavily in the Earth Day protests, Nader sponsored several study group reports designed to provoke citizen action against specific regional environmental outrages. The Water Lords (1971), by James Fallows, documented the pollution that industry was spewing into the Savannah River in Georgia. Damming the West (1971), by Richard Berkman and Kip Viscusi, described the how the U.S. Bureau of Reclamation was wreaking environmental havoc through its aggressive building of unnecessary dams. And The Paper Plantation (1974), by William C. Osborn, described how the pulp and paper industries of Maine were fouling that state’s air and water while thwarting reforms through its dominance of Maine’s politics.
Since those early days, Public Citizen has become involved in selected national environmental issues when it could make a special contribution. Because of Nader’s special expertise about automobiles, for example, Congress Watch has frequently lobbied for stronger emissions control standards in amendments to the Clean Air Act, and the Litigation Group has taken legal action to force automakers to fix defective emissions control systems.
Another environmental issue of special, ongoing concern to the consumer movement has been the hazards of toxic chemicals, an issue first joined by Nader in Sowing the Wind (1972), by Harrison Wellford, which probed the food safety dangers of the massive use of pesticides on crops, and The Chemical Feast (1971), by James Turner, which described the Food and Drug Administration’s inadequate oversight of the food industry.
In the mid-1970s, Congress Watch became heavily involved in lobbying for passage of the Toxic Substances Control Act of 1976, which established a more stringent system of federal regulation of industrial and commercial chemicals, and required premarket testing of many new chemicals. In addition to Congress Watch’s involvement in the 1980 fight for the so-called Superfund law, which created a $1.6 billion fund to finance the cleanup of the nation’s worst toxic dump sites, Nader helped popularize the issue through his 1981 book, Who’s Poisoning America?, (with coauthors Ron Brownstein and John Richard), which details the health and safety problems of chemical pollution.
Concern for toxic wastes reached a new peak in the early 1980s when Reagan’s appointees to the EPA became embroiled in an array of conflict-of-interest and mismanagement scandals. The Reagan EPA had been so indifferent to the problems of toxic dumping that eight years after enactment of the Superfund law, only five of nearly 23,000 identified waste sites had been cleaned up. Capitalizing on the EPA scandals, environmental, labor and consumer groups began pushing for strong, new amendments to the law, which they finally achieved in 1986. Because environmental groups did not have a strong legal expert to help craft the Superfund amendments, Congress Watch lobbyist Janet Hathaway stepped into the breach to ensure that the new law would contain the toughest possible statutory language.
Among the strong, new Superfund provisions that the coalition obtained were mandatory schedules and guidelines for waste site cleanup; a community “right to know” provision that forces companies to disclose the toxics released into the air, water and soil; the right of citizens to seek injunctions against companies for “imminent and substantial endangerment” caused by toxic dumping; the right of citizens to sue government if it fails to enforce the law; and more meaningful citizen participation in decisions about local waste site cleanup.
The one new provision that Hathaway desperately wanted Congress to enact, but which was beat back by business interests, was a new right for victims to sue toxic dumpers in federal court for any damages they might have suffered. Although thwarted in this goal, the Superfund coalition did win a new, uniform federal statute of limitations for any suits brought. This was itself a significant victory; previously, victims of toxic dumping could not even get into court to sue toxic dumpers because state laws held that the timetable for filing lawsuits began at the time of the toxic exposure — a blatantly unfair rule, given the long latency period for many chemically induced diseases. Under the new federal statute of limitations won by Hathaway et al., the clock for lawsuits starts ticking when victims first discover their toxic injury and its causes.
In 1984, Congress Watch Director Nancy Drabble helped galvanize Congress into initiating reforms in the federal pesticide law, whose protections were extremely feeble. By ingeniously linking passage of an industry subsidy bill to pesticide safety reform (see Chapter 3), Drabble got Congress to draft new amendments to the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), which were finally enacted in 1988. The new amendments, while disappointing in many respects, have speeded up the testing of pesticides whose health effects have never been evaluated using modern scientific methods.
What has distinguished the consumer movement’s environmental advocacy is its implicit connection to the nature of corporate power itself. “The modern corporation’s structure, impact and public accountability,” Nader wrote in April 1970, “are the central issues in any program designed to curb or forestall the contamination of air, water and soil by industrial activity.” It is an analysis that remains as valid today as then.
The “Seamless Web of Justice”
It is not accidental that Nader and the consumer movement have extended their activism into so many diverse realms. Given the breadth of corporate abuses, it was only natural that they would apply their idealism and skills to open up new battlefronts in the war for a consumer sovereign economy. As the ultimate political entrepreneur, Nader’s special talent has been to identify new advocacy needs and nurture the leadership to forge ahead.
It is also true that the patchwork quilt of consumer activism is not really as eclectic as it may seem. As Nader explains it, “Citizen action in one area connects up with others, a phenomenon I call the ‘seamless web of justice.’ My theory is that even if you start in a tiny, little area of civic justice, you’ll always find it connected to another area, and another — and it gets broader and broader. And we suddenly realize that it’s not only in the environment that everything’s connected to everything else, but also in the area of justice.” Thus the activist fighting for food safety, for example, soon learns about the importance of open government….the injustices of the campaign finance system….the barriers to obtaining good legal representation….the corporate influence on scientific research priorities….and so on.
The theory of the seamless web of justice: It helps explain how a lone auto safety crusader could end up building a mini-conglomerate dedicated to a rich and changing variety of citizen action.