energy star fraud just another bogus label

8/9/2019 Energy Star Fraud Just Another Bogus Label

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Audit Finds Vulnerability of EnergyStar

ProgramBy MATTHEW L. WALD

WASHINGTON Does a gasoline-powered alarm clock qualify for the EnergyStar label, the

government stamp of approval for an energy-saving product?

Like more than a dozen other bogus products submitted for approval since last June by

Congressional auditors posing as companies, it easily secured the label, according to aCongressional report to be issued Friday. So did an air purifier that was essentially an electric

space heater with a feather duster pasted on top, the Government Accountability Office said.

In a nine-month study, four fictitious companies invented by the accountability office also soughtEnergyStar status for some conventional devices like dehumidifiers and heat pump models that

existed only on paper. The fake companies submitted data indicating that the models consumed20 percent less energy than even the most efficient ones on the market. Yet those applications

were mostly approved without a challenge or even questions, the report said.

Auditors concluded that the EnergyStar program was highly vulnerable to fraud.

Maria Vargas, an official with the Environmental Protection Agency, which runs the program

with the Energy Department, said the approvals did not pose a problem for consumers becausethe products never existed. There was no fraud, Ms. Vargas emphasized. She said she doubted

that many of the 40,000 genuine products with EnergyStar status had been mislabeled.

But in anticipation of the reports release, the Energy Department has issued two statements inrecent days pledging to strengthen the program.

Yet auditors found problems beyond the approval of nonexistent products. They determined thatonce a company registered as an EnergyStar partner, it could download the logo from the

governments Web site and paste it on products for which it had not even requested approval.

The report is only the latest in a series involving the 18-year-old EnergyStar program, which wasset up to guide the public on energy-efficient choices that could both save people money and

help reduce the nations runaway energy consumption.

Watchdogs within the Environment Protection Agency and the Department of Energy havereported in the past that Energy Star has taken some claims of energy efficiency on faith. Yet the

new study suggests that it often does so on remote control.

Congressional auditors said they were told by EnergyStar officials that some of the approvals,

including the one for the gasoline alarm clock, had been issued by an automated system and that

the details had probably never been reviewed by a human being.


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Ms. Vargas added that the automated system that green-lighted the clock was only a preliminaryscreen to evaluate energy figures submitted by manufacturers and to cut out products that did

not qualify. Every product that is certified is reviewed by a human being, she said.

But Senator Susan Collins, Republican of Maine, who requested the accountability office study,

said in an interview, I dont think Id admit that.

If a government employee or contractor examined the comical picture submitted of the spaceheater with a feather duster, or read the description of the gas-powered clock with dimensions

suggesting it was the size of an electric generator and red flags didnt get raised, thats a

really troubling commentary, Ms. Collins said.

She said the ease with which the auditors had fooled the program suggested that consumers and

agencies that rely on the logo were paying extra for products that might not actually save energy.

This program is extraordinarily easy to defraud, she said.

Ms. Collins also noted that the economic stimulus bill included hundreds of millions of dollars intax breaks for people who buy EnergyStar products and that many government agencies were

required to choose EnergyStar products if they were available.

In effect, people are ripped off twice, as consumers and as taxpayers, she said.

Previous reports have suggested that the EnergyStar label is not always a complete or usefulguide to the best consumer choices. Last October, for example, the inspector general of the

E.P.A.said that 100 percent of the computer monitors that carried the EnergyStar logo had

indeed met requirements. But so did 80 percent of the monitors that did not have the logo; the

manufacturers had apparently not sought approval. For computer printers, 95 percent of the ones

with the logo qualified, but so did 60 percent of the ones that did not have the logo.

And some consumer products lacking EnergyStar approval consumed less energy than those that

had it, the audit found.

And the inspector general of the Energy Department reported the same month that EnergyStar

claims were not accurate or verifiable for many products. The program requires manufacturers

of windows and fluorescent lights to get their products certified by independent laboratories. Butcompanies that make refrigerators, washing machines, dishwashers, water heaters and room air-

conditioners, in which efficiency is far more critical because they gobble more energy, need only

check a box on a form to be certified.

The Energy Department has promised to set up a system of independent verification for allproducts. Last week, it said it would begin testing refrigerators, freezers, clothes washers,

dishwashers, water heaters and room air-conditioners. In October 2008, Consumer Reports

magazine reported it had tested refrigerators built by LG of South Korea and found that theywere not nearly as efficient as the maker claimed. LG eventually agreed to modify the machines

already sold to reduce electricity consumption and to reimburse customers. Last week, the

Energy Department said it had found a Samsung refrigerator that did not comply.


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The Energy Department does spot check some items with the EnergyStar logo, but mostly theones that do not use much power in the first place. The department recently announced that

several models ofcompact fluorescent lamps would have to remove the EnergyStar logo because

they were not durable enough. It has conducted spot checks on regulated appliances that do notcarry the logo and determined that some cannot be legally sold because they do not meet

minimum efficiency standards.

The audit to be released Friday did not set out to test any products but focused solely on testing

the certification process by submitting bogus products.

Gene Rodrigues, the director of customer energy efficiency at Southern California Edison,suggested that the EnergyStar label suffered from its appeal to manufacturers. It may be that

their ability to properly manage the brand suffered at the fringes, he said of the programs

overseers.

He argues that a strong federal certification program is vital. What we in the program industry

are looking for is for this to be a wake-up call to whip them into shape, he said.

In another sign that Energy Star is not dotting its is, program officials told the auditors that they

sought to assure honesty by warning corporate applicants on some of its paperwork that

intentionally submitting false information is a crime, under Title 18 of the United States Code.

But it is a crime under Title 19, not 18, and the warning does not appear on all of the relevant

forms, the report said.

energy star fraud just another bogus label

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