NOLA Watch: Gulf Stream Fails the Smell Test

Last Wednesday, on Capitol Hill, at a hearing packed with reporters, photographers, constituents, and industry reps, Representative Peter Welch (D-VT) zeroed in on a key moment in April 2006 that contradicted the testimony of Jim Shea, CEO of Gulf Stream.

Shea's company was paid $500 million to supply the Federal Emergency Management Agency (FEMA) with 50,000 trailers housing displaced persons in the wake of Hurricane Katrina. Residents in some trailers would later complain of health problems including bloody noses, burning eyes, acute respiratory illnesses, and even miscarriages -- as Amanda Spake reported in The Nation months before most in the mainstream media paid attention to this scandal. Shea testified that his company did nothing to hide any pertinent information about health issues associated with Gulf Stream trailers.

Yet in April 2006, as CNN prepared to air a story on elevated formaldehyde levels found in the trailers, Gulf Stream sent a statement to the network which Rep. Welch read aloud at the hearing: "We are not aware of any complaints of illness from our many customers of... travel trailers over the years, including travel trailers provided under our contracts with FEMA." Rep. Welch asked Shea, "Did your company make that statement?"

"We were speaking retrospectively," Shea said awkwardly, "prior to the March issue -- when [the problems] started."

Rep. Welch continued: "On March 20, 2006... you received a statement -- this was before you issued the 'no complaint' statement -- and I'll quote, 'There is an odor in my trailer that will not go away. It burns my eyes and I am getting headaches everyday. I've tried many things, but nothing seems to work. Please, please, please, help me'.... How do you square your statement to CNN -- 'we are not aware of any complaints of illness' made in April 2006 -- with a statement from a customer [in March] that was a complaint?... Had you received any complaints before April 2006 when you issued your statement to CNN that you had had no complaints?"

Shea paused a good five seconds before responding. "The complaints related to this matter that we received were two," he said.

"So the answer to my question is yes, you had received complaints prior to April, but you told CNN you had no complaints, correct?"

"And we were speaking of our history with FEMA as a program, sir," Shea said.

"Sir, that's a justification for saying something that was untrue," Rep. Welch said.

It was a bizarre hearing in that the Titans of deregulation -- the Republicans -- were arguing that a clear formaldehyde standard for trailers needed to be established in order for corporations to be held accountable. No one disagreed with the need for a clearer standard. In fact, Chairman Henry Waxman explained that a similar hearing was held in 1981 and members of Congress told FEMA, Housing and Urban Development, the Consumer Product Safety Commission (CPSC), and the Occupational Safety and Health Administration (OSHA) that a standard for formaldehyde levels in trailers was needed. (I can't imagine that Republicans were leading the charge on that.) "So I agree with my Republican colleagues when they say this is a failure of government. Government should have set standards.... But I also think this is a failure of industry," Rep. Waxman told four CEOs of trailer manufacturing companies. "Because some of you did testing and you found that there was a problem and that was the end of it. Several of you didn't do any tests at all, even though reports were coming out about high formaldehyde levels in trailers causing people to be sick."

Rep. Waxman pointed to Gulf Stream's testing of 11 occupied trailers over two years ago. Each one had levels of formaldehyde greater than 100 parts per billion, "the level at which acute health effects begin to appear in healthy adults," according to the Centers for Disease Control (CDC), Environmental Protection Agency, SPSC, National Institute for Occupational Safety and Health, and the World Health Organization. Four of the trailers had levels above 500 parts per billion, "the level at which OSHA requires medical monitoring of employees." In testing nearly 40 unoccupied trailers awaiting allotment to displaced families, Gulf Stream found that formaldehyde levels in half of them were above 900 parts per billion, "the level that EPA says no one should be exposed to for more than eight hours in a lifetime." Another company that built 5,000 units for FEMA -- Forest River -- hired a contractor to test its unoccupied trailers. The contractor advised that warning signs be placed outside the trailers reading, "Hazardous -- do not enter."

Rep. Waxman said, "Gulf Stream never told any family living in its trailers about [its] test results. The company did spend a month carefully crafting a letter to FEMA about the test results." Gulf Stream wrote that "the formaldehyde levels [in the eleven] occupied trailers fall below the OSHA standard" of 750 parts per billion -- the maximum allowable workplace exposure. It failed to mention the testing on the unoccupied trailers or describe the measured formaldehyde levels in the 11 occupied trailers that were cause for concern.

Dr. Michael McGeehin, Director of Environmental Hazards and Health Effects at the CDC, testified that a CDC study released in February concluded that all of the residents still living in 15,000 trailers -- down from 143,000 -- should be moved by FEMA due to formaldehyde exposure.

Rep. Waxman said, "The taxpayers paid $2 billion for trailers that now have to be scrapped as junk." He asked the four CEOs whether the government should get some of its money back from the companies? None of them offered support for that notion -- three remained silent, while Shea said that the CDC's results could have been impacted by residents' activities such as smoking or cooking fish. (In contrast, the CDC concluded that the formaldehyde levels were probably higher during hotter months and when the trailers were newer than those measured in the February report. McGeehin also disagreed with Shea that cooking fish would raise formaldehyde levels.)

While Republicans were careful to express support for people who became sick as a result of living in the trailers, they were far more aggressive in defending the manufacturers. Representative Darrell Issa (R-CA) mocked the proceedings, "Just full disclosure... in the room we're in right now we're at 80 parts per billion... if you need to leave, let us know...." Representative Dan Burton (R-IN) said, "I haven't seen any evidence that they violated any rule and haven't done their job to perfection. I'm kind of disappointed that we have you four here, beating up on you."

Despite Republican efforts to free the trail manufacturers from any responsibility, it was Representative Elijah Cummings who perhaps best summarized the failure of both industry and government to protect public health: "Our country is becoming mired in a culture of mediocrity, and a failure to be empathetic to human beings. So we can talk about standards here, there, and everywhere. But the question still remains: do we get what we bargain for, or are we getting something that does harm?"

While the CDC is now convening the relevant agencies to address the standards issue, and a federal class-action lawsuit against the trailer manufacturers and FEMA is pending, displaced people in 15,000 trailers still are in need of more permanent, safe homes.

With reporting from Capitol Hill by Greg Kaufmann, a freelance writer residing in his disenfranchised hometown of Washington, DC.

Katrina vanden Heuvel is Editor and Publisher of The Nation.

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