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Is ConsumerWatchdog.org Only Watching Out for Itself in the Legislature?

Steven Maviglio
Principal of Forza Communications, a Sacramento-based public affairs/campaign firm

ConsumerWatchdog.org, formerly known as the Foundation for Taxpayer and Consumer Rights, is on the warpath. It is fighting legislation sponsored by Los Angeles area Democratic Assemblymembers Mike Feuer and Mike Gatto that would require proponents of ballot measures to include a provision to raise the revenue to pay for them. And it’s pushing hard for the inclusion of “intervenor fees” in AB 52, a bill also authored by Assemblyman Feuer, that would regulate health plan rate increases.

Last week, an article in POLITiCO, the Beltway-based national political publication, revealed why.

According to POLITICO, ConsumerWatchdog.org “stands to gain millions” from passage of the rate regulation bill. The newspaper’s investigation revealed that the organization has raked in more than $7 million in “intervenor compensation” from 2002-2010.

Those funds come from a provision that ConsumerWatchdog.org founder Harvey Rosenfeld tucked into Proposition 103, the regulation that gives the California Insurance Commissioner the authority to review and approve insurance rate increases on car and property insurance. AB 52 has a similar provision. But no other state with health care rate regulation has anything like the one that’s being advanced in AB 52. That’s according to ConsumerWatchdog itself.

So why include it in California’s rate regulation legislation — when most other states with similar laws don’t have it? Follow the money — right back to ConsumerWatchdog.org.

In the POLITICO article, Consumer Watchdog’s Harvey Rosenfeld is quoted saying: “No one would work at Consumer Watchdog to become rich. We’re not pushing to go to court to make money. We’re saving money.”

There is no evidence of that. But according to Form 990′s on file with the California Attorney General’s office, Rosenfeld himself received more than $641,111 in compensation in a recent year. That includes $100,000 in salary from the Consumer Education Foundation, a group Rosenfeld set up whose only purpose seems to be making grants to Rosenfeld’s other organization, ConsumerWatchdog.org.

Not exactly the profile of a struggling consumer activist.

You have to search far and wide for this kind of data. Because despite blasting legislators and business when their financial information is disclosed, ConsumerWatchdog.org refuses to do the same, hiding names of its donors available for the media and consumers to see. And unlike other respected consumer organizations (like Consumers Union), ConsumerWatchdog.org has no members — just special interests that pony up for the organization to launch its much-publicized attacks (such as its battle against President Obama’s landmark health care reform bill).

Perhaps Assemblyman Feuer will do the right thing and amend his bill so that the light can shine on where these intervenor fees are going. It’s time someone put a leash on this self-appointed “watchdog.”

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