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Mr. BARNARD. Do you have any further questions, Mr. Horton?
Mr. HORTON. No.
Mr. BARNARD. Mr. Erdreich?
Mr. ERDREICH. No.

Mr. HORTON. I would like to join you in thanking the GAO. I know this report took a lot of time. I would like to commend you and your staff, Mr. Wessinger, for the report you made.

Mr. BARNARD. One final question, Mr. Wessinger.

If there had been no notice to this country by Canada, as there was no alerting to us by the Austrians, your findings are that there is no process in place that would have detected the DEG levels in imported wine?

Mr. WESSINGER. Unfortunately, I think that is the case, Mr. Barnard. As you know, we point out in our report there were indications DEG may have been in wines as early as 1979.

Mr. BARNARD. What about methanol? The same is true as far as methanol is concerned?

Mr. WESSINGER. I think it possibly could be true there. Until such time as someone becomes ill over the substance

Mr. DONOHUE. I would like to expand on that a little bit. According to BATF, they test for alcohol content. Certain of the tests, according to their spokesman, would have picked it up earlier if it had been in those wines tested.

The big question there is: Would they have tested the right wines? Had they tested a wine with methanol, they would have picked it up. There is a certain level above which methanol is viewed as a violation.

Mr. HORTON. Mr. Chairman, I do have one more question to ask.

You will recall the sequence: The GAO report was finished, I think, March 4. I had 30 days before releasing it. It was released shortly after that. Just coincidentally, I set the press conference for releasing it, and then a day or two before that press conference, the Italian wine story broke.

How did BATF's response to the methanol-contaminated Italian wines compare to and differ from

the procedures and policies it followed for the DEG-contaminated wine?

Mr. DONOHUE. The action they took there was somewhat similar with the Austrian wine. They stopped all imports, had everything tested, and they sent out notices.

They took better action on the methanol than they did over the German and Italian wines with the DEG.

What the problem we see is that they should have defined what the universe is; they should have concentrated their efforts on the Italian importers, like we pointed out in Mr. Wessinger's testimony.

It only took one of our staff 3 hours to determine which importers and which wines were Austrian involved in the DEG case. With the Italians, there would have been more, because a larger quantity was involved. Had they concentrated on that, we think they would have done a better job. However, they took better action than they previously had taken.

Mr. HORTON. Thank you. Mr. BARNARD. Thank you all for being with us today. I would like to request that, if possible, you stay in the audience for the remainder of the testimony, because there may be some followup questions that we will need to ask after the testimony from the BATF and FDA. Thank you.

Our next witness this afternoon will be William T. Drake, Deputy Director of the Bureau of Alcohol, Tobacco and Firearms. We would be delighted to have your associates join you, Mr. Drake.

STATEMENT OF WILLIAM T. DRAKE, DEPUTY DIRECTOR, BUREAU

OF ALCOHOL, TOBACCO AND FIREARMS, DEPARTMENT OF THE TREASURY, ACCOMPANIED BY JOHN MANFREDA, CHIEF COUN. SEL, ALCOHOL AND TOBACCO, AND BRUCE WEININGER, CHIEF, INDUSTRY COMPLIANCE DIVISION

Mr. DRAKE. With me is John Manfreda, chief counsel, Alcohol and Tobacco; and on my left, Bruce Weininger, chief of the Industry Compliance Division.

Mr. BARNARD. Mr. Drake, without objection your entire testimony will be included in the record. If you care to summarize, that will be fine. We leave that up to you.

Mr. DRAKE. I would like to summarize, Mr. Chairman.

I welcome the subcommittee's invitation to discuss the role of the Bureau of Alcohol, Tobacco and Firearms in dealing with diethylene glycol-contaminated imported wines.

The subcommittee has copies of my testimony for the record, which includes a chronology of events and actions taken by ATF to meet the problems created by the discovery of diethylene glycol in certain imported wines.

I would like to take the next few moments to highlight the main issues, and to give this committee an insight into our thinking processes and why we acted as we did.

First, no one will be any tougher on second-guessing our decisions and actions than we at ATF. During the past 6 months, I, along with my staff, have held repeated brain-storming sessions over each step of our entire operation as it related to diethylene glycol.

It is fair to say that given the same set of circumstances, the same timeframe and the same resources, we would make those same decisions again.

Perhaps we did not keep detailed records, and perhaps this lack of perfection in recordkeeping has led to some of the misunderstandings which seem to have arisen.

I believe, however, that the key to a successful operation is not in leaving a long, detailed paper trail, but in keeping one's priorities straight.

I am extremely proud of my staff and their work in this situation. With no complaints, they worked long, tough hours and weekends for several weeks because there was a job to be done. More over, I know our priorities were right on target.

We were faced with an immediate problem in which we had to act quickly. Our first priority was to get the contaminated wines off the shelves because they posed a potential threat to the health and safety of the American consumer.

To my knowledge, there has not been one confirmed report of any death or illness in the United States resulting from the DEGcontaminated wines. To the extent that one can judge from final results, I believe we succeeded in protecting the consumer.

When we first learned that a scandal was brewing in the Austrian wine industry concerning DEG, we took two immediate steps: We contacted the Austrian and German Governments for information on bottlers, producers and brand names of the contaminated wines; and we immediately started testing for DEG in not only Austrian wines but a number of other imported and American wines.

We also contacted the Food and Drug Administration who told us that DEG at high levels posed a more immediate health threat, but there could be a cumulative effect on the kidney and liver at relatively low levels. The best scientific information we had available reflects that there is no tolerable level for DEG.

This led us to what I believe is the only rational conclusion: That the presence of any amount of DEG in wine posed a potential health threat. Every decision made, and every step taken flowed from our basic priority of protecting the American consumer. It has been stated publicly that ATF was not able to assure

that every contaminated bottle of wine was removed from sale. Even unlimited staff and resources could not have given that assurance.

There is no practical way to guarantee that all of any contaminated product is removed from the shelves of all of the millions of stores in the country.

We identified 250 importers who had approved labels for importing Austrian wine, and gave that information to our regional offices, who in turn notified the importers. We believed, and still be lieve, that the important issue was to get the contaminated wine off the shelves as soon as possible.

We made a decision that it was faster, more efficient and more cost-effective to concentrate on the 250 known importers rather than to contact each one of the more than 12,000 wholesalers and importers who might at one time or another have sold imported Austrian wine. By identifying all importers of Austrian wines, we were certain that we would impact every Austrian wine on the market.

We did not rely solely on our own testing, or that of the whole salers and importers to get the message across. We have excellent cooperative relationships with the State liquor boards across the country. As we determined which brands were contaminated, each of the 18 control States were informed and took appropriate action to pull the wines from the shelves. We also kept in constant contact with the noncontrol States who worked closely with us in removing the wines from the retail outlets.

Between July 18, 1985, and April 29, 1986, we issued a series of 15 press releases listing the wines as labeled, warning the public against drinking the wines and suggesting they either return the wines to the retailer or dispose of them. The releases generated a substantial amount of press coverage which resulted in, by a conservative estimate, over 4,000 calls from the press and the public.

There were 74 ATF-diethylene glycol stories carried on the AP and UPI wires, the Washington Post, the New York Times, and five other major newspapers, in addition to hundreds of additional stories carried by local press, TV and radio.

There has been some concern expressed that we did not "properly differentiate" between wines containing "high" levels of DEG and those which contained "lower" or "trace" amounts, and that we did not “properly allocate" our resources to react to these different levels.

From the very beginning, based on the knowledge we had available, DEG was identified as a toxic chemical, and was not acceptable at any level as an additive to any product intended for human consumption.

Based on that information, any level of DEG found in Austrian wine was totally and equally unacceptable, and our reaction to its discovery was swift and consistent.

In addition, it should be recognized that during this period we did not know the size of the universe of contamination. We did not know whether we would find 1 or 1,000 different brands of contaminated wines. We did not know how many brands, 1 or 1,000, we would find that could be considered high.

In other words, we made judgments and decisions based on the information we had available at that exact time. We did not have the luxury that hindsight allows in analyzing judgments and decisions from a historical perspective.

The last issue I would like to address is ATF's followup action to verify that the contaminated wine had been removed from the market. It is true that we did not check each and every importer and wholesaler. Those actions would have required immense resources that are not at our disposal. We did monitor the recalls. We did hundreds of onsite inspections. We did receive daily reports that flowed into headquarters from our regional and field offices who were on the scene, every day.

One additional note: All of the brainstorming and second-guessing of our own actions during the diethylene glycol problem led us to take almost identical steps during the more recent methanol situation. Apart from fine-tuning some of the operational steps and, of course, apart from making certain this time that we do have a readily available and detailed paper trail, we have taken basically the same steps with the potentially far more dangerous problem of methanol. If you were to ask me, would we do it again, we most certainly would.

I am proud of our staff and gratified by the tremendous support of the Food and Drug Administration and numerous State agencies in this successful consumer protection initiative.

Do we have enough resources? Are the laws which we enforce perfect? I suspect that you gentlemen have your own thoughts on these subjects. At the bottom line, however, I believe that we have a consumer protection system that is fundamentally sound.

I will be happy to answer any questions you may have. [The prepared statement of Mr. Drake follows:)

Commerce, Consumer and Monetary Affairs Subcommittee

of the
Committee on Government Operations

Testimony
by William T. Drake

Deputy Director
Bureau of Alcohol, Tobacco and Firearms

Department of Treasury

May 28, 1986

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