In response to our Consumer Alert exposing the Prop 33 campaign for using paid campaign employees in their TV ads, the insurance industry-backed Proposition 33 campaign issued a statement to the LA Times Opinion blog – excerpts below – stating that “the two women in their ads were simply volunteering their stories in support of the effort to pass Proposition 33.”  That disingenuous response begs the question:

Is a Paid Employee a Volunteer? I guess if you can call charging people more for their auto insurance simply for not driving a “discount,” then why not call an employee a volunteer?

California election law requires campaigns that use paid spokespeople in their ads disclose this within the ad.  Nowhere in these ads do the proponents disclose that the two women work for the PR firm that is being paid over half a million dollars to run the Yes on 33 campaign.  That is why we filed an official complaint with the California Fair Political Practices Commission asking them to investigate the ads for violating election law.

If you feel that the public has a right to know when the people in campaign ads are being paid for their opinions, then watch our Consumer Alert and share with your friends and networks to help us combat these insurance-industry lies.

Excepts from the:

October 3, 2012

“Marketplace argues that it didn’t violate the law, and that may be technically correct. But the campaign misleads the public by presenting employees of its political consultant as disinterested consumers who just want a break on their insurance premiums…That seems par for the course for backers of Proposition 33, the latest in a long series of efforts by Mercury Insurance founder George Joseph to undo part of 1988’s Proposition 103.”

“In its response Tuesday, Marketplace said: ‘We encourage Consumer Watchdog to continue drawing attention to the ads because the message they deliver is both honest and direct.'”

“…The message is direct, all right, but it isn’t honest.”

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Posted by Daniel Palay, New Media Director of Consumer Watchdog Campaign and supporter of StopProp33.com.  For more information on the campaign visit us on Facebook and Twitter

You won’t believe this!

The insurance billionaire behind Prop 33 isn’t just lying about his phony proposal in the television ads airing this week. He is actually using paid employees to impersonate “real drivers” and not disclosing it to voters. We have the proof in this short video.

Please watch the short video exposing the Prop 33 campaign’s big lies and share it with all the California voters you know to warn them.

Campaign finance law requires that campaigns disclose if they are using paid spokespeople in their television ads, but the insurer-funded Prop 33 campaign didn’t disclose to viewers that it used two employees of its paid PR firm in advertisements to pose as average drivers.

You can help spread the word. Watch the short video and post it to your Facebook, Twitter and other accounts.

California voters shouldn’t be deceived by one insurance billionaire, Mercury Insurance’s George Joseph, who has spent $8.4 million to pass Prop 33.  Our friends, family and co-workers deserve to know the truth.

When was the last time an insurance billionaire spent $8.4 million on a ballot measure to save consumers money?

Please join us in warning California voters.

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Posted by Jamie Court, President of Consumer Watchdog Campaign and leader of StopProp33.com.  For more information about the campaign visit us on Facebook and on Twitter.

Remember those old, clunky TVs and computer monitors? The ones with Cathode Ray Tubes (CRTs) people threw out in favor of flat screens? Well, now electronics makers don’t want to recycle them.

Up until this week, California State law directed certified waste recyclers to sell leaded Cathode Ray Tube (CRT) glass from the old clunkers back to CRT makers or smelters.

But now we’re down to just one CRT maker and it’s in India. Neuro-toxic leaded glass started piling up in warehouses or got illegally dumped. So, the Department of Toxic Substances Control (DTSC) just issued an “emergency rule. Recyclers can go ahead and just take CRT glass to hazardous waste landfills located in some of the poorest, largely Latino, communities in the state.

Consumers buying TVs pay between six and ten dollars at the point of sale to fund a state program that pays recyclers to recycle. Now, we’ll be paying recyclers to dump more toxins into poor neighborhoods already suffering from high rates of pollution.

Granted, the DTSC had to do something. But this was not the right something.  Exceptions to rules tend to become permanent. And can be abused. This rule should be immediately reversed. Recyclers are already paid to recycle. They can use some of that money to pay a little more for CRT processing. Eventually, the technology will take off and the price will come down.  That’s how markets work.

Under California law, regulators are supposed to encourage new hazardous waste treatment technologies that reduce or eliminate the hazards to human health and the environment, where they can be practically utilized, to improve California’s economic and environmental well-being.

What the DTSC just did was the reverse. “This is knocking the legs out from under the industry that is developing the recycling technologies and making the capital investment,” said Jim Taggart, head of ECS Refining, the second-largest recycler in the country based in Stockton. The state should simply have kept its rules in place, he said. “It’s done by just not encouraging landfill.  You require recycling and the system takes care of it.”

ECS Refining is separating high concentrations of lead from CRT glass and selling it back to smelters.  Lead can be re-used in batteries. It’s selling glass to new customers from insulation to cement makers in other states. And the new technology can be adapted later to other materials as electronics advance.

The impetus for the emergency rule had to come from somewhere, said Taggart.  “Possibly the waste industry or recyclers that stand to benefit from landfilling the glass.” Taggart says that unscrupulous recyclers could end up putting leaded glass in ordinary municipal landfills that charge much less to take waste. And waste management companies that own landfills stand to profit from the boom in business.

“We invested $10 million dollars into this technology,” he said. “What’s a hammer cost?” He said unscrupulous recyclers will just break up CRTs by hand, and throw what they think is harmless glass into cheap municipal landfills. But he says that glass will still contain toxic levels of lead. “The state won’t have any way to control that.  It doesn’t have people at every landfill.”

Instead, regulators should be huddling with California lawmakers to see what can be done to use a chunk of that steady stream of money from consumers for electronics recycling to encourage the new technology. And it doesn’t have to stop there. Sheila Davis, executive director of the Silicon Valley Toxics Coalition says we need a paradigm shift. “We think the HPs, Apples, and Dells should be paying to make sure this stuff is not dumped on poor people but taken back and recycled responsibly.”

California might just want to join the 21st century and pass, like 23 other states have done, an Extended Producer Responsibility Law that makes electronics manufacturers that design, produce or sell a product minimize its environmental impact throughout its life cycle.

We’d shift away from charging consumers a recycling fee and have the manufacturer build the cost into product for its dismantling and recycling. That would be quite an incentive to figure out how to make products that are less toxic and easier to dispose of  in the first place.

Instead, this DTSC is helping to sully the present and landfill the future.

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Posted by Liza Tucker, a consumer advocate with Consumer Watchdog

The Consumer Federation of America released a new report earlier this week assessing consumer views on the factors insurance companies use to set premiums around the country.  Not surprisingly, Americans think that insurance rates should be based primarily on motorists’ driving safety record (87% and 85% of respondents believe rates should reflect a driver’s number of accidents and tickets, respectively).

More than a majority of Americans think it’s unfair to consider the ZIP-code in which you live or your occupation.  More than two-thirds (68%) call it unfair to charge drivers more if they did not have insurance because they did not previously have a car.  This data point should interest Californians, because there’s an initiative on the November ballot  – Proposition 33 – that would allow insurance companies to penalize people based on this precise factor that 68% of Americans consider unfair.

Proposition 33 was put on the ballot by Mercury Insurance’s billionaire Chairman, and his $8 million campaign conveniently ignores the fact that the initiative allows insurance companies to raise prices on drivers who didn’t previously have insurance because they didn’t have a car. No doubt, his pollsters are telling him the same thing that the national survey reports: Americans don’t think his scheme is fair.  (So if people think your initiative is unfair, your only option is to run a deceptive ad campaign filled with disingenuous patriotism and hope people can’t see the trick you’ve hidden behind that flag.)

But back to today’s report for a moment. Another interesting thing Consumer Federation did was look at rates around the country and show the effect of a variety of rating factors, including prior insurance coverage.  Two things stand out:

1. Where most companies in most states dramatically jack up the rates on customers who do not have prior insurance when they want to buy a policy, Californians’ premiums are unaffected by that factor because it is illegal to apply it in California.  The whole point of Prop 33 is to make California more like these other states in a bad way.
2. Generally speaking, rates in Los Angeles, California are both lower than the other big cities tested and more stable after testing for factors considered unfair, such as ZIP Code, occupation, prior insurance and credit scoring.  In other words, the insurance reforms Californians installed through Proposition 103 in 1988 not only apply standards of fairness to the marketplace, they have created a competitive and lower priced market as well.

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Posted by Doug Heller, Executive Director of Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.

Consumer advocates today called on the insurance company executive behind Proposition 33 to immediately withdraw new radio advertisements that mischaracterize the impact of the initiative on foreign service and military personnel in the wake of attacks on US embassies abroad.

In statewide radio advertisements paid for by Mercury insurance executive George Joseph, the Proposition 33 campaign erroneously claims soldiers will be able to keep auto insurance discounts they now lose, and that Prop 33 is about “supporting our heroes.” In fact, foreign service officers would be surcharged under the proposal for not driving while working oversees when they restart their auto insurance in California. Moreover, Prop 33 will not protect any current discount for soldiers.

In a letter sent to Mercury Chairman Joseph today, Consumer Watchdog wrote: “Out of respect for military officers and foreign service employees, who face life-threatening circumstances at our embassies abroad, we call upon you to immediately withdraw your deceptive and disrespectful radio advertising campaign in favor of Proposition 33.”

Download Consumer Watchdog’s letter here, or read text below

Listen to the Prop 33 radio ad here

A Los Angeles Times opinion staff blog published yesterday took the campaign to task for the deceptive ad: “The 30-second spot declares: ‘Proposition 33 protects our veterans and military families, and allows them to keep their discount on car insurance, saving them money.’ It would do nothing of the kind.”

Read the Times blog here:

Consumer Watchdog’s letter continued: “Your radio advertisement claims Prop 33 is about “supporting our heroes.” But under Prop 33, good drivers who have stopped driving for legitimate reasons – like serving abroad in our foreign service – would be hit with large surcharges if they decided to drive again and buy insurance in California. For political reasons, you exempted from Prop 33’s large rate increases a small segment of those who stop driving for legitimate reasons, active duty military officers. That certainly does not mean you are helping soldiers keep a discount. Moreover, foreign service officers, families of military officers, disabled veterans and others who stop driving for good reason, but cannot prove active duty military service is the reason for their coverage lapse, would get slammed under Prop 33 with big rate hikes.”

This month, Joseph also gave $195,000 to a nonprofit organization for its support of Proposition 33 in another attempt to mislead voters about the impact of Prop 33 and camouflage its insurance industry backing. Joseph gave 99%, $8.4 million, of the funds in support of Prop 33.

The measure would overturn a 24-year-old law banning discriminatory practices by auto insurance companies that were brought to light in a 1987 California civil rights case, King v. Meese. Proposition 103, passed by the voters in 1988, banned auto insurers from charging more, or refusing to sell insurance, to people who were not previously insured.

Read more about Proposition 33 at www.StopProp33.org

– 30 –

September 13, 2012

Mr. Joseph,

Out of respect for military officers and foreign service employees, who face life-threatening circumstances at our embassies abroad, we call upon you to immediately withdraw your deceptive and disrespectful radio advertising campaign in favor of Proposition 33.

You began your disingenuous “Heroes” radio advertising campaign for Proposition 33, the California ballot measure for which you have given 99% of the funding, the day after September 11th with the hope of fanning patriotic sentiments for your insurance company’s cause.   You could not have known that those cynical advertisements – which misrepresent your measure’s impact on our nation’s military, their families and foreign service officers – would air when American military and foreign service members are under grave threat worldwide.

Nonetheless, you now have an obligation not to betray the seriousness of the current circumstances our heroes face abroad with radio advertisements that lie about what Prop 33 does in their name.

As the Los Angeles Times editorial staff blog noted Wednesday:

“Proposition 33, an initiative to let auto insurers offer discounts to competitors’ customers, isn’t quite the same as Proposition 17, a similar proposal that voters rejected in 2010. But the campaign in favor of the measure seems to be following the same truth-distorting playbook.

“The Yes on Proposition 33 campaign has bought airtime on 19 radio stations in five cities for what appears to be its first commercial, which is due to begin broadcasting Wednesday. The 30-second spot declares: ‘Proposition 33 protects our veterans and military families, and allows them to keep their discount on car insurance, saving them money.’

“It would do nothing of the kind.”

As you well know, Prop 33 has nothing to do with military officers keeping any discount under current law. All your initiative does is legalize a now-illegal rating factor: Whether a driver has had auto insurance continuously or not.

Your radio advertisement claims Prop 33 is about “supporting our heroes.” But under Prop 33, good drivers who have stopped driving for legitimate reasons – like serving abroad in our foreign service – would be hit with large surcharges if they decided to drive again and buy insurance in California. For political reasons, you exempted from Prop 33’s large rate increases a small segment of those who stop driving for legitimate reasons, active duty military officers. That certainly does not mean you are helping soldiers keep a discount. Moreover, foreign service officers, families of military officers, disabled veterans and others who stop driving for good reason, but cannot prove active duty military service is the reason for their coverage lapse, would get slammed under Prop 33 with big rate hikes.

Mr. Joseph, you have repeatedly cited your experience as a veteran to justify why one insurance company billionaire should be allowed to change the insurance laws through Proposition 33.   We urge you to take a moment of silence to think like a veteran now and withdraw these advertisements.

Sincerely,

Jamie Court

Consumer Advocates Call On Group To Withdraw Support For Measure That Would Raise Car Insurance Rates on Good Drivers

The nonprofit Greenlining Institute acknowledged in a San Francisco Bay Guardian story published today that it received a $25,000 donation from Mercury insurance company, and expects more for its work in support of Mercury-backed Proposition 33. Prop 33 is funded by Mercury insurance’s billionaire chairman George Joseph and would raise car insurance rates on good drivers who have a break in insurance coverage, even if they’re not driving.

In a letter, Consumer Watchdog urged Greenlining to reverse its decision to support Proposition 33. Greenlining opposed a nearly identical ballot measure proposed by Mercury insurance company in 2010, Prop 17.

Download the letter here

Read the San Francisco Bay Guardian story

“We are writing to urge you to reconsider your shocking support for Proposition 33 and the auto insurance redlining it seeks to legalize,” wrote Consumer Watchdog founder Harvey Rosenfield and Washington DC director Carmen Balber. “Greenlining purports to represent the very low-income drivers who will be hurt the most if Proposition 33 is approved next November, allowing insurance companies to surcharge Californians who stop driving for legitimate reasons and then choose to get back on the road.”

Prop 33 would overturn a 24-year-old law banning discriminatory practices by auto insurance companies that were brought to light in the 1987 California civil rights case, King v. Meese.

“The rampant practice of surcharging, or refusing to sell insurance to, people who were not previously insured was one of the most pernicious of the discriminatory techniques employed by the insurance industry,” said the letter. “In signing the ballot argument for Proposition 33, you have aligned yourself with George Joseph and Mercury Insurance, the most persistent partisans for the legalization of the old redlining tricks that made auto insurance inaccessible to low-income families and communities of color for decades.”

The letter notes that Proposition 33 targets Californians who stop driving for legitimate reasons:

• When low-wage workers who commute by bus need to get a car in order to maintain their job, they will be surcharged by about 40% for auto insurance;
• When immigrant drivers are finally able to obtain a California driver’s license and try to buy insurance, they will be forced to pay hundreds and possibly thousand of dollars more than the drivers who purchased insurance in the past, even though they are equally good drivers;
• When drivers who have found it financially impossible to maintain uninterrupted insurance coverage turn to the auto insurance market in hopes of complying with the mandatory insurance law, they will face a financial penalty for being poor;
• Those who cannot afford these massive surcharges will be exposed to penalties and seizure of their vehicles for failure to comply with the Financial Responsibility Law.

The Mercury Insurance initiative’s lawsuit to stop the Attorney General and us opponents from telling the truth about Proposition 33 – how it will raise auto insurance rates – got tossed out of Sacramento Superior Court last Thursday. The Mercury campaign asked the court to rewrite the Official Ballot Pamphlet, which is sent to every voter’s home, so it would contain only Mercury’s false claim that everyone will get “discounts” if Proposition 33 passes.  After an hour-long argument, the judge said no.

But the ink was hardly dry on Thursday’s court order when Mercury told yet another lie – this time about what we said in court.

In a press release issued Friday morning, Mercury said: “CONSUMER WATCHDOG ARGUES IN COURT THAT THE TRUTH IS ELASTIC.”

We never said that, of course. (The release also called us “corporate lawyers,” which the corporations we take on would no doubt find bewildering.)

I guess we shouldn’t be surprised that George Joseph, the multi-billionaire Chairman of Mercury Insurance who has contributed 99.1% of the $8.29 million received by Proposition 33, can’t stop lying about his proposition and the consumer, citizen, senior and patient’s organizations who vehemently oppose it.  After all, according to the California Department of Insurance:

“Mercury [has a] lengthy history of serious misconduct, and its attitude – contempt towards and/or abuse of its customers, the Commissioner, its competition, and the Superior Court….Among Department staff, consumer attorneys, and consumer victims of its bad faith, Mercury has a deserved reputation for abusing its customers and intentionally violating the law with arrogance and indifference….”

Mercury’s dirty propaganda campaign didn’t work back in 2010, when the company mounted a nearly identical proposition to deregulate auto insurance, also sued the Attorney General and us, spent $16 million, and still lost. Joseph and the pigs at the Mercury trough (an assortment of PR hacks, phony non-profit groups, insurance agents and bought-and-paid-for politicians) think the voters are stupid. But they are wrong. California voters can smell a dirty, self-serving initiative a mile away.

The Mercury Insurance campaign might have gotten away with its Friday fabrication, except we were able to catch them red-handed.

Hours before Thursday’s hearing, I found out that Joseph’s lawyers had not requested a court reporter be there to take down everything that was said in court. (Thanks to severe budget cuts, state courts can no longer afford to pay for court reporters – the parties in a lawsuit have to pay.) It seemed odd that this mega-billionaire would not spring for someone to record the truth… and then I realized that the Mercury campaign might not want a transcript of what happened in court, so they could lie about it later.

So I pulled out my checkbook, went to a special window at the Sacramento Superior Court, and paid the $30 for the court reporter myself.

Good thing, as it turns out.

The court reporter’s transcript confirms that our lawyer, the highly respected James Harrison of Remcho, Johansen & Purcell, never uttered what Mercury quoted him as saying. Rather, citing the First Amendment and many legal decisions, he urged the court to reject Mercury’s attack on our conclusion that Proposition 33 will “deregulate” auto insurance premiums. Here are his words:

“Your Honor, as the Court noted, deregulation is an elastic and ideological concept. In the Huntington Beach case, for example, the Court refused to make a change to the argument that the measure requires AES, the electricity company, to pay its fair share. And the reason that the Court refused to intervene was that the term ‘fair share’ is a very elastic and ideological concept. What you understand to be a fair share might not be what I understand. The same is true of deregulation, your Honor. What I understand to be deregulation may have a very different meaning to someone else. It’s a very elastic concept.”

Mercury’s legal shenanigans wasted a lot of taxpayer money at a time when California courts are struggling to deliver justice fairly and efficiently despite a gaping hole that the Legislature has inflicted on the judicial branch budget. (Late Friday, Joseph’s lawyers filed an appeal, hoping to overturn the Superior Court’s decision.  It was summarily denied.)

Forcing the Attorney General to defend in court her summary of Proposition 33, which she is required by law to prepare for the ballot, was also an unnecessary drain on that law enforcement agency’s scarce resources. (Joseph was also furthering a strategy recently adopted by Wall Street and other corporate interests: Attacking Attorney General Kamala Harris in an attempt to intimidate and undermine her.)

The Mercury campaign’s public relations minions don’t care about the cost to taxpayers. To them, filing a lawsuit in court is just another gambit in their greed-driven, deceptive campaign to get the voters to pass a law allowing companies like Mercury Insurance to raise your auto insurance rates and make more money.

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Posted by Harvey Rosenfield, Founder of Consumer Watchdog and Author of California Proposition 103, the landmark Auto Insurance Regulation law in California.

Consumer Watchdog has been growling for a while about global corporations that use a tax loophole to pay less in California corporate taxes than in-state companies. Four major companies–Kimberly Clark (Kleenex, Scott toilet paper), General Motors, Chrysler and International Paper–have even launched a major lobbying campaign in the state to save their selfish loophole. They are happy, obviously, cheating the state of a billion or more dollars a year that could keep teachers in jobs, the disabled out of nursing homes and parks open.

Now there’s a ballot initiative, Prop 39, that’s aimed at closing the tax loophole, and one of its first public blasts is this funny video, “The Tax Dodger Olympic Dash”–track and field for billionaires.

Along with the video is a text tidbit, revealing that the same companies fighting to keep their loophole in California fought just as hard to keep such tax loopholes out of their home states. There’s nothing like a heaping helping of corporate hypocrisy to start the day!

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Posted by Judy Dugan, research director for Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.

More than two hours passed at Chevron’s Richmond, CA, refinery between the discovery of a leak and the ignition of a blaze that threatened the health of thousands of nearby residents and sent hundreds to hospital emergency rooms Monday night. At any point during those hours, shutting down the big crude-oil processing unit in which a pipe was leaking could have prevented or greatly limited the disaster.

The San Francisco Chronicle reported details of that excruciating delay Wednesday morning, along with very different accounts of why it happened. The plant’s emergency response managers vaguely said they saw the leak as too minor–just “20 drops a minute” at first, to trigger an emergency or notify anyone. Until, of course, it suddenly got bigger and exploded into a blaze. But workers on the ground saw it differently and told their story to their union’s safety experts:

“From the time they did see the leak, they debated what to do,” said Kim Nibarger, who has investigated refinery accidents nationwide. “It was not so much whether to fix the leak, it was about what could they do to keep the line running and get it fixed.”

Nibarger based his opinion on Monday’s incident after discussions with union representatives at the refinery. The choice, he said, should have been clear.

“When you have hydrocarbons outside the pipe, you are no longer running at a normal condition. It’s time to shut the thing off and fix it, not to try to figure out a way around it.”

The last big fire at the Chevron Richmond refinery, in 2007, started the same way: a leak in the same refining unit, No. 4. Two employees were injured and the refinery was shut for months.

What one local resident said in 2007 sounds like it was today:

“Once those [emergency] sirens sound, you are supposed to shelter in place,” [the resident] said. “That means nobody goes to work, nobody comes to work in the west end of Richmond and no schools open. The cost of that is incredible.”

The costs of shutting down a refining unit to be on the safe side are nothing compared to the costs of shutting down a community, of treating respiratory crises at the emergency room, of higher child asthma rates.

Motorists will also pay. San Francisco and Los Angeles wholesale gasoline prices jumped 30 cents a gallon overnight following Monday’s fire. If recent history is any guide, other West Coast refiners will just grab the extra profit rather than raising production to keep supplies up and prices down. That’s exactly what happened after a major refinery accident in Washington State last year, according to a study commissioned by Sen. Maria Cantwell.

So all Californians will pay something for Chevron’s attempt to keep Unit 4 running even though its own emergency response team knew about the leak.

Safety procedures are also at issue in Chevron’s offhore drilling near Brazil, where 155,000 gallons of oil leaked from undersea cracks. Brazil last month accused Chevron of failing to follow its own procedural manual and dismissing troubling test results when it started production from the well. Chevron is also continuing to pay its lawyers millions of dollars to avoid paying damages to Ecuadoran peasants whose land was ruined by Texaco, which is now part of Chevron.

Chevron is not alone in this mindset.

BP ignored safety and quality questions about sealing cement used to cap a deep offshore well in the Gulf of Mexico two years ago, when it could have ordered the cement contractor, Halliburton, to start over (meaning at least a few days of delay). We all know how well that went. BP also skimped on maintenance and ignored corrosion of its Alaska pipeline near Prudhoe Bay in a 2006 spill of 200,000 gallons that shut down the pipeline. Exxon let a known drunk pilot its giant oil tanker, the Exxon Valdez.

It’s a long list. But the common thread is that safety is not a profit center for the oil industry and every penny spent on safety dings the bottom line. Until, of course, cleaning up the mess costs millions or billions.

Posted by Judy Dugan, research director for Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.