Thursday, April 22, 2021

AGH files report with Consumer Product Safety Commission on alleged fraud

The Alliance for Green Heat filed a report urging the Consumer Product Safety Commission (CPSC) to investigate whether a recall or some other action is warranted for a Log Wood Stove made by US Stove company.

A whistleblower provided information to the EPA Office of Enforcement alleging serious fraud and violations of EPA regulations, some of which could be dangerous to consumers.  AGH reported on those allegations last week, which include alleged fraudulent labelling of stoves and potential safety hazards from stoves allegedly flood-damaged but sold as new. 

 

AGH urges anyone who bought a Log Wood Stove in 2019 or 2020 (model 1269E) to check the permanent label on the back of the stove to determine if they bought a 2015 compliant stove or a 2020 compliant one.  If you bought a 2015 compliant unit after June 15, 2020, or the product was advertised as 2020 compliant when it was only 2015 compliant, AGH urges you to file a report with the Consumer Product Safety Commission and to contact Rafael Sanchez at the EPA Office of Enforcement at Sanchez.Rafael@epa.gov or (202) 564-7028.

 

If the report filed by AGH meets the minimum requirements for publication on SaferProducts.gov, CPSC will send it to the manufacturer within 5 business days.  Reports that meet the minimum requirements for publication should be posted on SaferProducts.gov 10 business days after CPSC sends them to the manufacturer.


The CPSC confirmed that on April 23, 2021, they sent Report No. 20210421-C5A48-2147364589 to the manufacturer of the product described in AGH's Report. AGH consented to have its contact information provided to the manufacturer, so they now can contact AGH directly about the contents of the report, if they wish to clear up any of the allegations.  To date, they have flatly denied all of the allegations.

 

After the whistleblower began to alert consumers about the alleged fraud and dangers, US Stove obtained a Temporary Restraining Order (TRO) against the whistleblower, requiring them to refrain from accessing, publishing, disclosing, or otherwise disseminating USSC’s confidential information to any third party. There is a court hearing on the 26th during which US Stove will likely have to show the whistleblower’s accusations are false for it to prevail.  Otherwise, the whistleblower can continue to warn consumers about the alleged fraudulent activities and safety issues.  Normally in whistleblower cases, a TRO would be issued against the employer, not the whistleblower. However, TROs also have been used to silence a critic if they are spreading false information that damages the company.  

If the whistleblower’s allegations are true, it could lead to serious fines by the EPA and trigger a recall of certain products.  There have been a number stove recalls in the past several decades, the largest of which was for another stove made by US Stove.  

Companies can cooperate with, or impede, investigations by the EPA and CPSC, and there are different implications in each case.  The CPSC made headline news recently when it took the highly unusual step of issuing an administrative subpoena to Peleton, a company that makes home workout products, after Peleton refused to issue a voluntarily recall a treadmill and clashed with the agency over the wording of a proposed safety notice. The Washington Post reported that the next day, the CPSC issued a public warning calling the treadmill dangerous and telling people with small children or pets to stop using it. 


The US 1269e model in question is only one of many US Stove models and its the only one to be approved, pending review by a rigorous state process that was conducted by the State of Alaska.  Alaska reviewed both the 2015 compliant version, the 1269e, as well as the 2020 compliant one, the US 1269.  The Alaska review says that for the 1269e there were two test reports for the same model, and one passed and one didn't. failed the emissions certification test and then retested and passed, a unique issue and potentially an illegal one.   The Alaska review would not be able to detect whether a unit is being manufactured prior to its certification or sold as 2020 compliant, when it was actually the 2015 compliant version, as the 1269E was alleged to have been.  The EPA has the authority to revoke the certification of the US 1269e, based on evidence in their possession, prior to determining whether there is cause to issue a fine.


The EPA Office of Enforcement handles a variety of enforcement actions, but larger cases with potentially higher penalties are turned over to the Environment and Natural Resources Division of the Department of Justice, as this case reportedly has been.  On April 26, US Stove is expected to ask for a longer-term injunction against the whistleblower for sharing confidential information, but this would not prevent the whistleblower from cooperating with the Department of Justice’s ongoing investigation or a potential investigation from the Consumer Product Safety Board. 

Thursday, April 8, 2021

Whistleblower alleges wood stove manufacturer defrauded retailers and customers

EPA says they started investigation into case

April 9, 2021 - US Stove Co., a Tennessee-based company that manufactures most of their stoves in China has been accused by a former employee of fraudulent activity, which he also reported to the EPA enforcement division.  The employee who wishes to remain anonymous, alleged the company told retailers that a popular stove model complied with 2020 EPA emission standards. If those allegations are confirmed, thousands of people may have purchased far dirtier stoves than they thought they were buying and lead to massive fines for the company.

Breaking update: April 16:  US Stove Co. got a temporary Restraining Order against the whistleblower requiring him to refrain from accessing, publishing, disclosing, or otherwise disseminating USSC’s confidential information to any third party. The Temporary Restraining Order also requires him to return all USSC documents containing Confidential Information within 48 hours of receipt of the Temporary Restraining Order.  There will be a hearing on April 26 in a Tennessee Court for a Temporary Injunction and "other appropriate relief."  As the EPA investigation gears up, US Stove could sue the whistleblower for damages, requiring substantial legal fees on both sides. 

The old and new model of the 1269
look exactly alike and has a similar
model number. 

The whistleblower says that more than 4,000 model 1269E stoves were sold to Tractor Supply Company during 2019 and 2020. According to the whistleblower, US Stove Co. told Tractor Supply that the stoves complied with the 2020 emission standards and about 900 were sold after the May 15, 2020 deadline when all stoves had to be 2020 compliant.  The 1269E emitted 4.2 grams of particulates per hour based on EPA approved certification testing.  The newer US 1269E was tested at 1.8 grams an hour.

 

A representative of US Stove Co. vigorously denied these allegations, saying that “U.S. Stove has never sold a non-compliant product to Tractor Supply or ‘other outlets’. Further, U.S. Stove has never misrepresented the 1269E model as a 2020-compliant model, and further has never shipped 1269Es as if they were US1269Es.”


August Jones, President on left, with
Richard Rogers, Chairman of the
Board in their warehouse in 2019.

US Stove may be the oldest operating stove manufacturer in the US and is still owned and operated by the Rogers family.  The company was original based in upstate New York, and used extensive prison labor in its operations.  When that practice was banned in 1886, the company moved south, in part to avoid unionized labor.  But after a 1927 union fight, the company closed for a period until S. L. Rogers incorporated US Stove Corporation in 1930.  Today, Richard Rogers is the Chairman of the Board and his nephew, August Jones, is the President.  

Documents and emails viewed by AGH tell a different story, indicating that US Stove Co. was shipping 1269Es and telling Tractor Supply they were US1269Es, which were 2020 compliant.  EPA regulations stipulate that you cannot market or sell a stove model until the EPA has issued a certificate of compliance.  Polytest, the test lab that did the emission testing for the US1269E, completed their report on August 26, 2019.  Yet, documents appear to show that between June and September of 2019, US Stove Co. purchased 4,144 US 1269E’s from Jinhua Jason and Ningbo Precise, two factories in China.  The Certificate of Conformity was issued by PFS-TECO, the third-party reviewer to John Vorhees, a senior engineer at US Stove Co. Tractor Supply issued purchase orders for the US1269E’s in March of 2019. The national hardware chain reportedly received the stoves and paid the invoices between June and August 2019.   At issue is when US Stove released the first model plate for the US1269E.  There is no allegation of wrongdoing by Polytest lab or PFS-TECO.

The permanent metal name plates on
the back of the 1269Es are made and
affixed in China, and stoves sent
directly to Tractor Supply.

In February 2020, the Alliance for Green Heat (AGH) was contacted by a consumer who thought he was buying the 2020 compliant US1269E, but when he opened the box, it was the 1269E. He asked “why the box says one thing but the identity on the stove says something different. …  I checked other stores and they have the same small wood stoves with the same descrepancy.[sic]  I called the company about this situation and the young girl gave me the impression there is no difference.

 

According to the former US Stove Co. employee, Tractor Supply may not have known that the description of the stove on the box did not match the EPA nameplate on the back of the stove, or that the devices “were actually twice as dirty and not what the customers were expecting.”  Mary Winn Pilkington, Tractor Supply’s communications officer confirmed that the company was investigating this issue but did not yet have any comment.


In response to a request for a statement by AGH, the EPA said that "you may be assured we take allegations of fraud very seriously and are working to address the concerns you have raised."  The EPA's statement thanked AGH for providing them information about this case, however the information was sent by whistleblower to EPA office of Enforcement before AGH received it.  (See full statement below)


One outlet is now selling the 1269
for $428, possibly making it the 
cheapest EPA certified stove on
the market, a key reason that 
explains the high sales volumes
US Stove Company is well-known within the industry for selling low-cost wood stoves through hardware chain stores and online and experts believe it is probably the highest volume seller of stoves in North America, although actual sales figures are kept secret.  Both the older version of the 1269 and the 2020 compliant version sell for under $600 and it is not clear how much the company had to adjust the design to meet the stricter emissions requirements.
 

April 2020 flood damage US Stove facilities


In April of 2020, a severe storm brought heavy flooding to South Pittsburg, damaging hundreds of stoves and stove parts at US Stove Co.  The whistleblower also alleges that products US Stove claimed to be damaged by the flood in April was put back into stock in September and sold as new. This product was detailed as “scrapped” to the insurance adjustor.

 

The whistleblower also contacted Tractor Supply to alert them of potentially dangerous products that they may have sold.  “I'm having a hard time sleeping knowing the risk of fire, injury or even death could be caused by this water damaged product in the homes of families,” he told the buyer at Tractor Supply.

 

A company representative said in an email that “U.S. Stove was damaged by a flood in one of its warehouses. U.S. Stove worked with its insurance company to recover its damages. U.S. Stove did not sell flood-damaged stoves as new.”


Third party certifiers
are supposed to double check
the testing process, but have
no role in reviewing 
manufacturing or shipping
It is unclear whether this could lead to a recall of stoves, if the allegations are confirmed.  For stoves that may have been improperly labelled as 2020 compliant, Tractor Supply may have an obligation to notify them and offer a refund.  Previously, the largest recall of stoves in the past two decades also involved a U.S. Stove product when 4,400 window mounted pellet stoves were recalled.  

 

The Alliance for Green Heat has often contacted US Stove over the past 10 years after finding scores of non-compliant US Stove products on the market as well as examples of misleading advertising.  In 2012, US Stove products and those of other companies appeared to mislead consumers about their certification status.

 

In June of 2017, AGH found many non-compliant furnaces made by US Stove on the market.  AGH contacted nine of the retailers, and of those, six stopped advertising those boilers within 2 weeks. Others continued advertising uncertified wood furnaces after being alerted they were illegal to sell, including Sears’ online marketplace (orders fulfilled by the third party 123Stoves, Inc.), Homeclick, and HVAC direct. HVAC Direct continued to sell uncertified furnaces until they stopped in March, 2021 after pressure from a facebook campaign.  The EPA was aware of all these instances of non-compliant furnace sales but said they cannot discuss any enforcement actions.  There is little indication that they took any enforcement action in these cases.

 

An advertisement for a non-compliant
 US Stove boiler being sold in April
2021. The seller has two unused ones.
Today, AGH found brand new non-compliant US Stove furnaces (model 1660EFE) being sold on facebook  by a private individual in Jasper, Tennessee. This is a town adjacent to South Pittsburg where US Stove is headquartered and a number of US Stove employees and executives live.

The allegations from this senior executive of a stove manufacturer may represent the first time an industry insider has publicly blown the whistle in what is often seen as a tight-knit community where colleagues protect one another.  And it appears to be a coincidence that these allegations are coming out on the heels of scathing reports from NESCAUM and the State of Alaska that EPA’s enforcement of wood heater regulations are “dysfunctional.”  These reports led to the EPA announcing an extraordinary shake-up of its wood heater enforcement program.  This instance of alleged fraud may become one of the first test cases of how the EPA is ramping up enforcement of its wood heater regulations.

Tractor Supply was still selling the 1269
earlier in 2021 but they appear to have 
removed it from their website.

 

This whistleblower says that after raising his concerns internally, he was forced out of the company.  Now, he says he is worried about retaliation and how he can “resume support for my family in the future.”


Statement by the EPA's Office of Media Relations

April 8, 2021


Thank you very much for contacting the Environmental Protection Agency (EPA) regarding potential fraud at U.S. Stove.  We appreciate the efforts you have made to date in collecting information and your willingness to share it with us. We are very much interested in understanding better the facts surrounding this case and want to assure you that EPA is committed to reviewing the information you have provided as quickly as possible.  As an open enforcement action, EPA does not comment on the specifics involved, but you may be assured we take allegations of fraud very seriously and are working to address the concerns you have raised. 

 

We are aware of the findings from the NESCAUM report issued in March. EPA is committed to ensuring that wood stoves and other wood burning devices comply with Clean Air Act standards to reduce health-harming pollution.  In light of information from states and other stakeholders provided in late 2020 and early 2021, the agency is taking a number of actions to address concerns about the certification of wood stoves, including the methods and manner in which wood stoves are being tested for compliance with the 2015 New Source Performance Standards under the Clean Air Act.

 

Numerous brand new, uncertified units,
such as the 1660EFE furnace, are 
frequently for sale by private owners 
near the US Stove factory.
These actions will take time and continued engagement with stakeholders. Given the concerns raised, EPA is carefully reviewing both current and new Certifications of Compliance and will take actions as appropriate.


Postscript: June 8, 2021. US Stove furnaces that do not meet the current, 2020 EPA certification standards continue to pop up for sale around the US Stove factory, that spans the Tennessee/Alabama border. Even while US Stove Company is under scrutiny for various alleged illegal sales, it appears that they may still be trying to get rid of excess inventory of the 1660EFE model furnace. The EPA knows about this but they still apparently do not have the staffing or resources to do anything about it. See many more images and detailers about sellers on our Facebook page.


 

 

Tuesday, April 6, 2021

EPA announces extraordinary overhaul of wood stove certification program

Confidence in wood stove testing program shaken in wake of Alaska and NESCAUM exposé

Richard Wayland leads the nation’s
technical air quality management
programs


On Tuesday, April 5, the EPA published letters that they sent to wood stove testing labs, announcing they were embarking on a historic review of certification paperwork, similar to the examination that the state of Alaska is conducting.

 

The publication of the letters may have been prompted by a freedom of information request from a reporter, who got access to the letters hours before the EPA published them.

 

The overhaul could end up costing stove manufacturers large sums of money and the revocation of some models' certification.  This is sending reverberations throughout the manufacturing community of wood and pellet heating appliances, which has never faced such scrutiny and oversight since wood stoves were first required to be certified in 1988.

 

The EPA announcement is also derailing, at least temporarily, a move by members of Congress to refile legislation that would establish a national wood stove change out program heralded by industry as the best way to combat excessive wood smoke.  The EPA emphasized that local and state change out programs rely on EPA certification documents to help determine which stoves can achieve the best emission reductions. 

 

The immediate actions by the EPA include using a template similar to the one used by the state of Alaska to see if their review of deficiencies in paperwork matches the the state's review.  This indicates, as early reports confirm, that the EPA may not agree with some of the categories of deficiencies Alaska thought were significant.

 

The EPA is also announcing that starting immediately, they will be conducting far more intensive reviews of new certifications.  This is believed to also include the routine retesting waivers.  Under the current system, once a stove gets certified, it receives a 5-year certificate that can be renewed, without any additional testing, over and over.  While this benefits manufacturers who, prior to 2015, were still marketing stoves certified in the 1990s, it did not incentivize making even small improvements in the cleanliness or efficiency of the unit every 5 years.  

 

The letters to the EPA approved stove testing labs also put the labs under notice that they could lose their approved status if they do not improve their standard operating procedures. It is unclear why half of EPA approved labs and third-party certifiers appear to have expired approvals.  The newest third-party certifier, Guardian Fire Testing Laboratories, is based in New York, the state that has been providing most of the funding to NESCAUM through its energy department, NYSERDA.

List of EPA approved labs and 3rd
party certifiers who received letters

 

Although the letters the EPA sent to wood stove test labs dealt mostly with enforcement issues, they did not come from the EPA's Office of Enforcement, but rather from Richard Wayland, the Director of the Air Quality Assessment Division, which typically does not handle such measures.  Wayland’s Division is now under a new high profile political appointee, Joseph Goffman, who was one of Biden's top advisors during the presidential transition.  Under Goffman is Tomas Carbonell, the Deputy Assistant Administrator for Stationary Sources, another political appointee who worked on the 2015 wood heater NSPS during his tenure at the Environmental Defense Fund.  This may indicate a shifting and larger role for senior leadership at the Office of Air and Radiation, a potential sign that the Biden Administration is taking the NESCAUM report very seriously.

 

The EPA stopped short of implementing some of the recommendations in the NESCAUM report.  For instance, they have not yet indicated any interest in revoking an ASTM cordwood test method that NESCAUM and Alaska found to be flawed.  However, the agency did emphasize that the recently approved IDC cordwood test method could be used by any manufacturer and updated their approval of the method, possibly to correct an error found by veteran stove tester Ben Myren.  That error, which the Alliance for Green Heat highlighted in a recent blog, dealt with the amount of bark that must be left on logs during certification testing, and highlights the precarious role of the EPA in approving test methods where the underlying data has not been publicly released for experts to review.  It is unclear if EPA even had access to the IDC test method's underlying data which is owned by NYSERDA.  If the agency does have the data, it could make it available or it may have to disclose it through freedom of information requests.  


The EPA's announcement of this major overhaul comes just days after many top stove manufacturers and the main industry association, the Hearth, Patio & Barbecue Association,  filed comments vigorously opposing the results of the Alaska stove certification review. If the EPA does not approve Alaska's scheme of culling out stoves with too many deficiencies in their paperwork and which emit more than 6 grams an out during test runs, Alaska may be forced to only allow the new installation of pellet appliances in the Fairbanks area, that is fighting federal non-attainment status.


For many years, experts have known of the mounting complexities and loopholes in testing wood stoves. Then, by 2020, it became apparent that many stoves that were tested above 2 grams an hour were somehow able to test to below 2 grams an hour without being altered, calling into question whether the regulations led to a cleaner generation of wood stoves.  Pellet stoves and boilers however have genuinely become cleaner and more efficient from the tighter 2020 emission standards because of their automated functions and consistent fuel qualities. 


Related stories

EPA's cordwood test protocol moves forward (July 2021)

EPA and states vigorously defend stove audits (Sept. 2020)

Opinions of top stove industry insiders on controversial topics (Aug. 2017)

Study shows environmental advantages of pellet stoves and exaggerations by manufacturers (Oct. 2015)