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MOLD: A GROWING PROBLEM

JOINT HEARING

BEFORE THE

SUBCOMMITTEE ON

OVERSIGHT AND INVESTIGATIONS

AND THE

SUBCOMMITTEE ON

HOUSING AND COMMUNITY OPPORTUNITY

OF THE

COMMITTEE ON FINANCIAL SERVICES

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

JULY 18, 2002

Printed for the use of the Committee on Financial Services

Serial No. 107–77

(

(II)

HOUSE COMMITTEE ON FINANCIAL SERVICES

MICHAEL G. OXLEY, Ohio, Chairman

JAMES A. LEACH, Iowa

MARGE ROUKEMA, New Jersey, Vice Chair

DOUG BEREUTER, Nebraska

RICHARD H. BAKER, Louisiana

SPENCER BACHUS, Alabama

MICHAEL N. CASTLE, Delaware

PETER T. KING, New York

EDWARD R. ROYCE, California

FRANK D. LUCAS, Oklahoma

ROBERT W. NEY, Texas

BOB BARR, Georgia

SUE W. KELLY, New York

RON PAUL, Texas

PAUL E. GILLMOR, Ohio

CHRISTOPHER COX, California

DAVE WELDON, Florida

JIM RYUN, Kansas

BOB RILEY, Alabama

STEVEN C. LATOURETTE, Ohio

DONALD A. MANZULLO, Illinois

WALTER B. JONES, North Carolina

DOUG OSE, California

JUDY BIGGERT, Illinois

MARK GREEN, Wisconsin

PATRICK J. TOOMEY, Pennsylvania

CHRISTOPHER SHAYS, Connecticut

JOHN B. SHADEGG, Arizona

VITO FOSSELLA, New York

GARY G. MILLER, California

ERIC CANTOR, Virginia

FELIX J. GRUCCI, JR., New York

MELISSA A. HART, Pennsylvania

SHELLEY MOORE CAPITO, West Virginia

MIKE FERGUSON, New Jersey

MIKE ROGERS, Michigan

PATRICK J. TIBERI, Ohio

JOHN J. LAFALCE, New York

BARNEY FRANK, Massachusetts

PAUL E. KANJORSKI, Pennsylvania

MAXINE WATERS, California

CAROLYN B. MALONEY, New York

LUIS V. GUTIERREZ, Illinois

NYDIA M. VELA ́ ZQUEZ, New York

MELVIN L. WATT, North Carolina

GARY L. ACKERMAN, New York

KEN BENTSEN, Texas

JAMES H. MALONEY, Connecticut

DARLENE HOOLEY, Oregon

JULIA CARSON, Indiana

BRAD SHERMAN, California

MAX SANDLIN, Texas

GREGORY W. MEEKS, New York

BARBARA LEE, California

FRANK MASCARA, Pennsylvania

JAY INSLEE, Washington

JANICE D. SCHAKOWSKY, Illinois

DENNIS MOORE, Kansas

CHARLES A. GONZALEZ, Texas

STEPHANIE TUBBS JONES, Ohio

MICHAEL E. CAPUANO, Massachusetts

HAROLD E. FORD JR., Tennessee

RUBE ́ N HINOJOSA, Texas

KEN LUCAS, Kentucky

RONNIE SHOWS, Mississippi

JOSEPH CROWLEY, New York

WILLIAM LACY CLAY, Missouri

STEVE ISRAEL, New York

MIKE ROSS, Arizona

BERNARD SANDERS, Vermont

Terry Haines, Chief Counsel and Staff Director

(III)

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

SUE W. KELLY, New York, Chair

RON PAUL, Ohio, Vice Chairman

PETER T. KING, New York

ROBERT W. NEY, Texas

CHRISTOPHER COX, California

DAVE WELDON, Florida

WALTER B. JONES, North Carolina

JOHN B. SHADEGG, Arizona

VITO FOSSELLA, New York

ERIC CANTOR, Virginia

PATRICK J. TIBERI, Ohio

LUIS V. GUTIERREZ, Illinois

KEN BENTSEN, Texas

JAY INSLEE, Washington

JANICE D. SCHAKOWSKY, Illinois

DENNIS MOORE, Kansas

MICHAEL CAPUANO, Massachusetts

RONNIE SHOWS, Mississippi

JOSEPH CROWLEY, New York

WILLIAM LACY CLAY, Missouri

SUBCOMMITTEE ON HOUSING AND COMMUNITY OPPORTUNITY

MARGE ROUKEMA, New Jersey, Chair

MARK GREEN, Wisconsin, Vice Chairman

DOUG BEREUTER, Nebraska

SPENCER BACHUS, Alabama

PETER T. KING, New York

ROBERT W. NEY, Ohio

BOB BARR, Georgia

SUE W. KELLY, New York

BOB RILEY, Alabama

GARY G. MILLER, California

ERIC CANTOR, Virginia

FELIX J. GRUCCI, JR, New York

MIKE ROGERS, Michigan

PATRICK J. TIBERI, Ohio

BARNEY FRANK, Massachusetts

NYDIA M. VELA ́ ZQUEZ, New York

JULIA CARSON, Indiana

BARBARA LEE, California

JANICE D. SCHAKOWSKY, Illinois

STEPHANIE TUBBS JONES, Ohio

MICHAEL E. CAPUANO, Massachusetts

MAXINE WATERS, California

BERNARD SANDERS, Vermont

MELVIN L. WATT, North Carolina

WILLIAM LACY CLAY, Missouri

STEVE ISRAEL, New York

(V)

C O N T E N T S

Page

Hearing held on:

July 18, 2002 ..................................................................................................... 1

Appendix:

July 18, 2002 ..................................................................................................... 27

WITNESSES

THURSDAY, JULY 18, 2002

Ballard, Melinda, President, Policyholders of America ........................................ 12

Howard, Gerald M., Executive Vice President/CEO on behalf of the National

Association of Home Builders ............................................................................. 9

Redd, Stephen C., M.D., Chief, Air Pollution and Respiratory Health Branch,

National Center for Environmental Health Centers for Disease Control

and Prevention, U.S. Department of Health and Human Services ................. 7

Sandler, Howard M., M.D., Sandler Occupational Medicine Associates, Inc. .... 16

Stewart, Gordon, President, Insurance Information Institute New York, New

York ....................................................................................................................... 14

Tighe, Thomas C., Executive Assistant of the International Union of Operating Engineers and Director of Stationary Affairs .......................................... 11

APPENDIX

Prepared statements:

Kelly, Hon. Sue W. ........................................................................................... 28

Roukema, Hon. Marge ...................................................................................... 31

Clay, Hon. Wm. Lacy ....................................................................................... 33

Conyers, Hon. John .......................................................................................... 35

Gutierrez, Hon. Luis V. .................................................................................... 42

Lee, Hon. Barbara ............................................................................................ 44

Ballard, Melinda ............................................................................................... 46

Howard, Gerald M., .......................................................................................... 50

Redd, Stephen C., ............................................................................................. 57

Sandler, Howard ............................................................................................... 69

Stewart, Gordon ................................................................................................ 75

Tighe, Thomas C., ............................................................................................. 82

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Kelly, Hon. Sue W.:

‘‘Costly Lawyer cashes in on ‘Mold’ Money,’’ New York Post, May 17,

2002 ................................................................................................................ 86

Ballard, Melinda:

‘‘Breakdown of Mold—Related Insurance Claims by State, Number of

Claims and Date’’ .......................................................................................... 87

Written response to questions from Hon. Luis V. Gutierrez ........................ 88

Howard, Gerald M.:

Written response to questions from Hon. Luis V. Gutierrez ........................ 94

Sandler, Howard:

Written response to questions from Hon. Luis V. Gutierrez ........................ 96

Stewart, Gordon:

‘‘How did we get here? Texas: Mold’s Ground Zero.’’ ..................................... 99

Written response to questions from Hon. Luis V. Gutierrez ........................ 112

Tighe, Thomas C.:

Written response to questions from Hon. Luis V. Gutierrez ........................ 114

Page

VI

Air Conditioning Contractors of America, prepared statement ........................... 116

Associated General Contractors of America, prepared statement ....................... 120

Independent Insurance Agents & Brokers of America, prepared statement ...... 122

(1)

MOLD: A GROWING PROBLEM

THURSDAY, JULY 18, 2002

U.S. HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON OVERSIGHT

AND INVESTIGATIONS,

AND SUBCOMMITTEE ON HOUSING

AND COMMUNITY OPPORTUNITY,

COMMITTEE ON FINANCIAL SERVICES,

Washington, D.C.

The subcommittees met, pursuant to call, at 2:20 p.m., in Room

2128, Rayburn House Office Building, Hon. Sue W. Kelly [Chairwoman of the Subcommittee on Oversight and Investigations] presiding.

Present for the Subcommittee on Oversight and Investigations:

Representatives Kelly, Tiberi, Gutierrez, Inslee, Schakowsky and

Clay.

Present for the Subcommittee on Housing and Community Opportunity: Representatives Kelly, Miller, Tiberi, Frank, Lee,

Schakowsky, Clay and Israel.

Also present: Representatives Conyers and Gonzalez.

Chairwoman KELLY. This joint hearing of the Subcommittee on

Oversight and Investigations and the Subcommittee on Housing

and Community Opportunity will come to order.

I want to thank all Members of Congress who are present today.

There will be some more joining us. We have a vote on the floor

of the House, which is why there are not so many people here just

now, but they will be coming in, and I want to thank them for coming and for their presence today.

Without objection, all members present will participate fully in

the hearing; and all opening statements and questions will be

made part of the official hearing record.

The Chair recognizes herself for a brief opening statement.

In the preparation for this hearing, I have spoken to many of my

friends and colleagues about the issue of mold damage in commercial and private properties and reports of adverse health effects.

While there are many who are aware of the seriousness of this

issue, there are also many who are unaware of the growing scope

of this problem. In an effort to increase all of our knowledge, Chairwoman Roukema, Ranking Members Gutierrez, Frank and I have

agreed to hold this joint hearing.

In my view, one issue with this is the lack of scientific evidence

as to the direct correlation between mold damage and adverse

health effects. One of the reasons that I am personally interested

in this is that my major in college was bacteriology, and I dealt a

2

lot with molds and so forth. So this has a personal interest to me.

In addition to that, I am an asthmatic, and so are my kids. So, because of this uncertainty, I think homeowners’ fears grow sometimes without the definitive evidence of what is safe or potentially

dangerous levels of mold.

In addition, the uncertainty of this issue has created a window

of opportunity for unethical lawyers and contractors to prey upon

vulnerable populations. As evidence and without objection, I am

going to make part of the record a copy of a May 17 New York Post

article entitled, Costly Lawyer Cashes in on Mold Money.

[The following information can be found on page XX in the appendix.]

Chairwoman KELLY. This article tells the story of a lawyer who

settled a class action lawsuit for $1.7 million, taking more than

half of that money for himself; and he left the families with an average of $1,000 each. The part of the article that alarmed me the

most was this: ′′the money he offered me wasn’t even enough to buy

a decent tombstone for my daughter.′′ this was said by an 81-yearold woman named Mattie Qualie, whose daughter, Lorraine Woods,

age 58, died in 1998 from an alleged long exposure to molds.

All of us need to step back and look at the facts surrounding this

issue and do so in a coordinated manner. The witnesses we have

at the table today represent a broad cross-section of the interested

parties in the mold debate. By working together, I hope we will be

able to find some answers in an area where there are still large

numbers of unanswered questions.

Let me state unequivocally that all of us have great sympathy

for those who are suffering health problems of any kind, no matter

what the cause. I would personally urge property owners to do everything they can to protect their investments and, most importantly, the families, from mold infestation. At the same time, this

Congress must assess the true nature of the mold issue before

rushing into legislative action.

In the process of preparing for this hearing, my staff interviewed

numerous medical experts who emphasized that mold simply cannot be directly connected to so many of the serious medical conditions for which it has been blamed. There are many causes that

can be cited for the symptoms people blame on mold, such as

hypersensitivity, allergies, viruses and deficiencies of the immune

system.

As we will hear this afternoon, the Centers for Disease Control

is currently working with other institutions to study this issue and

provide more information on the true health effects of mold infestation. It is imperative that we look to the Nation’s medical research

institutions to help us separate legitimate claims from what some

have termed ‘‘mold hysteria.’’

Ultimately, we have got to have better scientific standards and

better safety education to help consumers and the industry identify

legitimate dangers to immediately begin for compensation and remediation. We are holding this hearing to help us separate the

facts from the myths surrounding the recent dramatic rise in mold

claims and its reported catastrophic effects.

While many Americans are unaware of potential dangers from

untreated mold growth in commercial and private properties, the

3

lack of scientific standards and documentation only adds to the

confusion we all feel when confronted by potential dangers of substances that we grew up to believe were harmless. Who would have

thought that when we shook pepper on our food, we were actually

shaking on a mold? Who would think when we ate peanuts, we

were actually ingesting a mold?

I think it is very important that we distinguish what is myth

from the scientific fact.

[The prepared statement of Hon. Sue W. Kelly can be found on

page XX in the appendix.]

I am now going to recognize my friend from Massachusetts for

his opening statement, Mr. Frank.

Mr. FRANK. Madam Chairman, on a day when the House is going

to be voting, since we are meeting during the House being in session, and given the large number of witnesses, I will waive an

opening statement so we can get the benefit of what they have to

say. I can submit remarks later for the record.

Chairwoman KELLY. Thank you very much, Mr. Frank.

Mr. Miller.

Mr. MILLER. Thank you, Madam Chairwoman.

I read a speech given at a gathering of attorneys, and the new

quote is ′′mold is gold.′′ it reminds me of tort litigation in California

on attached products for defects, where attorneys would go out and

sue a builder and every subcontractor and the lender. Then they

would go to the board of directors, and they would say, do you enjoin in this lawsuit, or you can be held personally liable for damages, which by law they could be. So then the board of directors

enjoins in the lawsuit, and the associations have to pay attorneys.

The attorneys go in and buy one unit and gut it. If they can find

nailing on drywall that is just an inch overspaced or half an inch

over, they say that is a violation and it is typical of every unit. If

they can find an oversized nut, they say that is typical of every

unit. If they can find a crack in the concrete, they say it is typical

of every unit.

I know a developer who built a project in 1986 that lost a lawsuit

in 1995 for $23 million, and it cost him $3.2 million to build the

complex. I mean, it is a little outrageous.

It reminds me when of when I was taking rhetoric in college. A

professor referred to a post-hoc fallacy, and it is that A occurs;

therefore, B occurs; therefore, A caused B.

I think we are jumping to conclusions on some of these issues.

I read some testimony that alluded to individuals having died

from mold, Aspergillus growing in their lungs was the cause. Yet

if you go to a wheat field, cornfield, a forest, a park, if you deal

with mulch and you look at the parts per billion that you can receive just mulching your yard or walking in a forest so far supersedes what you could receive in the house with mold growing, it is

just unbelievable. In fact, Aspergillus can be found in peanuts, pecans, peas, bread, cheese, rice, corn ears, barley grain, sorghum

wheat and cottonseed, exceeding what you will find in a house.

Some of the stuff I have read, I believe if there are legitimate

claims, I don’t have a problem with somebody being rewarded for

legitimate claims. But it appears that some of this is just a way

4

to get to an insurer or a builder and find a way to pull some money

out of their pocket.

Some of the claims that I have read, you would think there

would have to be some liability on the part of the homeowner to

do and perform basic maintenance on their home. When you have

a leaky pipe, you don’t wait a year to turn it into the insurer because your pipe was leaking, and then when your insurer pays you

money to fix it and it far supersedes that money for other things,

you still don’t fix the leak—I mean, there is some point in time you

have to look at yourself in the mirror and say, am I a little to

blame here?

I think we are avoiding that, in some cases and in some points,

individual responsibility seems to be overlooked and people look to

others to blame for their own negligence.

So I am looking forward to the hearing. If there is truly scientific

evidence that people are being damaged and it is other people’s

fault, let’s get to the bottom of that. But if somebody says, well,

look, there is something there, and harm must be occurring to

somebody because of that, and yet there is no scientific evidence

that that be the case—in fact, in some of the court cases I read

there were no damages awarded for health issues at all, and yet

these outrageous dollars are being proposed out there.

Madam Chairwoman, I applaud you for having this hearing

today and look forward to the testimony.

Chairwoman KELLY. Thank you very much, Mr. Miller.

Mrs. Roukema was unable to be with us today, but, with unanimous consent, I would like to insert her statement in the record.

[The prepared statement of Hon. Marge Roukema can be found

on page XX in the appendix.]

Chairwoman KELLY. We turn now to the ranking member of the

Oversight Committee, Mr. Gutierrez.

Mr. GUTIERREZ. Thank you very much, Chairwoman Kelley, and

the ranking member, Mr. Frank, thank you for joining us this

afternoon here and being part of this important hearing.

We are gathered here to discuss an issue of great importance to

thousands of Americans. The issue at hand is mold and the impact

it has on property and people’s health.

In fact, believe it or not, mold is a growing problem, experiencing

a five-fold increase in occurrences in homes. Thousands of Americans today are living in houses terribly infested by mold.

I am sure there are those that would argue that the five-fold increase is probably due to the fact that all the homeowners in the

United States have decided to disregard and be careless about their

water pipes and how it is they keep good conditions in their basement. Well, maybe that is the case, that homeowners across the

country, specifically in the State of Texas, apparently, if that is the

case, homeowners are being very, very derelict in their duty, as

they have had a 500 percent increase this year over last year.

So maybe it is all of the careless, unworthy homeowners who

bought a home, it is their prize possession, it is their number one

investment, and they just decided they were going to have mold in

it, and there is no other good reason for the sudden surge and increase in that mold.

5

With that, Madam Chairwoman, I have nothing further to say.

I would like the rest of my comments to be inserted in the record.

Chairwoman KELLY. Without objection.

[The statement of Hon. Luis V. Gutierrez can be found on page

XX in the appendix.]

Chairwoman KELLY. Also, without objection, I have a letter to

Chairman Oxley from the Associated General Contractors of America which, without objection, we will insert in the record.

[The following information can be found on page XX in the appendix.]

Chairwoman KELLY. We go now to Mr. Clay.

Mr. CLAY. Thank you, Madam Chairwoman. I appreciate your

having this hearing today, and I look forward to the testimony we

are about to hear.

We are indeed facing a growing problem with mold in houses and

buildings. Homeowners, insurance companies and building construction companies are encountering tremendous financial and

health problems because of harmful molds.

We have thousands of molds, and most of them cause no problems to humans. As a matter of fact, some are beneficial to man

and are vital for use in medicines, food production, and many other

aspects of our everyday lives. While we mostly stereotype molds as

being only in damp, dark environments, they exist everywhere.

Madam Chairman, I will cut my opening statement short so that

we can hear testimony from the witnesses and ask that I submit

my statement for the record.

Chairwoman KELLY. Thank you very much, Mr. Clay.

[The prepared statement of Hon. William Lacy Clay can be found

on page XX in the appendix.]

Chairwoman KELLY. Ms. Schakowsky.

Ms. SCHAKOWSKY. Thank you, Madam Chairman. I will also submit my opening statement for the record.

I do want to say that, on my way over here, I was telling some

colleagues of ours that I was coming here, and, to a person, they

told me of a situation of pretty devastating mold contamination in

their district. One Member told me about a school that actually had

to be completely shut down because of mold contamination. Another told me about a building across the street from the site of the

World Trade Center, some 60 stories tall or higher, that now is

shut down; and they are trying to figure out what to do with it because of this toxic mold infestation.

So it was really interesting to me. I had been aware of it from

some constituents in my district, but this is a growing problem that

increasing numbers of Members of Congress are aware of. I look

forward to the testimony today.

Thank you.

[The prepared statement of Hon. Janice D. Schakowsky can be

found on page XX in the appendix.]

Mr. GUTIERREZ. If the gentlewoman would yield, as Congressman

Schakowsky and I have both been made aware, in and around the

City of Chicago in two different suburban locations they have had

to close down two substantial high schools in the last 2 years because of the problem with mold. But maybe it was the kids coming

to school ill-prepared those days that brought the mold with them.

6

Chairwoman KELLY. Perhaps they came to school wet.

Mr. Gonzalez.

Mr. GONZALEZ. Madam Chairman, thank you very much for the

opportunity and privilege of attending this subcommittee hearing.

I am not a member of either subcommittee, and I do appreciate

being here.

Just a couple of observations. I hope this is not going to somehow

end up again a big argument over tort reform and everything else.

We are really here to be educated again with the facts. Unlike war,

legislation doesn’t have to have the effect of truth being its first

casualty.

As far as litigation, I am very aware of what is going on in the

State of Texas, but I will remind my fellow members, addressing

some of the remarks, that some of the claimants in my own community, I will tell you who they are, one of them is a Justice of

the Fourth Court of Appeals, a Republican; a State Senator, a

Democrat; and some very prominent families. I don’t think it is

going to fit the description that sometimes we have had some

abuses out there.

But we really need to get down to the truth to see how serious

it is, and in fact have we been handling it appropriately.

Thank you very much, Madam Chairman.

Chairwoman KELLY. Thank you very much, Mr. Gonzalez.

Mr. Inslee.

Mr. INSLEE. Thank you. I just want to express my appreciation

for your holding this hearing. Just two brief comments.

First off, I know this is a real issue in my district where we had

the taxpayers have a problem because a contractor in a school left

the situation that did cause an enormous amount of mold growth

that made this building entirely uninhabitable. The taxpayers had

to bring a claim against the individuals involved. The individuals

ultimately accepted responsibility, as they should have; and the

taxpayers were reimbursed hundreds and hundreds of thousands of

dollars they had coming to them. So I understand this has a broad

import for taxpayers, not just health.

The other comment I want to make as far as the tort issue, everybody has their perspective, and I am very interested in what is

going on out there in the legal claim field. But I will just share one

little story for you, if you talk about this issue in tort reform.

I had a friend, let’s call him Jim for a minute. I used to be a lawyer. I handled a lot of cases on behalf of people who had been injured, and Jim and I for 10 years had a running argument every

time we had dinner or a brew together. Basically, he said all these

claims were manufactured, fictitious, ridiculous, and they were ruining the American economy.

We had that argument for 10 years, until the night his son got

hit by actually a driver who had pulled out of a stop sign and

caused grievous injury to his son; and his attitude changed very,

very quickly. And my son is a home builder, so you know where

I am coming from. I will tell you, if you get this mold growing in

your house, your view of tort reform changes very rapidly, because

I know this is a problem for a lot of people.

Thank you, Madam Chairman.

7

Chairwoman KELLY. We are joined by our colleague, Mr. Conyers. Mr. Conyers has a singular interest in this and, in fact, is the

author of a bill, so we have asked him to join us today for this

hearing, so he will be sitting in on this hearing.

If there are no more opening statements, we will begin with the

witnesses on our panel.

Before us today we have Dr. Stephen Redd of the Centers for

Disease Control and Prevention, a division of the U.S. Department

of Health and Human Services. Dr. Redd, who is the Chief of the

Air Pollution and Respiratory Health Branch of the National Center for Environmental Health at the Centers for Disease Control,

is the institution’s lead scientist on air pollution and respiratory

health.

Following Dr. Redd will be Mr. Gerald Howard, Executive Vice

President and Chief Executive Officer of the National Association

of Homebuilders.

He will be followed by Thomas Tighe. Did I pronounce that right?

Tighe, like the necktie, for all of us to remember. He is Executive

Assistant to the General President and Director of Stationary Affairs at the International Union of Operating Engineers, both of

whom will provide us with information on mold infestation in

buildings.

Then we will hear from Ms. Melinda Ballard, the President of

Policyholders of America, who will discuss mold from the perspective of those whose homes have been affected.

Following that, we will hear Mr. Gordon Stewart, President of

the Insurance Information Institute, who will discuss the effects of

mold claims on the insurance industry.

Finally, we will hear from Dr. Howard Sandler, President of

Sandler Occupational Medicine Associates, who will join Dr. Redd

in discussing mold and health.

I thank you all for coming. We are very pleased to have you join

us here today to share your thoughts on this difficult issue.

Without objection, your written statements will be made a part

of the record.

If you have not been with us before, there are lights in front of

you in that black box at the end of the table. You will be recognized

for a 5-minute summary of your testimony. Your entire written testimony will be made a part of the record. But the lights will indicate, just the way they do on a stoplight on a street, green means

go; when you get to the yellow, it means you have 1 minute left;

and when it goes red, it means it is time to finish speaking. That

means your time has expired.

Chairwoman KELLY. So, let us begin with you, Dr. Redd. Thank

you so much for joining us today.

STATEMENT OF STEPHEN REDD, M.D., CHIEF, AIR POLLUTION

AND RESPIRATORY HEALTH BRANCH, NATIONAL CENTER

FOR ENVIRONMENTAL HEALTH, CENTERS FOR DISEASE

CONTROL AND PREVENTION

Dr. REDD. Thank you very much. I am Dr. Stephen Redd, the

lead CDC scientist on air pollution and respiratory health at the

Centers for Disease Control and Prevention.

8

Accompanying me today is Dr. Thomas Sinks, Associate Director

for Science of environmental issues at CDC.

It is a pleasure to appear before you today on behalf of the CDC,

an agency that serves by protecting the health and safety of the

American people. I want to thank you for taking the time to examine the importance of mold exposure and its affects on people’s

health.

Today I will briefly summarize three issues for the committee:

CDC’s perspective on the state of the science relating to mold and

health effects in people; CDC’s efforts to evaluate health effects

possibly associated with molds; and CDC’s next steps in addressing

this issue.

Fungi are a kingdom of organisms that include mushrooms,

molds and yeasts. There are between 50,000 and 250,000 species

of fungi. More than 1,000 species of mold have been found in U.S.

homes. Molds need moisture to grow and grow best in warm, damp

conditions.

Fungi and molds are known to cause several specific diseases.

Fungi can cause infections. Ingestion of mold-produced toxins can

cause liver and kidney tumors, and molds cause a rare, chronic

lung disease called hypersensitivity pneumonitis in workers in industrial and agricultural settings.

In addition, molds have been associated with allergies. Airborne

mold allergens have been associated with hay fever, allergic conjunctivitis and allergic asthma. The Institute of Medicine recently

concluded that there was evidence of an association between exposure to mold and exacerbations of asthma but insufficient information on whether mold exposure caused the onset of asthma.

We do not know whether molds cause other adverse health effects, such as hemorrhage from the lungs, memory loss or lethargy.

We do not if the occurrence of mold-related illness is increasing.

Other than surveillance for hospital-acquired infections, there is no

system to track the public’s exposure to and the possible health effects of mold.

CDC has undertaken a number of activities related to mold and

its possible effects on people’s health. CDC conducted two epidemiologic investigations of clusters of hemorrhage from the lungs

of infants. In one investigation a possible association was reported

between exposure to the mold Stachybotrys atra and disease. This

association was not found in a second investigation.

In a review of that first investigation, CDC reviewers and an external panel of experts determined that there was insufficient evidence of an association between exposure to Stachybotrys atra or

other fungi and hemorrhage from the lungs. CDC has plans to further evaluate this health condition, including tracking activities,

investigations of disease clusters, and research studies.

In recent years, we have conducted investigations in occupational

settings, in schools, and in residences following flooding episodes.

In addition to working with State health departments in North Dakota, Texas, and Connecticut, we have collaborated with the Federal Emergency Management Agency, the U.S. EPA, and the Department of Housing and Urban Development. My written testimony contains more details on these activities.

9

CDC is also funding the Institute of Medicine to evaluate the relationship between damp or moldy indoor spaces and adverse

health effects. In addition to conducting a comprehensive review of

the scientific literature, the Institute of Medicine will provide recommendations for public health intervention and for future research. This work began in January 2002 and will be completed in

the summer or early fall of 2003.

In addition to these efforts, CDC is currently developing an agenda for research, service, and education related to molds. This effort

will enable CDC to make recommendations for reducing mold contamination, identify conditions that contribute to the occurrence of

disease following mold exposure, and assist State and local health

departments in improving their capacity to investigate mold exposures.

This is challenging work. Molds can be found almost anywhere,

and individuals have different sensitivities to molds. It is not possible to specify a safe or a dangerous level for mold at this time.

Because mold exposure can be harmful, CDC concurs with the

recommendations of agencies such as EPA and FEMA that mold in

indoor environments should be removed.

Thank you for the opportunity to testify. I would be happy to answer any questions that you may have.

Chairwoman KELLY. Thank you very much, Dr. Redd.

[The prepared statement of Dr. Stephen C. Redd can be found on

page XX in the appendix.]

Chairwoman KELLY. Mr. Howard.

STATEMENT OF GERALD M. HOWARD, EXECUTIVE VICE PRESIDENT AND CHIEF EXECUTIVE OFFICER, NATIONAL ASSOCIATION OF HOME BUILDERS

Mr. HOWARD. Thank you, Madam Chairwoman, Mr. Frank, Mr.

Gutierrez. Thank you for holding this hearing.

My name is Jerry Howard, and I am the Chief Executive Officer

of the National Association of Home Builders. NAHB represents

more than 205,000 member firms involved in home building, remodeling, multifamily housing and other aspects of residential and

light commercial construction. In fact, it is not an exaggeration to

say that our members produce 80 to 85 percent of all the housing

units built in the United States.

Our membership is united in its concern over the impact of this

mold issue. Specifically, first and foremost, like all citizens, we are

concerned about the health of our fellow Americans. NAHB, upon

learning of the mold issue, immediately went to the forefront and

began to study the impacts of mold and what we might be able to

do about it.

As a result of that study, with what we have done is, A, we

began to educate our members about what they can do to decrease

the amount of mold and housing in the construction process; and,

B, to inform homeowners and home buyers about what steps they

can do to remediate mold.

Specifically, we will be presenting a pamphlet, a bilingual pamphlet, on our web site and in hard copy to all of our home builder

members who prefer to give it out to their customers, and we are

encouraging them to do so.

10

Secondly, NAHB is concerned about the potential impact of mold

on the housing industry as a whole. As you are all aware, the housing industry has been the bellwether and the buoy of our economy

over the last several years. In fact, depending on what numbers

you choose to believe, NAHB’s members in the housing industry

produce 14 percent of the Nation’s gross domestic product.

Over the past year, low interest rates and strong underlying demand for housing has kept housing strong while the rest of the

economy has struggled. Of the almost 1.6 million new housing

units, again I say, NAHB members produced 80 to 85 percent of

them.

Unfortunately, the recent attention to indoor mold has the potential to negatively impact the housing industry and housing affordability. Specifically, I would point to increases in general liability

insurance that our members are suffering. As an example, last year

the general liability insurance on a 63-unit entry-level housing development in California, and by ′′entry-level′′ I mean a purchase

price of $125,000 per home, the general liability insurance on that

project was $93,000, and it included mold insurance coverage. This

year, that same project is insured for $216,000; and mold is excluded from the coverage. Unfortunately, Madam Chairwoman and

members of the committee, that cost will ultimately be passed on

to the American consumer.

We agree with Dr. Redd and others who are going to testify that

this is a serious issue. However, our primary concern is that we not

rush to judgment. To the best that we can tell now, mold, while it

is harmful, is not linked directly to any serious illnesses, and specifically mold in well-constructed, well-maintained houses has not

been an issue for most Americans and their health.

A survey that NAHB handed out in 2002 showed that most of

our members are facing similar insurance cost increases as those

described in my earlier example in California. Our builders have

seen these insurance companies begin with these mold exclusions,

and 150 percent increases is not out of the ordinary.

Another potential adverse impact on the building industry are

the calls for these new regulations and new building code requirements. NAHB has always sought to limit the economic impact of

regulations on the cost of housing, and we will continue to do so.

However, if it can be proven that there is a significant link between

serious health risks and mold, NAHB would like to be part of the

solution, and we look forward to working with the Members of Congress to implement appropriate regulations.

Once again, we would suggest, however, that regulations generally do not fit the bill across the board for all types of construction and in all parts of the country. What may remediate mold effectively in California may not work in Vermont. What may work

in South Carolina might not work in Idaho. So we would like to

have the opportunity, if there is proven a nexus, to work with

Members of Congress to develop the appropriate techniques to remediate mold, while at the same time taking care to preserve affordable housing and housing affordability.

Again, let me reiterate that NAHB takes the health issue very

seriously, that our members have been in the forefront of informing

11

and studying, and we are prepared to work with Congress on this

issue.

Thank you, Madam Chairwoman.

Chairwoman KELLY. Thank you very much.

[The prepared statement of Mr. Gerald M. Howard can be found

on page XX in the appendix.]

Chairwoman KELLY. Mr. Tighe.

STATEMENT OF THOMAS C. TIGHE, EXECUTIVE ASSISTANT TO

THE GENERAL PRESIDENT AND DIRECTOR OF STATIONARY

AFFAIRS, INTERNATIONAL UNION OF OPERATING ENGINEERS

Mr. TIGHE. Chairwoman Kelley, committee members, on behalf of

General President Frank Hanley, I would like to thank you for the

opportunity to offer comments to your subcommittees.

My name is Thomas C. Tighe, and I am an Executive Assistant

to General President Frank Hanley of the International Union of

Operating Engineers. I have been a stationary engineer and associated with the building industry for 34 years.

The International Union of Operating Engineers is a progressive

trade union with over 400,000 members. Of that number, 120,000

are stationary engineers employed in the field of facility operations

and maintenance, providing a safe and efficient environment for

the American public.

Stationary engineers perform work in a multitude of facilities

throughout the United States. Our organization has developed a sophisticated and comprehensive network of training centers. We

have the capacity to provide craft and regulatory compliance training programs. The IUOE is uniquely qualified to offer comments on

indoor air quality issues at commercial facilities. Our organization

has been a national leader in providing indoor air quality training.

Mold is a growing concern, and the confusion over the issue continues to expand. Our organization is interested in the development

of future policy on this matter.

Mold presents a potential workplace hazard for workers and facility occupants. Your deliberations at these public hearings are important to the American public.

The IUOE has three specific concerns and would like to briefly

comment on each.

The first concern is education on overall mold issues. The general

public and industry-wide personnel need to be educated about the

facts related to mold.

Mold and IAQ-related issues are part of the new reality for the

general public. Currently, media reports of litigation settlements

are at the forefront of educating the public on the health hazards

of mold. Without a consensus from the scientific community on the

health effects of mold, speculation will drive this issue. There needs

to be a comprehensive educational program with a clear understanding of the facts about mold and its potential health effects in

our homes and workplace.

The second concern is the lack of Federal mold standards. Due

to the lack of Federal standards on prevention, investigation, testing and remediation of mold, the industry continues to be in a state

12

of confusion. The lack of standards has multiple ramifications within a variety of industries.

In commercial facilities, the manner in which mold complaints

are handled are varied and lack uniformity. This could create a variety of inconsistent procedures that can lead to questionable practices.

The Environmental Protection Agency should be commended on

their work in producing guidelines on mold remediation in school

and commercial buildings. The guidelines provide a general approach to a variety of issues when dealing with mold. The IUOE

believes this is a good first step in addressing this issue.

The problem remains, however, that until guidelines are transformed into standards, the industry-wide practice will remain nonuniform and, therefore, potentially unsafe.

The third and last concern is that specific training on mold

standards needs to be developed and delivered to a variety of industry personnel.

With the establishment of Federal standards, training programs

could be established to ensure a consistent and safe approach to

mold issues. Standards would create specific procedures for the

prevention, investigation, testing and remediation of mold. The development of comprehensive training for workers is imperative.

I have been involved in many aspects of curriculum development

and training implementation over the last 10 years and can attest

to the benefits of providing workers with detailed training on performance-based objectives. This approach, in our judgment, provides a cost-effective, results-oriented way of addressing complex

problems such as mold prevention and remediation.

The IUOE has experience in developing and delivering skillbased training programs and would be willing to explore the possibilities of assisting in any future projects or programs recommended by these subcommittees.

I would like to thank the committee for their time and effort in

this matter.

Chairwoman KELLY. Thank you very much, Mr. Tighe.

[The prepared statement of Mr. Thomas C. Tighe can be found

on page XX in the appendix.]

Chairwoman KELLY. Ms. Ballard.

STATEMENT OF MELINDA BALLARD, PRESIDENT,

POLICYHOLDERS OF AMERICA

Ms. BALLARD. My name is Melinda Ballard, and I run an association of homeowners called Policyholders of America, or POA. Since

we founded POA only 6 months ago, we have 18,763 American families in our membership, all victims of toxic mold. That number

should demonstrate what a crisis the American homeowner is in as

it relates to toxic mold infestations of their homes.

Our members range from welfare families to some of the most affluent in America. We are all active in politics not because we necessarily know anything about politics but we know that you all can

and will make a difference for us. We also know that our problems

are not your problems, and we don’t want you or any other American family to suffer the financial turmoil and devastating health

13

effects our families have suffered. This is why we are so passionate

about this issue.

I would like for everyone here to put themselves in the shoes of

a young family who bought their first home after years of

squirreling away enough money for a down payment. Imagine that

a storm ravages your roof and driving rain enters your home.

Imagine calling your insurance company to report this claim and

being told it is not covered, even though the policy says it is. Imagine watching blood come out of your youngest child’s ears and nose

while she gasps for every breath and not having a clue as to why

this is happening.

Then imagine discovering that the roof leak that happened several months before, wrongly denied by your carrier, caused mycotoxin-producing molds to overtake several rooms of your house, including an entire wall in your child’s bedroom.

Now imagine that you and your entire family must abandon your

home and all of your possessions because they are all contaminated; and continued exposure to these mycotoxins, now airborne,

could cause your 5-year-old daughter irreparable harm. You get remediation bids and find that the cost of fixing your home is greater

than the value of your home.

Apart from losing your home and everything you own, your family also faces tremendous health care costs and will be burdened

with the costs associated with renting temporary housing while you

battle it out with your insurance carrier over the coverage that you,

in fact, bought.

You try to hire an attorney—and a lot of you all like to blame

attorneys, and I don’t much like attorneys, but I can’t blame them

for this. You try to hire one. They won’t take it. They say that the

damage to your life is only $200,000, and it is going to cost more

than that to take the insurance company to trial. You can’t afford

to pay the out-of-pocket litigation cost, so you really have no recourse against your Goliath insurance company.

If you are that family, you have only a few choices: You can walk

away from your mortgage and let the house go back to the lender;

you can pay the tab for remediation by taking out a second mortgage, but, unfortunately, that would mean that the total loan is

greater than what the bank will let you borrow; you can sell your

home to some poor unsuspecting family and not disclose the problems; or, you can stay there, continue to expose your family to the

health hazards, and rack up medical bills to the point you claim

bankruptcy.

These are currently the choices of every family in our membership. The economy suffers, builders and mortgage companies suffer,

the family who knowingly buys the problem because of nondisclosure suffers, the medical profession suffers. There are no winners.

There are just losers.

I have asked the staff here to provide you with a handout which

is done State by State and by year of the mold claims as of February 5, 2002. These numbers should have been updated, but I was

too busy to do that.

But as of February 5, 2002, there were over 16,000 first-party insurance cases. These are not legal cases, I want that to be understood. These are homeowners that have actually had to hire either

14

an attorney or take their matter up with their State insurance department and get them to help resolve their claims.

Chairwoman KELLY. Ms. Ballard, I want to remind you, you have

1 minute.

Ms. BALLARD. Thank you.

POA has outlined a few recommendations that we would like for

you to consider. Hopefully, these recommendations will help you

carve a solution.

We would very much be in favor of a self-funded government pool

that mimics the flood insurance program. A couple of years from

today there will be no insurance policy that covers mold, and homeowners need to have somewhere to go. That is a fact of life.

We are not trying to bankrupt the insurance industry. We want

them healthy and happy so that they can honor their policies in the

future. But what we do need is a safety net to protect American

families. The pool should not be considered an insurance bailout,

it should be considered an American public bailout, and, by the

way, a self-funded one.

Because of the time restrictions, I will just submit the rest of my

testimony as part of the written record.

Chairwoman KELLY. Thank you. We have it, and it is already

submitted as part of the written record. You will get another crack

at this when questions come around.

[The prepared statement of Ms. Melinda Ballard can be found on

page XX in the appendix.]

Chairwoman KELLY. We turn now to Mr. Stewart.

STATEMENT OF GORDON STEWART, PRESIDENT, INSURANCE

INFORMATION INSTITUTE

Mr. STEWART. Thank you, Madam Chairman and members.

The year 2001 was the worst in the history of the property casualty industry, but I am not here to ask for sympathy. That is the

background. We estimate that in the homeowners sector the loss

was about $8.9 billion.

Mold is a major factor in these increased costs. Conditions have

reached crisis proportions in Texas; and mold has become a serious

problem in several other States, including California, Florida, Arizona and Nevada. Commercial and residential mold claims are now

common in most other States as well, and we heard from some

members about specific things going on in their districts.

We have submitted a large number of slides and bars and pies

that will give you a background of mold’s impact economically on

insurance.

A couple of quick numbers. Mold claims in Texas rose 1,306 percent between the first quarter of 2000 and the fourth quarter of

2002. The frequency of these claims per 1,000 policyholders rose

1,286 percent during the same period.

Mold claims in Texas, the cost of these claims, rose 560 percent

between 2000 and 2001. Now, up until the last few years, insurance adjusters routinely handled these in the context of sudden

and accidental water damage, which is the only circumstance, as

you know, under which mold is covered in the standard contract.

Mold damage has been specifically excluded, unless it is a result

of a covered peril, such as a burst pipe, et cetera. The simple presVerDate 11-MAY-2000 10:20 Nov 13, 2002 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 C:\DOCS\82476.TXT HBANK1 PsN: HBANK1
15

ence of mold, the fact it is around, like termites or damage from

vermin, is considered a home maintenance issue, not an insurancecovered issue. This has been true for a very, very long time.

In homeowner’s insurance today, the fear of litigation has led to

great uncertainty about this long-standing coverage exclusion, and

insurers are doing many things, as you probably know, to strengthen it, because it has always been there and now it is under some

attack.

Some reasons for this may be that, under the normal property

insurance premise, property insurance makes people whole. It

doesn’t offer very much opportunity for significant recovery. If you

can move into liability, if you can move into wrongful practices of

some kind, if you can move into health, then that changes the economic possibility for litigation enormously.

The result of this uncertainty is that costs are going up. Three

years ago, the few claims that insurers did see were handled for

a few thousand dollars. An average mold claim today costs about

$35,000 and can easily exceed $100,000. That is just to look into

the claim and deal with it. If you put that through the system, you

can see what will happen to the cost and, therefore, what will be

passed on to all of the other policyholders who don’t have claims. The average cost per policyholder went from about $23—this is in Texas—in the first quarter of 2000 to about $444. That is what

everybody else pays now if we look at every mold claim as a ‘‘white

suit’’ problem. That resulted in additional insurance costs in Texas

of about $850 million.

Now, the surge and frequency and costs of these mold claims in

Texas cannot be explained by changes in the weather, they cannot

be explained by population growth, they can’t be explained because

somehow all the houses are now different. There has not been, as

far as anybody knows, a new strain of mold, wildly toxic. There is

not a new plague abroad in the land.

So, as a member earlier said, what is the variable here? Well, we

are not entirely sure, but one variable we do know is the frequency

and extent of litigation that has emerged and the number of people

who have flocked to the mitigation, analysis, testing industry, some

of whom were doing air conditioning before, and we do know that

these things are new.

Now, are there possible risks in mold that are serious? Yes, there

could well be. As some doctors will tell you, certain individuals may

be susceptible to certain health consequences. But by no means are

all Americans at risk from the mold that has always been there.

They can’t be more at risk now than they were in 1999. What could

possibly have happened here? That is one of the things we are looking at.

Today we are faced with a lot more claims without effective Federal or State standards of what is an acceptable exposure level, are

the real health consequences. Nobody knows. We have greatly increased costs for the average claim, driven in large part by remediators who are just saying, this is what it will cost. We have few

ways of evaluating that, unlike lots of other home costs we are

used to. We have more court cases and accusations of severe and

permanent health damage; and there is no peer reviewed, scientific

research about health effects.

16

Health claims are coming under property policies that were

never intended to cover health claims, as you know. And now, fearing bad-faith lawsuits, which is an area where you can really build

up the legal costs, insurers are tending to throw money at mold

claims because they don’t want to be accused of not doing everything they could be doing and having a very expensive lawsuit.

The net of it is we have got these exploding costs, and the only

thing to do is either cut back on coverage and pass on costs to policyholders. These things are going on in State after State, so we

have a kind of insurance crisis developing as a result of the shock

of this relatively recent occurrence.

We are deeply concerned, and I say this not idly, about health

consequences. If you think about property casualty insurance, you

think of all the things we don’t want you to do. We don’t want you

to drive drunk, we don’t want you to smoke, we don’t want you to

do dangerous behaviors. We want you to live in a very sanitized,

boring way. We are deeply, as you know, involved in air bags, seat

belts, occupational safety, arson, fire, anything and everything to

keep claim costs down. This is a mantra of insurers. That is one

of the reasons we are considered to be boring to live around. We

don’t want bad things to happen to you.

If there is a serious mold health problem, we would like to be

able to deal with this, but we don’t see that something is radically

different biologically in 2001 than it was in the year 2000.

Chairwoman KELLY. Mr. Stewart, you are over your time. Could

you sum that up for us, please? We have your written statement

as part of the record.

Mr. STEWART. I would like to just tell you one story, since we

heard an anecdote, and this happens to be my personal anecdote.

We have an apartment. There was a water leak, a serious water

leak. The ceiling came down. We came back, found it on the floor.

Water damage. Lo and behold, we have mold.

I have a 3-year-old daughter. We just heard about a hypothetical

5-year-old, or an anonymous 5-year-old. I have a 3-year-old who I

love to the ends of this Earth.

What I did, in addition to calling people to do something about

the leak, was I got my old clothes, I got Clorox, I got up on a ladder, I put on a mask, and day after day, until something could be

done, I cleaned up the mold. She is okay.

Chairwoman KELLY. Mr. Stewart, I am going to have to cut you

off because you are really way over time, and I have not given anybody else this courtesy.

Mr. STEWART. Fine. I wanted to end with my personal story.

Chairwoman KELLY. Thank you very much.

[The prepared statement of Mr. Gordon Stewart can be found on

page XX in the appendix.]

Mr. STEWART. We move now to Dr. Sandler.

STATEMENT OF HOWARD M. SANDLER, M.D., PRESIDENT,

SANDLER OCCUPATIONAL MEDICINE ASSOCIATES

Mr. SANDLER. Good afternoon, Madam Chairwoman and members. My name is Howard Sandler. I am a physician specializing

in occupational medicine and environmental health.

17

I grew up in the D.C. area. My father was with the Department

of Defense, and for the last 15 years I have lived in the great State

of New York.

I have served as a medical officer with NIOSH, I have been a

consultant to OSHA, EPA, the Consumer Product Safety Commission, as well as local government agencies and private industry. I

have investigated numerous indoor air quality problems throughout the country in a wide variety of buildings, homes and schools.

Specifically, I am dealing with some of the buildings around the

World Trade Center site, including some of those who have water

damage and mold proliferation, as well as schools on Long Island

and schools in the State of Illinois. Increasingly, these concerns

have been around microbiologics, meaning bacteria, viruses,

endotoxins produced by bacteria, the dampness associated with it,

as well as dust mites and molds. I recently provided testimony before a New York State Senate hearing on proposed legislation on

Long Island.

Molds are everywhere. There are molds in this room right where

we are right now, and there is probably enough in this room that

they would not meet the new New York City Department of Health

′′guidelines.′′ those guidelines, by the way, were produced not based

on risk assessment on health, they were just pulled together as a

consensus statement by a variety of different practitioners and specialists.

The 100,000 species you heard from Dr. Redd certainly means we

have a lot of molds. About 350 species produce mycotoxins. The diseases, as you heard about, that can be produced by molds are

mycotoxicosis. In World War II the Soviet Union lost a lot of people

and horses to ingestion of moldy grain and fodder. People died from

this. If you have ever seen a case of mycotoxicosis, when it is real

and based on ingestion, it looks like clinical radiation poisoning.

But there are other disorders you heard about, such as allergies

and hypersensitivity pneumonitis. I have allergies. My kids have

allergies. We used to get allergy shots all the time. I understand,

Madam Chairman, that you have asthma. Twenty to 30 percent of

Americans have allergies, allergic rhinitis; and the most popular

allergins, if you will, are dust, dust mites, pollens and molds.

But, invariably, of all the schools and the different buildings that

I have looked at, I rarely find somebody is allergic to the precise

molds in those buildings. If you do skin testing on these people, you

don’t find a correlation, which is very curious.

However, some people do walk into buildings, and there are studies that show, for example, that people who have allergies and

asthma do worse in damp buildings. They try to correlate it with

mold because we do know that mold will grow where there is moisture. But the studies don’t show that. There are some equivocal

studies showing yes, some showing no, which is typical in science,

unfortunately.

The present science, however, is limited; and the quality of the

studies right now that have been done, for example, in the various

buildings in New York, are not of the quality to give you dose response evaluation, nor specific mold type association with specific

disorders.

18

The reality of the claimed health effects now on mycotoxins and

what has been called MVOCs, microbial volatile organic compounds, organic compounds which give you your mildew smell in

your bathroom or basement, such as my basement on Long Island,

in fact we don’t know if those are related to health effects because

they are in the air. The doses that you see in ingestion are much

greater than you see on airborne exposures; and while there are

certainly people who have theories about this, it is far from being

understood.

I think the key issue on legislation from a health and safety

standpoint are the following: Number one, let’s use the right definitions. Toxic mold is brand new. It is not scientific. It is based on

media, legal and other issues. Certainly molds do produce toxins,

but you just don’t refer to things as toxic mold.

I urge you to be very careful. Just don’t say ′′harmful.′′ harmful

means nothing. Is it simply an aggravation of allergies or causing

of allergies? So I think we have to be very careful how we do this.

I think we also have to look at and be very careful with triggers

like permissible exposure limits that OSHA sets or recommended,

that NIOSH recommends. There is just no science there right now

to do this.

As far remediation, to what level? I don’t know. Nobody knows,

and that is the problem. While certainly, if you see a huge amount

on the wall, you say, let’s get rid of it, does that being on the wall

produce enough in the air to cause a health problem? My studies

of buildings all over the country just don’t show it. However, I do

see people who have illness.

The bottom line is I urge the committee to address with adequate

funding and oversight appropriate scientific research, assessment

and recommendations. Let the legislation follow the development of

sound science in this area.

Thank you.

[The prepared statement of Dr. Howard Sandler can be found on

page XX in the appendix.]

Chairwoman KELLY. Thank you very much, Dr. Sandler. I very

much appreciate your comments. I will remind all of our panelists

that we do have your written testimony, it is a part of our record

and we will take it into consideration. I would like to give myself

5 minutes for questioning at this point. Dr. Redd, the first thing

I would like to ask you, if you would, in your testimony you listed

a Web site that was available to everyone who might have questions about the mold situation.

I am wondering if you would say that now so we could put it in

as a part of the record and for anyone who might be in the audience who might be interested in that Web site, they would have the

opportunity to copy that down. I believe that you will find that on

page 2 of your testimony, at least that is where I found it.

Dr. REDD. The Web site on page 2 is NTP-server.niehs.nih.gov.

Chairwoman KELLY. Back slash. Would you say that again,

please. Sorry, I want you to say it.

Dr. REDD. It is ntp, dash, S-E-R-V-E-R, dot, n-i-e-h-s dot NIH dot

G-O-V.

Chairwoman KELLY. And then you have to use the slash, the

back slash.

19

Dr. REDD. That is right. I think you have to start with http period, or, sorry, colon double slash.

Chairwoman KELLY. But that is usually on everybody’s computer. It is the rest of it. And I believe someone may want to correct me, it is—I think that slash is important in order to get to the

route. Is that correct?

Dr. REDD. I think it will—.

Chairwoman KELLY. Dot G O V.

Dr. REDD. I think just the G O V will get you there I think.

Chairwoman KELLY. Just G O V will get us there. Thank you

very much.

I wanted to make sure, Dr. Sandler, you said toxic mold is a

term that is scientifically inaccurate. That is very interesting, because I read the word toxic mold often in the press. When they describe mold, it is described as toxic. While all mold is not, those of

us that like gorganzola and blue cheese are aware it is not toxic.

Maybe it is. I would be very interested if you could define that,

toxic mold.

Dr. SANDLER. There are certain molds that produce microtoxins,

about 350 species, just like any other chemical. If you are exposed

in the appropriate manner either through inhalation or more probably ingestion, these type of microtoxins have been shown to cause

problems. The mere fact that you just go from mold to ′′toxic mold′′

to me is more of a media event than a scientific event. All chemicals are toxic at the right dose. That is all it means.

So I think you have to be very careful, though, to let the research

determine what are the roots of entry whether it is inhalation, ingestion, and I don’t think it would be skin absorption, as well as

the levels at which each one of those produce the problem. Clearly,

like I said before, the Soviet Union experienced that bad—we lost

I think 100 turkeys in this country. Not human turkeys, the fowl

type.

If you look it up in the literature, you will find there are plenty

of mold-related cases and usually from ingestion of moldy food

products. By the way, though, if you look at, as I think people already mentioned, there are a variety of different food substances.

There are levels of microtoxins that are available. And the FDA

has allowed a certain level of aflatoxin, which is a potentially carcinogen in wheat and other wheat products. So I don’t think we can

ever get rid of mold nor should we look at that. I think we should

try to find out what is a level that won’t produce harm.

Chairwoman KELLY. Thank you. Dr. Redd, when the CDC finishes its literature review on mold, what are the potential next

steps, and how likely is it that we are going to be able to separate

the valid consumer risk from bad science? Dr. Sandler has brought

this up. How are we, the public, going to understand this?

Dr. REDD. The recommendations of the committee, the Institute

of Medicine Committee, I think, is charged with doing exactly your

last point. Separating the wheat from the chaff, the things that we

know to be true from the things that we don’t know to be true or

not true. We are very much looking forward to the recommendations of that report, both from the public health intervention side

as well as for guidance in the types of research that the committee

recommends.

20

Chairwoman KELLY. Mr. Tighe, one last question, what is your

union doing to educate your members at large and the consumers

about controlling indoor mold growth?

Mr. TIGHE. We have trained stationary engineers that have the

maintenance responsibility for about 2 billion square feet of commercial space to date. Unfortunately, when our course was written

in 1995, mold was not a great issue in indoor air quality. Since

then, it has been a growing issue. And we provide research, public

research to our local union training programs and try to give them

documents, as I referenced, the EPA remediation guide for schools

and commercial facilities and try to establish best practices.

Because the one thing that we have certainly heard today is that

there continues to be the uncertainty as to the health effects of

mold. But the one thing that is not uncertain is that there are very

precise ways that you should deal with mold in order to not spread

the mold. And just one example, if I may, Chairwoman, in most

heating ventilation and air conditioning systems in the United

States, they take the return air and rather than duct that air back

to the system, they use the space that is above the ceiling. So there

may be a 3-foot space above that ceiling, that return air is taken

in and across that space and back into the system. Now, if you

have leaks and you have moisture and you have mold, and somebody gets into that ceiling and disturbed that, that is picked up by

the HVAC unit, put through the system, and dispersed into the occupant area.

Well, we try to stress to stationary engineers and maintenance

people that have some effect on this is to use good preventive maintenance activities and standards to try not to spread the molds to

various areas.

Chairwoman KELLY. Thank you very much, Mr. Tighe. I am out

of time and I turn now to Mr. Gutierrez.

Mr. GUTIERREZ. Thank you very much. I guess what we have

heard today, it is a very interesting panel, a very diverse panel, is

kind of there is something dangerous out there, we don’t know

what it is, so let’s not fret too much about it; it is there, but we

can figure it out in some time. Lawsuits is what is causing everything, it is not the mold. It is really mold, but if it weren’t for the

all the lawsuits, the mold would go away, and these kinds of situations.

But I think there is kind of little middle ground here, and that

is that something is wrong. There is a problem. Some may want

to diminish the problem, some may want to blame the problem on

lawyers, but the fact is that we have somebody that is here that

represents 18,000 people that got together that doesn’t seem like

they all have a lawyer. They all went to court and they are all suffering some damage.

And you know, I know that many times we like to look at situations and I was talking to my friend, Congressman Conyers, and

we were talking about when AIDS first came and everybody said

well, you know, that is just consenting homosexuals, that is really

not a problem that the public has to deal with. And we deal with

a lot of different things. You know, if people would only drive slower but then we decided seat belts was a good thing and side safeVerDate 11-MAY-2000 10:20 Nov 13, 2002 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 C:\DOCS\82476.TXT HBANK1 PsN: HBANK1
21

ty—I mean all kinds of safety things, and we passed laws and we

save lives by doing that.

We took on the—you know, if people didn’t smoke, well, they

wouldn’t get lung cancer, but we put it on packages. I can even remember learning about good old Smokey the Bear and not ever

starting a fire. We certainly know how important that message is

given the tragedies that are happening in the west in our country.

So it seems to me that there is a problem. I know that Mr. Howard from the home builders says yeah, there is a problem, get some

standards. Let’s figure it out so we can all use the same standards.

It seems like Mr. Tighe also says let’s figure this out. So I say let’s

figure it out because I think there is a problem out there that

homeowners are having.

I just have a problem with always blaming the victim, always

saying well yeah people have a problem, but, you know, they are

creating the problem so they can go to a lawyer and create a whole

new industry. I don’t know that people do that by and large. I find

that the American public is honest, hard working, God fearing and

is doing the right thing. And they are trying to keep their most valued asset, their home. So I guess, Dr. Redd, it is on you, when do

you think we can have some answers that are, you know, scientific,

objective, that we could look at so that we can create the kind of

standards and legislation to help all of the home owners that Mrs.

Ballard represents and that are suffering?

Dr. REDD. I agree with your statement that we need some answers. As far as an exact timetable to have all of this figured out,

I really can’t give you that. What I can say is that in about a year,

give or take a few months, we will have a report from the Institute

of Medicine which will, more or less, provide with us a blueprint

for things that we really ought to be doing now, and things that

we ought to be studying. So I think that is going to be a real milestone in terms of getting the answers that we really need.

Mr. GUTIERREZ. Do you have all of the staff and adequate funding that would you need to get an answer?

Dr. REDD. I think that in terms of activity between now and the

time that report is released, we do have resources to investigate

clusters of illness as we find out about them. I think from the point

of the—when that report comes out, it is going to depend on a lot

of on what sort of recommendations there are. It is really impossible to say what might be in the report and whether, or whether

we wouldn’t have resources at that point.

Mr. GUTIERREZ. Given today and the kinds of things that we

have learned today and the kinds of information that we have, I

think it would be safe to say that there are molds, molds do cause

problems, they are some relationship with molds and illnesses, but

we are not quite sure what the relationship is between those illnesses and molds. But mold, I don’t think it is an issue we should

ignore.

Dr. REDD. I absolutely agree with that.

Mr. GUTIERREZ. Thank you. We will see if we can work with you

to get that report as quickly as possible to get some solutions.

Thanks.

Mr. MILLER. [presiding.] Thank you. I award myself five minutes.

I was reading the book Leviticus that said God put a spreading

22

mold in the House of Aaron and Moses. I don’t disagree with what

my colleague said at all. We know there is mold, the only difference

is we don’t know what the problem is. I listened to every witness

out here, and everyone acknowledges yes, there is mold, but is

there necessarily a harmful affect on individuals from that mold.

Is it a causal effect of the mold that happens to be there and an

individual who might be sick.

Just because there is mold does not mean an individual is sick

from that mold. Yet the mold might be causing some damage. We

don’t really know. I have tried to research this as hard as I could

and I have read everything I can get. I have talked to environmental scientists and I have talked about the parts per billion in

a silo and this and that. We could argue mulch and all these

things, but the problem is we don’t know what the problem is.

And I think, Mr. Gonzales, you said earlier we want to hear the

facts. I can’t agree with you more. I believe accountability and responsibility and when it came to the seat belt your car hits the

wall, if a person flies through the window well, yeah, you know, a

seat belt is going to stop you from flying through the window. But

that is not what mold is. And you gave this very—Mrs. Ballard,

you gave a statement and you painted this picture imagery, it was

imagine the insurance company report that the claim, you know,

you have, that it is being denied, and imagine watching blood come

out of young child’s ears and nose and the insurers denying a

claim. That is terrible. Nobody would accept that. That is egregious. But was that your situation?

Ms. BALLARD. Yes, it was. We tried to make repairs. We had

scheduled repairs in our home in January and February of 1999.

Mr. MILLER. I wanted to ask you about that. What was your

problem?

Ms. BALLARD. We had a series of water leaks. It was several

plumbing leaks.

Mr. MILLER. It was in January?

Ms. BALLARD. It was in December of 1998. Close to January.

Mr. MILLER. In the testimony you had given, you had said it was

in January of 1998. And then when did you notify your insurer of

that?

Ms. BALLARD. Immediately.

Mr. MILLER. Your testimony said December of 1998 you notified

your insurer of a leak and made a claim. You found it in January

and you notified the insurer.

Ms. BALLARD. No. No. No. I am sorry, let me clarify. The claim

was made in December of 1998.

Mr. MILLER. You notified the insurer that you had a leak in December of ’98, but you found the leak in January. So almost a year

went by between when you found the leak and notified them. You

notified them in December and then 2 months later they gave you

a check for $108,618. Is that correct?

Ms. BALLARD. Not exactly. I think you are misquoting our—well,

please, let me finish because I don’t want you to misquote anything. We had 13 water leaks in our house. And our claim, what

our insurance company thought was the source of the problem had

been fixed 10 months before I had reported a claim. It appeared as

though—not appeared, it was found out subsequent to that that

23

there were 13 water leaks that were not discovered by the insurance company’s plumbers.

Mr. MILLER. But what we gathered from the court text was that

they were notified in December. And 2 months later they wrote you

a check for 108,000. The point I am trying to make is if we are

dealing—you painted this picture about negligence and the terrible

insurance company. That is an egregious company to think an insurer would come out and deny a claim. But in your situation, they

didn’t deny your claim.

In fact, when they paid you in February, your attorney notified

them of mold April 7th of 1999. That is the first time the insurer

knew about mold. April 8th the next day, they inspected your

home.

Ms. BALLARD. That is incorrect. Just so we go back and I don’t

want you to misspeak—.

Mr. MILLER. I don’t want to.

Ms. BALLARD. The claim was made, they thought the cause was

relating to a water leak that had been fixed 10 months before.

They, in fact, were incorrect. It was there were 13 other ongoing

leaks. Now, they did pay $100,000. We refused to accept the check

telling them that that was insufficient.

Mr. MILLER. But you cashed—but—one second. You cashed that

check in late February, that month.

Ms. BALLARD. We told them this was unacceptable because their

own estimates were well exceeding that amount.

Mr. MILLER. I accept that. And then in April you told them about

the mold. And then you both agreed to an independent umpire.

And they gave you a check for $1.2 million.

Ms. BALLARD. Sir, that occurred about 18 months after we are

talking. Mold does not stop growing because of an insurance company’s delays. They—and the appraisal process was called for by

the insurer, the umpire was later found out to have been—.

Mr. MILLER. I am running out of time. Did you ever make the

repairs.

Ms. BALLARD. Yes, we did. We repaired every water leak in the

house.

Mr. MILLER. I am going to have to reread the court document because it said they were never made.

Ms. BALLARD. We repaired every water leak in the house.

Mr. MILLER. I am going to close with the fact that if anybody has

a claim and an insured does not cover it, there is not a person on

this panel who would not want to hold the insurance company absolutely accountable and responsible for that. But what was the entire—there was—there was no award to you for health.

Ms. BALLARD. No, sir, there was not.

Mr. MILLER. What was the total award? 33 million?

Ms. BALLARD. 32, and there was $6-1/2 million of actual proven

property damage. Every one has focused on the health effects.

Mr. MILLER. $6 million worth of property damage in a home that you paid $275,000 for 10 years before.

Ms. BALLARD. And made a whole lot of additional improvements

and had a lot—.

Mr. MILLER. Must have been—thank you very much. Ms. Lee. I

am sorry, Mr. Gonzales then. Mr. Inslee.

24

Mr. INSLEE. I am sorry, I thought there was others who have

been waiting longer than me.

Mr. MILLER. You want me to pass you and come back.

Mr. INSLEE. I will go ahead. I am trying to be gracious. That is

a little unusual here so I was just trying. Mr. Howard, I think you

heard me allude to my son builds houses on Bainbridge Island,

Washington. That is just west of Seattle.

Mr. HOWARD. God bless him, sir.

Mr. INSLEE. We are proud of our sons and daughters. He does

great work. He really is a guy who takes a lot of pride in his work.

That is one of the things I am so proud of in seeing his work. And

I want to ask you about your sort of response to this issue. When

an industry gets in a situation like this where you have obviously

had an explosion in claims it sounds like listening to Mr. Stewart,

any way, there is sort of a couple responses it can take. One it can

try to educate the public about how to—maybe three kind of responses, educate the public on how to avoid problems associated

with the product, that is one response.

Second, to try to deny there is any losses associated with the

product, that is the second response, and third, to try to reduce the

occurrence of the problem by helping educate members of the association of your producers in how to reduce the exposure, reduce the

number of incidents which do occur, I think everybody agrees, on

occasion. Could you categorize how your engineers have been on

those three efforts?

Mr. HOWARD. We have been very aggressive in items 1 and 3,

specifically we have, as I mentioned in my statement, prepared a

Web site which would be mold tips dot com for consumer Web sites,

for consumers to go on and look, and we have got a whole list of

things that home owners can do to reduce the presence of mold and

the presence of moisture which seems to be from our research the

primary reason for mold in structures. So we have been very aggressive in trying to educate the consumers. I would point out

again our efforts in that regard are bilingual.

Secondly, we have a very well respected research laboratory here

in suburban Maryland called the NHB Research Center. It is one

of the preeminent laboratories for housing research in the United

States. The research center has undertaken to study the building

envelope as a whole to make determinations about what we can do

in the construction process to minimize the possibility for mold in

the home.

In addition to that, we study individual products to determine

mold, their likelihood for providing a food source for mold, and we

are also studying products that are also being touted as mold eliminators. So we are active in educating the consumer in researching

products and the whole construction process so we can educate our

members and in reaching out to our members once they that information and educating the public. We do not deny that there is a

problem. We would like to see the problem studied.

There is obviously a difference of opinion about the extent of the

problem, what causes it. And until we know exactly what causes

it, that is as far as I think we are prepared to go at this point. I

would say, however, that we are prepared to assist the Congress,

25

the CDC or anybody else in the research and we make our services

available.

Mr. INSLEE. What do you think is the most frequent reason for

a problem of excess moisture that might end up in mold growth?

If you are going, if you can just categorize it in the industry.

Mr. HOWARD. I would have to, Mr. Inslee, respectfully ask to be

able to answer that in writing. I am not an expert on that and I

don’t know the answer off the top of my head.

Mr. INSLEE. If could you do that I appreciate that. I will get you

my card.

Mr. Stewart.

Mr. STEWART. On the subject of public information and education, it really is the first line of activity of our organization. Because it is—anything related to any kind of insurance risk we are

trying to do things with this workplace safety or anything that will

help that. We have a Web site that has about 4 million hits a

month. And we also do video news releases to news stations that

have reached some 10, 15 million people. It is a major front line

activity.

As I have said, my own personal example we encourage everybody else. The first line of defense is do something about it rather

than wait for the problem to go. If it is hidden that is one thing.

Obviously you can’t. If there is negligence on the part of some

party, that is something else. An overwhelming majority of cases

simple behavior changes will fix the mold problem.

Mr. INSLEE. Given your success, if I get a constituent with a

mold problem, I will give him your home number.

Mr. STEWART. We maintain a national consumer hot line.

Mr. INSLEE. Thank you. I have one more question. Mr. Sandler,

we have this case on my island where the school got a problem,

$100,000 to fix the problem, sort of, I guess, everybody agreed

there was a problem with excess moisture, excess mold and there

were some pretty well documented health problems associated with

it. And I haven’t asked the people involved. But are there standards now that people do look to for some guidance as to what an

acceptable level is in the ambient air? If I had a constituent who

said I bought this house, I think it has got too much mold, my children are having asthma attacks, et cetera, what do I tell them as

to what to decide whether there is too much or too little mold or

what is the situation with standards in that regard?

Dr. SANDLER. I think the first issue that you really have to look

at is truly what is causing the problems. Remember in a school environment, for example the biggest health hazard you have are

with the kids because of the viruses that they share to each other

and the teachers. So that is issue. Why do people, for example, feel

better during the summer? Is it because they are no longer in the

school environment or is it because they are no longer being exposed to the viruses. Could it be the issues of bacteria and

endotoxin? Could it be from dust mites? Could it be from a variety

of different things? A lot of children or adults once they have asthma, they may have their symptoms exacerbated by odors. So sometimes it could simply be the mildew or some other odor that is

present in the school. Certainly once you have a mold infestation,

it is not pretty, can be structurally problematic.

26

Mr. MILLER. The gentleman’s time has expired. We have to wrap

this up. We have two votes on the floor. We are going to temporarily recess for about 20 minutes. But I would grant Mr. Israel 30

seconds to welcome one of the witnesses who is from his district.

Mr. ISRAEL. Thank you, Mr. Chairman. I understand that Dr.

Sandler’s company is based in Melville, Long Island, my neck of

the woods. I haven’t had an opportunity to hear your testimony, I

am sorry I was late, but I wanted the opportunity to welcome you

to the Capitol and look forward to working with you.

Mr. MILLER. The meeting is recessed for 20 minutes.

Chairwoman KELLY. [presiding.] The hearing is going to resume

now. Apparently some of the people are either stuck on the floor

or had to go to other hearings. I am going to hold this hearing

record open for 30 days so that the members who were not able to

attend the hearing will be able to direct written questions to this

panel, and you can respond within that 30-day period. Since there

are no more questions, the Chair will note that there will be these

additional questions. So without objection, this hearing record will

remain open for 30 days for members to submit those questions

and witnesses to respond.

I want to thank all of you here today. This is a very thorny difficult problem. We need sound science and we need alternatives.

We also need some insurance alternatives so that the insurance

question is able to be met with some alacrity on the part of the people in the industry being able to take care of those people, like Mr.

Tighe and the other people, Mr. Howard, your groups of people who

are involved can get some protection. And also Ms. Ballard, we

need to get you some protection too.

So I thank you all very much for appearing here today. I am

sorry that we kept you through the hearing. I had assumptions

that some of the people were going to come back but apparently

they aren’t able to. So thank you. We appreciate it. And this hearing is adjourned.

[Whereupon, at 4:22 p.m., the joint subcommittee was adjourned.]

(27)

A P P E N D I X

July 18, 2002

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