Mazda Motor of America of Irvine, California, will pay a total of $5.25 million for alleged violations of a Federal Trade Commission order and state orders related to lease advertising for its cars and trucks.

Under an agreement reached in October, Mazda will pay $4.05 million in civil penalties for allegedly violating a February 1997 FTC order. It was the largest civil penalty ever obtained by the Commission's Bureau of Consumer Protection. The 1997 order required Mazda to disclose important leasing terms clearly and conspicuously.

The FTC found, however, that Mazda's television leasing ads continued making disclosures that were in small and unreadable print, offset by distracting images or sounds, or that appeared on the screen for too short a time.

Mazda will also pay a total of $1.2 million in fines and costs to 24 states as part of the settlement.

"This substantial penalty should not only deter future violations of the FTC's order by Mazda, but send a strong signal to everyone in the automobile industry -- manufacturers, dealers and advertising agencies -- that important leasing information cannot be buried in fine print," said Bureau of Consumer Protection Director Jodie Bernstein. "This information is vital to consumers who are thinking about leasing or purchasing a vehicle."

The 1997 FTC order required Mazda's print and television lease ads to "clearly and conspicuously" inform consumers of important leasing terms such as the amount due at lease inception, and prohibited the company from highlighting only the most attractive lease terms such as low monthly payments.

According to the FTC, even after agreeing to the 1997 settlement, Mazda continued to run lease advertisements that allegedly violated the order. Mazda has also agreed to settle similar allegations made by 24 states.

GE's Belated Clean-Up

General Electric will spend more than $250 million to settle allegations that it polluted the Housatonic River with PCBs.

Federal officials alleged that the contamination resulted from GE's use of polychlorinated biphenyls (PCBs) and other hazardous substances at its plant in Pittsfield, Massachusetts.

Under the settlement, GE will remove contaminated sediment from the half-mile stretch of the Housatonic River nearest the GE facility by May 2001, cleaning both river banks and property in the river's flood plain.

GE also will clean up contamination at the Pittsfield plant and other sites in Berkshire County, including a school and several commercial properties.

From the 1930s until 1977, when PCBs were banned, GE manufactured transformers and other equipment containing PCBs in Pittsfield, causing widespread contamination of the 250 acre site and the river. PCBs are today found in the Housatonic from western Massachusetts to the mouth of the Long Island Sound.

Under the agreement, after the EPA selects a cleanup plan for downstream portions of the river, GE will perform that cleanup as well. The cost of cleaning the downstream areas will be in addition to the $200 million plus cost of cleaning the river closer to the plant and the plant site.

The settlement also addresses claims that GE damaged natural resources in the Housatonic River downstream from the site, extending through Massachusetts and Connecticut. GE will pay $15 million to natural resource trustees -- the U.S. Fish and Wildlife Service, the National Oceanic and Atmospheric Administration and agencies in Massachusetts and Connecticut -- to restore or acquire habitat and promote the recovery of fish and birds in the area

Agents of State Farm

A group of current and former State Farm Mutual Insurance Co. agents gathered at the National Press Club in October and called upon House and Senate Congressional committees and state insurance commissioners to investigate consumer abuses by State Farm, the nation's largest insurance company.

"This company overcharges homeowners, tries to force its agents to sell life insurance whether clients need it or not, and then turns around and blames its agents when they get caught," said former California State Farm agent Verne Walton.

State Farm has more than 66 million policyholders nationwide. The company has lost more than $1.5 billion in legal cases in 1999. The lawsuits accuse the company of doctoring claims, using fraudulent medical consulting firms, fraudulently using after-market replacement parts and misrepresenting life insurance policies as savings accounts to its customers.

"This company has not learned its lessons and has not changed its ways," said Rich Pyorre, a former State Farm agent. "These problems go all the way to State Farm's CEO Ed Rust Jr. and we believe he should resign from this company."

State Farm said that the media event put on by the agents was "a sad distraction caused by a few dozen people -- most of them disgruntled former agents with a litigation inspired motive."

State Farm's general counsel, Kim Brunner, said that virtually all of the 40 people who signed the letter seeking an investigation "have been involved in litigation with State Farm for more than two years -- 28 of them over State Farm's decision to terminate their contract."

--Russell Mokhiber