While the government is right to be concerned about stopping fraud and graft by military personnel and other federal employees in contracting, as reported in the New York Times story Graft in U.S. Army Contracts Spread From Kuwait Base, the bigger problem may be the powerful and largely unaccountable role of the many corporations that make their living (and, it is a good one) doing jobs in the security-industrial complex. As reported by Ellen Nakashima and Brian Krebs in today's Washington Post, in the story Contractor Blamed in DHS Data Breaches:

The FBI is investigating a major information technology firm [Unisys] with a $1.7 billion Department of Homeland Security contract after it allegedly failed to detect cyber break-ins traced to a Chinese-language Web site and then tried to cover up its deficiencies, according to congressional investigators.

Security-industrial complex, by the way, is an update to the phrase popularized after it was used as a warning in president Dwight Eisenhower's farewell speech: military-industrial complex. The new phrase is attributable to Robert O'Harrow, himself a Washington Post reporter but also the principal author of No Place to Hide. You can read an excerpt here, where the publisher's description explains:

In No Place to Hide, award-winning Washington Post reporter Robert O'Harrow, Jr., lays out in unnerving detail the post-9/11 marriage of private data and technology companies and government anti-terror initiatives to create something entirely new: a security-industrial complex. Drawing on his years of investigation, O'Harrow shows how the government now depends on burgeoning private reservoirs of information about almost every aspect of our lives to promote homeland security and fight the war on terror.

According to the story Missteps delayed recall of deadly cribs filed late last night by the Chicago Tribune's Maurice Possley, only the paper's investigation led to the recall of one million cribs. Both the company, Simplicity, and the CPSC, the story reports, knew about the problem following the 2005 death of infant Liam Johns and a subsequent family lawsuit and CPSC investigation.

But the company and the Consumer Product Safety Commission didn't warn parents across the country about the potentially fatal flaw in Simplicity cribs--not after Liam suffocated, not after more complaints about the crib rails and not after two more infants died. Once the Tribune began questioning the company and the agency this month, a massive recall of Simplicity cribs followed.

Nursing homes have never been nice places. But the corporatization and private buyouts of nursing home chains are making things even worse for the people who live there. Today's New York Times has a major story by Charles Duhigg called More Profit and Less Nursing at Many Homes. It's a great investigative story, because as the story points out, the Wall Street firms buying up nursing home chains have layered so many "byzantine" ownership structures together that even state and federal officials can't figure out the relationships for purposes of determining whether an operator is small, or is instead engaged in a pattern of massive unfair and unsafe practices across dozens of homes and therefore deserving of larger civil penalties and corrective actions. Duhigg manages to piece together the corporate webs that own many of the chains. From the story's lede:

Habana Health Care Center, a 150-bed nursing home in Tampa, Fla., was struggling when a group of large private investment firms purchased it and 48 other nursing homes in 2002. The facility's managers quickly cut costs. [...] The investors and operators were soon earning millions of dollars a year from their 49 homes. Residents fared less well. Over three years, 15 at Habana died from what their families contend was negligent care in lawsuits filed in state court. Regulators repeatedly warned the home that staff levels were below mandatory minimums. When regulators visited, they found malfunctioning fire doors, unhygienic kitchens and a resident using a leg brace that was broken.

Federal and state regulators also said in interviews that such cuts help explain why serious quality-of-care deficiencies -- like moldy food and the restraining of residents for long periods or the administration of wrong medications -- rose at every large nursing home chain after it was acquired by a private investment group from 2000 to 2006, even as citations declined at many other homes and chains. The typical number of serious health deficiencies cited by regulators last year was almost 19 percent higher at homes owned by large investment companies than the national average, according to analysis of Centers for Medicare and Medicaid Services records.

For more information about nursing home advocacy, see the website of the National Citizens' Coalition for Nursing Home Reform.

Over at the Des Moines Register, in a story called U of I, Iowa State use student data to sell credit cards, reporter Clark Kauffman describes in detail the relationship between Bank of America and the state's two largest universities, facilitated by go-between contracts with "private" alumni associations. Kauffman used open-records laws bolstered by a recent Iowa court decision holding that "private" foundations affiliated with "public" universities are themselves subject to open-records laws to pierce the veil of secrecy that has long-surrounded the contracts that govern all aspects of bank relationships with public universities -- sharing of student data, royalties (I call them kickbacks in the story) and details of credit card company marketing arrangements to students on campus.

The story highlights the exclusive campus credit card marketing deals that come with the contracts. While the big early money in these arrangements comes from profits on cards taken up by the vast pool of big-spending and financially-secure alumni involved in the plans, the longterm payoff for the banks is to become the first card in a young person's wallet.

The tawdrier aspects of campus credit card marketing -- and the effects on already-high student debt loads -- are of great concern to U.S. PIRG. With the support of the Ford Foundation, U.S. PIRG and its student PIRG chapters have recently launched a major truthaboutcredit.org project to change the way credit cards are marketed on college campuses. From the Des Moines Register:

Iowa's two largest public universities are aggressively marketing credit cards to their students as part of an arrangement that generates millions of dollars for the schools' privately run alumni organizations.[...] At the same time, however, the two schools have signed deals with their alumni associations in which they have agreed to endorse, promote and profit from Bank of America credit cards marketed directly to students.

Not all the giveaways are school-sponsored. Last week, the Ohio attorney general sued Citibank after fast-food restaurants distributed fliers at Ohio State University, offering students free burritos and sandwiches. What the restaurants failed to advertise was that the students needed to complete an application for a Citibank credit card to get the free food.

Check out Greg Beck's post Video Professor sues anonymous griping posters, demands their identities over at the Consumer Law and Policy blog. The post concerns a lawsuit by an infomercial king known as the Video Professor challenging certain consumer complaint websites ranking his products poorly. The sites also allow consumers to post ratings anonymously.

The Internet has become the preeminent forum for consumers to share information about products and services online. Courts have recognized that the First Amendment protects the right to post criticism anonymously, noting the risk that critical opinions would be chilled if the identity of anonymous critics could too easily be revealed. Indeed, Video Professor's own website advises consumers to search for customer reviews online.

Pam Gilbert, a former U.S. PIRG consumer advocate and longtime public interest attorney who served as CPSC executive director under Chair Ann Brown in the Clinton administration, is among those with sharp critiques of the agency in Annys Shin's story in today's Washington Post about the recall (CPSC release) of one million Simplicity cribs (made in China) following three known infant deaths, "seven infant entrapments and 55 incidents in these cribs."

The story is titled Infant Deaths Lead To Big Crib Recall with the subtitle Actions of CPSC Face New Criticism.

The toy recalls have prompted calls for an increase in the agency's funding, which has been cut in recent years, but Pamela Gilbert, a former CPSC executive director, said yesterday's recall reflects problems beyond resource constraints. "When a baby dies, there should be a more thorough review and more thorough fix," she said. "They have enough resources to investigate the design of a crib and investigate the circumstances of a few deaths."

Saturday's Wall Street Journal (pd. subs. req'd) has two major stories on data breach issues. One story concerns the potential for new account fraud. Mortgage Firm's Data Breach, by Jaime Levy Pessin, describes how:

The names, Social Security numbers and mortgage information of thousands of people have been leaked by an employee of Citigroup Inc.'s ABN Amro Mortgage Group unit onto a popular peer-to-peer file-sharing network. The leak made the information available to millions of casual music-sharers, as well as would-be identity thieves.

That story, In Data Leaks, Culprits Often Are Mom, Pop, by Robin Sidel, points out that:

Smaller shops have proven ill-prepared for the complexities of safeguarding credit-card information. Since 2005, more than 80% of the instances of unauthorized access to card data have involved small merchants, according to Visa USA Inc., the largest payment-card network. These businesses account for 85% of the seven million locations nationwide that accept plastic, according to Visa.

The first story, about Citibank, describes how an employee loaded Citibank data onto her own computer containing the P2P software (or, loaded personal peer-to-peer software onto a Citibank computer, more likely the former). Either way, the P2P software allowed everyone on the network to access her entire hard drive, including the detailed personal dossiers. Companies cannot simply tell employees their rules, they must audit and verify that their practices are being complied with. And the rules themselves must be robust. The notion that so much confidential data can be placed on a personal computer and left unencrypted and available to a P2P network suggests that Citi's rules weren't that well-thought out to begin with.

Similarly, as discussed in the second story, credit card companies and networks cannot simply blame small merchants for not complying with their complex data protection and retention standards, known as PCI. The card networks and their third party processors are in such a rush to expand their business that they probably simply put a sentence in a one-page contract that tells prospective merchant payment card accepters to go online and read hundreds of pages of rules. That means that the breaches are not entirely the small firm's fault. As the story by Robin Sidel explains:

Many small merchants aren't even aware that the rules exist. These store owners "are provided with no information and, sometimes, with erroneous information," says Anita Boomstein, a lawyer at Hughes Hubbard & Reed LLP who represents small merchants.

Consumers typically aren't liable for fraudulent purchases on their credit cards, but the theft of card data can still create big headaches, particularly if the information is used to create a fake identity. Industry experts recommend that cardholders scour their account statements regularly and report irregularities as soon as they are spotted.

Last night the Senate approved the FDA drug safety bill passed by the House the day before. The bill achieves 4 of PIRG's five priorities going into the process, according to my colleague Paul Brown, who worked the bill full-time for the last 9 months. The bill provides for transparency of clinical trial results, improves conflict of interest rules, increases FDA's civil penalty authority and transfers $225 million of drug company user fees to post-market safety reviews.

Our fifth priority, strict regulation of direct-to-consumer advertising, was largely scuttled (except for certain fines if ads are misleading) due to an alliance between drug companies and the media and advertising industry (we're shocked, shocked!), as reported in Media Industry Helped Drug Firms Fight Ad Restraints (pd. subs. req'd) in today's Wall Street Journal, but nevertheless passage of this new law with four priorities in strong shape is still a major victory for consumers. Previous blog. Because the bill also extends the user fee program for new drug approval for five years, big PhRMA is also for it, so the President will sign it. Our champions, including Senator Ted Kennedy (D-MA) and Reps. Frank Pallone (D-NJ) and Henry Waxman (D-CA) and others deserve great credit for keeping so many consumer provisions in the package.

The FCC held the fifth of six planned public hearings on media ownership issues around the country last night in Chicago. Illinois PIRG, Consumers Union and Free Press worked hard along with local groups, including Rainbow/Push, to bring out the community. The event was successful (Chicago Tribune story, Buzz Flash), with most of the 800 attendees supporting a greater diversity of voices on publicly owned airwaves (less media ownership concentration). This event was intended to explain the need for that diversity of voices to include greater minority ownership.

Over at the Credit Slips blog, Adam Levitin asks: Who's Paying for Your Rewards Points?. It's a good explanation of interchange fees paid by merchants to credit card companies. All consumers pay more at the store and more at the pump due to unfair interchange fees, meaning cash customers pay for the rewards earned by credit card customers. Our previous blog on my recent interchange testimony.

On August 29, U.S. PIRG Consumer Blog sharply criticized (see last few paragraphs) Mattel for blaming China for its problems. Well, today, Mattel finally apologized to the Chinese people (AP story) and took the blame for its own failure to trust, but verify. We don't care whether your suppliers are in Kansas or China, your company is responsible if you enter dangerous products into commerce in the U.S. From AP:

The extraordinary gesture by Thomas Debrowski, the Mattel executive vice president for worldwide operations, came in a meeting with the Chinese product safety chief, Li Changjiang, at which Li upbraided the company for maintaining weak safety controls. Mattel has recalled about 21 million toys in a span of five weeks, many because of excessive levels of lead paint.

Meanwhile, over at the latest New York Times piece, by Louise Story, After Stumbling, Mattel Cracks Down In China, yet another Mattel executive, executive vice president for worldwide operations, Thomas Debrowski, blames someone else:

"I think it's the fault of the vendor who didn't follow the procedures that we've been living with for a long time," Mr. Debrowski said.

"It was our fault at Mattel because we trusted, but we did not verify. Squeezing safety to meet low-cost price points, we failed to require independent third-party testing to assure that U.S. quality and safety standards were being met by our suppliers before we put the Mattel/Fisher-Price brands on the toys from China we entered into commerce in America to sell for small children to play with. So, we take full responsibility."

We joined other leading consumer groups in signing on to testimony by the National Consumer Law Center before the Senate Finance Committee yesterday. The hearing concerned whether banks are failing to protect Social Security recipients from illegal and improper seizure of their exempt benefits. The issue has grown in importance as more and more consumers receive benefits electronically. Excerpt from testimony by Margot Saunders of NCLC:

We estimate that on a monthly basis thousands of low income recipients of Social Security, SSI and other federal payments whose benefits are entirely exempt from claims of judgment creditors are left temporarily destitute when banks allow attachments and garnishments to freeze their only assets. As was illustrated in a recent Wall Street Journal article ("The Debt Collector vs. The Widow -- Viola Sue Kell thought her Social Security benefits were safe in the bank. She was wrong."), when a bank applies an attachment 14 or garnishment order to the exempt funds in a low income recipient's bank account, the consequences are generally devastating. There is no money for food or medicine. Checks written for rent or the mortgage are bounced. People go hungry. They get sick or sicker. They suffer anxiety. They are forced to pay steep bank fees and fees to merchants because the checks they wrote when they had money in the bank now bounce.

The banks (backed by their captive regulators, at least until yesterday's hearing), of course, use the first part of the Bart Simpson defense: "it's not my fault, I wasn't there, I didn't do it." More from our joint NCLC testimony:

We disagree with this assessment as a legal matter and as a policy matter. Legally, the cases have not yet caught up with the technological situation that exempt funds directly deposited in bank accounts presents, but the case law presents no bar to such a requirement. As a policy matter, how can there be any dispute that the funds provided by American taxpayers to keep this nation's elderly and disabled from starvation and destitution should be kept available rather than frozen for the convenience of creditors who have no right to the monies?

The House today -- on a 267-151 vote -- passed an FAA reauthorization bill, HR 2881, containing a number of strong passenger rights provisions. Usually, bills get weaker as they go through Congress; this bill got better before it went to the floor. That's no doubt due to the growing demands from citizens and victims across the country organized into the Coalition for an Airline Passengers' Bill of Rights. (See previous blog). Here's a statement on passage from Rep. Mike Thompson (D-CA), chief sponsor of the Airline Passengers Bill of Rights proposal (R 1303). Much of that proposed bill was added into the final FAA bill. Congress probably would not have acted except that thousands of citizens complained about being treated worse than cattle by the airlines. The Senate's companion FAA bill, which includes some passenger rights language but also some more controversial provisions related to funding for its core purpose of modernizing air traffic control, must now go to the Senate floor.

[At the end of this post is a release "The CPSC: The Little Agency That Couldn't." PIRG put it out at the first hearing yesterday.] In testimony today before the House Energy and Commerce Committee, Dana Best, MD of the American Academy of Pediatrics (AAP) recommended that lead limits for "all products intended for use by or in connection with children" be set to allow exposure to no more than trace amounts of lead:

The Academy recommends defining a "trace" amount of lead as no more than 40 ppm, which is the upper range of lead in uncontaminated soil.

She is finally asking Congress for help. It's about time. From AP:

Leaders of the agency responsible for protecting consumers from faulty products said Wednesday that Congress should increase their budget and power in the wake of huge recalls of lead-contaminated toys..."Our small agency has been ignored by the Congress and the public for way too long," said the acting chairman, Nancy A. Nord. "Our laboratory desperately needs to be modernized."

The CPSC: The Little Agency That Couldn't

"Information obtained by committee investigators that retailers have not informed the public of numerous lead hazards in children’s toys and products is not surprising. The CPSC law is so weak that it allows manufacturers and retailers to control negotiations over the terms and timing of so-called "voluntary" recalls. With no money and little power, the CPSC is the little agency that couldn't.

Congress needs to do three things to guarantee the safety of toys and other children’s products:

First, it must increase the CPSC's funding and its authority to monitor the marketplace, order recalls, notify the public and impose penalties on companies that break the law;

Second, Congress must immediately ban lead in all toys and children's products;

Third, Congress must add safety links to the import supply chain, including adding more inspectors at ports of entry, imposing measures to require government enforced mandatory third party testing, requiring product traceability labeling rules and adding bonding requirements for all importers to guarantee that they can pay for recalls, if necessary.

U.S. PIRG intends to work to ensure that any final safety laws enacted by Congress protect children and the public, not companies that break the law."
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U.S. PIRG serves as the federation of state Public Interest Research Groups, which are non-profit and non-partisan organizations that stand up to powerful interests. In November, the PIRGs will release their 22nd annual Trouble In Toyland report, highlighting lead and other toxic hazards, as well as balloons, small parts and other choking hazards. More information at our websites www.uspirg.org and www.toysafety.net, and breaking consumer news at the U.S. PIRG Consumer blog www.uspirg.org/consumer

Yesterday's airline passenger rights mock strand-in on the mall organized by the PIRG-backed Coalition for an Airline Passengers' Bill of Rights (the group is pictured top left) was a big success. At the event, Rep. Mike Thompson (D-CA) announced that he had negotiated a provision that "excessive delays" would require a right for passengers to deplane into an FAA reauthorization bill expected to be heard on the House floor today. Previous versions of the bill had only included some of the coalition's more modest demands, such as the right to potable water and working toilets. At bottom, that's coalition founder Kate Hanni addressing the crowd. Here's the New York Times story, with several photos. Excerpt:

Yesterday, Ms. Hanni staged what she called a "strand-in" near the Capitol in Washington, in a bid to keep up momentum for the get-off-the-plane legislation she wants enacted, over objections from the airline industry. A long tent was outfitted to resemble the interior of an airline, and wings were drawn on its exterior in duct tape. She offered long-shot invitations to members of Congress to experience confinement, replete with smelly portable toilets Ms. Hanni and fellow volunteers had rounded up. For the record, American said Flight 1348's toilets never overflowed.

That's Kate, inside the mock plane with reform supporter and U.S. Rep. Ron Klein (D-FL). Next photo: Here are the media hordes gathering for the news conference. CNN and one other outlet even brought satellite trucks for live remotes. In the orange hat is coalition research and props director Mark Mogel, who designed and built the plane. Next, on right, here's a shot of me addressing the crowd. Finally, at the very bottom, that's passenger rights supporter and new U.S. Rep. John Hall (D-NY). Hall is a longtime environmental and anti-nuclear activist, and as most of you know, also a rock star as leader of Orleans and the John Hall Band.

Sidebar: When I was with ConnPIRG, we worked several 1981-82 anti-nuclear fundraising shows at Yale's Woolsey Hall and other venues as the official anti-nuclear organization that collected signatures and handed out literature. The shows featured Bonnie Raitt backed by the John Hall Band. Incredible shows from incredible citizen-activist-musicians. Three quick vignettes from the Woolsey show: (1) I picked up the legendary late folksinger Dave Van Ronk, who was the opening act, at the New Haven train station with my Volkswagen bug. He was wasn't hard to find-- large bearded guy, small train station, guitar case, whiskey flask, sitting and reading a pulp science fiction novel. (2) Also, Yale student Jodie Foster stopped and volunteered at our table. Despite everyone wanting her autograph, she instead made them sign petitions. (3) Bonnie dedicated a raucous version of her song Three Time Loser to the Connecticut nuclear power plants Millstone I, II and III. Hall, along with Raitt and others, was a key founder of Musicians United for Safe Energy. It's good to have him in Congress. We can always use another consumer and environmental activist making laws.

House Passes Prescription Drug Safety Reforms -- Senate to follow

Statement by U.S. PIRG Consumer Health Care Advocate Paul Brown:

"The drugs in our medicine cabinets will be safer because of today's Congressional action. The reforms are the type of strong medicine needed to protect all Americans from unsafe drugs. The drug industry opposed many of these safety reforms, but in the end there were too many headlines about dangerous drugs.

The full release is below the jump. Senate will act tomorrow.

For Immediate Release: September 19, 2007 For More Information: Paul Brown, U.S. PIRG (202) 546-9707 ext 304

House Passes Prescription Drug Safety Reforms -- Senate to follow

The House today passed significant reforms to the Food and Drug Administration’s drug safety review system. Part of a comprehensive FDA bill, the bill was a compromise between Senate and House legislation that passed overwhelmingly earlier this year. The bill, which includes strong consumer protections, will be voted on in the Senate tomorrow.

Statement by U.S. PIRG Consumer Health Care Advocate Paul Brown:

"The drugs in our medicine cabinets will be safer because of today's Congressional action. The reforms are the type of strong medicine needed to protect all Americans from unsafe drugs. The drug industry opposed many of these safety reforms, but in the end there were too many headlines about dangerous drugs. Congress had to act, and we're pleased they did. In recent years safety problems with drugs like Vioxx, Paxil and Avandia have made consumers question whether the drugs they are taking to keep themselves healthy are causing more harm than good. The reforms strengthen the FDA's drug safety review process, and they hold drug makers more accountable to consumers. For a number of years, the FDA's system for reviewing the safety of drugs has been broken. Today's action by Congress takes steps to solve our drug safety problems."

The Food and Drug Administration Amendment Act will:

Congress must pass the Food and Drug Administration Amendment Act by September 30 to avoid layoffs at the FDA. The bill includes prescription drug user fee reauthorization that provides nearly $400 million of the Food and Drug Administration's $1.5 billion budget.
###
U.S. PIRG is the federation of state Public Interest Research Groups. State PIRGs are non-profit, non-partisan public interest advocacy organizations.

Later that same day-- updated to add these two hearing and testimony links. (1) Amina Fazlullah of U.S. PIRG's testimony; (2) link to the full hearing including all witness testimony. Other witnesses included FCC Commissioner Jonathan Adelstein and an AARP representative.

U.S. PIRG staff attorney and telecom expert Amina Fazlullah testifies this morning before the U.S. Senate Special Committee on Aging at a hearing Preparing For The Digital Television Transition: Will Seniors Be Left In The Dark?. The hearing will be webcast beginning at 10:30 AM Eastern. Here is an excerpt from Amina's testimony, which will be posted at the committee site later this morning:

It's been nearly two years since Congress established the official transition date from analog T.V. broadcasting to digital, yet virtually no U.S. consumer knows what will happen on February 17, 2009. On that date, television broadcasters will switch from analog to digital signals. The transition offers the country the return of valuable, "beach front property" spectrum that can be used to enhance emergency communications, spur innovation and improve broadband connectivity.

One other thing will happen on February 17, 2009. Every consumer who watches over-the-air TV with an analog set will have their set go dark. Including in the estimated 22 million consumers in this category are 8 million households with at least one member older than 50.

As an opener for today's House Energy and Commerce committee hearing on toy import safety, Eric Lipton of the New York Times reports in More Retailers Found to Have Lead-Tainted Items that based on letters responding to committee investigator queries, "Major American retailers, including Target, Limited Too and Dollar General, have found more lead-contaminated children's products in their inventories but have not yet notified the public, Congressional investigators have determined."

Why hasn't the public been notified? The recall laws in the U.S. are so weak that even if manufacturers (including importers under the definition), retailers, and distributors correctly notify the CPSC of hazards they become aware of, those firms still -- under the law -- essentially control the recall process and can drag that process out for a long time, can negotiate the terms of the recall (if goods are recalled at all as sometimes existing product is allowed to remain on shelves, provided new product is non-hazardous), and even can use the law to control the wording of the eventual "voluntary" joint CPSC/firm recall press release to the public. A lot needs to change to protect children and others from hazardous products, but the recall rules are high on every reformer's list.

Today's blog posts were not made in the middle of the night. My computer is still on DC time but I am in Geneva, Switzerland at the PIRG-backed TransAtlantic Consumer Dialogue conference on "The Reform of WIPO: Implementing the Development Agenda."

The conference aims to help frame issues important to civil society stakeholders, not merely limited to multinational rights-holding corporations (drug companies, publishers, etc.) but also consumers in both north and, especially, south (often called developing countries), as the UN's World Intellectual Property Organization (WIPO) reviews and implements proposals for WIPO's development agenda. The issues are explained well here by IPJustice.

In mid-September 2004 the TACD hosted the first Future of World Intellectual Property Organization (WIPO) Meeting in Geneva. That meeting brought together leading experts and stakeholders from academia, industry, NGOs, and governments, as well as members of the WIPO secretariat, to discuss the future of this United Nations Agency. In short, those gathered then examined what the mission of WIPO was and what it ought to be. At that years' WIPO General Assembly, in response to a proposal by Argentina and Brazil co-sponsored by 12 other developing countries and spurred on by the discussions at the said TACD meeting among other events, WIPO Member States decided to examine proposals on establishing a development agenda for WIPO. These proposals will be considered by the full WIPO beginning next week. We hope that the conference provides additional guidance to the WIPO and other governmental attendees.

Today at 9am US Eastern time, U.S. PIRG, CDD and EPIC hold a press briefing on Internet privacy at the National Press Club. Meanwhile, Google Calls for International Standards on Internet Privacy (Washington Post), as reported widely including this Washington Post story that ran on Saturday.

The story explains that in a recent speech in Europe, Peter Fleischer, global privacy counsel for Google, called for international rules that are less of a "patchwork" than U.S. laws and less "inflexible" than European laws. Google apparently likes "something closer to the privacy framework developed by the Asia-Pacific Economic Cooperation forum."

In the WP story, EPIC's Marc Rotenberg says that

Google, under investigation for violating global privacy standards, is calling for international privacy standards. It's somewhat like someone being caught for speeding saying there should be a public policy to regulate speeding.

Our colleague and Canadian privacy expert Philippa Lawson says (although not in the Washington Post), "It's no surprise that Google has jumped on these principles. They may be a good first step for China, but that's about it." We agree. China's got privacy problems, as well as dangerous toy and food problems. Lawson is leading a Canadian challenge to the Google/DoubleClick merger. She directs the Canadian Internet Policy and Public Interest Clinic of the University of Ottawa Faculty of Law. My previous blog on Google/privacy issues.

[Update: A few hours later-- I used the term "largely" because the court had disagreed with a few minor points made by the commission regarding its legal fees and ongoing costs to monitor compliance, but to be clear: the media are recording this as a "resounding" or "decisive" or "major" "defeat" or "rebuke." Microsoft is expected to take a hit in the markets today and, then, in overall market share in Europe.]

In a closely watched decision, a European court has largely upheld actions in 2004 by European Commission antitrust and competition enforcers against Microsoft for abusing its "dominant position" regarding both the interoperability of Windows and the bundling of Windows Media Player. I expect our European consumer colleagues at BEUC may issue a statement shortly. Here is the story in the International Herald Tribune.

There's a big story and a couple of fine editorials in the Sunday New York Times regarding the response of the toy, food, tobacco and many other industries to a variety of pressures, including but not at all limited to the massive public outcry over dangerous products being imported from China. Of course, a second goal of industry is to convince Congress that the price of federal regulation, no matter how insignificant its provisions, must be to permanently preempt or limit the authority of state legislators and state enforcement agencies including those pesky state Attorneys General to protect consumer, worker and environmental health, safety and financial well-being. Their goals even extend to eliminating the right of injured consumers to seek compensation in state courts. The front page story by Eric Lipton and Gardiner Harris is called In Turnaround, Industries Seek U.S. Regulation:

For toys and cars, antifreeze and fireworks, popcorn and produce and cigarettes and light bulbs, among other products, industry groups or major manufacturers are calling for federal health, safety and environmental mandates. Some of those industries are abandoning years of efforts to block such measures, often in alliance with the Bush administration, which pledged to ease what it views as costly, unnecessary rules.

Of course, in the story, I point out that lawmakers need to be careful: "I am worried about industry lobbyists bearing gifts...Their ultimate goal is regulation that protects them, not the public." Similarly, Georgetown law professor David Vladeck says, restating a point made in his recent Senate testimony, that industry seeks preemption as a condition of enhanced federal regulation: "This is Christmas. This is their wish list."

The Times also has two related editorials Sunday, the first is called The Need for Regulation: For All of the Nation's Imports and the second is The Need for Regulation: And Especially Our Children's Toys. And Monday's Wall Street Journal has a similar story by Jane Zhang: Food Makers Get Appetite for Regulation (pd. subs. req'd.) Our previous blogs on preemption and on industry's motives.

There's a nice opener in Monday's Washington Post for Wednesday's airline passenger strand-in event on the mall Wednesday. The story by Del Quentin Wilber is called Anger over Airline Delays Spurs Passengers' Coalition Into Action. It includes a nice feature on Coalition for an Airline Passengers' Bill of Rights founder Kate Hanni and quotes coalition research director Mark Mogel commenting that "The airlines picked a fight with the wrong woman." While the story notes that Mogel's "test flight" of the strand-in's mock plane was held on the runway Sunday due to lack of a permit for a local park, CAPBOR does have one for Wednesday. Come to the Mall between 11am-1pm to participate and sit in the "plane." The event will be mid-mall, at 12th Street, between the Capitol and the Washington Monument. By the way, as the Post notes, someone has hacked the coalition's blog. But there's a temporary site up and running, and the flyersrights.org site is also up with background on CAPBOR.

On Monday, I will participate in an international conference in Geneva, Switzerland, sponsored by the PIRG-backed TransAtlantic Consumer Dialogue (tacd.org). The conference concerns the activities of the powerful, but obscure, UN agency known as the World Intellectual Property Organization. The Reform of WIPO: Implementing the Development Agenda will examine WIPO's well-known potential to make access to medicine and access to knowledge more affordable for billions of citizens across the globe. The question has always been: But does WIPO have the political will? The event is one in a series of TACD conferences on reforming intellectual property laws.

On Monday at 9am, an expert panel including U.S. PIRG's Amina Fazlullah and University of Pennsylvania professor Joe Turow, author of Niche Envy: Marketing Discrimination in the Digital Age, will hold a public seminar at the Washington DC, National Press Club on "Google, Online Advertising, and Privacy."

The expert panel event is intended to tee-up the pending FTC 2-day town hall (1-2 November) on online privacy. It will review recent developments with online privacy, including behavioral targeting, and the proposed merger of Google and Doubleclick. The panel will discuss the challenges to the merger and the various remedies that the Federal Trade Commission could impose to help safeguard Internet privacy and ensure competition.

FULL ADVISORY BELOW THE JUMP.

PRESS ADVISORY

"Google, Online Advertising, and Privacy"
Press Club Briefing and Teleconference
Monday, September 17, 2007

Public Briefing - Session at Press Club
9 am - 10 am ET

An expert panel will review recent developments with online privacy, including behavioral targeting, and the proposed merger
of Google and Doubleclick. The panel will discuss the challenges to the merger and the various remedies that the Federal Trade
Commission could impose to help safeguard Internet privacy and ensure competition.

Participants:

The National Press Club
First Amendment Room
529 14th St. NW, 13th Floor
Washington, DC

In July, U.S. PIRG Consumer Blog broke the story that Bank of America would raise double-dipping ATM surcharges to $3, becoming the first big bank to hit the $3 level for double-dipping ATM surcharges. When a non-customer used a BofA machine, it now costs him or her $5.50 or so, since their own bank also charges them a foreign ATM fee of $2-$2.50, which it shares with the ATM owner, in this case, BofA. (You need to look at your monthly statement to learn about the foreign fee.)

Well, Kathy Chu of USA Today did a nice story on the problem today, and now everyone's finding about it.

So bank at a credit union, not at a bank. Most credit unions waive surcharges on other credit union members. There aren't as many credit union ATMs, but there are some, especially in metropolitan areas. And plan your trips so you have enough cash so you don't need to stick your card into one of Bank of America's or some other big bank's double-dipping ATMs.

Dudes, check out this new video about campus credit card marketing-- You've Been F#%?'D! Take action and pass it on to your friends. It's from our partners at Americans For Fairness In Lending or AFFIL).

Credit card companies sign you up even if you have little or no income, knowing you'll trigger high "penalty" interest rates and fees. That's where they make their big $$$.

College students, young workers, immigrants, the elderly and others who are not aware of the traps get solicited the most and hit the hardest.

Free t-shirts, frisbees and pizza come at a dangerous cost. Your signature can lock in very unfair terms.

U.S. District Court Judge William Sessions ruled yesterday that Vermont's law designed to limit greenhouse gas global warming pollution from cars and trucks was not preempted. (Washington Post, Vermont Times Argus including VPIRG statement, New York Times). Vermont is one of about a dozen states that have adopted standards first approved in California, although the states must now wait for EPA waivers to finalize the rules. Environment Maryland's clean cars page explains the issues.

Also yesterday, the U.S. Senate Judiciary Committee, chaired by Vermont Senator Pat Leahy, held an important hearing on whether Bush administration agencies are engaged in a cooordinated campaign to usurp state authority. Key testimony was provided by Professor David Vladeck of Georgetown University Law Center. In addition to his testimony, he released a new report The Truth about Torts: Using Agency Preemption to Undercut Consumer Health and Safety jointly authored with other colleagues participating in the Center for Progressive Reform, a national network of scholars. Previous blog.

I will be on CNBC this morning at 11:20 Eastern time or so (TV is always a few minutes late, sometimes early) talking about China, imports and the CPSC. At 11 am, Senator Dick Durbin, who has filed several safety proposals, will hold an Appropriations hearing with witnesses from the CPSC, toy industry and Consumers Union.

U.S. PIRG and Consumers Union have again updated our state model law for preventing identity theft (downloadable here as a pdf or doc). Among its highlights are a strengthened state Social Security Number protection provision, which is also available as a stand-alone model SSN bill.

The centerpiece of the comprehensive multi-part model law remains the security freeze. Only a security freeze prevents identity theft. Neither fraud alerts nor over-priced credit monitoring services can stop identity theft before it starts.

To date, 39 states and the District of Columbia have enacted security freeze legislation (although not all laws have taken effect). The best laws are free (Indiana) or very low one-time cost (several states) and/or provide for an instant temporary lift or unfreeze. Consumers Union maintains an up-to-date summary of both security freeze and state breach notice laws.

The lead story in the 6 September Privacy Times (subscription only) reports the following:

Pay attention, data collectors. Sloppy information practices are not free.

From the University of California at San Francisco's project on tobacco control, where "The Cigarette Papers" and other documents are also stored, an announcement of improvements to the website where the main tobacco industry information treasure trove is kept:

Today, the Legacy Tobacco Documents Library (http://legacy.library.ucsf.edu) released a new version of the website with new features and a few fixes that we hope you will find helpful.

There are, for example, 1,245 documents containing the phrase "public interest research group" and 915 documents containing PIRG. 619 pages contain PIRG but not "public interest research group." You can search, for example, for copies of Sylvester Stallone's letters where he agrees, for a fee of $500,000, to use Brown and Williamson tobacco products in 5 films (just search on Stallone).

You say you want an example of a database that doesn't work well to compare this to? Head on over to the clunky 19th Century Senate Office of Public Records [or sopr.senate.gov]. Good luck trying to figure out who is a registered lobbyist, who his or her clients are, how much money they were paid, and what the payment was for. Good luck with all the scanned documents.

Interesting blog item from Mary Pilon over at FiLife, Getting Chased by Puppies. At NYU, Chase on-campus credit card marketers are apparently luring students to their table with a puppy dog.

Tomorrow, the Senate Judiciary Committee, chaired by Pat Leahy (D-VT), will hold a hearing on Regulatory Preemption: Are Federal Agencies Usurping Congressional and State Authority? Expect Georgetown Law Professor David Vladeck, in particular, to defend stronger state laws. This hearing will focus not on express preemption by Congress but on the recent trend of federal agencies asserting that compliance with their modest rules grants corporate wrongdoers immunity from state common law claims, including for injury or death. It's a dangerous trend -- especially when the agencies claim it without Congressional authority -- as we have noted.

Syndicated columnist Cindy Skrzycki has an opener for the hearing in the Washington Post. Her story is unfortunately titled and tilted toward the notion that Trial Lawyers on the Offensive in Fight Against Preemptive Rules. This isn't a fight about trial lawyers. It's about the fundamental police power reserved to the several states to protect consumer and worker health and safety. Here's our PIRG page on state preemption.

On September 18th the D.C. City Council is expected to finalize action on legislation sponsored by Councilmember Mary Cheh (Ward 3) to subject predatory payday lenders to the 24% APR usury ceilings other small loan companies face. Payday lenders in the District now charge annual interest of up to 550% -- more than 20 times the legal limit for other lenders. Bill B17 -0132, the Payday Loan Consumer Protection Act of 2007 is supported by all leading consumer, civil rights, poverty and religious action groups and a coalition. The coalition has a news conference (scroll down) with several former payday staffers turned whistle-blowers scheduled for Wednesday September 12 at the District building. On July 10, the preliminary vote for the legislation was 12-0-1, with former Mayor (some time ago now!) Marion Barry, the only abstention. Barry (Ward 8), originally co-introduced the bill with Cheh, but has since joined forces with the industry lobby, which has been spending a lot of the cash bilked out of D.C. residents' pockets on a series of ads claiming that they are, in fact, the good guys. Well, did you expect them to say, "Yes, we are loan sharks?" Expect Barry to offer and withdraw, for lack of support, a pro-industry amendment to "regulate" the industry, but not "ban" it.

The government's Interagency Working Group on Import Safety has released a report to the President. On August 31, it also issued a Federal Register notice announcing a public hearing for October 1.

The report, not surprisingly, has little to say. It does somewhat randomly (page 8) call for amending the Consumer Product Safety Act to make it illegal for retailers and distributors to continue to sell voluntarily recalled products. Subject to how such a proposal were drafted, we'd support it. But we'd also like greater burdens placed on manufacturers conducting recalls to agree to do real recalls, not simply go through the motions. Under current law, voluntary recalls are more frequent not because manufacturers are altruists, but because the CPSC does not have adequate authority to make them do mandatory recalls without court delays and expense. It settles for weaker "voluntary" actions because they can be negotiated more quickly.

Sally Greenberg, our longtime ally as a Consumers Union senior attorney specializing in product safety and the corporate crime beat, has a new gig. On October 1, she takes over the nation's oldest consumer group, the National Consumers League, with the retirement of Linda Golodner. In Annys Shin's Washington Post story New Boss for Consumers League, consumer advocate Pamela Gilbert says it well: "With her at the helm of NCL, the consumer movement will get a great big shot of adrenaline." We wish Linda well in retirement and look forward to working with Sally and NCL.

Today the House followed the Senate in passing strong student loan reform legislation (New York Times story). PIRG students were active in efforts to pass the bill. In the photo, left, ConnPIRG's Trea McPherson speaks on behalf of students nationwide at a news conference with champion and Senator Ted Kennedy (D-MA). In the photo below, Senator Kennedy talks with Andrew Friedson (Student Government Association president at University of Maryland College Park) and Trey. Here is an excerpt from PIRG Higher Education advocate Luke Swarthout's statement:

The College Cost Reduction and Access Act is the most meaningful higher education reform in more than 15 years. The legislation addresses the dual financial challenges of access and affordability that face American college students. The legislation provides billions of dollars a year in additional grant aid to low-income students through the Pell Grant program. It will also help students address the burden of rising student debt through lower interest rates and a new repayment system.

For Immediate Release: September 7, 2007
For More Information: Luke Swarthout, U.S. PIRG Higher Education Advocate, 202-546-9707

Congress Passes Major Higher Education Reform

Today the U.S. Senate and House of Representatives passed the College Cost Reduction and Access Act by votes of 79 to 12 and 292 to 97 respectively. The bill now goes to the President who has said he will sign the legislation into law.

Statement by U.S. PIRG Higher Education Advocate Luke Swarthout:
"The College Cost Reduction and Access Act is the most meaningful higher education reform in more than 15 years. The legislation addresses the dual financial challenges of access and affordability that face American college students. The legislation provides billions of dollars a year in additional grant aid to low-income students through the Pell Grant program. It will also help students address the burden of rising student debt through lower interest rates and a new repayment system.

This legislation is an example of Congress getting policy making right. The bill trims excessive subsidies that benefit a handful of banks and directs them to millions of students and families who are working to pay for college. The bipartisan votes for this legislation, and the President’s pledge to sign it into law, are testament to the broad support for helping students and families pay for college."

The College Cost Reduction and Access Act will:

Increase the maximum Pell Grant award by $490 for each of the next two school years, by $690 for the following two school years and by $1,090 for each following year. The Pell Grant is the nation’s premier college access program, providing grants to 5 million low-income students each year. The maximum Pell Grant is currently $4,310.

Create an Income Based Repayment program that allows borrowers to repay their loans as percentage of their income. Borrowers would be expected to pay 15% of any income above 150% of the poverty line (about $15,000 for a single individual). This new program will protect borrowers with low salaries having to make unmanageable payments. As a result students will be able to make employment and life decisions based on their values rather than the volume of their debt.

Reduce interest rates on student loans for more than 5 million low and middle-income student borrowers receiving subsidized Stafford loans. To see how many students would benefit from these interest rate reductions read U.S. PIRG’s report , "Cutting Interest Rates, Lowering Student Debt" . (Note: this report does not describe the interest rate reduction used in the final College Cost Reduction Act)

Finance increased education spending by reducing subsidies to student lenders. Lenders will receive a reduced rate of return for offering federal student loans and a slightly reduced reinsurance rate from the federal government. As a result, the increased grant aid and loan benefits will have no additional cost to taxpayers.

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U.S. PIRG is the federation of state Public Interest Research Groups. State PIRGs are non-profit, non-partisan public interest advocacy organizations. The U.S. PIRG Higher Education Project was established in 1994 to secure more aid for students, with a focus on additional grants, reduced debt, and better service to students in the federal financial aid system.

Illinois PIRG and numerous Chicago area and national media reform groups (joint release) are preparing for the next FCC media ownership hearing, to be held in Chicago on September 20th.

And by the way, Free Press has announced that the next National Conference on Media Reform will be in Minneapolis next year from Friday-Sunday June 6-8. Make a note in your calendars. This is a not-to-be-missed event. Here's a link to some summary info from the Memphis NCMR in January 2007 and here are some photos from same.

Congress never acts to protect consumers unless the states act first or there is a massive scandal. But the scandal needs to be massive to get the sustained attention of the Congress. In 2002, we would not have enacted the Enron reform law known as Sarbanes-Oxley (industry had effectively stopped it) until WorldCom joined the scandal and the President had to run up to Wall Street to promise to restore faith in the markets.

In 1994, Congress passed the Child Safety Protection Act, its last substantial amendment to the toy safety laws. We had to drag the toy industry, kicking and screaming, to the table. The way we accomplished it? After ten years of non-action by either Congress or the CPSC on well-known choking hazards, the state PIRGs launched a state-by-state campaign to enact stronger standards. Following passage of Connecticut's law, and the quick slapdown by the U.S. courts of the industry's attempt to strike it down, the industry crawled back into Washington to announce it would no longer block reform.

Now, the multiple Mattel/Fisher-Price and other China recalls may be piling up into a big enough scandal that we can enact better import protections, toughen the CPSC's regulatory authority and get it more money and resources to protect American families from product hazards. In today's New York Times, Eric Lipton and Louise Story report that Toy Makers Seek Standards for U.S. Safety.

We haven't seen their plan for mandatory third-party pre-market testing. Since the makers are already responsible for guaranteeing that toys entering into U.S. commerce meet U.S. standards, they should be doing third-party testing already. The real questions here are raised by Don Mays of Consumer Union in the story. He said that "if the proposal was going to be effective, the government would also have to ensure that the tests were being done often enough, and spot-check products coming into the country to make sure that they were safe."

And we would add this: We question the industry's motives. Are they trying to reassure the public or create a liability shield? Congress must be clear that any additional requirements on the industry should not automatically grant immunity from private enforcement by aggrieved consumers. Why?

A manufacturer's compliance with minimum federal standards should never take away remedies for consumers. Not only are these often the only way consumers can be compensated for their injuries, but the threat of lawsuits acts as an additional protection against making dangerous products.

This just in: More bad stuff from China. AP is reporting that Mattel "will announce on Wednesday the recall of a third batch of Chinese-made toys because they may contain excessive amounts of lead paint."

Check out the new website Bank of America Bad for America. SEIU, the Service Employees International Union, says:

Instead of living up to its obligation to employ responsible business and banking practices, Bank of America is using its size and market dominance to run up fees and credit card rates, cut corners on community reinvestment efforts, deny loans to working families and minority communities, avoid paying taxes, and actively eliminate thousands of jobs.

We've joined AARP and other leading groups in an amicus brief (or friend of the court brief) in Riegel v. Medtronic, a case to be heard this fall by the Supreme Court. We are opposing this attempt by a medical device manufacturer (Medtronic) to claim immunity from product liability lawsuits brought by victims. Medtronic argues that since the device had received premarket approval from the Food and Drug Administration (FDA), state law claims (such as product liability claims) are preempted. More information here from Public Citizen, which is representing Mr. Riegel.