Today the Committee is holding its second hearing on formaldehyde in FEMA trailers.

A year ago, the Committee examined how FEMA responded to reports that the families living in government trailers were being exposed to hazardous levels of formaldehyde.

Our hearing revealed that the FEMA field staff had urgently asked the agency to test its trailers so that dangerous trailers could be identified and families protected. But FEMA refused to test. One FEMA lawyer directed: “Do not initiate any testing. … Once you get results and should they indicate some problem, the clock is running on our duty to respond.”

What we learned outraged Americans across the country. FEMA had a duty to protect the families living it its trailers, and it failed them.

I expect today’s hearing will also generate a sense of outrage.

The largest supplier of FEMA trailers by far was a manufacturer named Gulf Stream. In the weeks after Hurricane Katrina struck, Gulf Stream received contracts from FEMA worth more than $500 million to supply over 50,000 trailers for displaced residents of the Gulf Coast.

FEMA failed by ignoring the dangers of formaldehyde and resisted testing. Gulf Stream’s problem is different. The company did test trailers after hearing the first reports of high formaldehyde levels. It found pervasive formaldehyde contamination in its trailers. And it did not tell anyone.

The Committee received thousands of pages of internal documents from Gulf Stream. The documents show that Gulf Stream regarded the high levels of formaldehyde in its trailers as a public relations and legal problem, not a public health threat.

There is a confusing array of formaldehyde standards used by federal agencies. Here are some of the key numbers:

• 10 to 30 parts per billion is the level of formaldehyde found in most homes. Exposure at this level does not cause acute health effects like burning in the eyes, shortness of breath, or nausea.
• 100 parts per billion is the level at which acute health effects begin to appear in healthy adults. CDC, EPA, the Consumer Products Safety Commission, NIOSH, and the World Health Organization all recognize 100 parts per billion as a level that can cause acute adverse health effects. Vulnerable individuals like children, the elderly, and those who are chronically ill can experience effects even below this level.
• 500 parts per billion is the level at which OSHA requires medical monitoring of employees. This is an old standard adopted during the first Bush Administration.
• 750 parts per billion is the maximum workplace exposure level allowed by OSHA. It is also an old standard.
• 900 parts per billion is an EPA standard for hazardous response teams or industrial workers. EPA says that no one should be exposed to more than 900 parts per billion for more than eight hours in a lifetime.

And here’s what Gulf Stream found. Over two years ago, it tested 11 occupied trailers. Every single trailer had levels at or above 100 parts per billion, the level at which acute health effects begin to occur. Four of the trailers had levels above 500 parts per billion, the level at which OSHA requires medical monitoring.

Gulf Stream also tested nearly 40 unoccupied trailers. These were trailers that were sitting in FEMA lots waiting to be given to displaced families. Over half of these trailers had formaldehyde levels above 900 parts per billion, the level that EPA says no one should ever be exposed to more than once in a lifetime. Several had levels over 2,000 parts per billion. One had levels over 4,000 parts per billion.

Gulf Stream never told any family living in its trailers about these test results.

The company did spend a month carefully crafting a letter to FEMA about the test results. The letter told FEMA there was no problem in Gulf Stream trailers. It said: “Our informal testing has indicated that formaldehyde levels of indoor ambient air of occupied trailers fall below … the OSHA standard” of 750 parts per billion.

Gulf Stream did not tell FEMA that all 11 occupied trailers had levels above 100 parts per billion. It did not tell FEMA that four of the 11 occupied trailers had levels above 500 parts per billion. And it did not tell FEMA that over half of the unoccupied trailers had levels far in excess of 750 parts per billion.

Gulf Stream did say that it would share its testing results with FEMA. But of course, FEMA didn’t want to know and apparently never asked for the results.
The press asked Gulf Stream about its formaldehyde levels. Gulf Stream retained an expensive Washington public relations firm, Porter Novelli, and spent days crafting a statement. The statement read: “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.”

Gulf Stream did not tell the media that in March 2006 — a month before Gulf Stream released its statement — an occupant of a Gulf Stream trailer in Louisiana told the company: “There is an odor in my trailer that will not go away. It burns my eyes and I am getting headaches every day. I have tried many things, but nothing seems to work. PLEASE, PLEASE HELP ME!!”

The FEMA contract was lucrative for Gulf Stream. In fact, the company’s top executives saw their compensation double to over $1 million per year in 2005 and 2006.

But revenue growth does not justify the conduct we have found. Gulf Stream had test results that showed its trailers were a public health threat and the company never told the families living in its trailers.

The Committee also examined the conduct of three other trailer manufacturers. One of these companies, Pilgrim, apparently took the FEMA approach. Despite widely publicized reports of dangerous formaldehyde levels in FEMA trailers, Pilgrim never conducted any testing at all.

The other two companies, Forest River and Keystone, did not test any trailers purchased by FEMA. But they did do some limited testing of other trailers and found high levels. In one case, a contractor hired by Forest River reported finding formaldehyde levels of over 1,500 parts per billion in a trailer. The contractor told the company it should “post signs” on the outside of the unit stating “hazardous — do not enter.”

And like Gulf Stream, these manufacturers did not tell the public or FEMA about their test results.

My staff has prepared an analysis of the evidence before the Committee. At the appropriate time, I will ask that the analysis and the documents it cites be made part of the hearing record.

What this hearing will show is that no one was looking out for the interests of the displaced families living in the FEMA trailers. FEMA failed to do its job and trailer manufacturers took advantage of the situation.

Our Committee has held many hearings on waste, fraud, and abuse. In one sense, today’s hearing can be looked at as another example of government procurement gone astray. The taxpayers paid $2 billion for trailers that that now have to be scrapped as junk. But in this case, the health of thousands of vulnerable families was jeopardized.

During today’s hearing, the trailer manufacturers will be asked hard questions. I think they understand this. But I also want them to know that I appreciate their cooperation with the Committee and their willingness to appear voluntarily.