2014 Program Report

From The DirectorEmily Rusch, Executive Director

Dear CALPIRG member,

As ever, 2014 was a year of ups and downs for Californians.

On the one hand, there have been real signs of progress. We kicked off a campaign to stop the overuse of antibiotics on factory farms, and brought our case to Sacramento and the White House. Rate review saved people millions on their health insurance premiums, and for the first time, Californians with pre-existing conditions can get the coverage they need and stand on a level playing field with big insurers. And more Californians are able to make informed decisions about the food they buy, as more and more companies respond to consumer demand for GMO labels.

Even at the federal level, where gridlock and partisan polarization are the name of the game, we’re moving forward. Our work to reclaim our democracy reached new heights, with a constitutional amendment to overturn Citizens United reaching the Senate floor for a vote. And the Consumer Financial Protection Bureau continued to be a champion for consumers in the financial marketplace, providing more than $4.6 billion in relief and refunds for consumers harmed by illegal practices.

On the other hand, the 2014 elections highlighted the disparity between regular Californians and mega-donors, as dark money and Super PACs continued to flood our elections in the wake of wrong-headed Supreme Court decisions. Meanwhile, special interests stood in the way of commonsense reforms to protect our antibiotics, or to give us the right to know what’s in our food.

On these issues and others, CALPIRG studied and presented the facts for our case, reached out to decision-makers, brought our findings to the media, worked with new allies, and mobilized the public when we needed it to win. This work isn’t easy, especially given some of the special interests that we’re often up against. But thanks to your support, and the support of all of our members, we’re able to organize and build the power that we need to bring about real results for Californians.

Thanks for your support. We couldn’t do it without you.

Emily RuschExecutive Director

ON THE COVER: 1) Legislative Advocate Garo Manjikian spoke at a press conference in support of a bill to stop the overuse of antibiotics on factory farms. 2) Executive Director Emily Rusch filed a brief with the California Supreme Court in support of Proposition 49. 3) Consumer Program Director Ed Mierzwinski testified in Congress about the Target data breach. 4) Emily Rusch participated at a forum about small donor empowerment.

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As consumers, we should be able to make healthy, responsible and in-formed food choices, but instead we’re left in the dark about whether our food contains ingredients from genetically modified organisms (GMOs).

Most of the food available on store shelves contains GMOs—and it’s not without risk. Crops that are genetically modified are designed for increased pesticides and herbicides, which have been linked to serious health impacts. More than 60 countries, including the entire European Union, already require GMO labeling, but here in the United States, consumers are still denied this basic information.

To win consumers the right to know, CALPIRG has taken a two-pronged approach. As we’ve pushed for state and federal laws to require GMO la-bels, we’ve also called on grocery stores to label GMOs in their store-brand products.

Phone Banks, Shareholder Action In March, CALPIRG organized a call-in day that resulted in 150 phone calls to key legislators, helping to advance a statewide GMO labeling bill out of committee. However, the bill failed in the state Senate in May, despite receiv-ing a majority of the votes recorded.

“Despite the fact that a majority of Californians support labeling, big agri-businesses and the biotech industry lobbied heavily to defeat this bill,” said CALPIRG Legislative Advocate Garo Manjikian, in the Los Angeles Times. Meanwhile, California’s own Sen.

Barbara Boxer has introduced legis-lation in Congress to require GMO labels. CALPIRG is teaming up with state PIRG staff across the country to demonstrate the public support we need to get the bill to a vote, and win.

In recent years, food companies have taken steps to eliminate or label GMOs in their products. This growing list includes well-known companies and brands such as Cheerios, Chipotle, Whole Foods, Ben & Jerry’s, and more.

In July, we worked with Green Century Capital Management—a fossil fuel-free mutual fund founded by PIRG in 1991—to present a shareholder reso-

Let’s Label GMO Foods Calling On Grocery Stores To Give Consumers The Right To Know

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FIGHTING FOR THE RIGHT TO KNOW—In 2014, CALPIRG worked to take the mystery out of food shopping and give consumers the right to know whether the foods they buy contain genetically modified ingredients.

lution urging Safeway Inc. to label its store-brand products. Typically these types of resolutions gain the support of 5 percent of shareholders in the first year filed. In this case, despite strong opposition from the Safeway board, more than 10 percent of the company’s shareholders supported the GMO la-beling measure.

“It’s a start,” said CALPIRG Pro-gram Director Steve Blackledge, who presented the resolution at the board meeting. “As we keep pushing, we’re confident that more and more food companies will decide to give consumers the right to know what’s in their food.”

California Public Interest Research Group

Antibiotics are a critical component of modern medicine. They are essential to keeping people alive and well—wheth-er it’s fighting pneumonia, or dealing with infections that set in from scrapes or after chemotherapy and major sur-geries. But fueled by the misuse and overuse of the drugs, some bacteria are becoming “superbugs” that are resistant to antibiotics. Public health experts all warn that antibiotic resistance is a seri-ous, growing public health threat.

In response to these warnings, CALPIRG, along with our nationwide federation of state PIRGs, launched a campaign to stop the overuse of anti-biotics on factory farms, one of the pri-mary drivers of this problem. In 2014, we called on the Obama administration to take action to address this problem, and called on our state legislature to pass a law here in California to enforce stronger guidelines on the use of anti-biotics on healthy animals.

A Growing Public Health Threat More than 70 percent of antibiotics sold in the United States are used on animals. Antibiotics are typically given in large doses to livestock in their daily feed, mostly on animals that aren’t even sick! The Centers for Disease Control and Prevention (CDC) has warned, “much of antibiotic use in animals is unnec-essary and inappropriate and makes everyone less safe.”

According to the CDC, every year at least 2 million Americans become in-fected with bacteria that are resistant to antibiotics, and at least 23,000 people

die each year as a direct result of these infections. The World Health Organi-zation has also warned that “without urgent, coordinated action … the world is headed for a post-antibiotic era, in which common infections and minor injuries which have been treatable for decades can once again kill.”

California Can Be A LeaderCALPIRG supported legislation by Assemblymember Kevin Mullin (South San Francisco) to require all livestock and poultry producers that sell their meat in California to stop using anti-biotics on animals that aren’t actually sick.

Over the summer, CALPIRG launched a citizen outreach campaign on the issue. We educated more than 60,000 Californians, and collected 20,000 peti-tion signatures calling for action. We

also worked to unite health profession-als with parents and other concerned citizens to convince our elected of-ficials that strong action is both medi-cally necessary and politically popular.

Taking our case to the federal level, CALPIRG and our sister PIRGs across the country launched a nationwide campaign to convince the Obama administration to direct the Food and Drug Administration (FDA) to define the acceptable use of antibiotics on factory farms, and ban the practice of giving antibiotics to healthy animals.

In July, CALPIRG Federal Program Director Mike Russo testified before the President’s Council of Advisors on Science and Technology, bringing more than 50,000 petitions and 2,500 endorse-ments from medical professionals. We also partnered with local doctors to

Stop The Overuse Of AntibioticsKeeping Our Life-Saving Medicines Effective

A GROWING CONCERN—CALPIRG Legislative Advocate Garo Manjikian (at podium) worked alongside Assemblymember Kevin Mullin (right) and medical professionals on a bill that would limit the use of antibiotics on healthy animals in California.

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release a new white paper, “Ending the Abuse of Antibiotics in Livestock Production: The Case for Reform.”

The FDA has asked pharmaceutical companies to voluntarily stop the sale of antibiotics to farms for growth pro-motion. Unfortunately, this action is unlikely to solve the problem. Without strong requirements for a reduction

in the antibiotics fed to livestock, the development and spread of antibiotic-resistant bacteria will not slow down.

In September, President Barack Obama issued an executive order that took several important steps necessary to control the spread of antibiotic-resistant bacteria. However, he missed the op-portunity to call for critical reforms in the agricultural sector that are essential to protect public health. So we will keep working to convince the administration to enact stronger measures to stop the overuse of antibiotics on factory farms.

100,000 Petitions To Trader Joe’sWith a legislative and executive strategy deployed, CALPIRG joined Consumers Union to launch a petition drive calling on Trader Joe’s to stop selling meat and poultry raised on antibiotics.

Eighty percent of Trader Joe’s products are private label, which means it has more control over its suppliers and can

use that leverage to increase supply and keep prices competitive. In August, we delivered nearly 100,000 petition signatures to Trader Joe’s corporate headquarters in Monrovia, urging the company to do its part to address this public health crisis.

Other food companies are taking this stand. In February, Chick-fil-A announced that, within five years, it will no longer sell chicken that has been raised on anti-biotics. Other national chains like Whole Foods, Chipotle, and Panera Bread have already made this commitment.

WORKING TO PROTECT PUBLIC HEALTH—Clockwise from top; CALPIRG released a white paper with medical professionals in Berkeley; Federal Program Director Mike Russo testified before the President’s Council of Advisors on Science and Technology; CALPIRG canvassers educated tens of thousands of Californians on the issue this summer.

The overuse of antibiotics

on factory farms puts our health at risk

70% of antibiotics sold in the U.S. are given to

livestock and poultry, mostly to animals that aren’t even sick.

Resistant Bacteria Overuse of antibiotics has led to the rise of drug-resistant

bacteria that can spread from animals to humans through our

food, water and air.

More than 2 million Americans fall ill from antibiotic-resistant

bacteria every year, and at least 23,000 people die from those infections.

PNEUMONIA • STREP THROAT • E-COLI • WHOOP-ING COUGH • BRONCHITIS • PINK EYE • MALARIA •

• EAR INFECTION • IMPETIGO • SALMONELLA • TUBERCULOSIS • MASTITIS • RESPIRATORY TRACT INFECTIONS • E-COLI • WHOOPING COUGH • PNEU-

2014 Program Report

In a democracy, the size of your wallet should not determine the volume of your voice. But after a series of wrong-headed Supreme Court decisions, Su-per PACs and mega-donors now have the ability to drown out the voices of regular voters in our elections. CAL-PIRG is part of a growing movement working to restore common sense to our democracy, calling for a constitu-tional amendment to overturn these rulings, and empower small donors to have a greater stake in elections.

Government By The People ActSpecial interest money has long had a corrosive effect on our politics, but in 2010, the Supreme Court’s Citizens United v. FEC decision unleashed a new era of unprecedented spending by a handful of millionaires and cor-porations on our elections. Since then, we’ve seen the floodgates opened to waves of big money that threatens to drown out the voices of ordinary citi-zens in our democracy.

In January, on the fourth anniversary of the Citizens United decision, CALPIRG and our sister PIRGs held more than 30 lobby meetings in Washington, D.C.

In addition to advocating our ultimate goal—a constitutional amendment to limit big money in our elections—we asked our representatives in Washing-ton to co-sponsor the Government By the People Act. This bill would amplify the role of small donors to make sure the public’s voice is heard and enable more grassroots candidates to run. The bill was introduced in February with more than 100 co-sponsors.

The Government By the People Act would change the way our elections are financed through a combination of matching funds for small donations, and a “My Voice” tax credit. Instead of relying on Wall Street executives or special interest lobbyists for campaign contributions, participating candidates would rely on those that the Founding Fathers intended for them to represent: the people.

People would be encouraged to give small contributions through two parts of the proposal: First, contributions less than $150 would be amplified on a six-to-one basis by a newly-created “Freedom from Influence Fund.” No large contributions would be matched

at all. This means that a $150 contribu-tion would be worth $1,050 to partici-pating candidates.

Second, the first $25 dollars people contribute would qualify for a “My Voice” refundable tax credit. This would help spur more small contribu-tions, allowing candidates to engage with everyday voters rather than just with big-money donors. Seventeen members of California’s congressional delegation co-sponsored the bill.

“The American people deserve a po-litical system that makes sure all of our voices are heard, not just special interests that can afford to spend the most,” said CALPIRG Executive Direc-tor Emily Rusch. “This legislation will help to make that a reality.”

McCutcheon Decision Ups The AnteIn April 2014, the Supreme Court sided with mega-donors over voters yet again, making it clear that it has a fundamentally different vision of democracy than the American people.

In McCutcheon v. FEC, the Court struck down the overall limit on what an individual can give to federal can-didates, parties, and PACs in a two-year election cycle. That limit stood at $123,200—more than twice the average household income in the U.S. In 2012, only 1,219 donors came within 10 percent of hitting the aggregate limit. Research from CALPIRG and Demos projects that now that the aggregate limit has been struck down, this same set of 1,219 donors will be able to more than triple their contributions, to $459.3

Reclaim Our DemocracyFighting Back Against Big Money In Politics

DEMOCRACY FOR THE PEOPLE—CALPIRG Executive Director Emily Rusch filed a brief with the California Supreme Court in support of an initiative to overturn Citizens United.

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million. The 2014 congressional elec-tions were the first under the new rules.

Despite this setback, there have been signs of progress. In July, a constitu-tional amendment to restore limits to campaign contributions passed the Senate Judiciary Committee, and went to the floor of the Senate for a vote.

However, it failed to earn the two-thirds majority it needed to advance. In the meantime, CALPIRG is at the forefront of a growing national move-ment that has led 16 states and more than 550 cities to go on record in favor of an amendment to restore common sense to campaign finance.

New Voters: A Growing VoiceYoung people have a lot of challenges ahead of them—such as the soaring levels of student debt, the impacts of global warming, or difficult job markets —so how our elected officials tackle these and other pressing issues will have a sizable impact on the world

they inherit. Yet despite this, young people often feel disconnected from our elected officials, and have lower voting rates than older Americans. Since 1984, CALPIRG has been work-ing to engage young people in our democracy and remove barriers that prevent eligible young people from voting.

We are supporters of online voter reg-istration, and in 2014, California Sec-retary of State Debra Bowen launched a new, improved online voter registra-tion website that will work better on the mobile phones many young people will use when they register.

Over the summer, CALPIRG staff worked with more than 50 college campuses on their plans to make sure that students had the opportunity to register and vote this Election Day. In the run-up to the midterm elections, our New Voters Project helped tens of thousands of students register to vote for the first time.

EMPOWERING SMALL DONORS—CALPIRG Executive Director Emily Rusch (right) spoke at a forum about small donor empowerment with Reps. Jared Huffman (Calif., third from right) and John Sarbanes (Md., second from right), the author of the Government by the People Act.

Timeline: Elections, Big Money And The

Supreme Court

✓ March 2002The Bipartisan Campaign Reform Act of 2002 (BCRA, or McCain–Feingold Act) is enacted into law to address the role of “soft money” and the increasing presence of advocacy ads.

✗ January 2010 Citizens United v. Federal Election Commission ruling prohibits the government from restricting independent political expenditures by corporations, labor unions and other associations.

✗ April 2014 McCutcheon v. Federal Election Commission strikes down overall contribution limits to candidates and political committees. CALPIRG research found that this ruling could bring $1 billion in additional campaign contributions through the 2020 election cycle.

✗ November 2012In the first presidential election after Citizens United, just 32 mega-donors giving an average of $9.9 million matched the $313 million that President Obama and Mitt Romney raised from all of their small donors combined.

California Public Interest Research Group

The last year has brought with it some major shifts in the health care marketplace. For the first time ever, in every state in the country, millions of Americans with pre-existing con-ditions will be able to get the cover-age they need—and finally stand on a more level playing field with the big insurers.

Last year, CALPIRG and CALPIRG Education Fund educated tens of thousands of people across the state about how to navigate the new health care marketplace. Meanwhile, for the third year, California’s rate review law saved consumers and small busi-nesses hundreds of millions in health care costs.

Health Care Questions Answered In the face of glitches, confusion and misinformation, CALPIRG and CALPIRG Education Fund launched a statewide outreach campaign to provide young people with the tools they need to make smart health insur-ance choices.

We passed out tips to more than 100,000 households across the state, and in October, CALPIRG Education Fund held six events at college cam-puses to release our guide, “So You Need Health Insurance. Now What? California Health Insurance 101.”

This effort was undertaken along-side our national federation of state PIRGs. All told, the project reached more than 100,000 students across 18 states with facts about the Afford-able Care Act, and tips on making the

most of the new options to find the right coverage for themselves.

Health Care 101 CALPIRG also worked to ensure that consumers have the information that they need to make smart choices about their insurance. We testified before the Covered California board about the need for quality ratings of the hospitals and doctors that differ-ent insurance plans offer.

New rules allow consumers to make apples-to-apples comparisons about prices and the types of coverage they can get. Now consumers can also see what doctors are included, as well as the overall quality of the insurance plans.

Even more work needs to be done, however, to lower the high cost of health care. As much as one-third of

all health care spending is wasted on things like unnecessary paperwork, out-of-control hospital costs, and the wrong medical treatment. CALPIRG is calling on the state Legislature to hold the health care industry accountable for reining in costs or improving the quality of care.

Rate Review Saves $349 MillionSince a CALPIRG-backed health insurance rate review law was es-tablished in 2011, the review process has saved California consumers and small businesses $349 million.

Under current law, health insurance carriers must publicly justify any proposed rate increase on individual or small group health plans. Health insurance carriers must submit rate filings to state officials for review, and the public is able to access the filings online and comment on them.

After this comment period, regula-tors meet with carriers, and can then request that they modify or reduce rate increases if they find that they are unjustified. However, carriers are not required to comply with the request, and those rate increases are declared “unreasonable.” According to a CALPIRG white paper released in April, since 2011, nearly 1 million Californians have been subject to these “unreasonable” rate hikes.

However, of the 369 rate filings reviewed since 2011, only 16 times did carriers move forward with “unreasonable” hikes. As a result of objections raised in the rate review

Making Health Care WorkHolding Insurers Accountable & Educating Californians

NEW HEALTH CARE CHOICES—CALPIRG Student Chapters Campus Organizer Becca Loux educates students about choices with our Health Care 101 report at UC Santa Cruz.

process, carriers have reduced or withdrawn 44 rate hikes, saving money for an estimated 1.3 million Californians in each year rate review has been in effect.

We’ve seen the effectiveness of the rate review process for individual consum-ers and small businesses. In order to

fully protect all consumers from unrea-sonable rate hikes, rate review needs to be expanded and strengthened.

Over the summer, after rate review had three full years to prove its ef-fectiveness, a CALPIRG-backed bill made its way through the California state Legislature that would allow for similar scrutiny of plans for large em-ployers, meaning that more and more Californians could save money on un-justified health insurance rate hikes.

SB 1182, introduced by state Sen. Mark Leno (San Francisco), passed the state Senate in May—however,

when it reached the Assembly, the rate review provisions were stripped out of the bill. Despite this, the bill (which was ultimately signed by Gov. Jerry Brown) will bring more transparency to insurance claims data, with the overall goal of control-ling rising health care costs.

As the overhaul of the new health care marketplaces starts to settle down, CALPIRG will keep working to make sure those marketplaces meet their potential to boost competition, reduce costs and improve quality.

Meanwhile, we will continue to call for stronger laws that expand rate review in California, so that we can protect all consumers—not just those in the small or individual markets—from unreasonable health insurance rate hikes.

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GETTING THE FACTS ON HEALTH INSURANCE—Knowing your options can make all the difference when it comes to health insurance. CALPIRG Education Fund and CALPIRG Student Chapters were on college campuses across the state, distributing our “So You Need Health Insurance. Now What? Health Insurance 101” guides, to help students make informed choices about their health care.

Rate Review In California: By The

Numbers

1,367,783 Califorinians who saved money in 2014 because of rate review.

369 Number of rate hikes proposed in 2014 throughout the state.

$349,058,974Total estimated savings to California health care

consumers, thanks to effective rate review.

$$$

Source: California Health Insurance Rate Review: An analysis of implementation and results for consumers. 2014.

2014 Program Report

Consumer ProtectionStanding Up For Consumers, Parents And Students In The Marketplace

The recent financial crisis and the deep recession that followed delivered a devastating blow to Californians and people across America. In its wake, CALPIRG helped win the creation of the Consumer Financial Protection Bureau (CFPB), the first federal agency with just one job—protecting consumers from unfair financial practices.

Now, more than three years since the CFPB opened its doors, the agency has provided more than $4.6 billion in relief and refunds for consumers harmed by illegal practices. However, given this track record of success, there has inevitably been pushback from the very financial industry that the CFPB was created to watchdog.

So in the last year, CALPIRG has stepped up our campaign to mount a strong defense of the CFPB, advocating for better tools for consumers to help them navigate the marketplace and to document the new challenges they face in the emerging digital marketplace. After all, the idea of the CFPB needs no defense, only more defenders.

Defending The CFPBIn May, CALPIRG Consumer Program Director Ed Mierzwinski was the only consumer witness at a House Financial Services hearing on 11 bills to weaken the CFPB. Mierzwinski called the bills an attempt to kill the CFPB with a “death by a thousand cuts.” Despite passing through the House committee, the bills have not yet advanced, and stand little chance of being signed into law.

In July, the month that the CFPB turned three years old, we achieved a major victory when the bureau proposed to add consumer stories, or narratives, to its Public Consumer Complaint Database. Adding the narratives has been a featured recommendation in five recent CALPIRG Education Fund/Frontier Group reports on the database, which now contains more than 400,000 consumer complaints.

“Stories that compare how long a consumer complained, how many

SPEAKING OUT—CALPIRG Field Director Austin Price released our 28th Annual “Trouble in Toyland” report (above) with doctors from Childrens Hospital in Los Angeles. CALPIRG student leaders (below, with Assemblymember Das Williams) worked to stand up for consumers.

times she called, and what different creditor representatives told her will add a new dimension to analysis by PIRG, other researchers, and even other consumers shopping for a bank,” said Mierzwinski.

Meanwhile, the CFPB continues to hold major financial institutions accountable for deceptive practices. In the past year, it won settlements in major actions against JP Morgan Chase, Bank of America, and US Bank for deceptively marketing junky credit card add-ons. In total, these settlements retuned more than $1 billion in refunds to consumers.

Whether it’s through reports on the CFPB’s impact on consumers, or staving off countless attempts to attack, repeal or defund it, CALPIRG and CALPIRG Eductation Fund will continue our campaign to let the public, the media, and our decision-makers know the value of this important agency.

28th Annual Toy Safety Report CALPIRG Education Fund’s 28th annual “Trouble in Toyland” report found that while most toys meet safety requirements, some toys for sale last winter still put kids at risk.

Thanks to Congress and the Consumer Product Safety Commission (CPSC), we have seen dramatic increases in toy safety in recent years, with new safeguards to protect children from toy injuries and deaths. Unfortunately, the new rules fall short in a few places, particularly when it comes to

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THE CONSUMER’S CHAMPION—Federal Consumer Program Director Ed Mierzwinski testified before the U.S. Senate on keeping financial data out of the hands of hackers and identity thieves.

choking hazards and toxic chemicals. The toy industry and big toy retailers that continue to peddle dangerous toys should do more to make sure products go beyond simply the legal minimums and are actually safe.

Over the years, our report has led to more than 150 recalls and regulatory actions, and has helped educate the public and policymakers on the need for stronger public health and

consumer safety standards. Parents and gift givers can avoid some of the hazards out there by following a few easy tips, which you can find at www.toysafety.net.

Protecting Students On CampusAs negotiations broke down between the U.S. Department of Education and financial firms over regulations for on-campus debit cards, CALPIRG pushed for legislation that would work to pro-tect college students from aggressive and unfair banking practices.

In July, CALPIRG Higher Education Program Director Chris Lindstrom

testified before the U.S. Senate Bank-ing Committee about the risks stu-dents face from campus debit cards.

“We found in [CALPIRG Education Fund’s] 2012 report, ‘The Campus Debit Card Trap,’ that two in five college students in the country are exposed to debit cards on campus that may drive up their costs,” said Lindstrom. “Students at some campuses are charged steep and

unusual fees to get to their federal financial aid.”

CALPIRG Education Fund’s report, “Private Loans, Public Complaints,” also outlined which private lenders generated the most complaints from students on the CFPB’s Consumer Complaints Database. Sallie Mae was the most-complained about lender in every state.

CALPIRG will continue to work alongside the Department of Educa-tion and the CFPB to establish more protections for students and improve campus debit card fairness.

A Helpful ResourceThe CFPB’s searchable database

helps consumers make better economic and safety choices by

reviewing others’ experiences and searching for problems.

Available To The PublicThe Consumer Complaint Database

enables the CFPB to identify financial practices that threaten

to harm consumers and enables the public to evaluate the performance of the financial industry and the CFPB.

400,000 ComplaintsThe database tracks complaints made

by consumers to the CFPB and the responses of financial institutions to

those complaints.

How the Consumer Complaint Database

works for you

CFPB