PennPIRG

PENNSYLVANIA PUBLIC INTEREST RESEARCH GROUP & PENNPIRG EDUCATION FUND

Annual Report

Fiscal Year 2003 FROM THE DIRECTOR

Beth McConnell, Director

Battling corporate tax cheats. Standing up to powerful pharmaceutical giants. Fighting massive financial conglom- erates.

These issues all involve high stakes for Pennsylvanians, and they’re all at or near the top of PennPIRG’s consumer action agenda. Our agenda is about protecting our hard-earned dollars, so we can provide for our families and invest in our communities. It’s about making sure affordable, quality health care is available to each and every Pennsylva- nian. And it’s about making sure our democracy works the way it should—that the best interests of the public are placed before the narrow agenda of any single powerful interest.

PennPIRG took on several new and exciting programs this year, and we made significant progress for consumers on each front:

• PennPIRG’s advocacy helped pass a bill in the state House that demands fairer prices for prescription drugs from the pharmaceutical companies. This bill would require the state to stretch its health care dollars further, ensuring that more low-income senior citizens in Pennsylvania have access to state pharmacy assistance programs.

• PennPIRG and our allies helped convince Gov. Ed Rendell to propose closing a corporate tax loophole that drains tens of millions in revenue from the state, leading to cuts in important public services.

• PennPIRG members and those of other state PIRGs sent thousands of public comments to the Federal Communica- tions Commission opposing an action that weakened rules limiting how many TV stations a media giant can own. The action would also have eliminated the rule preventing powerful conglomerates from owning newspapers and TV stations in the same markets. PennPIRG is now urging Congress to overturn the FCC action.

• PennPIRG helped cast a spotlight on an under-investigated side of the medical malpractice crisis: how unsound business practices on the part of insurance companies are the larger culprit in rising malpractice premiums.

In each and every one of these challenges, we’ve faced well-financed, politically powerful special interests. Unfortu- nately, their resources, their access and their influence mean the public doesn’t always win, at least not right away. But when there’s so much at stake, we can’t afford to be intimidated. You can judge for yourself the results of our work in the pages of this report. Thank you, as a friend and supporter of PennPIRG, for being part of it.

Photo credits from top left, clockwise: Emily Templin releases “Paying The Price,” WPGH Fox 53; Beth McConnell urges fair drug prices, C- SPAN; Emily Schiller and Sen. 2003 marked 15 years of action in the public interest for PennPIRG. On the Michael Stack release a toy safety re- pages that follow are a few of PennPIRG’s most significant achievements port, Office of Sen. Michael Stack; the in protecting Pennsylvania’s consumers, safeguarding our democracy and Capitol, S. Solum, Getty Images. preserving the environment throughout our history. 1. PENNPIRG MARKS 15 YEARS

Staff, alumni and friends looked back at 15 years of public interest advocacy

PennPIRG Mission Host committee chairs Reps. Greenwood and Hoeffel joined PennPIRG is an advocate for the public Auditor General Casey and others to mark 15 years interest. When consumers are cheated or the voices of ordinary citizens are drowned out by special interest lobby- The year 2003 marked 15 years of action pollution from Pennsylvania power plants ists, PennPIRG speaks up and takes action. We uncover threats to the public in the public interest for PennPIRG. From by 60 percent, protecting the health of state interest and seek to end them, using the passage of strong environmental stan- residents. the time-tested tools of investigative dards to the defense of the Common- research, media exposés, grassroots wealth’s cornerstone consumer laws, • And, PennPIRG successfully sued the state for failing to enforce the Motor Voter organizing, advocacy and litigation. PennPIRG has ensured a voice for the pub- PennPIRG’s mission is to deliver per- Law, which improves voter registration. lic in the state’s political arena over the sistent, result-oriented public interest past 15 years. PennPIRG took the opportunity provided activism that encourages a fair, sustain- by the anniversary year to thank all those able economy, and fosters responsive, PennPIRG’s anniversary was commemo- democratic government. rated on June 10 in Philadelphia. Auditor who have worked with and supported the General Robert Casey delivered the key- organization in achieving so much in the note address to guests including state and public interest. local leaders, long-time members of PennPIRG, representatives from other groups, staff, alumni and volunteers. Among the host committee members were Congressman Chaka Fattah, NBC Chan- nel 10’s Tracey Davidson, state represen- tatives and senators, and other leaders in Pennsylvania’s public interest community. Robert Casey Those attending the event spent the Pennsylvania evening reflecting upon some of the suc- Auditor General cesses the organization has achieved, in- cluding: “PennPIRG has been, continues to be, and I think always will be a voice for • PennPIRG helped convince federal leg- the voiceless.” islators to eliminate $26 billion in waste- ful government spending that also threat- ened public health and the environment. Auditor General Robert Casey (left), former PennPIRG Director David Masur • PennPIRG’s advocacy helped convince and current Director Beth McConnell mark state regulators to cut summertime smog PennPIRG’s 15th anniversary.

Clean Water Lawsuit Arctic National Wildlife Refuge

PennPIRG’s survey of dangerous toys 1991: PennPIRG wins a $450,000 settle- 1992: PennPIRG works with other state has led to the recall of over 100 ment in a Clean Water Act lawsuit against PIRGs to help block a proposal to open the products since 1989. PennPIRG’s first Lukens Steel. The company had been dump- Arctic National Wildlife Refuge to oil and Director David Yeaworth (right) and ing illegal pollution into the Brandywine gas drilling. Consumer Advocate Ed Mierzwinski Creek in southeastern Pennsylvania. discuss strategies on consumer issues. WORKING FOR FAIR RX PRICES

Bill that would lower drug prices for seniors passed Pennsylvania House

PennPIRG’s reports and testimony documented skyrocketing dustry in order to expand services, rather prescription costs and advocated the bill’s passage than limiting benefits to Pennsylvanians, by preserving PACE and PACENET,” McConnell continued. On June 17, the Pennsylvania House maceutical companies’ efforts to block unanimously passed a bill that could pro- more affordable generic drugs from the PennPIRG applauded Reps. Pat Vance vide as many as 100,000 additional low- market, engage in unethical marketing (Cumberland) and Todd Eachus (Luzerne) income seniors in Pennsylvania with pre- practices, and mislead the public and regu- for leading the effort to pass the legisla- scription drug insurance and assistance. At tion. PennPIRG continued to urge the Leg- press time, the bill was on the full Senate islature to finish work on the bill. At press floor for consideration. time, the bill was close to becoming law. The bipartisan bill would require drug Earlier in the fiscal year, PennPIRG companies to provide prescription drugs weighed in on House Bill 2819, which to the state for the same price the federal would prohibit price discrimination by government pays under medical assistance pharmaceutical companies who charge programs. It would also guarantee that the uninsured consumers as much as double PACE and PACENET programs, which what they charge big purchasers for the currently provide pharmacy assistance to same drugs. 218,000 seniors, expand benefits, making as many as 100,000 additional seniors eli- PennPIRG praised Rep. Gannon (Dela- gible for assistance. The programs are in ware County) for his leadership on this is- danger of collapse due to skyrocketing sue and urged the committee to consider drug prices. changes to the legislation to ensure that all consumers—particularly the uninsured— “While thousands of Pennsylvanians get the best deal on prescription medica- struggle to afford the medications they tions. Emily Templin, PennPIRG campaign need, and the state struggles to help them, director, releases “Paying The Price,” “The pharmaceutical industry’s history of drug companies consistently inhibit fair which found that the uninsured in Penn. competition, causing drug prices to sky- blocking access to generic drugs, abuse of pay 78 percent more for drugs than the loopholes in patent laws, and unethical rocket for consumers,” said PennPIRG Di- federal government. rector Beth McConnell. marketing practices suggest that the indus- try is not likely to begin offering the best McConnell provided testimony to the lators as to who is really paying for the price to uninsured consumers of its own House Health and Human Services Com- industry’s research and development. volition,” said McConnell. “That’s why we mittee just weeks before the measure was need a state-run buying pool, which would approved, noting the need for affordable “The bill would enable the state to extract allow consumers and state government to drugs and reminding legislators of phar- lower prices from the pharmaceutical in- band together and demand better deals—

Clean Water Act Voter Registration

In 1992, PennPIRG’s Sheila Ballen 1996: PennPIRG’s lawsuit against the U.S. 1998: PennPIRG files and wins a lawsuit (right to left) joins then-Mayor of Phila- EPA forces Pennsylvania officials to imple- requiring the state of Pennsylvania to facili- delphia Ed Rendell, another supporter ment key parts of the Clean Water Act that tate voter registration by providing state resi- and Fuel Buyers’ Director Mike reduce pollution. dents with the opportunity to register to vote Sullivan to promote Fuel Buyers. when renewing a driver’s license. 3. just like the federal government and HMOs common prescriptions than the federal Investigative Research already do.” government pays for the same drugs. PennPIRG released “Paying The Price” in July. The report, released in partner- On average, Pennsylvanians spent $50.45 In Philadelphia, uninsured consumers pay ship with other state PIRGs, surveyed each time they had a prescription filled or 81 percent more for the most common 500 pharmacies in 19 states, and found that:

• Uninsured consumers in Pennsylvania Federal Government Negotiates Lower Prices pay 78 percent more for 10 common On average, the federal government negotiates prices that are just over half of prescription drugs than the federal gov- what an uninsured Pennsylvanian pays for the same drugs. ernment pays.

$0 $20 $40 $60 $80 $100 $120 $140 $160 $180 • In Philadelphia, the uninsured pay 81 percent more than the federal govern- Celebrex $129.19 $180.14 ment. Prevacid $72.11 $152.18

Zocor $67.81 $145.77 • In Pittsburgh, uninsured consumers pay 73 percent more than the federal Prilosec $67.32 $141.16 government for the same common Plavix $94.26 $137.11 drugs. Lipitor $41.12 $79.49

Norvasc $26.03 $52.65 PennPIRG is using this survey to advo- cate that lawmakers establish a state- K-Dur 20 $12.18 $25.51 Federal Government run prescription drug buying pool, Lanoxin $8.53 $10.38 Uninsured Pennsylvanians which would pool the buying power of Furosemide $7.31 $10.14 state consumers to negotiate fair drug prices.

Source: “Paying The Price” refilled in 2001, a 9.4 percent increase from drugs, and in Pittsburgh, they pay 73 per- 2000. Those costs are expected to continue cent more. According to PennPIRG’s re- to rise. While consumers pay more, re- search, drug companies charge wildly dif- search shows that the pharmaceutical in- ferent prices for the same drugs, giving the dustry is the most profitable in the world, best deals to the federal government while State Sen. spending millions on marketing every year charging the state and uninsured consum- Jane Orie despite claims that high prices are needed ers significantly more. Allegheny County to fund research and development. “HMOs and the federal government use “I believe that PennPIRG is keeping the PennPIRG further urged the Legislature to their buying power to negotiate fairer public well-informed of what is establish a state-run buying pool, which prices for the drugs they purchase,” said happening at the state and federal would use the state’s bargaining power to Emily Templin, a PennPIRG campaign di- levels . . . Moreover, the organization’s negotiate fair drug prices from manufac- rector. “The 41 million uninsured Ameri- keeping in touch with members of the turers. Individual consumers could opt into cans who have no one doing the same on Pennsylvania House and Senate and the buying pool and benefit from discounts their behalf are paying the price—while informing us of PennPIRG members’ the state demands. drug companies are making money hand stances on various issues is always over fist.” invaluable.” PennPIRG used investigative research to make the case for the pool, releasing “Pay- PennPIRG used the report to urge state de- ing The Price” in early summer 2003. The cision-makers to establish state-run buy- report found that uninsured consumers in ing pools to negotiate lower drug prices Pennsylvania pay 78 percent more for 10 for the uninsured.

Clean Water Safe Drinking Water

PennPIRG successfully defends the 1998: PennPIRG’s advocacy helps stop the 1999: PennPIRG sits on the board of the state’s automobile Lemon Law from reopening of a steel mill that would have Philadelphia Water Department, the state’s attacks in 1998, protecting consumers dumped more dangerous pollution into largest water authority, and helps create from unsafe or defective cars. Here, Pennsylvania’s waterways. Pennsylvania’s first Consumer Confidence David Masur (left) is interviewed by Report for its customers. consumer reporter Herb Denenberg. STANDING UP FOR TAXPAYERS

Gov. Rendell proposed closing an unfair corporate tax loophole

for 2003-2004. As a result, valuable pub- The governor’s proposal came just one month after PennPIRG lic services like public transit, health care and others called for the reform for the disabled, drug and alcohol treat- ment programs, environmental protection and others suffered big budget cuts. In a March budget address, Gov. Ed shifting revenue to subsidiaries in tax-ha- Rendell proposed closing a corporate tax ven states like Delaware and Nevada. PennPIRG asserted that when some un- loophole that, according to PennPIRG re- scrupulous businesses evade state taxes, “At a time when our state is grappling with searchers, allows at least 37 corporations that means individual taxpayers, consum- a serious budget problem, it’s outrageous to withhold $63 million in tax revenue ers and businesses that do pay their fair from the state each year. The governor’s share end up shouldering a bigger burden. proposal came just one month after PennPIRG and a coalition of groups urged “If everyone pays their fair share, not only the change in tax law. could we fund many of the programs and services we care about, but we might be “When corporations don’t pay their fair able to lighten the tax burden on everyone share, all Pennsylvanians suffer the con- in time,” McConnell continued. sequences,” commented PennPIRG Direc- tor Beth McConnell. “Individual taxpay- The loophole was made famous by Toys ers and responsible businesses end up pick- “R” Us and is exploited through the use of ing up a larger tab, while important public “Passive Investment Holding Companies” programs face budget cuts.” (PICs) in tax-haven states such as Dela- ware, Nevada and Michigan. In the case Following the governor’s proposal, the of Toys “R” Us, the mega toy retailer cre- House Finance Committee introduced leg- ated a subsidiary, “Geoffrey, Inc.,” in Dela- islation to close the loophole by requiring ware. This subsidiary legally holds the corporations to pay taxes on royalty and patents, trademarks and other intellectual interest payments made to out-of-state sub- property Toys “R” Us needs to do busi- sidiaries, or prove that making such pay- PennPIRG Director Beth McConnell ness. Geoffrey leases back the right to use ments was not a tax avoidance strategy. joined other groups at a February news those patents and trademarks in exchange As of press time, the issue was still before conference in Harrisburg, urging Gov. for royalties and interest payments. Once the Legislature. Rendell to close the corporate tax paid, Toys “R” Us stores across the nation loophole. have reduced substantially their in-state In an effort to urge lawmakers to adopt this taxable profit. legislation, PennPIRG released “The Great that many of the most profitable corpora- Escape” in the summer of 2003. The re- tions are evading taxes,” McConnell said. In 1990 alone, Geoffrey, Inc. received port analyzed financial information for 37 more than $55 million in such royalties and corporations based in Pennsylvania that Declining tax revenue contributed to interest payments from Toys “R” Us stores have recently been sued elsewhere for Pennsylvania’s $2.7 billion budget deficit across the nation, as revealed in a South

Clean Air Standards Open Space Initiatives

In 2000, President Clinton announces 2000: State regulators order Pennsylvania 2000: PennPIRG’s organizing helps win a PIRG-sponsored plan to protect 60 power plants to cut their summertime smog approval of three local initiatives to protect million acres of America’s national for- pollution by 60 percent, a direct response open spaces in Bucks County, located just ests. Here, PennPIRG’s Stephanie to PennPIRG’s advocacy. north of Philadelphia, and helps win in- Haynes thanks the president for his creased funding for land preservation in leadership on environmental issues. Springfield, Bucks County. 5. Carolina State Supreme Court decision. may be losing $296 million each year as Advocating Solutions Since Delaware assesses no corporate corporations shift revenue out of state. taxes earned from this sort of revenue, • In Feb. 2003, PennPIRG’s Beth shareholders of the toy giant earned the • Thirty-seven corporations with a signifi- McConnell and a coalition of groups $55 million tax-free. cant presence in Pennsylvania have been held news conferences in Harrisburg, reporting that a loophole in state tax laws allows major corporations to shift Corporate Tax Loopholes revenue out of state. McConnell called on Gov. Ed Rendell to propose closing Potential Pennsylvania revenue loss through the loophole by well-known the loophole. companies recently involved in litigation over the practice Just one month later, in a March budget Companies Recently Involved In Litigation Over Income Shifting address, Gov. Rendell proposed closing Aaron Rents Home Depot USA Sonoco Products Co. the corporate tax loophole. Following Abercrombie & Fitch Honeywell International, Inc. Stanley Works the governor’s proposal, the House ADP, Inc. Kimberly Clark Corp. Staples Finance Committee introduced legisla- American Greetings Corp. Kohl’s Syms Corp tion that would close the loophole by Budget Rent-a-Car Corp. K-mart Luxottica Brands (owner of requiring corporations to pay taxes on Burger King Lane Bryant Sunglass Hut Int’l, Inc.) Casual Male Retail Group YUM! Brands (owner, Long John Silver’s) The Limited Brands royalty and interest payments made to ConAgra Foods, Inc. May Department Stores TJX Cos. out-of-state subsidiaries, or prove that CompUSA Novacare Toys R Us avoiding such payments was not a tax Crown Cork & Seal Payless Shoesource, Inc. Tyson Foods avoidance strategy. PennPIRG’s most Dress Barn Radio Shack Corp. Urban Outfitters recent research highlighted that nearly Eaton Admin Corp Sherwin Williams York International $63 million in revenue is lost from the Snap on Tool Gap, Inc. state each year from 37 corporations Total Estimated Revenue Loss to Pennsylvania: $62,409,730 who likely exploit this loophole.

Source: “The Great Escape”

It is impossible to know which or how involved in litigation regarding their al- many businesses are engaging in this shell leged use of PICs in other states. game. Unlike federal tax payments, cor- PennPIRG estimates these 37 corporations Rep. Joseph porations’ state tax payments are not open alone may be avoiding $63 million in Hoeffel for public review. But several states have Pennsylvania taxes each year if they are U.S. Congress attempted to close this loophole in recent using PICs. District 13 years through legislation or litigation. • If just six of Pennsylvania’s biggest em- PennPIRG evaluated the experience of “PennPIRG has been a champion for those states, recent court cases and infor- ployers are income shifting, the loss to the people of Pennsylvania in the fight mation contained in a Wall Street Journal Pennsylvania could exceed $50 million to protect consumers and defend our investigation to estimate the amount of annually. democracy. Whether it is advocating or educating, PennPIRG is a leader in the revenue Pennsylvania could be losing each “As long as corporate state tax payments year from use of the PIC loophole. The fight for a safer, more healthful are secret, the public will lack the infor- Pennsylvania.” findings included: mation to demand accountability from • Government studies in New Jersey and businesses and government. With no risk Massachusetts have estimated that closing of being caught—and no public pressure the loophole would result in a 7.9 percent on government to go after tax evaders— increase in corporate tax revenues. If this businesses will continue to use loopholes same rate applies in Pennsylvania, the state to get around the law,” concluded McConnell.

Automobile Lemon Law Price Biases

In 2000, PennPIRG’s Beth McConnell 2001: PennPIRG plays a key role in 2001: PennPIRG releases Pennsylvania’s meets with then-Vice President Al Gore strengthening the automobile Lemon Law, most comprehensive study of gender price at a Philadelphia power plant to urge giving consumers recourse if a new car biases in the dry cleaning and salon indus- him to support a national energy plan proves to be defective or unsafe. tries. that would increase energy efficiency and the use of renewable sources. PUTTING CONSUMERS FIRST

Corporate fiascos, identity theft and rising malpractice costs threatened consumers

fornia in the 1970s. Research shows that PennPIRG staff worked to protect consumers’ rights on issues as a result of that law, which requires that ranging from consumer privacy to corporate reform insurers justify and receive approval for rate changes from an independent state board, premiums in California dropped by PennPIRG staff defended consumers’ medical malpractice rates and better regu- 20 percent over three years. Since then, rights, drew public scrutiny to unfair or late the insurance industry. rate increases have only kept up with the unsafe practices, and advocated strong new rate of inflation. consumer protections. In June, PennPIRG joined Auditor Gen- eral Robert Casey and groups such as AFL- Corporate Accountability Consumer Privacy After a wave of corporate scandals rocked In 2002, the state Legislature considered the economy and shook public confidence, two bills that would have protected con- President Bush signed new accounting and sumers from identity theft and other pri- corporate reform legislation in July 2002. vacy violations, thanks in part to According to Ed Mierzwinski, Penn- PennPIRG’s advocacy. PIRG’s lead consumer advocate in Wash- Senate bill 1407 (Corman) and House bill ington, D.C., the Sarbanes-Oxley legisla- 2080 (McGeehan) prevent public posting tion is both a landmark reform and only a or display of an individual’s Social Secu- first step. The new law holds executives rity number. The collection, storage and and corporate boards of directors liable for wide use of Social Security numbers place the accuracy of their companies’ books consumers at risk. It makes it harder for and the independence of their auditors. It consumers to control or track the dissemi- also lengthens jail terms and other penal- nation of their personal information, and ties for securities fraud. easier for identity thieves to misuse it. As required by that law, the Securities Ex- On Nov. 13, 2002, PennPIRG’s Beth change Commission (SEC) appointed a McConnell testified before the Senate In- Ed Mierzwinski, lead consumer new, independent accounting oversight tergovernmental Affairs Committee in sup- advocate in PennPIRG’s Washington, board in October. However, SEC Chair port of the Senate bill. Representatives for D.C., office, calls on Congress to crack Harvey Pitt’s choice for head of the new big banks, retailers and others—who use down on corporate fraud. oversight board, Judge William Webster, Social Security numbers as identification had been involved in a serious audit fail- numbers for customers and print the num- ure in the past. PennPIRG called for Pitt’s bers on materials—spoke against the bill. CIO, Citizens For Consumer Justice and resignation, and urged officials to instead others to hold news conferences in appoint John Biggs, head of the nation’s Insurance Reform Scranton and Harrisburg. The conferences largest teachers’ pension fund, as the new Throughout the past year, PennPIRG ad- urged policy-makers to adopt a law simi- accounting oversight chair. Pitt announced vocated legislation that would steady lar to the voter initiative passed in Cali- his intention to resign on Nov. 5, 2002.

Diesel Pollution Clean Water

In 2001, then-Director David Masur 2001: PennPIRG convinces the Philadel- 2001: Despite the fact that few of announces the settlement of a lawsuit phia-area regional transportation authority Pennsylvania’s rivers and streams remain against P.H. Glatfelter Co. The settle- to use low-sulfur diesel fuel in its buses, in pristine condition, polluters try to weaken ment—the largest of its kind in state which reduces air pollution. the state program that protects exceptional history—forced the company to clean waterways. PennPIRG’s advocacy helps de- up pollution from its York paper mill. feat the attack. 7. LOWERING HEATING BILLS

Pooling their buying power, Pennsylvanians saved on home heating oil

Building Coalitions PIRG Fuel Buyers saved the average member in the Delaware The public health, good government Valley as much as $250 on home oil heating costs and consumer groups PennPIRG teamed up with in 2002-2003 included:

• AFL-CIO For over a decade, PennPIRG has offered “The average member saved 17 cents per • National Consumer Law Center consumers a way to increase their power gallon this season. With increased con- • Association of Community Organiza- in the marketplace, providing members sumption due to weather, the savings re- tions for Reform Now (ACORN) with increased home heating oil savings ally added up,” said Emily Schiller, Fuel • Citizens for Consumer Justice in 2002-2003. Buyers’ director. “With no other consumer • Service Employees International protections for home heating oil—the Union The cold winter of 2002-2003 led to sky- state’s only unregulated utility—we are • Maternity Care Coalition rocketing heating oil prices, which rose able to help our members take matters into • Philadelphia Unemployment Project nearly 45 percent, according to the Energy their own hands.” • Keystone Research Center Information Administration. Yet PIRG • Committee for Justice for All Fuel Buyers, a project of PennPIRG, pro- • Pennsylvania Health Law Project vided oil consumers with significant sav- ings, collectively totalling over $150,000. PIRG Fuel Buyers is a consumer oil buy- ing group that allows the citizens of the Delaware Valley to join together and de- mand fair prices for heating oil. Using the collective buying power of more than 1,100 household members, PIRG Fuel Buyers offers consumers an alternative to “business as usual,” saving members as David Masur much as $250 per household. The group PennEnvironment negotiates prices based on the daily whole- Director sale price of oil, ensuring that consumers “Since PennPIRG separated its envi- benefit immediately when prices drop, and ronmental program into a new organi- are protected from price gouging when zation, PennEnvironment, PennPIRG they rise. Individually, consumers are un- has been able to sharpen its focus on able to affect the cost of necessities like issues that will have a big impact on Fuel Buyers Director Emily Schiller and consumers and taxpayers in Pennsyl- oil heat. By joining with other Fuel Buy- Rev. Robert Johnson of the Eastwick ers members, the group can lower prices vania. That means more work will be Project Area Committee worked to educate done to advance the public interest.” by at least 10 to 20 cents per gallon. consumers on how to save money on heat.

PennEnvironment Tobacco Tax

In 2002, PennPIRG’s Adam Lioz helps 2002: In June, PennEnvironment is created 2002: The Pennsylvania Legislature raises win anti-sprawl laws that redirect as the new home for PennPIRG’s environ- taxes on cigarettes by 69 cents per pack, growth into urban areas. mental work, allowing both groups to due in part to PennPIRG’s advocacy. Re- sharpen their focus and redouble efforts to search shows that higher taxes lead to de- defend consumers and the environment. creased smoking, especially among teens. LEVELING THE PLAYING FIELD

Wealthy donors steered the 2002 elections, a problem exacerbated by McCain-Feingold

PennPIRG’s Adam Lioz analyzed how big money influences who ence that a small circle of wealthy con- runs for office and who wins, and called for further reforms tributors have on who wins, or who runs in the first place,” Lioz said.

In 2002, Adam Lioz, a democracy advo- gree to which big money influences who Lioz’s second report, published Oct. 30 and cate in PennPIRG’s Washington, D.C., of- runs for office and who wins. His first re- titled “The Best Elections Money Can fice, continued to highlight shortcomings port, titled “The Wealth Primary” and Buy,” predicted that more than 90 percent in the new McCain-Feingold campaign published Oct. 15, found that the candi- of the biggest fundraisers would win the finance law, and built support for pro- dates who raised the most money won 90 general election the following week. Lioz posals that would level the playing field percent of the 2002 major party prima- noted that fundraising is not the only fac- for potential candidates and reduce the ries. Lioz’s research showed that primary tor that influences elections. In some influence of big-money interests in po- campaigns were, for the most part, funded races, spending by political parties and litical campaigns. by large contributions from less than one- outside interest groups can have a signifi- tenth of one percent of the electorate. cant impact. The McCain-Feingold law “We pride ourselves on the idea that any- reduces the amount of this in campaigns, one can grow up to be president,” com- “By increasing contribution limits, but Lioz said that this would not outweigh mented Lioz. “But our research suggests McCain-Feingold will increase the influ- the increase in hard money. that’s only true if you appeal to special interests and wealthy donors. And it seems like McCain-Feingold will only amplify that problem.” The McCain-Feingold law bans “soft money” contributions, but doubles how much a donor can give to a candidate, from $1,000 to $2,000. “Even with the new McCain-Feingold campaign finance law in effect, potential candidates will still need to chase large checks from a small group of wealthy contributors if they hope to win,” said Lioz. “And that means our elected offi- cials are beholden to these large donors, instead of the people they represent.” On Oct. 15, Adam Lioz, a democracy advocate in PennPIRG’s Washington, D.C., office, Lioz published two PennPIRG Education explained that, even with the McCain-Feingold campaign finance law in effect, potential Fund reports in 2002 that analyzed the de- candidates will need to cater to a small group of wealthy contributors to win.

Financial Information FY03 Income FY03 Expenses

Charts reflect combined financial information Citizen 60% Program 75% for PennPIRG, PennPIRG Education Fund and PennPIRG’s citizen outreach programs. Grants 36% Fundraising 14% Other 4% Administrative 11% 9. PENNPIRG SUPPORTERS

PennPIRG and PennPIRG Education Fund

Foundations Citizen support is the cornerstone of PennPIRG and PennPIRG Education Fund. The Pennsylvania Public Interest Thousands of Pennsylvanians supported PennPIRG by making contributions Research Group Education Fund in fiscal year 2003. The members listed below were particu- (PennPIRG Education Fund), a N C I TE I R larly generous in backing the organization’s research and ad- 501(c)(3) organization, conducts L E B S research and public education on

U T vocacy. Names that appear in bold denote PennPIRG Public P Interest Partners. These members provide stability to the emerging public interest issues. PARTNERS organization’s resources through our monthly giving program. Contributions to PennPIRG Education Fund are tax-deductible. The following foundations and organizations have given their support to PennPIRG Education Development Committee Paul Goldenberg • Betty Gottlieb • John Fund: PennPIRG Development Committee Mem- Green • David Hakes • Keith Harenski • bers contributed $1,000 or more, or are Jonathan Harris • Christina Hayakawa • 1957 Trust Public Interest Partners giving $80 or more • Frederick Heldring • Eugene Hirsch • each month. Mary Holmes • Terry Hoodak • James • Consumer Federation Of America Kirchner • Marla & Peter Loevy • Rich- Foundation Barbara Bott • Jonathan Marks • Dou- ard Lonsdorf • Bob Luisi • John Maloney glas H. Phelps • Joseph Potz • Tracey Marino • Dorothy McFeeters • Paige McGuire • Pamela Mehalick • Sponsors James Michels • H. Stephen Miller • Paul Sponsors supported PennPIRG with con- Mintz • Barbara Monegan • Timothy Planned Giving tributions of $250 to $999, or are Public Montague • Harvey M. Morris • Daniel Members who include PennPIRG Interest Partners giving $20 to $79 each Nicolson • R. Michael O’Brien • Jesse in their will leave a legacy of month. Pryor • Judith Rishel • Tiffany Rocco • activism on behalf of Pennsylvania’s consumers and will Bradford Beal • John Bitman • Paul Boni Roslyn Romanoski • Lisa Rooney • Bruce ensure the future health of our • Dorothy Brown • Lisa Bryan-Smith • Ruggeri • Michael Rutkowski • Lisa Alice Case • Elizabeth Cattie • Dan Sames • Vince Sanfilippo • Deborah state’s democracy for decades to Cohen • John Colgan-Davis • Marie Schmidt • Irving Sears • Lorna Secrest • come. For more information about Conti • Michelle Craven • Nancy De Ann W. Spaeth • Kate Sparks • Pat including PennPIRG in your estate Streel • Christine Devine • Shelley Nakayama & E. Stankiewicz • Joseph and major giving plans, call (800) Edalatpour • Howard Eisen • Nancy Steele • Patricia Stewart • Bridget 841-7299 or e-mail Elfant • Samuel F. Etris • Karen Tomasicchio • Kathleen Y. Troncelliti • [email protected]. Fitzpatrick • Barbara Fortner • Don Fox Joan Vondra • Michael Waller • Kathleen • Geraldine Fruchtman • George A. Washington • Patricia Wells • John and Gerbner • Karl Ghering • Karen Gilly • Martha Wolf

FY03 Program Expenses Breakdown Photo Credits

Fair Rx Prices For Pennsylvania 57% Stop Identity Theft 6% All photos clockwise from top left of page. Page 1: Jan Pelton; page 2: Abdul Sulayman, Abdul Sulayman, Staff photo; page 3: WPGH FOX 53 News, Stop The Corporate Tax Dodge 20% Democracy and Other 1% Staff photo; page 4: Chart designed by Jane Wong of Public Interest GRFX, Office of Sen. Jane Orie, Staff photo; page 5: PCN Cable Network, Staff Affordable Health Care For All 10% photo; page 6: Chart designed by Jane Wong of Public Interest GRFX, Office of Rep. Joe Hoeffel, Staff photo; page 7: Staff photo, Channel 27 ABC News; Insurance Reform and General Consumer page 8: Abdul Sulayman, Jan Pelton, Staff photo; page 9: C-SPAN 2; Back Issues 6% cover: Jan Pelton. Printed on recycled paper by Fowler Printing and Graphics. Design by Public Interest GRFX, (215) 985-1113. PennPIRG (& PennPIRG Education Fund) Staff (Partial List)

Emily Schiller Beth McConnell PennPIRG Fuel Buyers’ Ajayi Harris Director Director Citizen Outreach Director PIRG staff since 1993 PIRG staff since 2002 PIRG staff since 1997

JoAnn Kester Telephone Outreach Adam Lioz Ed Mierzwinski Project Director Democracy Advocate Consumer Advocate PIRG staff since 1997 Staff since 1998 PIRG staff since 1977

Contact Information

State Office Affiliate Office PennPIRG PennPIRG www.pennpirg.org 1334 Walnut Street, 6th Floor 1015A North Front St. [email protected] Philadelphia, PA 19107 Harrisburg, PA 17102 (215) 732-3747 (ph) (717) 230-9710 (ph) (215) 732-4599 (fx)

PennPIRG Pennsylvania Public Interest Research Group, Inc. NONPROFIT 1334 Walnut Street, 6th Floor ORG. Philadelphia, PA 19107 U.S.POSTAGE PAID BOSTON, MA PERMIT NO. 57842

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