Like millions of people, Tyger Dacosta fell victim to what has been described as the largest product recall in American history: the Takata airbag recall.
He soon discovered that not only was this crucial safety device defective, but the repairs would be slow.
“So, for eight months, I was driving around in a dangerous car,” he said. “That could have killed me.”
For that risk and inconvenience, Dacosta figured he was due part of the $95 million fine that Takata has been ordered to pay the federal government. He was wrong.
“I got zero,” Dacosta said. “Zero.”
So, where does the money go?
The short answer is: a place few trust or have access to.
We analyzed three years of federal fines at nine large agencies, totaling more than a billion dollars. What stood out in our limited review is how rarely corporate fines are earmarked for consumers or the agency that investigated.
For example, when the Consumer Product Safety Commission announced that Gree Electric Appliances would pay a $15 million fine for making defective dehumidifiers, that money went “straight to the U.S. Treasury for general use,” the CPSC said.
When Fiat-Chrysler reached an agreement with the National Highway Traffic Safety Administration over its response to recalls and agreed to pay a $105 million civil penalty, that money went to "the U.S. Treasury for general use,” NHTSA said.
And, a $100 million Federal Communications Commission fine that AT&T faces for claims it misled customers about its unlimited data plan is destined for “the U.S. Treasury for general use,” the FCC said.
Over and over, U.S. government agencies told us federal law requires them to send fines into a general pool that Congress spends as it sees fit.
“I think it’s a travesty,” said Rosemary Shahan, who runs the Center for Automotive Reliability and Safety. “That’s money that could go to prevention and compensation for victims.”
Shahan is a longtime crusader for automotive safety and consumer rights. She believes federal fines should stay in the federal agencies that sniff out the misconduct — not Congress.
“I think probably every safety group in the country would like to see that happen,” she said.
One federal agency told us it is set up differently: The Consumer Financial Protection Bureau.
The CFPB recently fined Wells Fargo $100 million for opening bogus accounts without customers' consent. But that money did not go to Congress. The full amount went to a fund that is specifically designated for financial education and victim compensation.
It's called the CFPB Civil Penalty Fund, and it has grown rapidly over the past three years. The balance of the consumers-focused fund is now $305 million.
But the stockpile has also raised eyebrows.
It sits in a non interest-bearing account with the Federal Reserve Bank of New York. Critics call the pot too large, the agency too aggressive.
During an April hearing on Capitol Hill, U.S. Sen. Richard Shelby (R-AL) challenged CPFB Director Richard Cordray.
“Some people believe what you all are after is money, rather than justice,” Shelby asked. “What do you say to that?”
Cordray shot back without hesitation.
“I think if you’re enforcing the law, there are people who aren’t going to like it,” he said.
NBC asked CFPB about the size of the $305 million fund. To explain the agency’s answer, we discussed Enron.
When that embattled, Texas-based energy company imploded in 2001 thousands of people lost billions. There was basically nothing left of Enron.
The CFPB said its nine-figure fund is designed to bail out victims of the next Enron-style collapse. Essentially, today’s fines from a company that is still solvent — and able to separately pay restitution — might help compensate the future victims of another firm that goes belly-up.
But it is an exception.
Federal fines in many other consumer-focused agencies are paid to the U.S. Treasury – where Congress controls spending. That’s where Takata’s $95 million went.
And that angers Dacosta. “Congress has no business spending that money,” he said. “The money belongs to the people. The people who are driving around in dangerous cars like this.”
Shahan, the consumer advocate, told us this setup is unlikely to change. She said she and others have attempted to change the law to direct fines to victims.
But lawmakers have resisted, she said.