January 22, 1999 CONGRESSIONAL RECORD — SENATE S929 have comforted and reassured those enlisted in the Coast Guard as a young to an article that appeared in the Jan- who are bound homeward at last. man in 1926. He never married, and uary 8, 1999, edition of The Washington In 1903, Scotch Cap Light Station was served faithfully in the Coast Guard for Post. It is important because it the first light put in place on the out- the next 20 years. And we know that touched on a serious and growing prob- side coast of Alaska. Located at the just before his final transfer to Scotch lem plaguing our nation’s consumers western end of Unimak Island, approxi- Cap, he was quoted saying, ‘‘I hope to and motorists everywhere. Under the mately 425 miles southwest of Anchor- serve at as many Coast Guard ships and title, ‘‘Wrecked Cars, On the Road age, the light marks the entrance to stations as I can before I retire in ten Again,’’ the Post writer detailed how Unimak Pass. Its only contact with the years.’’ We know that in the end, he easy it is for a person to unwittingly outside world was—every three months died doing the job he loved; keeping purchase a rebuilt salvage vehicle com- or so—a visit from a buoytender bring- the light burning for those in peril on pletely unaware of the car’s previous ing supplies. the sea. And we know his life was not damage history. It was, and is, one of the most iso- wasted, nor forgotten—and we cele- At this time Mr. President, I ask lated places imaginable, especially in brate the christening of the USCGC unanimous consent to have printed in the winter, and its hardships were leg- Anthony Petit this 30th day of Janu- the RECORD the January 8, 1999, article endary—one lighthouse keeper froze ary, in the year of our Lord 1999.∑ from The Washington Post. both his hands just trying to go from f The article follows: the lighthouse tower to his quarters [From the Washington Post, Jan. 9, 1999] TRIBUTE TO RON AND BEVERLY during a blizzard. It was so hazardous WRECKED CARS, ON THE ROAD AGAIN—RE- GENDRON OF MANCHESTER ON that no families were allowed, and in PAIRED U.S. TEST VEHICLES POSE SAFETY the early days, lighthouse keepers were THEIR RETIREMENT PROBLEMS FOR UNSUSPECTING OWNERS allowed a full year off for every three ∑ Mr. SMITH of New Hampshire. Mr. (By Cindy Skrzycki) years they spent on the island. President, I rise today to honor Ronald The huge concrete barrier rolled down a In 1940, the original building was re- and Beverly Gendron, two remarkable track at 20 miles an hour and smashed into placed by a brand-new, reinforced-con- people who have been dedicated to the 1996 Mustang GT convertible. The Mus- crete structure built on a bluff near the making a difference in the lives of the tang fishtailed, the windshield shattered and shore, raising the light to 90 feet over less fortunate for over ten years in the the side of the car was heavily damaged. This Mustang was essentially cannon fod- the ocean, and protected by a concrete city of Manchester, New Hampshire. der in a regular series of safety tests con- sea wall. But it wasn’t enough. Ronald and Beverly founded the ducted by the government—in this case, to The disaster began early, on April l, Helping Hands Outreach Center over determine whether the fuel system would 1946. At 1:30 a.m., the crew woke to an ten years ago and have been committed stay intact in an accident. The car passed earthquake lasting about 30 seconds, to helping New Hampshire’s needy ever the National Highway Traffic Safety Admin- strong enough to knock things off since. Ronald and Beverly have now re- istration test and, as usual, the Government shelves. After the quake, the tired from the Helping Hands Outreach Services Administration sold it at an auc- watchstander at a radio-direction-find- Center and are continuing their dedica- tion on July 2, 1997. Stamped at the bottom of the GSA’s sales receipt: ‘‘Salvage Only— ing (RDF) installation—built a little tion to helping others by organizing a Not to be Titled for Highway Use (wrecked/ farther up the hill during World War new outreach center in Laconia, New inoperable).’’ II—radioed the lighthouse crew and Hampshire. So why did David Staber end up tooling was told there was no major damage. Ronald and Beverly Gendron founded around Cadott, Wis., in the Mustang after Then, just before two o’clock in the the Helping Hands Outreach Center of paying $9,500 for it? And why did Daniel morning, a second quake hit. The sec- Manchester in 1986. The Center is dedi- Mencheski of Green Bay, Wis., sink $22,000 ond tremor was expected, but not the cated to assisting in the problems of into a 1995 Chevrolet Tahoe that had been million-ton wall of water—a tsunami— homelessness, hunger, and drug and al- rear-ended by a moving barrier in another government test? that quickly followed it. cohol addictions. You have to go back to Arkansas, where The RDF station logbook reported: Ronald and Beverly have retired from investigators believe a car salesman figured Terrific roaring from ocean heard, fol- Helping Hands of Manchester to em- out how to doctor the bills of sale from the lowed immediately by terrific sea, top bark on a new endeavor. They are orga- GSA and pass the cars off as any other dam- of which rose above cliff and struck nizing a new social service organiza- aged used car. In other words, cars sacrificed station, causing considerable dam- tion in Laconia, New Hampshire. With to the altar of safety by the government are ages.’’ the Gendrons’ help, the Open Arms illegally finding their way back to the The watchstander again used his Outreach Center of Laconia will be a street—where they constitute a safety haz- ard. radio to contact the lighthouse. This ministry dedicated to providing assist- ‘‘All of these cars have gone through some time, there was no reply. This time, he ance to troubled families. Ronald and form of destructive testing and have exten- wrote in the logbook: Light extin- Beverly will work closely with Laconia sive to severe damage. There’s no assurance guished and horn silent.’’ and State officials to offer housing and they could be repaired or meet safety stand- The wave from the second earth- shelter in the Greater Laconia area. ards,’’ said Philip Recht, deputy adminis- quake is now estimated to have been Mr. President, the Gendrons have de- trator of the NHTSA, who called it ‘‘the ulti- over 100 feet high. It completely erased voted their time and their hearts for mate contradiction of our mission and whole the concrete lighthouse, killing the compliance program.’’ over ten years to serve the homeless It’s a problem that happens all too often in five crewmen instantly, and leaving and suffering in the Greater Man- the used car business, in which unsuspecting only wreckage. The bodies of Chief An- chester Area. Ronald and Beverly buyers purchase cars with ‘‘washed’’ titles thony Petit and his crew were gone. served southern New Hampshire’s that remove any warnings that the cars may They washed ashore again a few days needy well. have been in accidents and sustained dam- later, identifiable only by their bridge- I would like to extend my best wishes ages that would make them junk in some work and jewelry. to them as they embark on their new states. Bernard Brown, a Kansas City, Mo., lawyer Chief Anthony Lawrence Petit was endeavor to assist in the lives of the just a man—an ordinary man—but his who specializes in car fraud, said there may needy in the Lakes Region of New be as many as a million vehicles totaled, re- life and death offer a glimpse at the Hampshire. It is people like the built and resold to unsuspecting consumers thousands of ordinary men and women Gendrons that help make New Hamp- every year. who join the Coast Guard and serve shire a special place to live. It is an The NHTSA case also highlights the patch- their fellow citizens in extraordinary honor to represent them in the United work of state laws and requirements for ob- ways. He was born and raised on Michi- States Senate.∑ taining a vehicle title that allow it to be driven and considered safe. gan’s Upper Peninsula, in the town of f Hancock, on a ship canal crossing the ‘‘We have handled cases of persons suffer- ing severe injuries in accidents caused by Keweenaw Peninsula. As a boy, he WRECKED CARS, ON THE ROAD AGAIN improperly rebuilt wrecks. We have had ex- would have known the ships well, along perts examining large numbers of unsafe, re- with the Coast Guard buoy tenders and ∑ Mr. LOTT. Mr. President, I rise built wrecks. We have seen documentation lighthouses that kept them safe. Petit today to call our colleagues attention on tens of thousands of rebuilt, totaled S930 CONGRESSIONAL RECORD — SENATE January 22, 1999 wrecks retitled by states with ‘clean titles’ mented in the official paper trail that fol- A month later, the Wisconsin Department that show nothing of the cars’ salvage his- lowed the cars from the auctions to titling in of Transportation told Staber he was driving tories,’’ Brown said. Wisconsin. a fraudulently titled government test vehi- Overall, since the inception of the crash- ‘‘Our investigation indicates Century Sales cle. test program in the 1970s, NHTSA has dam- fraudulently obtained an Arkansas clean In the wake of the discovery, NHTSA has aged 7,120 vehicles at four test sites. No one title, number 9720521491, on July 24, 1997, by alerted consumers on its World Wide Web has traced the history of all of those cars, submitting a fictitious GSA purchaser’s re- site to vehicles that have been in the crash- but there may be many more back in com- ceipt and authority to release property. The test program for the years 1996 through 1998. merce, posing unknown safety problems for document submitted did not have the lan- Mr. LOTT. In this case, the vehicle their owners. guage that was on the original document,’’ had been totaled as part of a govern- The agency alerted the Department of said a letter that the Wisconsin Department ment crash test. After being demol- of Transportation sent to Staber. Mencheski Transportation’s inspector general’s office, ished by the National Highway Traffic which is handling the case. got a similar letter. Carfax Inc., a computerized vehicle-history The warning on the bottom of the receipt Safety Administration (NHTSA), the service in Fairfax, has been working with saying the car was for salvage only had been vehicle, which the Post called ‘‘cannon NHTSA to identify how many cars and erased. fodder,’’ was sold at an auto auction. It trucks are likely to have been fraudulently Investigators believe Century Auto made was then rebuilt and sold to a used car titled. It reviewed the histories of 494 cars up ‘‘new’’ GSA bills of sale, excluding the buyer in Wisconsin who had no way of that NHTSA crashed from 1995 to 1998, com- warning. At the bottom of those, the com- knowing that he purchased a crash test ing up with the 25 that were repaired, re- pany allegedly stated the make, model year, car. Apparently, as the article sug- titled, and sold to unsuspecting owners. the vehicle identification number and odom- eter reading. A few signatures and dates also gests, he is not alone. There may be Carfax found another 67 that were retitled, thousands of government crashed vehi- but some of those may be ‘‘branded’’ as sal- were altered, the receipts show. vage. That means they may be driven in Still did not return phone calls. His lawyer cles that have been returned to the some states and, in others, they could be in Little Rock had no comment. road for normal highway driving. What apparently happened next was that used only for parts. Scott Fredericks, Carfax Think about that. Thousands of Still or his associates took the ‘‘clean’’ sales director of consumer marketing, said it’s NHTSA crash-tested cars back on receipts to get Arkansas titles for the cars— likely that ‘‘a goodly number [of the 67] are America’s roads and highways. and got them with no problem. back on the road, which is a hazard to con- Roger Duren, of the Arkansas Office of This consumer, like millions of other sumers.’’ Motor Vehicles, said either the GSA bill of used-car purchasers across the country, Legislation stipulates that funds from the sale or another government form known as fell victim to the fraudulent practice GSA auction sales be returned to NHTSA to ‘‘Certificate to Obtain Title to Vehicle,’’ known as ‘‘title washing.’’ In the Wis- help pay for more vehicles for its crash-test which transfers a vehicle from government consin case, a clean title was easily ob- programs, which cost $2.7 million in 1997. ownership to the auction buyer, is accept- The auctions raised about $290,000 in 1996 and tained bearing no indication of the ve- able. hicle’s previous damage history. Since nearly $570,000 in 1997. The title certificate is supposed to be In the case of the Mustang, the GSA sold it the vehicle’s checkered past was con- stamped by GSA ‘‘Not to be Titled for High- cealed, the buyer ended-up paying to Ben Still of Century Auto Sales in Ben- way Use’’ and would have been a flag to state ton, Ark., who paid $5,037 by check. Century examiners. In the case of the Mustang, at thousands of dollars for a structurally Auto, in turn, sold the vehicle to a used car least, the form mistakenly did not carry unsafe car that posed a threat not only and salvage dealer in Hortonville, Wis., with that warning, GSA officials said, and Still or to his well-being, but to the safety of what appeared to be a ‘‘clean’’ Arkansas his associates did not present that form. everyone with whom he shares the title, according to documents acquired by Still—in Arkansas—then told Schmidt he road. The Post. Still’s name is on the GSA official had three cars with collision damage that Mr. President, during the last Con- receipt, according to a copy obtained by the were drivable, Schmidt said. Still advised gress, Senator Wendell Ford (D-Ky.), Post. that they would go fast. He wanted the Investigators said the Wisconsin dealer and I co-authored The National Sal- money in advance, sight unseen. He promised vage Motor Vehicle Protection Act to then sold the car for $9,500 to Staber, who clean Arkansas titles, according to Schmidt. took ownership on Nov. 6, 1997. The Mustang ‘‘As soon as we saw them, we knew they begin closing the dangerous loopholes had only 720 miles on the odometer. were crash-test stuff,’’ said Schmidt. But the that allow unscrupulous rebuilders to Staber, who owns Cadott Auto Recyclers titles didn’t arrive until Schmidt agreed to take advantage of used car consumers. and buys as many as 500 damaged vehicles a sign ‘‘as is’’ forms and accept the cars, The Act would have dramatically im- year, said he spent another $8,000 to repair Schmidt said that when Still wouldn’t take proved public disclosure by requiring and repaint the car, which retailed for about them back, he decided to sell the Mustang that totaled vehicles be designated $28,500. and the Tahoe. ‘‘I know what I’m doing, but this one got ‘‘salvage vehicles.’’ It also required Schmidt sent the Mustang convertible to a that rebuilt salvage vehicles be in- me,’’ said Staber, who is suing the Wisconsin salvage auction in Appleton, Wis., and dealer from whom he bought the car. ‘‘I saw Staber was the high bidder. Schmidt said he spected to ensure that stolen parts the title and I never suspected the fraud. I told Staber everything he knew about the were not used in the repair. Addition- don’t like losing $18,000. I work too hard for Mustang. ‘‘At the time, I didn’t know you ally, ‘‘rebuilt salvage vehicles’’ would my money.’’ couldn’t drive a crash-test car,’’ he said. have a decal permanently affixed to Mencheski’s Tahoe also was bought from a The Tahoe was sold at a private salvage the driver’s side door jamb. The bill GSA auction by the same Arkansas dealer auction to a dealer in Michigan, who took it also contained a provision requiring all for $6,678, according to the receipt from the to a repair shop in Green Bay owned by previous brands on a vehicle to be car- auction sale. It then took a circuitous route Mencheski’s brother-in-law. The brother-in- ried forward to each state retitling the through northern Michigan before reaching law thought the Tahoe would be just the Green Bay, Wis., where Mencheski bought it. four-wheel-drive his sister and her husband vehicle. The vehicle now sits in Mencheski’s drive- were looking for. As my colleagues are aware, the way without a title and is undrivable. The other vehicle bought by Schmidt was a practice of selling rebuilt salvage vehi- Mencheski said it will cost him $400 a month Mustang coupe, which he sold for parts. cles as undamaged used cars costs con- in loan payments for the next six years; he ‘‘So, who should be at fault? I’m just the sumers and the auto industry nearly $4 borrowed against his 401(k) retirement ac- guy in the middle,’’ said Schmidt, who be- billion annually. It is estimated that count to buy a used minivan to replace the lieves the blame lies with ‘‘the people who every year, as many as one million ve- useless sport-utility vehicle. issue the titles.’’ He, too, is suing the dealers who handled As for Still, investigators are looking at hicles are ‘‘totaled,’’ rebuilt, and the Tahoe before he bought it. whether he forged the signature of a federal placed back into used car commerce. In ‘‘I wanted one with a clean title,’’ said official, altered a federal document and gave some states, as many as 70 percent of Mencheski, who is a lineman for Wisconsin false information to the Arkansas Office of all ‘‘totaled’’ vehicles may return to Electric Power Co. ‘‘It had less than 100 Motor Vehicles. the roads after being purchased by miles on it.’’ Staber and NHTSA learned about the Mus- unsuspecting citizens. While most Here’s how the process worked: Over time, tang’s unlawful title when Staber had trans- states require some type of disclosure investigators said, Century Auto made 13 mission problems and took the Mustang to on a vehicle’s title to indicate its his- purchases at GSA auctions. Century Auto Jim Carter Ford in Eau Claire, Wis. Ford then sold three of those cars—Staber’s Mus- Motor Co. checked the vehicle identification tory, the requirements vary from state tang, another Mustang and Mencheski’s number and found it was a NHTSA test vehi- to state, and it is the resulting hodge- Tahoe—to Michael Schmidt, president of cle, which voided the warranty coverage, ac- podge of conflicting state laws that al- Schmidt’s New London Auto Salvage Inc. in cording to documents from the investiga- lows dishonest rebuilders to obtain Hortonville. Those transactions are docu- tion. ‘‘clean’’ titles. January 22, 1999 CONGRESSIONAL RECORD — SENATE S931 When a title has been laundered, all ators, including the distinguished Mi- ORDERS FOR SATURDAY, future purchasers are deprived of im- nority Leader, TOM DASCHLE, Senator JANUARY 23, 1999 portant information alerting them to MCCAIN, Chairman of the Commerce Mr. LOTT. Mr. President, I ask unan- potential problems with the vehicle. Committee, HARRY REID, and other col- imous consent that when the Senate These later buyers may include private leagues from both sides of the aisle. It completes its business today, it stand purchasers or automobile dealers. also garnered broad bipartisan support in adjournment until the hour of 10 Dealers typically purchase used vehi- in the House of Representatives which a.m. on Saturday, January 23, and that cles from auctions and from their cus- approved similar title branding legisla- the Senate then immediately resume tomers as trade-ins, and then sell them tion by a vote of 333 to 72. Even though consideration of the articles of im- to used car consumers. In such cases, peachment. I further ask unanimous both parties are victims. this non-partisan consumer-friendly legislation was widely supported by consent that following Saturday’s pro- Congress acted on this problem by ceedings, the Senate stand in adjourn- adopting legislation in 1992 directing both chambers of Congress, it fell vic- tim to a steady stream of misrepresen- ment until 1 p.m. on Monday to then the creation of a task force to examine resume consideration of the articles of tation. Throughout the legislative the problems associated with salvage impeachment. process in both chambers, a number of vehicles. The task force included a di- The PRESIDING OFFICER. Without verse group of stakeholders who con- significant changes were made to ad- objection, it is so ordered. cluded that the lack of uniformity in dress the concerns of state attorneys f state laws allows unscrupulous rebuild- general and consumer groups. Unfortu- ers to easily wash titles and to subse- nately, even after these changes were PROGRAM quently sell rebuilt vehicles as adopted, the National Highway Traffic Mr. LOTT. Mr. President, I remind undamaged. It also noted that rebuilt Safety Administration, a direct con- vehicles could be a risk to the driving my colleagues that we will continue tributor to this national problem, op- the questions on Saturday beginning at public. Among the task force’s rec- posed this modest but important bill as ommendations was the development of 10. We don’t know exactly how long it a bargaining chip for its own agenda. federal legislation to create uniform will go. It depends on the feeling in the definitions and procedures for titling Mr. President, it is my intention to Senate and whether or not we asked salvage vehicles. reintroduce auto salvage legislation the questions we need to have answers The National Salvage Motor Vehicle during this session. I have given to. I hope, though, it will not exceed 4 Protection Act was based largely on NHTSA the opportunity to review and p.m. on Saturday. I thank my col- the task force’s recommendations. I do comment on the proposed bill. I wel- leagues for their attention and partici- not want the recommendations of a come NHTSA’s input and I am hopeful pation today. federal task force to collect dust. All that the Administration will join with f too often, Congress does not follow us, and the American Association of through with the recommendations of ADJOURNMENT UNTIL 10 A.M. Motor Vehicle Administrators, the ex- TOMORROW commissions it creates. Here is one of perts on titling matters, to foster na- Mr. LOTT. Mr. President, I ask unan- those instances where Congress wants tional uniform titling requirements. to implement them—a majority of both imous consent that the Senate stand in chambers want to enact them. A wide- It is time to put politics aside to pro- adjournment under the previous order. ly diverse bipartisan group. tect the public from the practice of There being no objection, the Senate, This much needed legislation re- title washing and the greed of dishon- at 5:53 p.m., adjourned until Saturday, ceived the formal support of 57 Sen- est rebuilders.∑ January 23, 1999, at 10 a.m.