The Cato Review of Business & Government
The Cato Review of Business & Government
Sarah J. McCarthy is Co-Owner of Amel's Restaurant in Pittsburgh, Pa.
"I haven't seen anything like this since I lived under the Nazi occupation of Greece in World War II," said Nick Manganas, referring to Occupational Safety and Health Administration (OSHA) agents in camouflage and the state troopers and federal marshals accompanying them, videotaping him from the woods above his bridge-painting job.
Manganas Painting Company of Canonsburg, Pennsylvania has been hit with the second largest fine in the history of OSHA, $4 million, for allegedly exposing its workers to lead while sandblasting the Jeremiah Morrow Bridge, the tallest bridge in Ohio, which spans the Little Miami River on Interstate 71 near Cincinnati.
John Manganas Jr., who painted the Fort Pitt, Fort Duquesne, and many other bridges around Pittsburgh, cannot believe that he has been charged by OSHA with "willfully" trying to poison his men. "This is uncalled for," says Manganas, vice president and laborer at the company. "I thought I had done everything that was necessary to make this job safe. Money was no object in protecting my men from lead."
OSHA appeared at his job site on August 2, 1993, the very day that the new safety laws went into effect, and slapped Manganas Co. with a $1.3 million fine. John Manganas Jr. says that fine, combined with another $2.7 million OSHA fine, will be the end of his company if upheld.
Secretary of Labor Robert Reich even went on television to denounce the Manganas Co. on the day it was cited by OSHA. "Manganas is a bad actor," said Reich, "He didn't provide the least bit of respiratory protection for his employees."
John Manganas Jr., who has been working since he was 16 in the business his father founded, was stunned by the fines and by Secretary Reich's comments-especially since Manganas had purchased hundreds of thousands of dollars worth of state-of-the-art safety equipment before beginning work on the bridge. He had been given no warnings, he says, and had no chances to correct any problems before the multi-million dollar fines. "I know the secretary means well," he said, "but I'm not the kind of man to willfully poison my men. In this business your reputation is all you have."
OSHA administrator James A. Dear explains that the agency increased its penalties during a strategy review undertaken after the Clinton administration took office. "OSHA is indeed trying to be more aggressive," says Hank Muranko, the former president of the American Industrial Hygiene Association.
The bridges that Manganas Co. paints have old, lead-based paint that must be sandblasted off before applying any new coatings. Lead, which is hazardous when ingested or inhaled, is a danger to the men doing the work. New environmental and worker safety rules, many coming in the past three years, have caused bridge-painting costs to jump sharply. OSHA's lead standards, for example, cover 32 pages of fine print.
Manganas is caught in a changing regulatory environment and in the middle of the conflicting regulatory goals of OSHA and the Environmental Protection Agency (EPA). New EPA guidelines require an enclosure tent to be placed over bridges during paint removal to protect rivers and streams from falling paint chips and dust.
Manganas says that the health threat to his workers is made worse by the containment enclosures required by the EPA. He thinks that painting a bridge in a tent may be the reason that some of his men were found to have elevated lead levels. Sanford Weiner, a researcher at the Massachusetts Institute of Technology, says, "Enclosure can be very dangerous to the workers, and is not likely to be worth the effort."
The EPA has recently ordered the state of Michigan to remove the old lead paint from the Mackinac Bridge, which spans the peninsulas where Lake Michigan and Lake Huron meet-in spite of the fact that unremoved lead paint on bridges has never been shown to be a health hazard to anyone. The EPA-mandated cleanup will cost Michigan taxpayers $50 million and represents a health threat to the workers who are conducting it.
"In 35 years of sandblasting and repainting, no one has ever documented any harm by paint chips falling from the Mackinac Bridge," reports Burton W. Folsom, a senior fellow at the Mackinac Center for Public Policy in Michigan. The Mackinac Bridge has been sandblasted and repainted every nine years since it was built in 1957. "In fact," Folsom writes in Human Events, "the greater risk may well be from workers inhaling paint particles or having accidents during the enclosure process."
Michigan State Senator Walter North, former chief executive of the Mackinac Bridge Authority, is even more blunt. "It's flirting with death. We have strong Michigan winds that could hit that tent, break it apart and kill someone in a passing car. That's why I said no enclosure when I was in charge."
Manganas and other paint contractors in the Western Pennsylvania chapter of the Painting Contractors of America travelled to Harrisburg in 1989 to discuss what they considered to be health hazards in the EPA's new law mandating containment tents. "What about the guys working inside the tents?" they argued. "That's a different department," replied a state official. An administrator told Manganas that if paint dust were allowed to fall into the river, mosquitoes would die and fish would starve.
Manganas believes that he was singled out for what his mother refers to as "the catastrophe" because of the size of the Jeremiah Morrow Bridge job. It was a $10 million job, the biggest Manganas had ever done, and he believes that OSHA wants to make an example of him to send a message to contractors all over the country. His young daughter cried when she saw her dad on television being accused of "trying to poison the men."
Manganas believes that many members of the International Brotherhood of Painters will support him. Several painters walked off his jobs due to what they considered to be harassment by OSHA. The painters, who make between $22 and $30 per hour plus benefits, became irritated and said they could not concentrate on their work because of OSHA's monitoring. Edward Pence, a member of Local 643 of the International Brotherhood of Painters, says OSHA might be overzealous. "It looks to me like this case is bogus," Pence says.
Manganas has lost several bridge-painting jobs because of his problems with OSHA. This is the first year in 35 years, he says, that his company has lost money. "People tell me that I should get politically active," says Manganas, "but I don't know what to do. I don't even know how to deal with lawyers."
Meanwhile back in Washington, OSHA is being refashioned by a new Congress; many of the new congressmen criticize OSHA as the archetype of an agency gone astray. Freshman Rep. Charles Norwood, a dentist from Georgia, says he was "pushed too far" by OSHA and that he is chomping at the bit to rein in the agency. "They've been sitting in their cubicles for 25 years thinking they knew what was best for every industry in this country," says Representative Norwood. "They don't. And they don't want to know. All they want to know is what they can get away with to collect money from us."
"Most employers would describe OSHA as the Gestapo of the federal government," says Rep. John A. Boehner (R-Ohio), a former plastics salesman. A bumper sticker expressing the feelings of many business owners proclaims, "OSHA is America's KGB: It Turns The American Dream Into A Nightmare."
Freshman Rep. Lindsey Graham (R-S.C.) says he understands, however, that government action was needed to correct past abuses of employees. He tells of growing up in Seneca, where his parents ran the Sanitary Café, a bar outside the gates of a textile plant. Graham saw the workers covered every day with a film of cotton, and noticed fingers missing on many of the workers. "The textile plant placed a greater emphasis on productivity than safety," he says, and he believes that it was necessary for the government to come in and make workplaces safer.
"But by the time Graham ran for Congress last year," reports the Washington Post, "he had long since become convinced the pendulum had swung too far toward federal intervention. He thought the role of the government in regulating workplaces had 'gone from being helpful to being the biggest obstacle dividing the nation by race and by employers and employees."' Representative Graham now sees his mission in Congress as an attempt "to correct the excesses of government from the past generation."
And so the battle goes on in Washington and Pittsburgh, between a small businessman caught in the pendulum swing-John Manganas Jr., accused of willful negligence regarding the health and safety of his men-and an OSHA that some say is out of control.
President Clinton, responding to the growing complaints about OSHA and other regulatory agencies, recently said: "Today we are ordering a government-wide policy. Enforcers will be given the authority to waive up to 100 percent of punitive fines for small businesses so that a person who acts in good faith can put his energy into fixing the problem, not fighting with a regulator. In other words, if they want to spend the fine money fixing the problem, better they should keep it and fix the problem rather than give it to the government. We will stop playing 'gotcha' with decent, honest businesspeople who want to be good citizens. Compliance, not punishment, should be our objective."
John Manganas Jr. carries the president's message with him. He has shown it to OSHA officials. So far his pleas have fallen on deaf ears. "Maybe things are changing," he says, "but maybe too late for me. I may be the first and last case like this."
The key issue is whether there is a less punitive way for regulatory agencies to work with businesses to eliminate workplace hazards, without eliminating the workplaces. Manganas has hired an industrial hygienist. He says that he is willing to cooperate, willing to do whatever it takes to improve the safety of his men. As Regulation goes to press, Manganas is awaiting the verdict on his first trial for the $1.3 million fine, and is about to go to trial for the second fine of $2.7 million. Stay tuned.
Regulation is published four times a year by the Cato Institute. Editorial and business offices are located at 1000 Massachusetts Avenue, N.W., Washington, D.C., 20001. For subscription information, please write to Circulation Department, Cato Institute, same address, or call (202) 842-0200.
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