Citing FTCR’s Work, CA Gov. Davis Solicits Insurance, Utility Contributions to Stop Initiative Reform

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FTCR Responds

In a letter to Governor Gray Davis, consumer advocates who have led high-profile California ballot propositions on insurance reform, HMO patient protections and utility rate reductions chided the Governor for using the non-profit group as an example of why insurance insurance and other business interests should donate money to Governor Davis to defeat Prop. 25.

The letter follows.


February 28, 2000

The Honorable Gray Davis


State of California

State Capitol

Sacramento, CA 95814

By facsimile

Dear Governor Davis:

Two weeks ago you convened a conference call with some of California’s most powerful corporate special interest groups. As reported in today’s LA Times, you asked insurance, utility and bank executives to contribute to the effort to stop the campaign finance reform initiative, Proposition 25. We have since learned that you singled out myself and our organization, the Foundation for Taxpayer and Consumer Rights, in your pitch to the special interests, noting that if Proposition 25 became law these industries would have to contend with more, and more competitively financed, consumer protection initiatives such as those we have written and sponsored in the past: insurance reform Prop. 103 in 1988; HMO reform Prop. 216 in 1996, utility rate reform Prop. 9 in 1998.

Californians are justifiably proud of the initiative process, for as these and other initiatives demonstrate, direct democracy has often succeeded in overcoming the entrenched corporate lobbies and protecting the health, safety and pocketbook of the state’s consumers and taxpayers. Proposition 103 has delivered over $14 billion in savings to California motorists; Prop. 216 spurred the passage of the HMO reform legislation you signed last year; even Prop. 9, outspent forty to one by the utility companies, has at least prevented other states from passing unfair utility deregulation laws. Indeed, lest you have forgotten, I have attached a picture you published years ago in which you were standing with Ralph Nader in support of the campaign for Proposition 103.

Back then, you courageously backed the public interest initiative. Since then, the special interests have only become more effective in using tens of millions of dollars to confuse and deceive voters for the purpose of defeating citizen initiatives. Why, as Governor, does the use of the initiative process by ourselves and other citizen groups now concern you so greatly that you would ask the insurance, utility and other business interests to fight disclosure and public financing reforms that would restore at least a modest balance to the process? Are you untroubled by the threat to democracy posed by unaccountable corporations dictating public policy in this state? Do you not see the apparent conflict-of-interest that you have placed yourself in by soliciting funds from the same insurance industry that is mounting a referendum campaign against consumer protections laws you signed last year? Many consumers have questioned why you have not spoken out more forcefully in support of Propositions 30 and 31, the product of a negotiated compromise you imposed. Or is it simply that Proposition 25’s reforms threaten your own perplexingly ceaseless and prodigious fund raising? Nothing better illustrates the need to clean up the cesspool of campaign corruption, beginning with the modest protections afforded Proposition 25.

Let me assure you that regardless of the outcome of the vote next week on Proposition 25, FTCR will continue to use the ballot initiative as a means to support important consumer rights as long as elected officials continue to trade away consumer and citizen protections at the behest of the corporate lobbies. Indeed, our citizen-based Oaks Project will shortly have the capability to qualify statewide initiatives and to campaign for their passage on an all-volunteer basis.


Harvey Rosenfield


Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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