Consumers looking for bold action this year on laws protecting their wallets from rapacious drug companies, their privacy from the prying eyes of telecom companies, and their environment from the degradation of the oil and gas industry, didn’t get any. But they did get some legislation that helps them take banks to court for fraud and to follow the money behind political ads.
First, the blatantly ugly–Jerry Brown signed a bill benefitting just one company and his sister Kathleen who sits on its board. If anyone thought the days of special legislation benefitting one narrow interest are over, they’re not.
The bill benefits Five Point Holdings and Kathleen Brown who sits on the real estate company’s board. Five Point paid Kathleen Brown, a partner in the powerful lobbying and law firm of Manatt, Phelps & Phillips, $122,667 in 2016 for her board work and it looks like that paid off.
The bill merges two water agencies into one better-heeled one to guarantee Five Point a steady supply of water in a thirsty desert to the massive new Newhall Ranch development it will build in northern L.A. County far from major job centers.
It also creates one more buyer of imported water from Brown’s favored multi-billion-dollar Delta Tunnels project to divert Sacramento River water south under the S.F. Bay Delta without bringing additional water to Los Angeles.
Another ugly fact of life this year: the California Medical Association strong-armed lawmakers into declawing Senator Jerry Hill’s legislation of the requirement that doctors notify patients when the medical board puts them on probation.
Medical board oversight of doctors was renewed, but that was small consolation when the board has been excoriated for failing to adequately regulate doctors and protect patients and for making it difficult to look up doctor records on its website.
A poll by Consumer Reports last year found that 82 percent of patients think doctors should tell patients that they are on probation and why. The reasons can include everything from sexual misconduct, criminal convictions involving their practices, and drug or alcohol abuse that clouds their judgment or performance. That still isn’t happening in California.
Privacy legislation to stop telecom companies from gathering consumer data without consent and selling it died under AT&T and Verizon’s lobbying onslaught. But stay tuned for a possible ballot measure that would create an even more far-reaching right to privacy.
Brown signed a bill that puts only a Band Aid on prescription drug pricing. The legislation, introduced by Lt. Gov. hopeful Senator Ed Hernandez, requires companies to notify consumers and health insurance companies of price increases before raising them. The bill only creates a false sense of security for consumers who have no way to dodge outrageous price hikes when drugs already cost two thirds more in the U.S. than anywhere else.
It’s in keeping with Hernandez legislation pushed through some years back that requires health insurance companies to notify consumers and businesses when their rates are declared unreasonable by state regulators.
Ironically, it was Hernandez, a recipient of hundreds of thousands of dollars in health insurance industry donations to his campaigns and ballot measures, who stopped legislation allowing regulators to reject unjustified rate hikes, as the majority of other states already allow. He also obstructed a ballot measure that introduced bulk drug purchasing as an antidote to jumps in the price of drugs.
The Senate voted to confirm one much-maligned Brown appointee to the Public Utilities Commission, signaling nothing good for the environment. Cliff Rechtschaffen, Brown’s former top aide on oil and gas, was Brown’s hatchet man who fired two diligent wellhead safety regulators in 2011 at the behest of Jerry Brown and Occidental Petroleum.
After facing tough questions and requests from the Senate to put his answers in writing, Senators voted for the utility-friendly Rechtschaffen’s confirmation in the dead of night on the last day of session. Governor Brown, no doubt, put the heat on.
The legislature passed a gas tax on consumers of $52 billion to fix the state’s roads, which really need it. But the legislation didn’t also tax an oligopoly of oil companies and refiners that take advantage of offline refineries to jack up prices, export gas during shortages, and keep less gas on hand than they should.
The legislation should have included taxation of some of those ill-gotten gains to pay for roads pounded by vehicles that burn the climate-warming products that refiners push.
Legislators also passed a bill written by the oil and gas industry and backed by Brown that extends the state system of capping carbon emissions and trading pollution allowances to bring them down. Sounds great, but the legislation extends a liberal system of dispensing free permits to polluters. As long as it stays cheaper to continue to pollute than to invest in reducing emissions, that is what polluters will do.
Plus this bill contained a poison pill, essentially exempting refineries from meaningful regulation of their greenhouse gas emissions. The legislation put the lie to Brown’s image as a climate change warrior.
And Senator Henry Stern’s bill to keep the giant Aliso Canyon natural gas reserve owned by Sempra’s Southern California Gas shut until after a root cause analysis was completed on the biggest methane well blowout in U.S. history died under intense lobbying. The PUC’s Rechtschaffen concurred in reopening Aliso Canyon without publicly revealing the root causes of the blowout or who was responsible, and indeed without performing necessary seismic and environmental reviews.
Some of the good that happened this legislative year was the killing off of bad legislation. Last-minute legislation introduced by Assemblymember Chris Holden to roll California’s electric grid into a regional one to freely trade electricity was derailed by advocates, public interest attorneys, and labor unions. If it had passed, the Brown-backed proposal to create a regional grid would have opened up the state to Donald Trump’s appointees to invalidate California environmental and ratepayer protection laws.
The Supreme Court already affirmed that state agreements and laws can be nullified when states participate in a regional market like the one that Holden’s legislation would have created. Hello cheap coal power from Warren Buffet’s extensive western portfolio of power plants. Goodbye California’s tough renewable energy standards.
On a brighter note, political advertisers will have to face the consequences of letting consumers follow the money behind their prevaricating ads. Brown signed the California Disclose Act. The law now requires groups behind political ads to list who is really paying for them, and requires ballot measure ads to clearly and prominently list their three biggest funders. The law applies to TV, radio and print ads, and to Robo-calls.
And there was a silver lining in Wells Fargo’s stealing of the identities of 3.5 million customers to secretly open fake accounts in their names. Brown signed a bill cosponsored by the Consumer Federation of California, the Consumer Attorneys of California, and State Treasurer John Chiang that unshackles Wells Fargo customers with claims for damages from mandatory and often-biased arbitration.
The law means any California customer a bank defrauds can take that bank to court, while consumer advocates continue to battle mandatory arbitration clauses in consumer accounts across the board at the federal level.