2009 Annual Report. U.S. Public Interest Research Group & U.S. PIRG Education Fund

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1 Federation of State PIRGs AKPIRG Arizona PIRG CALPIRG CoPIRG ConnPIRG Florida PIRG Georgia PIRG Illinois PIRG INPIRG Iowa PIRG Maryland PIRG MASSPIRG PIRGIM MoPIRG MontPIRG NCPIRG NHPIRG NJPIRG NMPIRG NYPIRG Ohio PIRG OSPIRG PennPIRG RIPIRG TexPIRG VPIRG WashPIRG WISPIRG 2009 Annual Report U.S. Public Interest Research Group & U.S. PIRG Education Fund

2 From The Director Andre Delattre, Executive Director Dear U.S. PIRG supporter, For fighters for the public interest, 2009 brought with it a perfect storm of opportunities for social change, along with an anticipated upswing in special-interest efforts to fend off any change at all. Along with millions of Americans, we welcomed this year with renewed hope for progress on health care, Wall Street reform and many other fronts but we knew it wouldn t be easy. The battle for a more affordable and secure health care system continues, as does the effort to rein in reckless speculation on Wall Street. In the states, budget crises militate against new initiatives and threaten old public assets. As these fights go on, though, we want to share with you the victories we ve won and the progress we ve made in Washington and across the country. Our campaign to restructure the nation s transportation priorities toward cleaner, cheaper, faster solutions got a boost in early 2009 when Congress added $16 billion for high-speed rail and public transportation to the final economic recovery bill. In May, U.S. PIRG Consumer Program Director Ed Mierzwinski was invited to the Rose Garden to witness President Obama s signing of a credit card reform bill that bans practices like exorbitant fees and gotcha rate increases. It s a landmark win for consumers. According to Ed, we have come a long way on this issue: I ve been doing this work in Washington, D.C., for 20 years. For the first 19, we couldn t even get a committee vote on credit card reform. And on a Saturday evening last November, the House of Representatives passed the first meaningful health care reform bill in 40 years. It passed by a margin of just five votes, and was a step that U.S. PIRG Health Care Advocate Larry McNeely and staff at the state PIRGs coast to coast fought hard for. With your support, we look forward to more opportunities for more action and progress on these and other issues. Andre Delattre Executive Director ON THE COVER: 1) Consumer Program Director Ed Mierzwinski 2) CALPIRG organizers with Gov. Schwarzenegger 3) Washington, D.C., Office Director Gary Kalman 4) Democracy Advocate Lisa Gilbert 5) Citizen Photo Petition 6) Illinois PIRG Campaign Coordinator Ryan Rastegar 7) University of Maryland Student PIRG Intern Lauren Kim 8) Tax & Budget Advocate Nicole Tichon 9) PennPIRG Field Associate Catherine Ngo 10) CALPIRG Legislative Advocate Pedro Morillas 11) MASSPIRG Staff Attorney Elizabeth Weyant 12) Public Health Advocate Elizabeth Hitchcock.

3 Transparency 2.0 Government Spending Data Goes Online Where are our tax dollars being spent, exactly? Sometimes it s easier to find out than others. President Obama s economic recovery program raised the bar for public disclosure of how federal stimulus dollars were being put to use across the country. Other times, a lack of transparency made the picture murkier. As U.S. PIRG s federal tax and budget analyst, Nicole Tichon can attest there are a lot of question marks about how trillions of dollars were spent on the bank bailout. That s troubling, because it means that recipients of bailout funds could continue to engage in the practices that led to the financial meltdown, even after getting backing from taxpayers. Transparency In The Digital Age The ability to see how government uses the public purse is fundamental to democracy. Budget transparency checks corruption, bolsters public confidence in government, and promotes fiscal responsibility. In the private sector, Internet search technology has revolutionized the accessibility and transparency of information. We take it for granted that we ll be able to track deliveries and check cell phone minutes online. But in many places, when it comes to tracking government expenditures online, we are still being left in the dark. U.S. PIRG is working to change this across the country. In many places, legislation and executive orders have already lifted the electronic veil on where tax dollars go. The economic recovery package raised the bar for public disclosure of how federal stimulus dollars were put to use across the country by requiring that states set up Recovery.gov Web sites to report their spending (above). However, as Tax & Budget Analyst Nicole Tichon has testified, there are many questions about how trillions of dollars were spent on the bank bailout. At least 25 states currently mandate that citizens be able to access a searchable online database of government expenditures. We ve worked in state legislatures to successfully jumpstart state budget transparency Web sites in California, Maryland, Oregon (where OSPIRG s Jon Bartholomew is a member of the Transparency Oregon Advisory Commission) and Wisconsin. In Chicago, we are leading an effort to open Mayor Richard Daley s books, and paying close attention to his ongoing efforts to privatize that city s roads, airports and parking meters. Experience from the leading states in this field demonstrates that these Web portals are effective, low-cost tools that can bolster citizen confidence, reduce contracting costs and improve public oversight. They also can help ensure that companies receiving tax breaks or other subsidies actually deliver on their promises. We expect these tools to become indispensable for citizen watchdogs and journalists in the years to come. 2

4 Some Good News In Fine Print Credit Reform Passes And Congress Moves To Rein In Wall Street During Ed Mierzwinski s first 19 years as a consumer advocate for U.S. PIRG in Washington, D.C., no bill opposed by a credit card company was so much as scheduled for a vote by a congressional committee. But the events of the last two years helped loosen the credit card industry s grip on Congress and made very clear the need for reform. In 2009, U.S. PIRG helped pass legislation that will stop many of the credit card industry s most egregious anticonsumer practices. The new law bans credit card companies from retroactively hiking rates on existing balances, prohibits universal default in the first year of a contract (the practice in which a card company changes the terms of your contract if it finds a new negative mark on your credit report). It also protects college students from many of the predatory marketing schemes that we ve documented on campuses in recent years. Mierzwinski joined two of the legislation s biggest champions, Rep. Carolyn Maloney (N.Y.) and Sen. Chris Dodd (Conn.), in the Rose Garden in May as President Obama signed the bill into law. From Bailouts To Bonuses? In October 2008, following the collapse and near-collapse of major financial institutions, Congress enacted a sweeping $700 billion taxpayer-financed bailout of the financial sector with the primary purpose of getting money to flow through the economy again through personal and business loans. But with virtually no reporting requirements or restrictions on how the money was to be used, no one knows where the money went. To highlight these failures and provide a framework to ensure accountability and oversight of the bailout, U.S. PIRG Tax and Budget Reform Advocate Nicole Tichon published Failing the Bailout: Lessons for Obama From Bush s Failures on TARP. A month after releasing the report, Tichon was the only public interest U.S. PIRG s Ed Mierzwinski testified five times in 2009 in favor of new rules for Wall Street. advocate to testify at the Congressional Joint Economic Committee hearing on TARP transparency. She summarized her findings and told the committee that the picture for taxpayers is blurry at best and infuriating at worst. Evidence suggested that taxpayer funds were spent on lobbying for additional funds, executive bonuses to be paid on profits that did not exist, and a wide array of corporate perks. If better oversight and transparency measures had been in place for the first installment of cash, we d at the very least know where the money went and why, Tichon said. No More Risky Bets At the core of the financial crisis was a failure to adequately regulate financial products, which is why U.S. PIRG worked in 2009 to pass new protections that will minimize the chance that reckless and irresponsible behavior by Wall Street banks and insurance giants can ever again push our economy to the edge of collapse. Just prior to the holiday recess, the House passed a comprehensive package of bills that would set new rules for Wall Street. The legislation included a U.S. PIRGbacked Consumer Financial Protection Agency (CFPA) with the power to prevent dangerous financial products including certain types of sub-prime loans from being put on the market. Elizabeth Warren, the Harvard law U.S. Public Interest Research Group

5 professor who was appointed to head the Congressional Oversight Panel on the banking bailout last year, explains it this way: We don t eat tainted meat and we don t drink adulterated milk because we have fairly good regulation. Financial products are no different. Free markets are not well supported when consumers are at risk for injury. maintain hundreds of subsidiaries in tax-haven countries in order to avoid paying billions in income taxes each year. They are also members of the socalled Promote America s Competitive Edge, or PACE, Coalition, which is working to prevent tax reform. The corporations awarded the 12 largest government contracts maintained Mortgage Lending Reform New Protection For Californians In 2009, Gov. Arnold Schwarzenegger signed a collection of mortgage reforms designed to curb abuses that created the mortgage crisis. Annual Lobbying By Commercial Banks $50 MILLION $30 MILLION The Governor s approval of these measures is a message that California can no longer be the wild west for the lending industry, said CALPIRG Consumer Advocate Pedro Morillas. The most far-reaching of the bills addresses the fundamental problem that brokers were given incentives to cheat consumers. The new rules are spelled out in plain English. Brokers have to act in the best financial interest of their client, added Morillas. $10 MILLION The new law will remove the incentive for brokers to put borrowers into worse loans than they qualify for and increase accountability by making mortgage fraud a public offense. Addressing Oregon s Crisis In 2008 alone, commercial banks spent almost $50 million lobbying against regulation and safeguards. Oregon has been facing skyrocketing foreclosure rates and was ranked in the top ten foreclosure states for the first quarter of Ed Mierzwinski testified five times before Congress, advocating the CFPA as part of comprehensive financial reform. As of this writing, Sen. Chris Dodd s companion bill in the Senate is still being considered. Who Slows The PACE Of Tax Reform? Dell, Merck, General Mills, PepsiCo these are just a few of the 100 or so corporations that received more than $10 billion in government contracts in The same 100 contractors more than 440 subsidiaries in offshore tax havens. And, some of these same corporations take advantage of tax loopholes that cost the rest of us more than $100 billion each year in lost tax revenue. According to our recent analysis, Who Slows the Pace of Tax Reforms? this dirty dozen has been spending big money more than $37 million in 2008 on lobbyists to fight legislation that would close offshore tax-dodging schemes. Two new OSPIRG-backed laws will address this crisis. One requires lenders to evaluate in good faith a loan modification at the borrower s request and to meet with the borrower to discuss their options. The other will help ensure that we don t face another mortgage meltdown in the future by establishing Oregon s authority to implement and enforce new federal guidelines on mortgage lending. 4

6 Making Health Care Work States Make Progress On Health Care While Federal Government Falls Short One Saturday evening in November, the House of Representatives passed the first meaningful health care reform bill in 40 years. It passed by a margin of just five votes and was a win that U.S. PIRG Health Care Advocate Larry McNeely and staff at the state PIRGs coast to coast fought hard for. The Senate passed its own version of the bill in late December. But we knew when we started this effort that it would be only the beginning of our work to make health care affordable for all Americans. With costs skyrocketing, 14,000 people losing coverage every day, and a once-in-a-generation opportunity for change, the stakes could scarcely be higher. We have called for reforms that would benefit patients, not big insurance companies, by delivering greater efficiency, a greater emphasis on health outcomes over tests and procedures, more information on which treatments and medicines work best, and more choices for insurance customers. According to our report, Health Care In Crisis, under the current health care system, the yearly cost of a health care policy will more than double by Even after adjusting for inflation, the average employer-paid family health policy will rise from $11,381 in 2006 to $24,291 by The facts tell us that, left unchecked, health care costs will financially cripple American businesses and families, says U.S. PIRG Health Care Advocate Larry McNeeley. Which is why we need to act before the problem gets any worse. In 2009, we published research, met with legislators and organized the grassroots to push for meaningful reforms. Among those measures: giving doctors better access to data on which drugs, devices and procedures work best; investing in better technology to manage and track patient records and test results; creating incentives for more and better preventive care; and creating a public health insurance option that competes for customers with traditional insurance companies. Washington, D.C., Office Director Gary Kalman spoke at a press conference on lowering the cost of health care. Sen. Sherrod Brown of Ohio (left) also spoke. Researching the problem An analysis by CALPIRG documented a major culprit for the rising costs: California spends roughly $9 billion on billing and insurance processing each year. Of course, that problem isn t exclusive to California. In another report, The Three Trillion Dollar Question, we demonstrated that by implementing reforms, including streamlining the billing process and offering a public option to compete with private insurance companies, it would be possible to cut the cost of health care in America by $3 trillion over a decade. Organizing small businesses We spent much of the summer and fall engaging an important constituency in the health care debate: small business owners. Our report, The Small Business Dilemma, surveyed small business owners on health care. Seventy-eight percent of the owners we surveyed who do not offer coverage to their employees wish they could. Of that group, nearly 80 percent cited health insurance s high cost as the reason they don t offer coverage. In November, we organized more than 100 small business owners from across the country to fly to Washington, D.C., to meet with the administration and with lawmakers not yet committed to reform. It s hard for a politician to categorize health reform as anti-business when droves of small business owners are telling them that they need reform, that the status quo is untenable, said McNeely Annual Report

7 Like individual consumers, small businesses lack the negotiating power to get a better deal. They can also experience enormous increases in premiums if just one employee becomes ill or gets sick. These dysfunctions in the system mean many small businesses and their employees can t afford health insurance. pay goes toward health care versus profit. And the law creates a universal application for small businesses and families to use when they are trying to buy insurance. The $3 Trillion Question What Health Care Reform Can Save For Families, Businesses and Taxpayers Potential Savings Over Ten Years: Payment Reform & Prevention $1.1 Trillion Comparative Effectiveness Research $480 Billion Streamlined Billing $350 Billion Public Health Insurance Option $230 Billion Prescription Drug Advertising $210 Billion Health IT $180 Billion Insurer Efficiency $100 Billion Ending Government Overpayments $93 Billion From citizen petitions, to meetings and press events on Capitol Hill, U.S. PIRG worked throughout 2009 to push health care reform through Congress. We also organized more than 100 small business owners to fly to Washington, D.C., and meet with their legislators. The cost also discourages entrepreneurs from starting businesses yet another negative impact of high health care costs on our economy. Results in the states While reform continued to prove elusive at the federal level, state PIRGs nationwide worked in state legislatures to move important state-level reforms. Illinois PIRG won a bill that will hold insurance companies accountable when they unfairly deny claims. They will also have to report how much of each premium dollar consumers The Oregon Legislature passed a pair of OSPIRG-backed health reform bills to expand access and tackle rising costs. The reforms will institute stronger oversight of health insurance rate hikes, improve health care cost transparency, and cut red tape. They also establish an Oregon Health Policy Board to implement ongoing reforms that contain health care costs, improve quality and expand access. CALPIRG helped stop the practice in California of dropping coverage for people when they fall ill, and MASSPIRG helped lower drug prices by reining in drug company marketing practices with a ban on most industry gifts to doctors. Small Business Dilemma How Rising Health Care Costs are Tough on Small Business 78% of small businesses who do not offer coverage would like to do so. Only 24% of owners surveyed felt that their interests were represented in the current health reform debate. See the full report online: 6

8 Chemical Facilities Must Be Safer House Votes To Protect Communities Near America s Chemical Facilities In December 1984, Bhopal, India, a city of half a million people, experienced a catastrophe when a chemical gas spill from a pesticide factory created a dense cloud over the city: 20,000 people lost their lives. And it could happen here one hundred and ten million Americans live in the shadow of a catastrophic release of poison gas. There are more than 7,000 facilities in the United States that would endanger more than 1,000 people in the event of an accident. One hundred of those facilities would each put more than 1 million people at risk. Chemical Industry Fights Reform In 2006, the chemical industry and their allies in Congress derailed bipartisan legislation that would have required chemical facilities to consider using safer alternatives to the toxic chemicals and processes they currently use. Instead, Congress approved a far weaker, temporary measure that expired in October Public Health Advocate Liz Hitchcock worked with a coalition of labor, environmental and public health groups to make sure that, this time, Congress gets it right and we re getting closer. A November vote in the House of Representatives brought us closer to protecting the millions of Americans who live and work in the danger zones around chemical facilities. toxic release would put the surrounding community at risk to assess their ability to reduce the danger by switching to safer alternatives. It also authorizes the Department of Homeland Security and the Environmental Protection Agency, in some circumstances, to require the use of those alternatives at the nation s most hazardous facilities. We should not tolerate unnecessary risk to millions of Americans when we know that we can do better, Hitchcock said, and we should not tolerate further delay in passing this already long-overdue protection for America s communities. Sen. Frank Lautenberg (N.J.) noted the momentum of the House vote when he announced his intention to introduce a Senate version of the chemical security bill in Hitchcock has been working with staff from Sen. Lautenberg s and Sen. Joe Lieberman s (Conn.) offices to keep that momentum going all the way to the president s desk. Since 2001, hundreds of chemical facilities have switched to safer and more secure chemicals and processes, eliminating risk to millions of people. Thousands of facilities have yet to adopt safer technologies, leaving Americans unnecessarily at risk. The House passed The Chemical and Water Security Act of 2009, which will require thousands of facilities where a The Sunoco Refinery in Marcus Hook, Penn. (left) would endanger more than 4.4 million in the event of an accident. There are 100 facilities nationwide that threaten more than 1 million people. U.S. Public Interest Research Group

9 Keeping An Eye On Unsafe Toys Tested Tactics And New Technology To Protect America s Children At the beginning of 2009, the acting Chair of the Consumer Product Safety Commission (CPSC) caved to industry pressure and delayed enforcement of the landmark Consumer Product Safety Improvement Act that U.S. PIRG helped to win in Download U.S. PIRG s toy safety iphone app in the itunes store. U.S. PIRG and product safety champions from across the country joined together to urge the Obama administration to replace Acting Chair Nancy Nord, a Bush administration appointee who had opposed the new law. In May, President Obama named Inez Tenenbaum to serve as the new chair of the CPSC and long-time product safety advocate Robert Adler to serve as new commissioner. Additionally, the president increased the CPSC s budget by 71 percent. Commissioner Adler joined Public Health Advocate Elizabeth Hitchcock at a Capitol Hill press conference to release U.S. PIRG s 24th annual toy safety report. Adler praised U.S. PIRG for our long commitment to keeping America s kids safe. Toy Safety Goes Mobile This year, in addition to the report s usual findings on choking, noise hazards and toxic threats, we released an interactive smart phone application available online at mobi or to put this safety information at consumers fingertips while they shop. The mobile site also enables toy buyers to report a potentially dangerous toy to At St. Peter s School in Philadelphia, PennPIRG Field Associate Catherine Ngo spoke to the media about hazardous toys on store shelves during a press conference to release our Trouble in Toyland report. U.S. PIRG for investigation and follow up with the CPSC. PIRG Research Leads To Recall A cloth book identified by Illinois PIRG, Big Rex and Friends, contained a red vinyl dot appliqué on one of its pages. We sent the book to an EPA-certified lab for testing, which determined that it contained lead at more than six times the level allowed by the new law. After we notified the CPSC, they reviewed and announced an official recall. In The News Trouble In Toyland got media coverage in outlets from the Tampa Tribune to the L.A. Times, and even Saturday Night Live s Weekend Update. Above, Michael Russo, CALPIRG health care advocate, on Fox 11 Los Angeles. 8

10 21st Century Transit On Track American High-Speed Rail Is Ready To Leave The Station For decades, Congress has turned a blind eye to modernizing transportation by funding projects that fail to decrease congestion or provide greater travel choices. Yet last year, the total vehicle miles traveled for cars and trucks fell for the first time since the oil crisis of the 1970s, and passenger rail ridership increased to new records each of the past five years. This shows an increased demand for intercity rail services. And while the United States lags decades behind nations such as Japan, France and Germany, with commitment from the federal government, it would be ambitious, but possible, to link all major U.S. cities within 500 miles of one another with high-speed rail by mid-century. And 2009 started out as a strong year. We made the case for more transit investment in President Obama s economic recovery package, and lawmakers committed $9.3 billion to high-speed and intercity rail and designated $8.4 billion to other public transit agencies. Transportation Bill Commits To Rail Then as Congress was finalizing its transportation spending bill, U.S. PIRG joined more than 100 organizations, public officials, municipalities, and small businesses from across the country to push for the full $4 billion investment in high-speed rail recommended by the House of Representatives. U.S. PIRG, Transportation for America, the Midwest High Speed Rail Association, and Virginians for High Speed Rail set up a Web site to show Congress the overwhelming nationwide demand that exists for high speed rail investment. In December, the Consolidated Appropriations Committee bill included $2.5 billion for high-speed rail. While not everything we were hoping for, it was still more than double the president s original recommendation of $1 billion and represents a sustained commitment from Congress. Americans drove less last year for the first time since the oil crisis of the 1970s, and passenger rail ridership increased to new records each of the past five years. While the figure is still short of the full $4 billion recommended by the House, it is a significant step in the right direction, said Phineas Baxandall, U.S. PIRG s senior analyst. It sends a clear message to the country that high-speed rail is on the move. The decision will create jobs in the short-term and over the longer term, it adds momentum to forge a 21st century transportation system with a robust network of high-speed rail that will connect metropolitan areas, boost national productivity, and reduce our dependence on oil. Study Shows: Transit Creates Jobs In a new analysis of 10 months worth of American Recovery and Reinvestment Act (ARRA) data released in December by the House Transportation and Infrastructure Committee, three public interest and smart growth groups found that stimulus money spent on public transportation projects created almost double the jobmonths as money spent on highway infrastructure projects. Every billion dollars spent on public transportation projects created 16,419 job-months compared to 8,781 for highway projects. This data proves if the goal is creating the most jobs, then we should invest in buses, trains and rail cars, which create almost twice as many jobs as road-building, noted Baxandall. Then Why So Much Road-Building? If you re wondering why your tax dol Annual Report

11 lars are being spent on new roads, even though high-speed rail is more popular and creates more jobs, while existing transportation infrastructure falls into a dangerous state of disrepair, a new U.S. PIRG report suggests that the answer might be found in campaign finance disclosures. one in Minneapolis that collapsed in 2008, killing 13 people. Later that year, Congress passed a transportation appropriations bill that earmarked spending on more than 700 highway projects but only 74 for maintenance or repair to bridges, Case Study Privatization And The Public Interest: Chicago s parking meters Chicago has been the most aggressive city in the United States in the privatization of public infrastructure. Since 2004, the city has privatized the Chicago Skyway toll road, four downtown parking garages, and the city s system of 36,000 parking meters, with only the recent financial crisis preventing the privatization of Midway Airport as well. The recent sale of city parking meters to a private firm has drawn particularly harsh public criticism as a result of rate hikes, equipment malfunctions and questions about whether the city received fair value. Top left: WISPIRG Advocate Johanna Lathrop. Top right: CALPIRG State Director Emily Rusch at a press event for high-speed rail. Bottom: U.S. PIRG Senior Analyst for Tax & Budget Policy Phineas Baxandall (center) and Transportation Advocate John Krieger (center left) at a briefing on the financing of transportation through public-private partnerships. Our report, Greasing the Wheels, looked at the influence of campaign contributions from road builders, developers and others with an interest in the development of new roads. The findings suggest that spending is skewed toward road-widening and new highway projects, and that elected officials often overlook preventive maintenance projects, especially when new projects are encouraged by campaign contributions. That s even though the nation has 73,000 crumbling bridges, including tunnels and overpasses; the rest went to road-widening and new highways. States Lead The Way CALPIRG s Emily Rusch played a key role in the passage of Prop 1A, the ballot measure that approved nearly $10 billion in funding to build a high-speed rail connecting California s cities. Also in November, voters approved a measure in Washington to secure new funding for the area s light rail system. WashPIRG worked with leaders in the Seattle metropolitan region to promote the measure. The $1.16 billion parking meter privatization deal violated principles of good government, could lose money for Chicago over the long term, and has already resulted in negative impacts to drivers and the city s neighborhoods. Among the issues: The whole idea was originally conceived behind closed doors, and the lead consultant to the deal received a no-bid contract. The City Council took only two days to approve the plan with minimal time to review key documents, and analysis by the city s Inspector General suggests that the true value of the system to the city was greater than $2 billion. To prevent future bad privatization deals, the city of Chicago should adopt rules and processes that will ensure privatization proposals receive a thorough vetting prior to a decision and embrace a commitment to government transparency. 10

12 Affordable Higher Education Changes To Student Aid Programs Should Expand Access, Reduce Debt The maximum federal Pell Grant award increased from $4,730 to $5,550 on July 1, thanks to a PIRG-backed measure contained in President Obama s economic recovery package. The Pell Grant Program aids almost 7 million low-income students. U.S. PIRG Education Associate Rich Williams spearheaded a coalition including the United States Student Association that ensured the aid was included in the final package. Student PIRG campus chapters worked to get more than 200 college campuses signed on to a letter calling on Congress to increase the Pell Grant Program. House Passes Student Aid Bill In September, the House passed a student aid bill championed by U.S. PIRG for its promise to increase student aid programs for the tens of millions of students who rely on grants, loans, and access to community college to achieve a college education. The bill would end wasteful subsidies to student loan companies and use the savings as much as $87 billion over 10 years to help students pay for college. It would also ensure that Pell Grants increase each year in accordance with the cost of living. a campaign to Raise Pell ; more than 2,000 college students ed, e-faxed, tweeted and posted on Facebook, urging their senators to include the cut to lender subsidies as they crafted the Senate version of the bill. Subpriming Students Student aid is more important than ever because, as the U.S. PIRG briefing paper, Subpriming Students, showed, due to aggressive marketing, nearly 3 million American students took out private loans to pay their tuition last year, up from less than 1 million just four years before. Just about any company or school can offer a high-cost loan and market it to students as a student loan, at any terms it finds profitable. Many of these loans are actually unnecessary and carry high rates and fees. Students using private student loans to pay for college may as well be putting their degree on a credit card, according to U.S. PIRG s Williams. Sixty-seven percent of four-year college graduates carried debt averaging about $23,200, much of it in private loans that can carry interest rates of as much as 18 percent. And that s just one more reason why U.S. PIRG is pushing for a Consumer Financial Protection Agency to ensure that products like private student loans are fair and transparent. With a CFPA, America s students stand to benefit from more disclosure and fairer pricing. Because the proposal would pay for the increase in aid by cutting excessive bank subsidies from the student loan programs, banks that lend to students, including Sallie Mae and Bank of America, are opposing the legislation. In response, the student PIRGs launched Higher Education Associate Rich Williams spoke in November at The Lexington Institute s policy forum on the future of the federal student loan program. U.S. Public Interest Research Group

13 A Fair & Open Democracy From Ethics Turf Dispute To Campaign Finance, Democracy Needed An Advocate In 09 In 2008, we helped create the new Office of Congressional Ethics (OCE) to police ethical scandals. The OCE s mission is to bring accountability to Washington, whereas in the past, ethics investigations have tended to disappear into a black hole at the House Ethics Committee and never get addressed. Unfortunately, in October 2009, the OCE found its power challenged by the Ethics Committee, which disrupted the Office s investigations into certain Congressmen by refusing to release documents. The new office has helped to increase sunlight on the ethics process in the House, and we would sincerely like to see it continue to have that chance, said Democracy Advocate Lisa Gilbert. U.S. PIRG with the Campaign Legal Center, Common Cause, Democracy 21, the League of Women Voters and Public Citizen pressed Congress not to undermine the performance of the OCE with inappropriate challenges to its work. We Need Fair Elections Now U.S. PIRG has long supported fixing our campaign finance laws to encourage candidates to raise campaign funds from small donations, rather than the current big donor-dominated system. And since the Supreme Court s decision to allow unlimited corporate spending on political advertising, it is even more important that we pass the Fair Elections Now Act, authored by Sen. Dick Durbin Democracy Advocate Lisa Gilbert worked on Capitol Hill to ensure a more fair and open democracy. Bottom: Gilbert and Illinois Sen. Dick Durbin (center) with the Fair Elections Now Coalition. (Ill.) with significant input from U.S. PIRG Democracy Advocate Lisa Gilbert. Introduced in March, the bill aims to encourage small donations by providing a candidate $4 in federal funding for every $1 received in small donations. Our nation s current campaign financing system makes it virtually impossible for elected officials and candidates to be viable without the support of big donors, said Gilbert. That skews the democratic process. By October 2009, the bill had more than 100 cosponsors in the House. Getting Voter Registration In Line With The Times Election officials supportive of voter registration modernization According to our research, modernizing voter registration could have eliminated more than $33 million in wasted spending during the 2008 election season. We have the technology to use existing state and federal databases to proactively register eligible voters in a way that takes far fewer resources and is more accurate than large registration drives. So why are we still using a pen-andpaper process that leads to errors and incomplete or duplicate registrations? So far, 50 local elections officials have signed on to our principles. An OSPIRG-backed bill to allow online voter registration passed the Oregon State House in March. If signed into law, the bill would make Oregon the third state with online voter registration. 12

14 U.S. PIRG Supporters Citizen Support Is The Cornerstone Of Our Work Citizen Support Citizen support is the cornerstone of our work. Tens of thousands of Americans supported U.S. PIRG by making membership contributions in The members listed on the following pages were particularly generous in their support of our work. Names that appear in italics denote members enrolled in U.S. PIRG s monthly giving program. These members provide stability to the organization s resources through our monthly giving program. Featured Giving Opportunities Planned Giving U.S. PIRG and U.S. PIRG Education Fund gratefully accept bequests, beneficiary designations of IRAs and life insurance, and gifts of securities to support our work. Your gift will assure a legacy of activism and education that will stand up to powerful interests and revitalize participation in our democracy for decades to come. For more information, call or send an to plannedgiving@uspirg.org. Earthshare U.S. PIRG Education Fund participates in workplace giving programs with Earthshare, a federation of local, state and national environmental groups. Our designation number in the Combined Federal Campaign is # If your employee giving program does not currently include environmental organizations, please urge them to include Earthshare in your payroll deduction program. Foundation Support U.S. PIRG Education Fund U.S. PIRG Education Fund, a 501(c)(3) organization, conducts research and public education on emerging public interest issues. Contributions to U.S. PIRG Education Fund are tax-deductible. In 2009, U.S. PIRG Education Fund received support from: Arca Foundation Colston Warne Program of Consumers Union Educational Foundation of America Ford Foundation Jane Takeuchi Udelson Fund Lainey Feingold and Randy Shaw Justice Fund of the Fidelity Charitable Gift Fund Surdna Foundation The Rockefeller Foundation Wallace Global Fund, Inc. U.S. PIRG In 2009, U.S. PIRG, a 501 (c)(4) organization, received support from: Institute for College Access and Success Rockefeller Family Fund Financial Information FY09 Income FY09 Expenses Charts reflect FY09 financial information for U.S. PIRG, U.S. PIRG Education Fund and U.S. PIRG s citizen outreach programs. Grants 39% Citizens 31% Dues from state PIRGs 25% Other 5% Program 86% Fundraising 9% Administration 5%

15 FY09 Program Expenses Transportation Solutions 19% Tax and Budget Policy 8% Consumer Protection 18% Other 5% Reforming Health Care 15% Toxics & Public Health 14% Media & Internet Reform 13% Elections & Government Reform 8% Photos: All photos taken by our staff unless noted below. Cover: Shutterstock.com; Page 8: (left to right) Mike Brice Photography under Creative Commons License, Fatdeeman under Creative Commons License, Woolie Monster under Creative Commons License. Page 9: HFNG under license from Shutterstock.com, istockphoto. Design by Public Interest GRFX (215) ; printed on recycled paper.

16 U.S. PIRG U.S. Public Interest Research Group Membership Services Department 1444 Wazee St., Ste. 120, Denver, CO Address Service Requested NONPROFIT ORG. U.S.POSTAGE PAID BROCKTON, MA PERMIT NO. 430 U.S. PIRG National Staff (partial list) 2009 Annual Report Douglas H. Phelps Chair, Board Of Directors Andre Delattre Executive Director Gary Kalman Federal Legislative Director Ed Mierzwinski Consumer Program Director Steve Blackledge Deputy Director Allison Cairo Deputy Director Sujatha Jahagirdar Program Director, New Voters Project Phineas Baxandall Senior Analyst for Tax and Budget Policy Amina Fazlullah Staff Attorney Larry McNeely Health Care Advocate John Krieger Staff Attorney Elizabeth Hitchcock Public Health Advocate Chris Lindstrom Higher Education Program Director Rich Williams Higher Education Associate Lisa Gilbert Democracy Advocate Jeff Bernstein Policy Analyst State Staff (Partial List) Diane Brown Executive Director, Arizona PIRG Emily Rusch State Director, CALPIRG Gynnie Robnett Deputy Field Director Andrew MacDonald Program Director, ConnPIRG Danny Katz Executive Director, CoPIRG Brad Ashwell Legislative Advocate, Florida PIRG Brian Imus State Director, Illinois PIRG Johanna Neumann State Director, Maryland PIRG Janet Domenitz Executive Director, MASSPIRG Rebecca Weber Executive Director, NYPIRG Dave Rosenfeld Executive Director, OSPIRG Megan DeSmedt State Director, PennPIRG Melissa Cubria Advocate, TexPIRG Blair Anundson Field Associate, WashPIRG Bruce Speight State Director, WISPIRG