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Blumenthal, Harkin, Casey Introduce Legislation To Hold Companies Accountable For Concealing Defects

(Washington, D.C.) – Today, U.S. Senators Richard Blumenthal (D-Conn.), Tom Harkin (D-Iowa), and Bob Casey (D-Pa.) introduced the Hide No Harm Act of 2014, a bill that would make it a crime for a corporate officer to knowingly conceal the fact that a corporate action or product poses a danger of death or serious physical injury to consumers and workers. The bill, which would create punishments of up to five years in prison and potential fines, would also create a safe harbor from criminal liability in cases where a corporate officer notifies a federal regulatory agency and individuals subject to the danger.

Recent revelations of morally reprehensible hiding of known harms by GM officials should prompt criminal prosecution, not just public condemnation. Concealment can kill – and corporate officers should be held accountable for it,” Blumenthal said. “This measure would criminally punish corporate officials who conceal that a product is dangerous. Penalties for severely risking consumers’ lives or health should be more than money paid by the corporation, in effect the cost of doing business. This new law also would protect and create a legal safe harbor for whistleblowers who disclose defects and dangers. The goal is to assure that GM’s corporate anti-consumer concealment never happens again.

“Consumer and worker safety should always come before corporate profits. It is inexcusable when a corporation knowingly exposes consumers or its workers to dangerous safety hazards,” Harkin said. “We must have stronger protections to establish clear safeguards against such negligence. The ‘Hide No Harm Act’ would take immediate action by making it a crime for a corporate officer to knowingly conceal the fact that a corporate action or product could cause serious harm to consumers and workers, while protecting whistleblowers who help to bring to light this type of danger. Passing this bill is a strong step to protect Americans and significantly improve corporate accountability.”

“If a corporate officer knows of a defect in a product that could cause harm to consumers or workers and fails to act then that officer should be held fully accountable by law,” Casey said. “The problems with the ignition switch in GM vehicles has had a significant impact on Pennsylvania families. It’s not enough for GM to say it’s sorry. We have to reform our laws so that those with the power to act are held accountable when they don’t.”

The Hide No Harm Act of 2014 comes in response to the General Motors (GM) ignition switch defect that corporate officers became aware of in 2004, but failed to issue recalls for until 2014. Rather than immediately notifying consumers or federal safety agencies of the potential for death or serious physical injury that could result from driving the defective cars, GM concealed the problem in internal investigations and secret settlements. The defect resulted in at least 13 deaths, countless injuries, and damage, as well as other serious consequences for consumers, employees, and shareholders.

Concealment by other corporations has also resulted in deaths and injuries. For example, executives at Second Chance Body Armor knowingly manufactured and sold deficient ballistic vests to law enforcement and the military for nearly five years, resulting in two documented incidents of ballistic failure during firefights. In addition, executives at Simplicity for Children knowingly allowed defective cribs to remain on the market, resulting in at least 11 infant deaths. In these cases, the corporate officers who knowingly concealed the defects suffered very little, if at all.

"Our current fines and penalties are not tough enough to ensure that every business is playing by the same rules," said Katherine McFate, president and CEO of the Center for Effective Government and CSS co-chair. "We have to make sure that the businesses that are willing to put the health of the American people at risk face heavy sanctions. The bad actors should not have a competitive advantage over responsible businesses that adhere to health and safety standards."

Robert Weissman, president of Public Citizen and Coalition for Sensible Safeguards (CSS) co-chair, said: “Too many times, we’ve seen officials at companies decide to keep selling a dangerous product to consumers, knowing that even if they get caught, the penalties will be small. This bill would protect the public because it would finally put formidable penalties on these rule-breakers and help deter them. Our regulatory system needs more teeth to ensure that companies take health and safety seriously.”

Peg Seminario, safety and health director for the AFL-CIO, said: “Countless numbers of workers and citizens have suffered and died because companies withheld and hid information on the dangers of products and exposures like asbestos. This bill would hold corporate officials personally responsible for their role in these deaths and injuries,  help stop corporate concealment and save lives.”

Rachel Weintraub, legislative director and senior counsel with Consumer Federation of America, said: “This bill will provide an important deterrent to companies and their executives who knowingly sell and distribute unsafe products to consumers. The consequences to consumers can be dire while the consequences for companies may be negligible. This legislation seeks to ensure that the consequences of selling an unsafe product are significant.”

Sally Greenberg, executive director of the National Consumers League, said: "The National Consumers League supports Senator Blumenthal's legislation to hold corporate wrongdoers criminally liable if they conceal serious dangers that lead to consumer or worker deaths or injuries. In case after case – GM, Toyota, Vioxx, Simplicity Cribs – companies cover up grave product defects that cause the death or grave injury of consumers, including children and teenagers. Civil penalties don't work to deter this behavior – the company pays a fine and no one is held accountable. That must change and criminal liability will be that game changer."

Celia Wexler, senior Washington representative, Center for Science and Democracy at the Union of Concerned Scientists, said: “Access to information is the cornerstone of our democracy. This legislation sends a clear message that corporations have a serious responsibility to inform the public, including disclosure of information crucial to protecting public health.”

The Hide No Harm Act of 2014 is supported by host of advocacy groups and policy organizations. For more information about the bill, click here. For video of the press conference, click here, for audio of the press conference, click here.