Consumer Watchdog

Consumer Watchdog
Consumer Watchdog
Formation 1985
Type non-profit
Purpose/focus taxpayer and
consumer advocacy
Location Santa Monica,
Region served United States
President Jamie Court

Consumer Watchdog (formerly the Foundation for Taxpayer and Consumer Rights) is a non-profit, progressive organization which advocates for taxpayer and consumer interests, with a focus on insurance, health care, political reform, privacy and energy.

The consumer organization was founded in 1985 by California Proposition 103 author Harvey Rosenfield[1] and is headquartered in Santa Monica, California. Its chief officers include President Jamie Court[2]and Executive Director Douglas Heller.[3] Other notable staff include consumer advocate John Simpson.[4]

The group states on its website: "Big Business has an endless amount of money and thousands of lobbyists working every day to protect and increase their profits - no matter who it hurts. We get in their way and work to protect and improve the lives of American consumers and taxpayers."


Early History

After lobbying with consumer advocate Ralph Nader on a number of issues including campaign finance reform and nuclear power proliferation, Rosenfield founded Consumer Watchdog in 1985.

Later, Rosenfield and Nader campaigned against Prop 51, an insuraunace industry backed initiative on the California ballot in 1986 that limited damage claims on lawsuits.

Though Proposition 51 passed, Rosenfield continued to work for insurance rate reductions at his newly formed public interest group. Rosenfield believed insurance regulation was the only solution to rising insurance rates in California. In response, Rosenfield drafted new insurance reform legislation, which insurance industry lobbyists defeated in the state capital. [5]


Insurance Reform

Proposition 103

In 1987, Rosenfield began to write a ballot box proposal to regulate California property and casualty insurance companies and formed a campaign to sponsor it called Voter Revolt. The proposal turned into insurance reform Proposition 103 and promised voters a minimum 20% rollback in rates for property, auto and other kinds of insurance. The measure required auto insurers to base auto insurance premiums primarily on a policyholder's driving safety record, annual mileage driven and years driving experience. Proposition 103 also made the California Insurance Commissioner an elected official, subjected insurers to California's antitrust laws, civil rights laws and unfair business competition law.

Voter Revolt operated on a $2.9 million dollar budget, a fraction of the insurance industry's $63 million dollar lobbying and advertising effort. The insurance industry, fearing they would not be able to defeat Proposition 103, launched three competing initiative measures in an attempt to confuse voters.[6]

To bring attention to his cause, Harvey Rosenfield used grassroots publicity stunts like having guards accompany Rosenfield while he delivered the signatures that got Proposition 103 on the ballot. As well, the group attempted to deliver truckloads of cow manure to the headquarters of Farmers Insurance of Los Angeles.[7][8]

These stunts, many 18-hour days, canvassers knocking on 1 million doors, and the high profile endorsement of Ralph Nader, helped Voter Revolt pass the initiative in November 1988. The win was seen as a huge blow to the insurance industry. Since then, Consumer Watchdog has defended Proposition 103 from insurance industry challenges and ensured the proposition's implementation. In 2008, the Consumer Federation for America estimated that Proposition 103 had saved consumers over $62 billion dollars since 1988.[9]

Proposition 17

During 2010, Consumer Watchdog fought Proposition 17, a ballot measure sponsored by Mercury Insurance Group to repeal a provision of Proposition 103 that prohibits insurance companies from considering a driver's history of prior insurance coverage when determining the price or availability of automobile insurance. Mercury spent $16 million in its effort, funding a group called Californians for Fair Automobile Insurance Rates. Consumer Watchdog argued that the measure would have allowed Mercury and other companies to impose surcharges of as much as $1,000 on drivers who have not had continuous coverage. To raise awareness of the fact that an insurance company was trying to hide its sponsorship of Proposition 17, Consumer Watchdog sent a man in a chicken suit to legislative hearings on the measure. [10] The group was outspent 12-to-1, but the measure was narrowly defeated on June 8, 2010.[11]

Healthcare Reform

HMO patients' rights

In 1994, during the Clinton healthcare debate, Consumer Watchdog created Californians for Quality Care and appointed Jamie Court to spearhead the effort. In 1996, Consumer Watchdog worked to have the nation's first patients' bill of rights proposition placed on the California ballot. However, Proposition 216 failed to pass, garnering only 38.7% of the vote.[12]

In 1998, Consumer Watchdog advocated for legislation, ultimately signed into law by California Governor Gray Davis, to extend broad need rights to HMO patients. To bring attention to the issue, the group dumped a truck load of pinto beans at an HMO industry conference to emphasize Consumer Watchdog's opposition to HMO "bean counters" overriding doctors' decisions.[13] Most of the legislative package later passed with the help of the California Nurses Association in November 1998.[14]

As a result, California has the strongest HMO patient protection laws in America. Many of the provisions of California's bill were included in the national U.S. Patients' Bill of Rights act, which passed Congress in 2001.

Prescription Drug Costs

During the 2004 election, Consumer Watchdog chartered two private trains—dubbed the Rx Express—to take seniors to Canada to buy cheaper drugs. The group wanted to show how Americans pay about 60 percent more for prescription drugs than people in other countries.

The Rx Express train trips generated more than three hundred television appearances, with a Nielsen audience of sixty-five million, sixty newspaper articles, and one hundred radio interviews.

The provision of prescription drug benefits to seniors became a central issue in the election and ultimately translated to an expansion of Medicare.[15]

In 2009, Consumer Watchdog launched with Mayor Antonio Villaraigos the LARx Prescriptions Savings Card Program, a City-wide card program that provides discounts on all pharmaceutical medications and is open to all interested individuals with no age, income or other eligibility restrictions. Consumer Watchdog developed the program with the City of Los Angeles.[16][17]

HMO Care for New Mothers

Consumer Watchdog helped influence Congress to ban what the group called “drive-through deliveries,” hospitals forcing mothers to be discharged after 8 hours. The group exposed a Kaiser memo to the media, which displayed distasteful remarks about why newborn mothers should be discharged in that amount of time. A number of news agencies picked up on the story, which brought the issue to the spotlight and eventually lead to congressional hearings. Congress later passed a law requiring that newborns and their mothers not be discharged from the hospital any sooner than forty-eight hours without their consent.[18]

Energy Regulation

In 1998, the group co-sponsored Proposition 9, a ballot initiative to block aspects of the utility deregulation laws passed by California lawmakers in 1996. Proposition 9 failed due to the $40 million dollar opposition campaign funded largely by California's three major private utilities – Pacific Gas &Electric, Edison International and Sempra Energy. During the 2000-2001 California Electricity Crisis, Consumer Watchdog became the lead critic of a proposed legislative bailout of the three major utilities. The legislature did not enact the proposed bailout.[19][20]

The group also runs Oil Watchdog, “a blog and resource library about the profiteering, power, and unscrupulous practices of the oil industry.” Leading up to the 2010 California elections, Oil Watchdog wrote a report exposing the profit motive of Valero when it donated $5 million into a ballot initiative that aimed at stopping California's green energy industries in their tracks.[21] The group created a controversial video to expose the practices of Koch industries, which it displayed in Times Square.[22]

Political Reform

In 2003, Consumer Watchdog launched Arnold Watch to expose Governor Arnold Schwarzenegger's ties to special interests. The group also targeted four Schwarzenegger-backed proposition on the ballot in a special election in 2005. Specifically, Proposition 74, which would have lengthened the time it takes for teachers to get tenure, Proposition 75, which would have limited public employee unions' political spending, Proposition 76, which would have limited California's spending and Proposition 77, which would have removed lawmakers ability to redistrict the state. Consumer Watchdog's grassroots efforts lead to the defeat of the propositions and changed Schwarzenegger's governorship.[23]

The group also helped expose former Senate majority leader Bill Frist’s conflicts of interest. Frist, a doctor whose family controlled one of the nation’s largest hospital chains, HCA, was then backing a Senate bill to limit legal accountability for doctors and hospitals when they commit medical malpractice. The group publicly demanded that Frist sell at least $25 million of stock he held in the company. At the time, HCA was one of America’s largest hospital companies and owner of HCI, the nation’s fifth biggest medical malpractice insurer. [24][25]

Though the group’s initial request went ignored by Frist, the Senate ethics committee and the mainstream media, it did create a record, which later became significant in the demise of the politicians political career.

Stem Cell Oversight

Consumer Watchdog created Stem Cell Oversight and Accountability Project to ensure that citizens of California reaped the benefits of state funded stem cell research. As the Independent Citizen’s Oversight Committee hashed out the intellectual property rules of Proposition 71, a successful 2004 ballot initiative that created $3 billion in general obligation bonds to fund stem cell research, Consumer Watchdog pushed to have language put in the regulations that ensure any cures that result from the research be made available to underserved populations and that the state recoup a portion of the taxpayers' investment. Consumer Watchdog, along with the Public Patent Foundation, also challenged patents held by the Wisconsin Alumni Research Foundation (WARF) on the grounds that the patents stymied research.[26][27] The groups’ efforts resulted in the United States Patent and Trademark Office revoking two of WARF's patents, though they were later modified and re-instated. Third was rejected, but that decision is being appealed by WARF. After the challenge was filed, WARF substantially eased licensing requirements, making stem cells more readily available for researchers.[28][29]


Financial Privacy

Consumer Watchdog fought for financial privacy legislation in 2002. The legislation, which required consumers to opt in before financial services companies shared their personal information with other companies, had public support, but lawmakers wouldn’t move it forward. The group wanted to expose how much personal information was for sale on the Internet for a relatively cheap price. To prove their point, the group published the partial social security numbers legislators opposed to financial privacy on his website. As a result of the group’s tactics, and the signature gathering help of e-loan's Chris Larsen, Governor Davis signed the "country's toughest financial privacy legislation."[30]

Google & Internet Privacy

Funded by the Rose Foundation, Consumer Watchdog’s Inside Google's is an initiative to educate the general public "about the need for greater online privacy, and to hold Google accountable for tracking consumers online without explicit permission and for exhibiting its monopolistic power in dangerous ways." [31]

Consumer Watchdog has also been influential in "Do Not Track Me" revolution. The consumer group was recognized by David Vladeck, the consumer protection chief at the Federal Trade Commission, during an online privacy conference on December 1, 2010 in Washington DC. That morning Vladeck announced that the FTC would recommend that every browser come equipped with a "do not track me" function that prevents companies from collecting data against the user's will.[32][33]

Consumer brought attention to many of Google privacy issues with a series of online videos in 2008. The first explained how new browser functions in Chrome stealthily transmitted information to the company for tracking purposes. The second explained how Google was reading emails in its Gmail system to market consumers based on contents.[34]

In the face of the exposures, Google agreed to fix privacy problems identified by the videos in its Chrome browser that it claimed were inadvertent. Moreover the company made some larger privacy changes answering criticisms in Consumer Watchdog videos. In November 2009 Google launched a dashboard[35] offering consumers better knowledge of and control over their information on Google¹s various services. In January 2010 the company began offering SSL encryption using the HTTPS protocol as the default mode for its Gmail service.[36] In May the company began offering an encrypted SSL connection for its search engine as an option. For maximum consumer protection, SSL should be the default mode for search and should be offered on other Google service as well. Recently, Google entered into a landmark overhaul of its privacy polices in a settlement with the FTC that addressed or touched upon many of the privacy issues Consumer Watchdog has raised.[37]

In 2010, to bring attention to Google's privacy issues, Consumer Watchdog checked networks in California Representative Jane Harman's home to see if her unencrypted Wi-Fi network might have been tapped when the company captured images for the Google Streetview service of Google Maps.[38]

In the summer of 2010, the organization launched a video in Times Square portrayed Google chief executive Eric Schmidt as an exploitative ice cream salesman.[39] The cartoon led to criticism of Consumer Watchdog by some in the technology industry media.[40][41] In 2011, the group created another video of Schmidt in an effort to get him to testify in front of Congress about Google’s privacy issues.[42]

In 2011, Consumer Watchdog issued a report, Lost in the Cloud: Google and the US Government, filled with details obtained through the Freedom of Information Act (FOIA) and interviews. The report claimed that Google has "inappropriately benefited" from close ties to the government. It also alleged that Google's influence with the Obama Administration, DHS, FCC, NASA, U.S. Patent & Trademark Office, Department of Defense, and NSA has helped shield Google and caused "insufficient federal action on Google’s 'Wi-Spy' debacle."[43]

The report also asked Congress to look into "Air Google," asking how NASA'S Moffett Airfield has been "turned into a taxpayer-subsidized private airport for Google executives."[44]

Because of Consumer Watchdog's work, Google allegedly tried to influence the Rose Foundation to halt funding for Inside Google.[45]

Legal Cases

  • MacKay v. 21st Century
  • Consumer Watchdog v. Dept. of Managed Health Care
  • Imburgia, Mecca and Greiner v. DirecTV[46]
  • Challenging Mercury Insurance on Illegal Broker Fees (CA Dept. of Insurance Noncompliance Action)
  • (Faigman v. AT&T Mobility LLC)
  • Feller & Freed v. Blue Cross of California
  • Fogel v. Farmers Group, Inc[47]


  1. ^ A Bittersweet Outcome, Los Angeles Times, December 27, 2000
  2. ^ "Mandatory Health Insurance? No Sale" Los Angeles Times, September 25, 2007
  3. ^
  4. ^ Temple, James (2011-04-04). "California Senator unveiling "Do Not Track" bill". The San Francisco Chronicle. 
  5. ^ Muir, Frederick (1988-12-03). "Rosenfield: Hero to Some, Troublemaker to Others". Los Angeles Times. Retrieved 2010-08-12. 
  6. ^ Wells, Ken (1988). "Moxie Pays Off for Harvey Rosenfield, The New Scrouge of California Insurers". Wall Street Journal. 
  7. ^ Wells, p1
  8. ^ Muir, p2
  9. ^ Hunter, J. Robert (April 2008). "State Automobile Insurance Regulation: A National Quality Assessment and In-Depth Review of California’s Uniquely Effective Regulatory System". Consumer Federation of America. 
  10. ^ Joseph, Brian (2010-03-24). "Consumer advocates cry fowl over initiative". Orange County Register. Retrieved 2010-06-10. 
  11. ^ Berton, Justin (2003-08-23). "Voters defeat insurance measure". San Francisco Chronicle. Retrieved 2010-06-10. 
  12. ^
  13. ^ Benson, Michael (1999-04-21). "Some Insurance Activists Turn the Actuarial Tables". Wall Street Journal. Retrieved 2010-08-10. 
  14. ^ "WHO'S WHO---Local Forces Playing Key Roles in Patient Rights Issue". Los Angeles Business Journal. 2001-07-16. Retrieved 2010-08-10. 
  15. ^
  16. ^'s_guide_to_raising_hell?page=entire
  17. ^
  18. ^'s_guide_to_raising_hell?page=entire
  19. ^ Howe, Kenneth (1998-10-25). "STATE PROPOSITIONS / Proposition 9". San Francisco Chronicle. Retrieved 2010-08-10. 
  20. ^ "Prop. 87 shot down throughout state - except along coast". 2006-11-08. 
  21. ^
  22. ^
  23. ^ Martin, Mark (2003-08-23). "THE SPECIAL ELECTION / CALIFORNIANS SAY NO TO SCHWARZENEGGER / STATE MEASURES: Governor reaches out, doesn't concede". San Francisco Chronicle. Retrieved 2010-08-10. 
  24. ^
  25. ^
  26. ^ Full text of Proposition 71
  27. ^ Simpson, John (2006-03-27). "Taxpayers must benefit from stem-cell research". San Francisco Chronicle. Retrieved 2010-08-06. 
  28. ^ Coplan, Ann. "Stem cell research patent overturned". The Badger Herald. Retrieved 2010-08-06. 
  29. ^ Pollack, Andrew (2007-04-03). "3 Patents on Stem Cells Are Revoked in Initial Review". New York Times. Retrieved 2010-08-06. 
  30. ^ Sample, Herbert (2003-08-23). "Governor signs privacy measure". Sacramento Bee. 
  31. ^
  32. ^
  33. ^ "Technology". Los Angeles Times. 
  34. ^
  35. ^ "Twitter hack raises questions about 'cloud computing'". CNN. 2009-07-16. 
  36. ^
  37. ^ The Washington Post. 
  38. ^ Kravets, David (2010-07-09). "Consumer Group Sniffs Congresswoman's Open Wi-Fi". Wired. Retrieved 2010-08-10. 
  39. ^ Saint, Nick (2011-01-10). "Crazy Anti-Google Group Distributes Cartoon Video Of Eric Schmidt Preying On Children". The San Francisco Chronicle. 
  40. ^
  41. ^ "Today in Tech". CNN. 
  42. ^
  43. ^
  44. ^
  45. ^ Kang, Cecilia (2010-05-09). "Consumer Watchdog targets Google". The Washington Post. Retrieved 2010-08-06. 
  46. ^
  47. ^

External links

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