The exploding Firestone tires on Ford vehicles set off significant aftershocks in the media and government. While the car company and the tire manufacturer blamed each other, the Senate Commerce Committee took both companies to task at a high-profile September hearing. Even Republican senators called for increased regulatory power and funding.
One could almost sense the hard-line conservatives' knees jerking: Surely it wouldn't be long before someone tried to shift the tire-scandal focus from big corporations to big government. Sam Kazman, it turned out, was the man for the job.
Kazman is general counsel for the Competitive Enterprise Institute (CEI), a Washington-based think tank. Just as the Senate committee opened its hearings, Kazman weighed in on The Wall Street Journal's editorial page to say the real safety problem was with the National Highway Traffic Safety Administration (NHTSA). He argued that NHTSA's alleged string of "regulatory disasters" proved not that the agency is toothless and underfunded, as consumer activists maintain, but that it shouldn't be trusted with more money and power. "In the private sphere of competition and liability, corporate incompetence usually costs companies dearly," Kazman wrote. "But in the political sphere, regulatory ineptness seems to have the opposite result."
The libertarian Cato Institute also used the Ford-Firestone debacle to argue against better regulation. On The New York Times's op-ed page, Robert A. Levy, a senior fellow at Cato, wrote, "Government regulation is not the only safeguard for consumers against corporate negligence or corruption. The market itself provides a protection: who will now buy Firestone products, unless they can be proved safe?" Never mind that eight years elapsed between the first lawsuits involving Firestone tires on Ford Explorers and the "voluntary" recall--which parent company Bridgestone/Firestone instituted only after NHTSA began its investigation.
CEI and Cato have something in common other than an aversion to regulation: They get funding from automakers. Ford gave $100,000 last year to CEI. And General Motors, Chrysler (now DaimlerChrysler), and five Japanese automakers have contributed to Cato.
Both Cato and CEI deny that their funding sources have anything to do with their choice of issues, and opposition to government regulation is a cornerstone of both institutes. But there needn't be a quid pro quo to make industry support worthwhile. "Ford doesn't throw away its money," says Clarence Ditlow, executive director of the Center for Auto Safety. New safety and environmental regulations--and better enforcement--can impose new costs on automakers, making politics and policy a matter of the bottom line. And some experts believe political contributions can be smart investments. "Any time a company gives money away, from both a theoretical and practical standpoint, it should have some relationship to corporate profitability," says Charles Elson, director of the Center for Corporate Governance at the University of Delaware.
Supporting market-oriented think tanks is just one part of automakers' antiregulatory strategy. Ford and its employees have contributed over $475,000 to candidates and parties in the 2000 election cycle, according to the Center for Responsive Politics. "The auto industry is obviously trying to ensure that any requirements imposed on them minimizes the cost to the industry," says Sally Greenberg, an auto safety expert with Consumers Union. "Unfortunately, safety is too often part of the equation and is compromised as a result."
The Ford Motor Company Fund's annual report for 1999 doesn't mention CEI, which got nearly 3 percent of its annual budget from Ford last year. Corporations are not required to disclose such donations, and nonprofit organizations aren't required to list their donors. Courts give companies wide latitude in connecting their donations to fiduciary duty. A bill sponsored by Representative Paul Gillmor, an Ohio Republican, would require companies to disclose their total charitable contributions and to detail any contributions to charities with connections to company officers. But under that legislation, Ford's donation to CEI--and Chrysler's to Cato, and countless other corporate attempts to influence public policy--could stay secret.
Meanwhile, Sam Kazman's article in the Journal didn't note Ford's backing of his organization. All in all, the automaker's $100,000 contribution looks like money well spent.
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