Manufacturers say they are not responsible for FEMA trailers that had toxic levels of formaldehyde, despite Democrats' findings that companies knew about the dangers yet sold them to the government anyway after Hurricane Katrina.

The report by Democrats on the House Oversight and Government Reform Committee is at odds with an analysis done by Republican staffers on the same committee. The Republican report backs the companies and found that trailer manufacturers should not be held accountable for the high levels of formaldehyde — a preservative commonly used in building materials — in trailers that the Federal Emergency Management Agency set up to house people displaced by Katrina in 2005. Republicans say it is the government's fault for not having standards for safe levels of formaldehyde in trailers.

But Democrats say their staff interviewed employees from one of the manufacturers — Gulf Stream Coach — who said they, too, were suffering effects from formaldehyde exposure, including nose bleeds, shortness of breath, dizziness and bleeding ears. One employee told investigators that there was a foul odor throughout the plant.

Gulf Stream Coach, Inc., received the bulk of the FEMA trailer contracts after Katrina, collecting more than $500 million.

Committee Chairman Henry Waxman, D-Calif., said the Democrats' investigation found that Gulf Stream did test trailers, but treated the test results as a public relations liability instead of as a health hazard.

"It found pervasive formaldehyde contamination in its trailers, and it didn't tell anyone," Waxman said Wednesday.

Chairman of Gulf Stream Jim Shea said there was no actual "testing" of trailers. Instead, there was informal screening with a Formaldemeter, which is not a scientific test.

However, Shea said his company in 2006 asked FEMA if it should test the trailers. But FEMA said no, he said.

The accusations against these manufacturers will make it difficult for the government to do business with them in the future, said Rep. Mark Souder, R-Ind. And no company would agree to cooperate with the government if this is the outcome, he said. The four trailer manufacturers testifying Wednesday all come from Souder's district in Elkhart County, Indiana. These are among the manufacturers being sued by people who lived and currently live in these trailers. Souder sits on both Government Oversight and the Homeland Security committees. FEMA is part of Homeland Security.

The Republican report also faults the Centers for Disease Control and Prevention, FEMA and the Environmental Protection Agency for controversial testing that it says led to misleading results about the formaldehyde exposure. Last year, scientists tested hundreds of FEMA trailers and found potentially dangerous levels of formaldehyde.

Tony Buzbee, a lawyer representing hundreds of current and former trailer occupants who are suing dozens of trailer manufacturers, said it's laughable to assert that the manufacturers bear no responsibility for the levels of formaldehyde in the trailers they made.

But there is no government standard for the amount of formaldehyde in travel trailers. The government sets standards for indoor air quality for materials used to build mobile homes, but not travel trailers. If the government were to set a standard for materials in travel trailers, the order would have to come from Congress.

Until experts determine a safer level of the preservative, FEMA has set its own standard at 16 parts formaldehyde per billion parts of air.

To make a point, Republican staffers used a Formaldemeter to test the formaldehyde levels in the room next to the hearing room and found the levels at 80 parts formaldehyde per billion parts of air.

Tests last year found an average of 77 parts formaldehyde per billion parts of air in FEMA trailers. Gulf Stream's Shea said 16 parts per billion is not a realistic standard, and his company will not agree to it.

Gulf Stream's lobbying costs have more than doubled over the course of the controversy. In 2003 and 2004, there was no lobbying activity on behalf of Gulf Stream for trailer-related issues. In 2005, Gulf Stream paid less than $10,000 to lobby the House and administration on trailer contracts. But it paid $50,000 in 2006, $120,000 in 2007, and $60,000 in the first quarter of 2008 to lobby the House and administration on trailer issues, according to Senate records.

Katrina victims now occupy 15,000 travel trailers in the Gulf Coast. This is down from the more than 143,000 trailers that once housed Katrina victims.