CU calls on CA AG to investigate whether criminal charges should be filed against Bridgestone/Firestone & Ford

SAN FRANCISCO – Consumers Union, the non-profit publisher
of Consumer Reports, called on California Attorney General Bill
Lockyer today to investigate whether executives of Bridgestone/Firestone
and Ford violated a California law by failing to alert state officials
about dangerous tire defects in a timely manner. Under California’s
Corporate Criminal Liability Act, managers of businesses, including
officers and executives, can face criminal prosecution for concealing
dangers in products or workplace settings that could put consumers
or workers at risk of death or injury if they fail to notify state
officials within fifteen days of learning of the defects.

“This case once again reminds us of the need for
greater accountability when corporations knowingly sell dangerous,
defective products to consumers,” said Harry Snyder, Senior Advocate
for Consumers Union’s West Coast Regional Office. “If company officials
at Bridgestone/Firestone or Ford knew of the serious concealed dangers
in these tires and failed to properly notify California officials about
them, then they should face criminal prosecution.”

On August 9, Bridgestone/Firestone announced the
recall of its P235/75R15 Firestone ATX, ATX II, and Wilderness AT tires.
The tires have been recalled because of tread separations that have
been blamed for dozens of fatal crashes. Officials at both companies
have maintained that they were not aware of the scope of the tire defects
until shortly before they announced the recall. However, evidence is
mounting that officials at Bridgestone/Firestone and Ford may have
been aware of these dangerous defects long before the tire recall was
announced.

For example, news accounts have indicated that Congressional
investigators have internal documents obtained from Firestone detailing
the company’s damage and injury claims showing a high incidence of
tire failure as early as 1997. Similarly, congressional investigators
reportedly believe that Ford may have ignored trends in its own warranty
data, which showed that the company had received claims for hundreds
of defective tires between 1991 and 2000.

Furthermore, Ford’s 1999 recalls of Firestone tires
sold on Ford Explorers in 16 countries abroad were not reported to
the National Highway Traffic Safety Administration, even though they
were similar to tires sold on Explorers in the United States. While
companies are not legally required under federal law to notify NHTSA
regarding recalls in foreign countries, the companies may have been
required to report this information to California state officials under
the Corporate Criminal Liability Act. Since 1992, there have been as
many as 50 to 100 lawsuits related to the Firestone tires subject to
the current recall. Many of these lawsuits were settled with secrecy
orders in place, with the effect that critical safety information may
have been kept from the public.

Consumers Union was instrumental in creating the
California Corporate Criminal Liability statute, which was signed into
law by then-Governor George Deukmejian in 1990. California is the only
state with a law that requires individuals within corporations to report
known, hidden dangers in the products or workplaces under their management.
Under the statute, failure to notify the California Division of Occupational
Safety and Health Agency in the Department of Industrial Relations
(Cal-OSHA) could be a felony.

The Firestone tire recall has prompted calls by lawmakers
in Congress for a federal statute that would subject corporations and
their executives to criminal prosecution if they failed to notify regulators
of known product dangers. On September 7, Senator Arlen Specter (R-PA)
introduced a bill that would impose federal criminal penalties on the
employees of any corporation who knowingly and recklessly introduce
a defective product into interstate commerce.

“Lawmakers in Washington are seeking to enact the
very criminal liability that California has had on the books for nearly
a decade,” said Elisa Odabashian, Senior Program Manager at Consumers
Union’s West Coast Regional Office. “If the Attorney General determines
that the California Corporate Criminal Liability Act has been violated
in this case, we urge him to bring criminal charges against the responsible
parties at these companies. Corporate executives need to know that
they may face jail time and financial penalties for failing to notify
California officials about dangerous product defects.”

Consumers Union, publisher of Consumer
Reports, is an independent, nonprofit testing and information organization,
serving only the consumer. We are a comprehensive source of unbiased
advice about products and services, personal finance, health, nutrition,
and other consumer concerns. Since 1936, our mission has been to
test products, inform the public, and protect the consumers.