In the Face of FDA Inaction on Harmful Food Dyes, California Offers Hope of Protecting Consumers
The Revolving Door: How a Florida Insurance Commissioner is Going on a Lucrative Career as an Insurance Lobbyist — Likely at the Expense of Consumers
Rock n’ Play Recall Demonstrates How Secrecy Provision of Law Hides Product Dangers from Consumers
Group Letter to Chairman Gensler Spotlights Climate Risks in Private Markets
In the Face of FDA Inaction on Harmful Food Dyes, California Offers Hope of Protecting Consumers
By: Thomas Gremillion, Director of Food Policy
For far too many parents, navigating the food system feels like traversing a minefield. CFA is working to address one source of this anxiety: artificial dyes.
For decades, researchers have suspected that several artificial dyes contribute to hyperactivity and attention deficit disorder in children. These suspicions were recently confirmed by the California Office of Environmental Health Hazard Assessment. After comprehensively and systematically reviewing the evidence, the agency concluded in 2021 that several dyes “cause or exacerbate neurobehavioral problems in some children.” Specifically, the agency’s report fingers the color additives FD&C Blue No. 1, FD&C Blue No. 2, FD&C Green No. 3, FD&C Red No. 3, FD&C Red No. 40, FD&C Yellow No. 5, and FD&C Yellow No. 6.
Last year, CFA joined consumer advocacy partners in petitioning the California Department of Public Health (CDPH) to require a warning label on dye-containing foods and supplements to alert consumers about the adverse effects these dyes have on children’s neurobehavior. Earlier this month, I testified with other petitioner representatives, and experts including toxicologists, epidemiologists, and pediatricians, at a public hearing that CDPH held on the group’s petition. We sought to counter industry trade groups’ and paid consultants’ arguments against acting on the science.
One common argument was that these dyes are safe because the U.S. Food and Drug Administration (FDA) has approved them, and FDA is the expert. However, FDA’s approval of these dyes happened in the 80s or even earlier, before the dawn of the personal computer, never mind the genetic analysis technologies that have shed light on why food dyes appear to cause hyperactivity in some children, and even appear to have as large an effect on children’s behavior as lead does on children’s IQ.
Industry has argued that FDA’s ongoing market surveillance should suffice to ensure public protections against these food dyes remain up-to-date. However, FDA’s market surveillance of the harms caused by these dyes has let consumers down, in part because FDA is underfunded and under resourced. The entire FDA Office of Food Additives Safety—responsible for regulating more than 10,000 chemicals in food and a multi-billion-dollar industry—has just over 100 full-time technical staff. And it does not currently have a director.
According to a 2013 study of over 4,000 chemicals purposely added to food such as flavors, preservatives, and sweeteners, less than 22% had sufficient data to estimate how much is safe to eat, and less than 7% were tested for developmental or reproductive effects. FDA may not even know that a chemical is in the food supply, thanks to the Generally Recognized as Safe (GRAS) process, under which food companies have been allowed to determine themselves that over a thousand food chemicals are Generally Recognized as Safe.
Unfortunately, FDA is not going to stand up for consumers on food dyes, but California can. And one big reason for doing so is to establish a level playing field for companies that want to do the right thing. A few years ago, several large companies including General Mills, Kellogg, and Mars made bold pledges to remove artificial colors from their products, but most of them have not followed through. And no wonder! If a company’s competitors can save money and otherwise take advantage of using these chemicals, it’s hard to make the business case for change.
In Europe, public health authorities have required a warning label on most dyed foods for 15 years. The experience of many leading U.S. companies “across the pond” shows that reformulating foods to remove dyes is feasible and economical. If we arm American consumers with accurate information about food dye harms, we can be confident that it will move the market on this issue just as it has in Europe. Consumers have a right to make educated choices about what foods they purchase and consume. If the FDA can’t stand up to protect consumers, particularly young children, from harmful food dyes, then individual state public health departments should. California, CFA urges you to lead by example and put consumers first.
The Revolving Door: How a Florida Insurance Commissioner is Going on to a Lucrative Career as an Insurance Lobbyist — Likely at the Expense of Consumers
By: Michael DeLong, Insurance Research Advocate
The fifty-one state Insurance Departments are responsible for regulating insurance, protecting consumers, and making sure that insurance rates are not excessive, inadequate, or unfairly discriminatory. Some commissioners are determined to help consumers. Others, less so. Some regulators seem to treat their time in government as a slow-moving job interview for a high-paying positions within the insurance industry. They exit their Department of Insurance through the “revolving door” that connects the agency with the industry, taking lucrative jobs as lobbyists or “government affairs” executives in the insurance sector after they leave their public post.
As the doors are revolving, we also see former industry staff moving into the public agencies as well. The problem is not just limited to the Commissioners—top-level insurance department staff also pass through too often, and it can result in an unhealthy relationship between the insurance industry and the departments that are supposed to oversee them. Not surprisingly, the revolving door can undermine consumer protection and enforcement of the laws. If an Insurance Commissioner plans to get a job at an insurance company after they leave office, they may avoid taking actions that would upset that company. Regulators may even take actions or make decisions enabling them to cash in later, when they join insurance companies that they have regulated. Insurance companies, in turn, hire former Commissioners and regulators to gain personal access to government officials, to seek favorable legislation and regulations, and to get inside information on what Insurance Departments are doing.
A recent poster child of this phenomenon is former Florida Insurance Commissioner David Altmaier, who abruptly resigned late last year to join an insurance lobbying firm. For fourteen years, Altmaier worked in the Florida Office of Insurance Regulation (OIR), and from 2016 to 2022 he was Florida’s Insurance Commissioner, a period marked by hostility to consumer advocates and consumer protection, and, as his last year concluded, the extraordinary lapse in regulatory oversight of insurers that were low-balling and defrauding policyholders dealing with Hurricane Ian claims.
In late 2022, Altmaier urged the Florida legislature to pass sweeping law changes, claiming that they would stabilize Florida’s troubled property insurance market. The Florida legislature held a short special legislative session in 2022 and enacted these reforms, which created a new layer of reinsurance funded by the state, banned one-way attorneys’ fees in insurance claims litigation, and made it harder for policyholders to bring litigation against insurers.
In a December 2022 letter to Governor Ron DeSantis, Altmaier praised these new laws and wrote that “we have worked with the Florida Legislature to meet historic challenges with historic reforms.” But some observers were more skeptical, doubting that the reform would reduce property insurance costs. In a Twitter post, Florida House Democratic spokesman Jackson Peel asked, “What do you think will be announced first: The next insurance company leaves Florida’s collapsing market or his new high paying job in the insurance industry?”
The answer was the latter, with a slight twist: Altmaier obtained a high paying job at a lobbying firm, as a lobbyist, excuse me, “advocate,” for the insurance industry. His new is quite explicit about the value of the revolving door: “I leverage over a decade of experience to help insurance and insurance-adjacent entities navigate the complex world of regulation and regulatory policy.”
In that same letter mentioned earlier, Altmaier submitted his resignation, which took effect on December 28th, 2022—only a couple of weeks later. Why did he depart so quickly? Because on January 1st, 2023, a new anti-lobbying law took effect. Before then, former Florida agency heads (including former Insurance Commissioners) would be banned from lobbying for two years, and this law extended that lobbying ban to six years. By resigning before the law became operational, Altmaier could avoid this extended ban.
And in March 2023, Altmaier announced that he had a plum new job: he would be joining the Southern Group, the top-earning lobbying firm in Florida. Florida Politics reported that Altmaier “will be utilizing his network of contacts to build a national insurance advisory practice.” Insurance Journal reported that the former Commissioner “will be ‘an extraordinary effective advocate’ at a time that insurance companies need those skills the most.” With no sense of irony or impropriety, the Southern Group’s website announces that “Today, the sharp lines between government, business, and constituencies have blurred.”
In his new job, Altmaier is taking advantage of another loophole in Florida’s anti-lobbying law. The law bans Florida agency heads from lobbying their former agencies—but not from lobbying Florida legislators. Altmaier’s salary is not listed. But we suspect that his new position is quite a bit more lucrative than his old position as Florida Insurance Commissioner.
To summarize: former Florida Insurance Commissioner David Altmaier, in charge of regulating insurance and safeguarding consumers, abruptly resigned from his job, where he was hostile to consumers and cozy with the insurance industry. And not even three months later, he joined Florida’s largest lobbying firm to advocate for insurance companies by using his former contacts and knowledge. This case is a perfect example of the revolving door, where some insurance regulators move seamlessly from public service to very profitable lobbying and influence-peddling.
We invite Florida’s new Insurance Commissioner, Michael Yaworsky, to chart a different path and pledge not to work for the insurance industry when his time at the agency ends.
Rock n’ Play Recall Demonstrates How Secrecy Provision of Law Hides Product Dangers from Consumers
By: Courtney Griffin, Director of Consumer Product Safety
The Consumer Product Safety Commission continues to find recalled Rock n’ Play sleepers listed for sale on Facebook Marketplace, despite representations from Meta, Facebook Marketplace’s owner, that it would take steps to prevent the re-sell of recalled products on its platform. In his second letter to Mark Zuckerberg, CEO of Meta, CPSC Chair Alex Hoehn-Saric once again urged Meta to do more to stop the illegal sale of recalled consumer products.
In another letter to Mattel and its subsidiary Fisher-Price, Hoehn-Saric also urged the company to take additional steps to protect babies from the hazards posed by recalled Rock n’ Play infant sleepers. Hoehn-Saric called on the company to announce the recall again and do more to remove Rock n’ Play sleepers from the resell market and homes. According to the CPSC, the average listed price of a Rock n’ Play sleeper on the secondary market is $25, more than what some consumers will receive if they act on the recall.
The CPSC issued a recall on Rock n’ Play sleepers in April 2019 and again in January 2023 because of poor results. The sleeper has been linked to the deaths of almost 100 infants, with at least 8 occurring after Fisher-Price recalled the product. In a letter to members of Congress in March 2023, Fisher-Price stated that it has “completed more than 465,000 cumulative corrections related to recalled Rock n’ Play sleepers, including product in manufacturer inventory, retailer inventory, and with consumers.” This amounts to less than 10% of the 4.7 million recalled Rock n’ Play sleepers.
In addition to highlighting how easy it is to purchase dangerous recalled products, the Rock n’ Play saga also demonstrates how dangerous products flood the market because of the unique restrictions that govern the CPSC’s public disclosure of information. Section 6(b), 15 U.S.C. § 2055(b), a provision of the Consumer Product Safety Act (CPSA), prohibits the CPSC from disclosing information about a consumer product that identifies a manufacturer or private labeler unless the CPSC has taken “reasonable steps” to assure that the information is accurate, the disclosure is fair and reasonably related to effectuating the purposes of the CPSC. As such, the CPSC must provide the manufacturer or private labeler with an opportunity to comment on the accuracy of the information, and the CPSC may not disclose such information for at least 15 days after sending it to the company for comment. The reality, however, is that the process between the CPSC and manufacturers or private labelers often takes many years before the information can be disclosed to the public.
In the case of the Rock n’ Play, it remained on the market for a decade despite infant deaths tied to the product. The CPSC issued an alert in May 2018 regarding “infant deaths associated with inclined sleep products,” but did not identify specific products in a way that was helpful for most caregivers. However, it was an accidental disclosure of information that prompted the events leading to the Rock n’ Play’s recall. While reviewing data it requested from the CPSC, Consumer Reports found several infant fatalities linked to the Rock n’ Play and similar products. Under section 6(b) that data should have been redacted but the agency had made a mistake and released the information to Consumer Reports. By the April 2019 recall, approximately 4.7 million Rock n’ Play sleepers had flooded the market.
Recently the CPSC issued a Supplemental Notice of Proposed Rulemaking to update the regulation interpreting section 6(b). The Supplemental Notice of Proposed Rulemaking did not in any way repeal or significantly alter the main restrictions of section 6(b), but the proposed changes would streamline and modernize the regulation interpreting the statute. CFA submitted public comments supporting the minor changes, but stated that repeal of section 6(b) is necessary to promote consumer safety and transparency.
Senator Richard Blumenthal (D-CT) and Representative Jan Schakowsky (D-IL) reintroduced the Sunshine in Product Safety Act in March 2023. In a related press release, Senator Blumenthal said: “This measure removes the regulatory straight jacket that deprives consumers of vital product safety information. Current regulatory requirements give companies the right to veto vital CPSC warnings and deny the truth to consumers. By repealing Section 6(b), our measure would free the CPSC to swiftly warn the public about hazardous products and require companies to put people ahead of profits.”
In the same press release Congresswoman Schakowsky said, “Section 6(b) of the Consumer Product Safety Act prevents the Consumer Product Safety Commission (CPSC) from telling the public about potentially dangerous products without the company’s permission. Simply put, it protects companies over consumers. This cannot stand.”
Blumenthal and Schakowsky previously introduced the Sunshine in Product Safety Act in April 2021 after reports that Peloton obstructed the CPSC’s investigation following injuries and a child’s death.
CFA strongly supports the Sunshine in Product Safety Act, stating in the bill’s press release: “It is time for Congress to stop allowing companies to put the lives of consumers, especially our most vulnerable, in danger. We applaud Senator Blumenthal and Congresswoman Schakowsky for valuing transparency and the lives of consumers by introducing the Sunshine in Product Safety Act. It is past time to repeal the gag order that is Section 6(b) and allow the Consumer Product Safety Commission to do its life-saving work to the best of its ability.”
Caregivers have an expectation that the products they purchase, especially products for babies and children, are safe. Yet the CPSC cannot share critical, sometimes life-saving information. CFA and other product safety advocates support the Sunshine in Product Safety Act for this reason. It is important that we let our elected officials know that companies should not be able to hide or delay critical safety information. Consumers deserve timely information about the potential hazards in their homes and babies deserve to sleep in safe products. It is imperative that Congress passes the Sunshine in Product Safety Act to protect consumers.
Group Letter to Chairman Gensler Spotlights Climate Risks in Private Markets
By: Dylan Bruce, Financial Services Counsel
On April 4, a diverse group of organizations, including investor protection and shareholder advocates, climate advocates, and businesses, wrote to Securities and Exchange Commission Chairman Gary Gensler to highlight how private markets contribute to and exacerbate climate-related risks for investors and our financial system and what the Commission must do to meet these growing risks.
Specifically, the letter discusses the troubling and emerging trend of public companies shifting carbon-intensive, “dirty” assets from their balance sheets into private markets, a practice known as “brown spinning.” These transactions, which can effectively remove high emitting assets out of publicly available disclosures and into the shadows of private markets, are increasingly being employed in emissions-intensive industries, often to meet seemingly altruistic climate goals. Regrettably, the net effect is that the climate impacting assets and activities continue unabated while the associated climate-related risks for investors and markets become worse and more difficult to assess. As the letter states, “The ability of private companies to stay dark and of public companies to shift dirty assets into the dark could mean that the overall levels of emissions and climate impacting activities could remain the same, or perhaps even grow. If private markets become a de facto risk repository for the dirtiest assets, then despite the Commission’s best efforts to facilitate relevant climate-related information, investors would remain in the dark about these risks, unable to price these risks effectively or ascertain their true exposure to these risks.”
To address this issue, the letter urges the Commission to take decisive action to limit companies’ ability to hide climate-related risks in private markets and to promote the health and vitality of public markets generally. This can be done in part by reining in the excessive growth of private markets. Accordingly, the SEC should move forward with several regulatory proposals that are currently on the Agency’s agenda, including updating the Accredited Investor definition, making modest changes to the Regulation D framework, and making long overdue changes to Section 12(g) of the Exchange Act. The letter observes that “these updates would stem the growth of private markets and encourage companies to go public, where they would be subject to public disclosure requirements, including disclosure of their climate- and other Environmental, Social, and Governance-related risks.”
Unless the structural problems that allow companies to effectively hide dirty assets in private markets are addressed, “the Commission’s efforts to improve climate disclosures [for public issuers] will, at best, be a partial success, leaving a wide swath of investors and our markets vulnerable to the profound risks of climate change, and compounding the unhealthy imbalance between public and private markets that exists today.”