OSHA too generous in cutting fines, watchdog says

Introduction

The Occupational Safety and Health Administration reduces virtually all proposed fines as an incentive for companies to fix workplace safety problems quickly instead of spending years fighting the agency, but one-third of fine reductions may not have been merited, according to a new watchdog report.

The Labor Department inspector general found that 98 percent of the 142,187 citations issued by OSHA during a two-year period received fine reductions. Out of an original combined total of $523.5 million in fines, OSHA reduced the amount by $351 million as a way to encourage employers to fix problems quickly. But OSHA has failed to evaluate if that $351 million in penalty reductions resulted in safety improvements, it said.

And in cutting fines, the agency did not always consider an employer’s overall safety record because its computer system can’t track violations company-wide. One-fourth of all citations during the period were issued to employers with a history of serious safety violations, the report said. Many of the same employers had similar violations in subsequent OSHA inspections “indicating that correction of workplace hazards may not have been comprehensive and company-wide,” the inspector general said.

“We found as much as $127 million (36 percent) in penalty reductions may not have been appropriately granted,” the watchdog said. Most of that amount came from overly generous cuts in fines for small companies, it said.

FAST FACT: Buzzell Tree Service was initially cited for $152,500 in OSHA fines but paid $12,125 for violating equipment requirements which resulted in an 82-foot pine tree crushing an employee to death, the report said. In a lawsuit, prosecutors accused the New Hampshire company of requiring employees to stand in front of trees that were being felled, holding onto rope, and pulling the tree directly toward them until the tree began to fall.

Other new watchdog reports released by the Government Accountability Office (GAO), various federal Offices of Inspector General (OIG), and other government entities:

FINANCE

• SEC will assess if its current stock market circuit breakers should add a “limit up/limit down” mechanism to prevent another May 6 flash crash in which the stock market fell sharply and recovered in a few minutes (SEC and CFTC staff).
• HUD should consider civil fraud charges against Consumer Credit Counseling Services of the Midwest, which submitted reimbursements for housing counseling sessions that were already paid or did not meet HUD requirements (OIG).
• HUD should take administrative action against the former executive director of Terre Haute, Indiana’s housing authority for poor management of Section 8 housing, and require the authority to reimburse nearly $200,000 for misspent funds (OIG).
• Florida’s Polk County did not follow HUD requirements for a Neighborhood Stabilization Program. It should terminate the program administrator, and either reimburse HUD $4.4 million for acquired properties or transfer them to the county (OIG).

NATIONAL SECURITY

• A computer system dubbed “SPOT” cannot reliably track government contracts, assistance instruments and related personnel in Iraq or Afghanistan for the Pentagon, State Dept. and U.S. AID (GAO).
• Pentagon’s Logistics Civil Augmentation Program was able to account for nearly 97 percent of the 572,928 government property items valued at $2.9 billion as it draws down troops from Iraq (OIG).