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PIRG:  Lott Sneaks Dangerous Rebuilt Wreck Bill into Package:  Last Minute Special Deal for Car Dealers, Insurance Industry

Contact:                                               For Immediate Release:

Joan Claybrook, Public Citizen 202 588 1000           October 16, 1998

Clarence Ditlow, Center for Auto Safety 202 328 7700

Jack Gillis Consumer Federation of America 202 737 0766

Ed Mierzwinski U.S. PIRG 202 546 9707

Rosemary Shahan, CARS 530 759 9440

Senate Majority Leader Trent Lott (R-MS) is paying back wealthy campaign contributors by pushing to add a dangerous auto salvage bill to the Omnibus Appropriations package, leading consumer and safety groups said today. 

ãLott's bill, S. 852, was pushed by the car dealers and insurance industry to preempt stronger state laws that inform people if theyâre buying dangerous, patched-up wrecks,ä said Public Citizen President Joan Claybrook. ãThe $1.1 million car dealers gave to the Republican Party in soft money over the last six years has so mesmerized Sen. Lott heâs forgotten heâs for states rights, and against the preemption of state law. The tragedy is that people will be injured or killed in Lottâs Lemons.ä

 S. 852 makes it easier for dealers to sell dangerous, wrecked cars that have been given cosmetic repair jobs to make them look safe. The bill would establish a loophole-riddled, complex national system for labeling re-built wrecks before re-sale, but it exempts older or less-expensive cars, which are often the most dangerous, say the safety groups.

 ãState Farmâs $3 million in lobbying expenses will be paid back many times if it can ram through this bill. It wants to avoid state law enforcement- it recently paid fines to one state (Indiana) of $150,000 and damages of $2,500 to each of up to 1,400 Indiana consumers who had purchased dangerous rebuilt wrecks,ä said Rosemary Shahan, President of Consumers for Auto Reliability and Safety (CARS). Thirty-eight state attorneys general have also urged the defeat this anti- consumer legislation. 

ãThe paltry $2,000 fine in this bill for failing to brand a wrecked car is no deterrent and will just be another cost of doing business,ä said Edmund Mierzwinski, Consumer Program Director of the U.S. Public Interest Research Group (PIRG). ãSen Lott has permitted the criminal penalties which enhance enforcement of the law to be stripped from this bill.ä

 Consumer groups protested in a letter to Members of Congress that the complex bill was being secretly rammed through at the last moment. ãThey should keep these hidden wrecks off the highway by keeping S. 852 out of the Omnibus Bill,ä said Jack Gillis of the Consumer Federation of America.

 ãLottâs bill gives auto dealers a license to steal by selling unsafe rebuilt wrecks as cream puffs,ä said Clarence Ditlow, Director of the Center for Auto Safety.

 An analysis by PIRG and Public Citizen of political contributions and lobbying by car dealers and the State Farm Insurance Company found the following:

PAC and individual contributions from car dealers:
  • 17 of the top 20 Senate recipients of car dealer cash from 1995 through mid-year 1998 co- sponsored S. 852. These Senators received an average of $39,320 in PAC contributions from car dealers, nearly three times the average $13,600 received by all Senate incumbents.
  • From 1995 through mid-year 1998, car dealers showered the incumbent Republican Senators with over $1.1 million in PAC contributions and gave Democratic Senators an additional $246,000.
  • From 1995 through mid-year 1998, car dealer PACs contributed an average of $20,250 to incumbent Republican Senators, nearly four times the average $5,500 car dealers contributed to incumbent Democratic Senators.

Contributions for the first 18 months of this election cycle:

  • Car dealer Republic Industries Inc. contributed $100,550 to the Republican Party in soft money. 
  • JM Family Enterprises, the world's largest Toyota distribution franchise, contributed $100,000 in soft money to the Republican Party, and $28,000 to the Democrats.
  • The auto industry as a whole contributed over $900,000 to Republican Party committees through the first 18 months of this cycle and another $1.87 million in the 1995-1996 cycle.  

Lobbying Expenses: 

  • State Farm spent $3.02 million on lobbying from the beginning of this Congress in January 1997 through June 30, 1998, the most recent data available. The National Auto Dealers Association (NADA) reported spending $607,450 over the same period.

Among other things, the bill will:

  • Exempt all vehicles over six model years old, regardless of how severely damaged they are. Most used cars in America are more than six years old.
  • Pre-empt stronger consumer protections in states that participate in the national titling scheme.
  • Eliminate the criminal penalties for engaging in salvage fraud that were in the original House- passed bill: three years in prison and/or $50,000 in fines. It limits fines to $2,000.
  • Fail to provide ways for victimized consumers to obtain refunds.
  • Dealers have no duty to check whether the vehicle they'e selling you is not a wreck.



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