Public Citizen Annual Report 2007

www.citizen.org

Public Citizen is a national, nonprofit advocacy organizationthat represents people in the halls of power. For more than 35 years,we have successfully fought for openness and democratic accounta-bility in government; public funding of elections; a more ethicalCongress; clean, safe and sustainable energy; safer trucks and auto-mobiles; stronger worker safety protections; safe, effective andaffordable prescription drugs; and fair trade.

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If you would like to contribute to Public Citizen or become amember, please call (202) 588-1000 or visit our Web site at www.cit-izen.org/join.

Board MembersPublic Citizen Inc.Adolph L. Reed Jr.,ChairJoan ClaybrookDavid HalperinHoward MetzenbaumJoseph A. Page,Secretary-Treasurer

Public CitizenFoundation Inc.Robert C. Fellmeth,ChairLisa A. BlueJoan ClaybrookJoseph W. CotchettLiz FigueroaJim Hightower,Secretary-TreasurerSteve Skrovan

Directors David J. Arkush,Congress Watch;Marilyn Berger,Administration; Brent Berwager,Development; Angela Bradbery,Communications; Tyson Slocum,Energy; Tom Smith,Texas; Lori Wallach,Global Trade Watch;Sidney M. Wolfe,M.D., HealthResearch; BrianWolfman, Litigation

PresidentJoan Claybrook

EditorBridgette Blair

Production ManagerJames Decker

From the president

In the 2006 congressional elec-tions, the American public –

fed up with Washington’s statusquo of scandals, ethics abusesand bad policies – showedRepublicans the door. Votersbrought in a new guard –Democrats, led by House Speak-er Nancy Pelosi and SenateMajority Leader Harry Reid.

Since Democrats took overcongressional leadership inJanuary 2007, they have showngreat promise, ushering throughpro-consumer legislation, includ-ing increased fuel economy stan-dards and lobbying and ethicsreforms. Public Citizen helpedcraft and push through these andother important measures, andworked to limit federal subsidiesfor oil, gas, coal and nuclearindustries.

After much pressure fromPublic Citizen and its allygroups, Congress also voted inlate 2007 to eliminate fundingfor the administration’s danger-ous “pilot project” that wouldallow heavy trucks from selectedcompanies in Mexico to travelthroughout the U.S. eventhough they may not meet ourenvironmental or safety stan-dards.

Earlier in the year, Congresshanded Public Citizen anothermajor victory when it did notrenew fast track trade authority.Fast track gives the executivebranch enormous discretion tonegotiate and write trade agree-ments and delegates awayCongress’ constitutional powerto set the terms of U.S. tradepolicy.

In addition, Democrats haveput an end to the consideration– or even the mention – of anumber of anti-consumer billsthat businesses pushed hard forin prior Congresses. Theseinclude laws lessening the pro-

tection of consumers in medicalmalpractice cases and repealingthe estate tax at a cost of $1 bil-lion to taxpayers.

In 2007, Public Citizen alsosaw success outside Congress. Anew rule issued in September bythe National Highway TrafficSafety Administration requiresvehicles to protect passengers’heads in side-impact crashes –something Public Citizen haslong pushed for. By 2013, allvehicles will have this protection– most likely side head air bags –helping to reduce the 9,000deaths caused annually by side-impact crashes. And in April,Public Citizen urged the Foodand Drug Administration (FDA)to reject a new painkiller,Arcoxia, because it is associatedwith an increased risk of heartproblems. An FDA advisorycommittee voted againstapproval, and Arcoxia has notmade it to the market.

That’s not to say PublicCitizen hasn’t been disappointedby some decisions of the newCongress. In 2007, Democraticlawmakers, who need Republicansupport to pass bills that willwithstand a presidential veto,weakened several strong meas-ures. Take, for example, the fail-ure of the Senate to pass a com-prehensive energy bill inDecember. The bill would haverepealed $12.5 billion in recentlycreated subsidies for the oilindustry and shifted that moneyinto renewable energy and ener-gy efficiency measures. But theSenate, pressured by its friends inthe oil and fossil fuel industries,caved, leaving intact these bil-lions in unnecessary subsidies.However, we got a huge loan

guarantee for energy companiescut in half, and that money muststill be appropriated.

Another example of a con-gressional misstep is the Houseof Representatives’ Energy andCommerce Committee’s Dec.18 approval of an inadequate billreauthorizing the ConsumerProduct Safety Commission(CPSC). Not only does it notrequire safety data on dangerousproducts to be made public, butit does not enable the CPSC toblock unsafe imported productsat the border – before they reachstore shelves. Further, its increasein civil penalties is minimal andfunding is insufficient. With allthe headlines about unsafe toysand other products, the failure ofthe House bill to protectAmericans in this case is uncon-scionable.

Public Citizen will continueto hold both Democrats andRepublicans in Congressaccountable for bad policy deci-sions. In 2008, we’ll continueissuing reports chock full of solidresearch, walking the halls ofCongress, holding press confer-ences, challenging bad decisionsin court and otherwise alertingthe American public. We want toensure that Congress puts theinterests of its employers – theAmerican people – first.

For us to continue our work,we need your help. You can signup for our activist alerts (visitwww.citizen.org/action) to stayup-to-date on our efforts. Oryou can donate to Public Citizenby visiting www.citizen.org/jointo help us keep the fight strong.

Thank you for your supportin 2007. Stay tuned in 2008 –it’s going to be a busy year.

Contents

Congress, 3

Courts, 5

Trade, 7

Health, 9

Energy, 11

Texas, 12

Safety andRegulations, 13

Financials, 14

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Congress

Congressional Ethics ReformThis Great Law Passed in 2007. Now, Who’s Going to Enforce It?

In 2007, congressionalDemocratic leadership, withreform-minded congressionalfreshmen, stormed CapitolHill and passed a lobbying andethics reform law.

Public Citizen had workedon lobbying reform since2005, when no attention wasgiven to lobbying abuses. Wehelped craft and promote thefinal legislation in 2007 to cur-tail lobbyist-funded congres-sional trips, ban gifts from lob-byists, rein in earmarks anddisclose lobbyist fundraisingfor lawmakers.

But who will monitor andenforce the law? Traditionally,enforcement of ethics amongmembers of Congress hasbeen monitored and enforced

by other members of Congressthrough the ethics committee,whose members are appointedby the majority and minorityleaders.

With scandals aroundCapitol Hill and the nation,the congressional ethics com-mittees did not want to admita problem existed. However,reform groups like PublicCitizen pushed harder whenformer superlobbyist JackAbramoff, found guilty forattempting to bribe publicofficials, agreed to point outthose he bribed.

“Public Citizen organizedpress conferences denouncingthe inaction by the ethics com-mittees, issued reports docu-menting the egregious ethics

abuses in Congress, and eventestified before congressionalcommittees about the prob-lems – but at that time it wasall to no avail,” said JoanClaybrook, president of PublicCitizen.

In 2007, when Democratstook control of Congress, allthis changed.

On Day One, the 110thCongress passed rules banninggifts from lobbyists andrestricting congressional travel.Other sweeping lobbying andethics reforms passed bothchambers and were signed intolaw on Sept. 14.

But the creation of aneffective ethics enforcementagency to ensure complianceto the new rules was excludedfrom the new law. The Senaterejected Public Citizen’s callfor an independent Office ofPublic Integrity to enforce thenew ethics rules – with Sen.Ted Stevens (R-Alaska), sub-ject of a Department of Justiceethics investigation, declaringethics enforcement isCongress’ job and should notbe turned over to an inde-pendent agency.

House Speaker NancyPelosi (D-Calif.) appointed atask force, headed by Rep.Michael Capuano (D-Mass.),to study ethics enforcement inCongress and recommendreforms. The task force pro-posed changes in ethicsenforcement on Dec. 19.

But the task force fell

short, recommending anOffice of Congressional Ethicsto oversee ethics violationswithout any investigativeauthority, such as subpoenapower. The office couldresearch complaints; however,the public could not file com-plaints against lawmakers orstaffers. Final determinationsof a violation would be madeby lawmakers.

This is not an improvedethics enforcement system; it isthe same old system with morebureaucratic layers to shieldmembers from culpability. Anindependent enforcementoffice with investigativeauthority is needed to recom-mend final enforcementactions to congressional ethicscommittees in public reportsand allow the public filing ofcomplaints.

Public Citizen condemnsthe task force recommenda-tions and will appeal toreform-minded members ofCongress in 2008. We arecounting on Speaker Pelosiand the congressional fresh-men to come through onceagain and create a real enforce-ment system for the new lob-bying and ethics law.

If not, Public Citizen willmonitor compliance onCapitol Hill and call the pub-lic’s attention to corruption onour own.

Ethics task forces comeand go, but we’re not goinganywhere.

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Craig Holman, lobbyist for Public Citizen’s Congress Watch division,speaks in October about lobbying reform at a European Parliament hearingin Brussels, Belgium.

Photo Courtesy of Wilhelm Lehrmann, principal administrator, European Parliament

Laura MacCleery, former directorof Public Citizen’s CongressWatch division, on 2007:

“It’s been a banner year for PublicCitizen’s Congress Watch division, asrenewed energy from Capitol Hill sped upthe pace of our work. In the wake of theJack Abramoff scandal, Congress opened itsnew session with the passage of ground-breaking lobbying and ethics reform rules.Later, other reforms, which we helped craft,passed Congress, and the president signedthem into law in early September. We arealready seeing sharp reductions in travel jun-kets by congressional staff and tighterrestrictions on the revolving door betweenlucrative lobbying jobs and Capitol Hill.

And we are working on a more perma-nent and fundamental solution to themoney-in-politics problem: public fundingof elections. We proudly supported Sens.Dick Durbin and Arlen Specter as theyunveiled a promising new bill for publiclyfunded congressional elections, and we areworking at this writing to assist lawmakersas they plan to introduce a similar bill in theHouse of Representatives. We are also push-ing legislation to update and upgrade thepresidential public funding system.

We struck gold with a major reportrevealing the trap that binding mandatoryarbitration sets for the unwary in consumercontracts, showing that consumers lose tocredit card companies a stunning 94 percentof the time. Buried in the fine print ofemployment, cell phone, cable, credit cardand other contracts, binding arbitrationrobs consumers of their right to a day incourt when companies try to treat themunfairly. We are working hard to sign up co-sponsors in Congress for the ArbitrationFairness Act, a bill to make boilerplate arbi-tration clauses unenforceable against con-sumers, and are anticipating a long battle inthe coming year with the Chamber ofCommerce and other big business groupsWe are ready for a tussle, and look forwardto your help.”

WhiteHouseforSale.org re-introduced in 2007Big-dollar presidential campaign fundraisers,

known as “bundlers” because they collect a largenumber of smaller donations, are stuffing the cof-fers of 2008 presidential candidates.

Some bundlers are also lobbyists and thus gen-erally expect something in return for their largess –like a swanky political appointment, a lucrativegovernment contract or a juicy earmark. Toexpose the large number of bundlers gatheringcash for presidential candidates, Public Citizen re-introduced its WhiteHouseforSale.org site in July2007. The constantly updated Web site featuresthe latest news articles on money and politics aswell as in-depth information about the history ofbundling and more.

22,,338811:: Number ofbundlers for 2008 presi-dential candidates 114422:: Number of lobbyistbundlers for 2008 presidential candidates$$442266,,552211,,552299:: Amountraised by 2008 presidential candidates(including money raisedby bundlers)Numbers as of Feb. 4

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In July, summer interns Brian McGiverin and XeniaTashlitsky of Public Citizen’s Congress Watchdivision demonstrate in Washington, D.C., insupport of the D.C. Voting Rights Act.

Photo by Greg Berger

Courts

In Court, Public Citizen DefendsConsumers, Confronts Corporations

Public Citizen has alwaysdefended consumers’ rights,but 2007 was an especially bigyear for this work, both insideand outside the courts.

In the courts, PublicCitizen took on two huge cor-porations – medical devicemaker Medtronic and pharma-ceutical giant Wyeth – to sup-port patients who were badlyinjured after they used thecompanies’ products. Bothcases involve the concept of

pre-emption. Although thepatients in both cases suedunder state laws, the corpora-tions argued that federalapproval of their productsshould bar injured consumersfrom seeking damages.

Charles Riegel of NewYork state suffered a seriousinjury in 1996 when a ballooncatheter made by Medtronicburst during his angioplasty. InRiegel v. Medtronic, PublicCitizen attorney Allison Zieve

argued before the U.S.Supreme Court on Dec. 4 thata pre-emption provision in theFood, Drug and Cosmetic Actdoes not bar individualsinjured by medical devicesfrom seeking damages understate law. A decision is expect-ed by June. In the other case,Diana Levine, a professionalmusician from Vermont whowent to the hospital in 2000for treatment of a migraineheadache, was injected with a

drug manufactured by Wyeth.Levine was left with injuriesthat led to the amputation ofher right arm. She was award-ed damages by the Vermontstate courts, but Wyeth hasasked the U.S. Supreme Courtto hear the case, claiming thatfederal law pre-empts Vermontstate law in favor of Wyeth.The Supreme Court hasaccepted Wyeth v. Levine;Public Citizen will argue thecase.

Public Citizen also hasbeen hard at work outside thecourtroom to preserve citizenaccess to the courts. In fall2007, the organization issueda report, “The ArbitrationTrap: How Credit CardCompanies EnsnareConsumers,” that alerted con-sumers to the dangers of bind-ing mandatory arbitration,which removes a consumer’sright to have disputes withcompanies heard in court.

It requires that disputes goto arbitration instead, which isexpensive and generally unfairto consumers. Mandatoryarbitration clauses are buriedin the fine print of millions ofcustomer-service agreementsfor everything from creditcards to cell phones. PublicCitizen is pushing for passageof the Arbitration Fairness Actof 2007, which would requirethat agreements to arbitrateemployment, consumer, fran-chise and civil rights disputesbe made after a dispute hasarisen. Public Citizen willcontinue to fight for con-sumer rights on these andother issues.

From pre-emption to constitutional law to Internet free speech, the Public Citizen LitigationGroup has protected consumers and their access to the courts in 2007. The following are just a fewkey cases the organization’s lawyers handled over the past year:

Alexander v. Cahill: Public Citizen challenged New York’s new rules governing attorney adver-tising, saying that they violated lawyers’ First and Fifth Amendment rights. Public Citizen won aninjunction against the rules; the case has been appealed.

Hoormann, et al. v. SmithKline, Beecham Corp.: Public Citizen objected to a proposedclass-action settlement against GlaxoSmithKline because the settlement set up too many hoops forpeople to jump through to claim their money. In response, the court increased the financial dam-ages for which each class member would be eligible without having to provide proof of purchase.The plaintiffs had argued that Paxil was dangerous and ineffective in children under 18.

New York State Restaurant Association v. New York Department of Health, et al.:Public Citizen argued in support of New York City’s right to require restaurants to put calorie con-tent information on menus. The court ruled that cities and states can require menu labeling in mostcircumstances, but New York City’s law is pre-empted by federal law. The city is changing its law.

American Historical Association v. National Archives and Records Administration:A federal court struck down key parts of President Bush’s executive order limiting public access tothe records of past presidents. Public Citizen had sued in 2001, claiming that the order’s provisionsviolated the Presidential Records Act. The judge struck down the section of the executive order thatgranted past presidents, vice presidents and their representatives unlimited time to review documentsbefore they are made public.

Mobilisa v. Doe: The Arizona Court of Appeals held that parties who want to sue an anonymousInternet speaker must present evidence to support their claims and show that their interest in identify-ing the speaker outweighs the speaker’s interest in remaining anonymous. The court followed therecommendation that Public Citizen provided in a brief.

Lawyers Go to Bat for Consumers in 2007

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Brian Wolfman, director of The Public Citizen LitigationGroup, on 2007:

“In 2007, the Public Citizen LitigationGroup focused on work in four main areas, andwe plan to continue pressing those issues thisyear. 1) Consumer access to the courts.Sometimes that means challenging pre-emption,as in the case of Riegel v. Medtronic – our 52ndSupreme Court case – and sometimes thatmeans improving a court remedy, as in our workon the Paxil class-action settlement. 2) Federalregulators who don’t obey the law. We go afterfederal agencies when they don’t do whatCongress has told them to do. Take, forinstance, our hours-of-service case, whichinvolves the number of hours truck drivers canlegally drive on a daily and weekly basis.Congress told the Federal Motor Carrier SafetyAdministration to issue a rule that modifies thecurrent rules to protect the health of drivers andpublic safety. Congress wanted the agency topromote safety, but the agency made thingsworse. That’s where we stepped in. And eventhough the courts agreed with us that the feder-al agency should make the rule better, theagency is still trying to make it worse. So wecontinue our fight. 3) Government secrecy.Using the Freedom of Information Act, we goafter the documents the government wishes tokeep secret but should be made public. 4)Internet free speech. We defend case after caseto assure that “little guys” are able to criticizebig corporations and government officials onInternet Web sites and in chat rooms. In addi-tion to continuing our work with these issues,we look forward to arguing our 53rd, 54th and55th cases before the Supreme Court in 2008,which will, as always, be a very busy year for thePublic Citizen Litigation Group.”

Public Citizen Litigation Group Director Brian Wolfman(far left) and attorney Allison Zieve (left front) exit theU.S. Supreme Court, flanked by family and friends, onDec 4. Zieve had just argued on behalf of a maninjured by a balloon catheter.

Photo by Lindsay Barton

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Trade

With stories about jobsbeing sent offshore, wagesdeclining, and unsafe foodand toy imports topping thenews in 2007, our currenttrade policies – and theirharmful effects – became afront-burner issue for law-makers, political candidatesand the public.

Last year provided manyexamples of the importantshift in perspective on globaltrade:

1. The Democratsseized control of both cham-bers of Congress thanks to37 fair trade supportersreplacing incumbents whohad voted for the U.S. tradestatus quo of the NorthAmerican Free TradeAgreement (NAFTA), theCentral America Free TradeAgreement (CAFTA) andfast track;

2. Globally, the WorldTrade Organization (WTO)

expansion talks ground to ahalt, bringing to fruitionPublic Citizen’s long-stand-ing attempt since 1999 tohalt the spread of this power-ful global commerce agency;

3. The Free Trade Areaof the Americas – a hemi-sphere-wide NAFTA expan-sion agreement involving 34Latin American andCaribbean countries that wehave battled along withinternational allies since1995 – was officiallydeclared dead;

4. Fast track – auniquely undemocraticprocess that gives the execu-tive branch enormous discre-tion to choose trade part-ners, write trade agreementsand enter into them beforeCongress ever votes, therebydelegating away Congress’constitutional power to setthe terms of U.S. trade poli-cy – was not renewed by

Congress despite PresidentBush’s demands. With this,Public Citizen achievedanother decade-long goal.

However, the year alsobrought reminders of futurework that needs to be doneand the role Public Citizenplays. When Democratictrade committee leadersdecided to engage the Bushadministration to add laborstandards to several pendingNAFTA expansion agree-ments that Public Citizenhad helped derail in the pastin order to revive them, theorganization and alliesworked to make clear thatthis was not an acceptableway forward.

A majority (117) ofDemocrats in the U.S.House of Representatives –including 12 of 18 commit-tee chairs and 31 freshmen –opposed the Peru free tradeagreement, thereby sending

a clear signal that the modestchanges made to the Bush-negotiated pact were insuffi-cient. As part of that effort,Public Citizen worked withlabor, Latino, environmen-tal, consumer, faith, familyfarm and other groups in theUnited States and Peru.

For years, Public Citizenhas worked to highlight therole that trade agreementsplay in jeopardizing the safe-ty of imported food andproducts.

Sadly, our predictionscame true as dire warnings ofdangerous imported foodand products hit the news.We prepared key reports onimported food safety andtoys and offered guidelinesfor necessary changes to ourtrade and consumer safetylaws – and how consumerscan protect themselves as weall work together to fight forthese changes.

Perspective on Global Trade Shifts in ‘07

Public Citizen GlobalTrade Watch divisionstaffers David Edeli (left)and Kate Pollard (right)lead protesters inWashington, D.C., asthey chant slogans duringa May rally against theproposed NorthAmerican Free TradeAgreement expansion toColombia.

Photo by Brandon Wu

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Lori Wallach, director of Public Citizen’s Global Trade Watch division, on 2007:

“That we succeeded this year in disarming Bush from any further fast track trade authority was a great victory– not just for the sake of Americans but for people around the world who otherwise would be subject to his esca-lation of NAFTA, the WTO and other mechanisms to implement Bush’s vision of global corporate rule. Plus, yearsof investment in building grassroots power and a terrific staff paid off. I’ve never been so proud than I was whenseeing the role Public Citizen’s trade program played in this year’s Peru NAFTA expansion fight.

Meanwhile, our long-term, relentless fight to build a broad national demand for a new approach on trade andglobalization is playing out as caucus-goers and voters in Iowa and New Hampshire’s early 2008 primaries pushedthese issues to the forefront and demanded presidential candidates state their plans for change.”

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The “New Accountability Project” ofPublic Citizen’s Global Trade Watchdivision works to diversify participationin the U.S. trade policymaking process-es and increase the accountability ofU.S. officials to promote globalizationpolicies that suit most Americans’needs. The project does this by helpingstate and local officials becomeinvolved in the U.S. trade policymak-ing process, which to date has notincluded them or many other affectedinterests.

Since it was launched in 2005, theproject has educated officials in a num-ber of states about how trade agree-ments limit their policy space and pro-

vided them technical support so thatthey could provide effective input tofederal trade officials.

Many non-tariff, regulatory constraintsin today’s trade agreements apply tostates – even though state officialshave had no role in setting these rules,much less to agreeing to bind theirstates to comply.

These include policies over which stateand local governments traditionallyhave had jurisdiction, such as procure-ment of goods and services for thestate’s use, zoning and services suchas health care, energy, banking andlocal economic development.

Several states passed legislation in2007 to ensure that their legislaturesget to vote on whether the state mustbe bound to comply with these con-straints.

Also in 2007, 10 states passed resolu-tions calling on the U.S. Congress toreplace the fast track system of tradenegotiations with a new, more inclusiveand accountable system under whichstates cannot be bound to comply withnon-trade regulatory constraints intrade agreements without the priorinformed consent of the states.

For more information, visit www.citi-zen.org/trade/subfederal.

States that have passed legis-lation to ensure full democraticprocess for agreement binding

States that passed fast trackreplacement resolutions

States that have done both

Maryland

Building Involvement in Trade Policy – One State at a Time

Alabama, Maine, Montana,Nevada, Pennsylvania, Utah,Vermont, Wisconsin

Hawaii, Rhode Island

Health

Public Citizen Pushes for Patient Safety Each year, the Health

Research Group at PublicCitizen issues petitions,writes letters and testifiesbefore the federal govern-ment to make sure drug com-panies are not endangeringthe lives or health of thosewho take prescription orover-the-counter drugs.

While one would thinkthat would be the job of theFood and DrugAdministration (FDA), theagency’s objectivity in deter-mining the safety of drugs iscompromised because it relieson drug companies to fund alarge proportion of its activi-ties. The Prescription DrugUser Fee Act (PDUFA), a1992 law, requires the FDAto be funded from user feesthe government chargespharmaceutical companies to

have the FDA review theirdrugs. This presents an obvi-ous conflict of interest for theFDA: How does an agencyfairly assess the safety andeffectiveness of drugs when itneeds money from the drugcompanies to survive?

Since PDUFA’s enact-ment, there have been anunprecedented number ofdrug withdrawals, accordingto a May 4 Public Citizen let-ter to Congress asking thatthe act be repealed. PDUFAcompromises the drugapproval process by makingwhat should be independentFDA reviewers indirectlyaccountable to the manufac-turers of the drugs they aresupposed to scrutinize.

“It’s time for Congress togive the FDA the tools andfunding it needs to best pro-

tect the American public,”said Dr. Sidney Wolfe, direc-tor of the Health ResearchGroup. “PDUFA has donetoo much damage already.”

Public Citizen maintainsthat this essential public serv-ice function should be fundedentirely from the federalbudget. However, inSeptember, Congress reau-thorized PDUFA for anotherfive years, voting to continuecharging drug companiesuser fees.

In reauthorizingPDUFA, though, Congressdid make some progress. Itrequired the creation of anational database of clinicaldrug trials that will makeinformation about all ongo-ing clinical trials available tothe public on the Internet. Aclinical trials database,w w w. c l i n i c a l t r i a l s . g o v ,already exists, but it lists onlystudies that are beginningand does not provide theresults of the trials. The newdatabase will make availableinformation about results formany trials. Public Citizenhas long advocated the cre-ation of such a new database,and did so again in a July2007 report (available atwww.citizen.org/publications/release.cfm?ID=7534) ana-lyzing the quality and accessi-bility of all of the currentlyavailable clinical trial reg-istries and results databases.The report concluded thatthese registries and databasesare inadequate and requirestrong federal regulations tomake them more useful tothe public.

Even with this increased

transparency in drug infor-mation, many other problemsstill exist with U.S. drug safe-ty, and Public Citizen spenttime and resources in 2007successfully fighting forpatient safety. In April, PublicCitizen urged the FDA toreject the approval of a newpainkiller, Arcoxia. The drugis in the same class of drugs asVioxx, which was banned in2004 because it led to heartattacks. Like Vioxx, Arcoxia isassociated with an increasedrisk of heart problems. Wolfetestified before the FDA thatthe drug should not beapproved for sale in theUnited States, and, in fact,should be pulled from themarket in the more than 60countries where it is sold.After Wolfe’s testimony, theFDA advisory committeevoted against approval, andArcoxia has not made it tothe market.

In another effort, PublicCitizen wrote a letter to theFDA on April 9 calling for amisleading ad about the dan-gerous painkiller Celebrex tobe taken off the air. Pfizer,the manufacturer ofCelebrex, released a commer-cial in early April 2007 thatmisrepresents the risks of tak-ing Celebrex by asserting,contrary to scientific evi-dence, that the heart dangersof Celebrex are no greaterthan those of any other non-steroidal anti-inflammatorypainkillers (such as Advil orAleve). The FDA has neverrequired that the commercialbe taken off the air or inprinted form.

The Prescription Drug User Fee Act(PDUFA), a 1992 law, requires theFDA to be funded from user fees thegovernment charges pharmaceuticalcompanies to have the FDA reviewtheir drugs. This presents an obviousconflict of interest for the FDA: Howdoes an agency fairly assess the safe-ty and effectiveness of drugs when itneeds money from the drug compa-nies to survive?

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Health Research Highlights Of 2007

February: Public Citizen petitioned the FDA to ban third-generation birth control pills, which are known to double apatient’s risk of potentially life-threatening blood clots. Thispetition was accompanied by www.NotMyPill.org, an onlineoutreach campaign that included a YouTube video and anopportunity for interested parties to voice their support of ourpetition to the FDA. So far, more than 20,000 people havesigned the petition. The FDA has not yet responded.

March: Public Citizen published an article in The Journal ofthe American Medical Association (JAMA) that analyzed theaccessibility and quality of information about pharmaceuticalgifts to physicians in Minnesota and Vermont, the only twostates that currently disclose such transactions publicly. PublicCitizen researchers concluded that the laws requiringdisclosure were inadequate, and Public Citizen went on totestify before the Senate Special Committee on Aging on June27 about the need for national public disclosure ofpharmaceutical company gifts to physicians. Such a bill hasbeen introduced in the Senate.

April: Public Citizen published a major report analyzingMedicaid programs state-by-state. The report found majordisparities in the quality of the state programs. The reportexamined more than 100 factors related to the programs’eligibility requirements, reimbursement policies, scope ofservices and quality of care for each of the 51 individual stateMedicaid programs. The report was an update of a 20-year-old Public Citizen report on Medicaid, and it again put publicpressure on states to improve their Medicaid programs.

October: Public Citizen testified before an FDA advisorycommittee that children under 12 should not be given over-the-counter cough and cold medications due to a lack of evidencethat the medicines are safe or effective for that age group. TheFDA panel voted to ban scores of popular cough and coldproducts intended for children under the age of 6, a measurePublic Citizen feels does not go far enough.

“Public Citizen’s Health Research Group devotes much of its time and resources to removing unsafe medications fromthe market, exposing flaws in the country’s health care delivery system and publicizing the too-cozy relationship betweendoctors and the drug industry.

In 2007, we were involved in efforts to get the diabetes drug Avandia off the market after it was shown to increase therate of heart attacks. We testified before an FDA advisory committee urging the FDA to take this dangerous drug off themarket.

We also testified against the approval of the painkiller Arcoxia, which is in the same drug family as Vioxx. After our tes-timony, the FDA advisory committee voted against drug approval.

In March, we published an article in The Journal of the American Medical Association describing the gifts that drugcompanies shower on doctors – ranging from dinners to large consultant fees. The article has led to calls for a national data-base disclosing such gifts, and we testified at a Senate Aging Committee hearing on this issue. A bill calling for such a data-base has now been introduced, with our assistance, by Sen. Herb Kohl (D-Wis.) and Sen. Chuck Grassley (R-Iowa).

Our fight to protect the health of the American public continues in 2008. We plan to increase our involvement in issuesrelated to health care delivery – including Medicare and Medicaid, and single-payer national health insurance.”

Dr. Sidney Wolfe, director of the Health Research Group at Public Citizen, on 2007:

Dr. Sidney Wolfe, director of the Health Research Group atPublic Citizen, speaks at the “Taming the Giant Corporation”conference held in June in Washington, D.C.

Photo by Bridgette Blair

Energy

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Public Citizen Battles to Reduce OilConsumption, Increase Fuel Economy

In 2007, American con-sumers made it clear thatthey were fed up with highprices at the pump, increasedpollution and governmenthandouts for Big Oil. Andfor a while, it seemed likeCongress would agree.

The big energy issue thisyear was Congress’ passageof an energy bill that – withany luck – would haverepealed subsidies to oilcompanies and, instead,would have provided incen-tives for consumers andindustry to use renewableenergy. Public Citizen metwith key lawmakers through-out the year and asked themto help reduce the nation’sdependency on foreign oilby backing financial supportfor renewable fuels like windfarms and solar power, as

well as by increasing fueleconomy standards for carsand light trucks.

Tyson Slocum, directorof Public Citizen’s EnergyProgram, testified before theU.S. House Committee onEnergy and Commerce’sSubcommittee on Oversightand Investigations on May22 about gas prices, oil com-pany profits and price-goug-ing. He explained that evenwith record industry profitsand sky-high gas prices, BigOil is not adequately invest-ing its windfall into projectsto help consumers or to easethe nation’s addiction to oil.Oil companies, he said,should not be rewarded forthis anti-consumer behaviorwith subsidies and taxbreaks.

The final energy bill,

passed Dec. 13, containedsome consumer-friendly pro-visions. Congress improvedfuel economy standards,requiring automakers tomake vehicles that achieve35 miles per gallon by 2020.

But the bill is a faintshadow of what it once was.Here’s what else happened:

1. What we wanted: Arepeal of $12.5 billion insubsidies for the oil industryso that money could be usedfor renewable energy andefficiency measures.

What we got: Inresponse to Big Oil’s $315billion in profits since 2005,the House ofRepresentatives included aprovision in its version of theenergy bill that would haverevoked the subsidies and,instead, used the money forrenewable energy and effi-ciency measures.

However, the Senate inDecember stripped the revo-cations from its version ofthe bill. President Bush alsothreatened to veto the ener-gy bill if the revocation pro-vision remained. So Big Oilgot to keep its handoutsfrom the government.

2. What we wanted:Exclusion of a proposed $50billion loan guarantee pro-gram for the nuclear powerindustry.

What we got: PublicCitizen lobbied long andhard against the loan guaran-tees, citing the fact thatnuclear power plants oftencan’t repay their loans –which in this case, wouldmean that taxpayers wouldend up footing the bill.Congress listened; thenuclear loan guarantees werenot included in the final ver-sion of the energy bill.(However, $20 billion innuclear loan guarantees didpass Congress in a fundingbill, but the money must stillbe appropriated – yet anoth-er battle.)

3. What we wanted:More emphasis on renew-able energy.

What we got: Originally,the House bill included aprovision that required utili-ties to produce or procure15 percent of their powerneeds from renewable ener-gy sources by 2020. Butindustry ties and threatsfrom Republicans led theSenate to remove the bill’srenewable requirement.

Thanks to Congress’unwillingness to stand up toBig Oil on behalf of theAmerican people in 2007,Public Citizen will be hard atwork in 2008, pushing forenergy independence andinnovation.

Public Citizen’s Energy Program Director Tyson Slocumtestifies in May before the U.S. House of Representatives’Energy and Commerce Subcommittee on Oversight andInvestigations.

Photo by Collin Baker

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“We spent a lot of time and resources in 2007 trying to undo some of the damage of the 2005 energy bill. And, formost of the year, we thought we were largely successful. Because of our work – and the work of others in the publicinterest community – we limited the amount of money that the administration can dish out to nuclear power plants inthe form of loan guarantees. However, despite our efforts, oil companies will still receive $12.5 billion in giveaways dur-ing the next decade because Congress did not delete them when it finally passed the energy bill in December.

And throughout the year, we continued to build the grassroots networks necessary to stop a new generation ofnuclear power plants from being built. We joined with old and new environmentalist friends to educate citizens aboutthe dangers of nuclear power.

Global warming and high gas prices are on everyone’s minds as we enter 2008. We know that. So we’ll continue toadvocate renewable energy systems, energy efficiency and an end to the current system of tax breaks for oil and energycompanies.”

Tyson Slocum, director of Public Citizen’s Energy Program, on 2007:

Texas Fights Dirty Energy, Coal GiantsThe Texas office of Public Citizen is

a powerhouse – literally. The office is fueled by the desire to

develop smarter, cheaper, cleaner andcooler energy sources while trying tostop corporate plans to build dirtypower plants.

In 2007, Public Citizen and itsallies were once again pitted againstindustry giants. The Lone Star Statehad 19 new coal-fired plants on thedrawing board, 11 of which were pro-posed by TXU Corp., the largest elec-tric utility in the state.

Construction of that many dirtyfacilities would have resulted in theadditional annual emissions of moresmog-forming gases than 1 million carsand more ozone-depleting gases than20 million cars.

Coal-burning power plants areresponsible for 80 percent of the car-bon dioxide emissions from all U.S.power plants and are significant sourcesof mercury pollution. Texas powerplants emit more carbon dioxide andmercury than the plants in any otherstate.

But thanks to the organizing effortsof Public Citizen and a number of like-minded consumer and environmentalgroups, eight of those 11 TXU plantswill never see the light of day. Thegroups convinced 36 municipalities tojointly recruit a volunteer legal team to

challenge the new plant proposals,urged 400 companies in theDallas/Fort Worth area to unite againstthe encroaching coal plants and moti-vated citizen groups statewide toprotest and testify against this super-sized expansion of dirty power facilities.

The work paid off. When TXU wasin the process of being acquired by pri-vate equity firms Kohlberg KravisRoberts and Texas Pacific Group, thefirms announced impressive environ-mental commitments, which included apledge to cancel plans for the eight coalplants.

And Houston-based NuCoastalPower Corp. agreed to offset 100 per-cent of the carbon dioxide and mercu-ry emissions from its new petroleumcoke facility in Port Comfort, Texas.The agreement was forged betweenNuCoastal, Public Citizen and theSustainable Energy and EconomicDevelopment (SEED) Coalition.

Public Citizen also is working withthe SEED Coalition, Sierra Club andother groups to balance the pro-nuclearmedia attention surrounding the newsin September that the state’s oldestnuclear power plant, which has operat-ed since 1988, might expand.

In September 2007, the NuclearRegulatory Commission accepted anapplication to build two new nuclearreactors at the plant – the first such

application in the U.S. in 29 years. Theunits would be added to the old facilitynear Bay City, Texas, called the SouthTexas Nuclear Project, also known asthe South Texas Nuclear GeneratingStation.

Tom “Smitty” Smith, director ofPublic Citizen’s Texas office, and otherleaders of environmental and publicinterest groups are educating the publicabout the fact that expanded use ofrenewable energy – and not newnuclear reactors – is the way to respondto growing energy needs.

They lobby and influence legisla-tors, agencies and industry to pursuesounder alternatives, such as windpower. Texas now leads the nation inwind power production and has thetwo largest wind farms in the world inthe planning stages. Public Citizen hastaken on the role of mediator betweenthe wind industry and birding groupsbecause of concerns that coastal windenergy projects might impact migratorybird populations. Working with TheWind Coalition, the groups want todevelop guidelines for carefully select-ing the location of wind plants to avoidany disruption to the flight patterns ofmigratory birds.

“We engage stakeholders of everystripe in our determination to improvethe cost, safety and efficiency of energyfor everyone,” Smith said.

�Safety and Regulations

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Public Citizen Presses for Safer TrucksFact: Truck driver fatigue

is a big factor in up to 40 per-cent of all big truck crashes.Fact: The risk of a crashincreases dramatically aftereight hours of truck driving.

For years, Public Citizenhas pushed the federal govern-ment to make sure tired truck-ers are given adequate rest – tokeep the truckers healthy andto keep everyone on thenation’s roads safe.

In 2007 alone, we testifiedbefore Congress, won a law-suit, lobbied lawmakers andhosted a press conference tolet the nation know about therisks of allowing truck driversto drive long periods withoutrest. But despite a commandfrom Congress a decade agoand two harsh decisions by thenation’s second-highest court,the federal government hascontinued to spin its wheels,trying to force through busi-ness-friendly hours-of-servicerules that would allow truck-ing companies to require theiremployees to drive long hours– even when tired – and short-en the rest period betweenwork weeks.

In July 2007, PublicCitizen and other safetygroups thought that they hadwon the hours-of-serviceissue, once and for all, whenthe U.S. Court of Appeals forthe D.C. Circuit struck downthe TransportationDepartment’s Federal MotorCarrier SafetyAdministration’s (FMCSA)hours-of-service rules thatincreased truckers’ daily driv-ing time from 10 hours to 11hours and allowed truck driv-ers to start driving again amere 34 hours after meeting

their 70-hour weekly drivingrequirements, thus driving aslong as 88 hours in eight days.This is the second time thiscourt told FMCSA to rewritethe rules. The first time, in2004, resulted in FMCSAwriting a new rule that was vir-tually identical to the previousone.

In response to the July rul-ing, FMCSA issued an interimfinal rule in December, keep-ing the increased daily andweekly driving time. PublicCitizen responded by holdinga press conference with victimsof tired truckers, testifyingbefore Congress on Dec. 19,denouncing the not-so-newrule, and asking the court ofappeals to enforce its earlierdecision striking down therule.

Public Citizen and othersafety groups were victoriousin 2007 on another majortruck safety issue: FMCSA’splan to push ahead with a

reckless “pilot project” to givea number of Mexico-basedtrucks full access to U.S. roads,even though those trucks maybe unsafe and may violate U.S.environmental standards.Before the pilot project,Mexico-based carriers werepermitted to travel only withina limited border zone. But theNorth American Free TradeAgreement required the U.S.to give carriers from Mexicofull access to U.S. roads.

Public Citizen lobbiedferociously against the ill-con-ceived project, building grass-roots activist support for ourposition.

In December, Congressbanned funding for the project– a move intended to shut itdown. This victory came afterPublic Citizen and othergroups shined a spotlight onthe issue throughout 2007. InApril, Public Citizen and otherenvironmental and safetygroups sued the administra-

tion because it was not goingto allow the public to com-ment on the pilot project. Theadministration eventuallycaved, allowing public com-ment. FMCSA moved for-ward with the pilot projectdespite opposition – untilCongress put a stop to it.Nevertheless, the Bush admin-istration insists on defying thelaw. In fact, the administrationtold the media in Decemberthat it plans to continue theproject and, in late December,gave full access to U.S. roadsto yet another Mexico-basedtruck. The administrationclaimed that Congress bannedonly the “establishment” ofthe pilot project, not its con-tinued operation.

“We will continue to pro-tect the public’s safety in2008, no matter how daunt-ing a task the Bush administra-tion tries to make it,” saidPublic Citizen President JoanClaybrook.

“Because 2007 began with a historic power shift in Congress, we started the year expect-ing an equally historic shift for public safety. Ultimately, though, we had to fight just as hard asever – and, with the impressive showing of support from Public Citizen members and activists,we pulled off some amazing victories. Getting the Department of Transportation to do its jobfor auto and highway safety was as much of a battle as ever in 2007. Still, when the adminis-tration turned a deaf ear to concerns about safety, Public Citizen pressed forward, turning tothe courts and Congress to force the Department of Transportation to put the public first. Wewon important victories in the courts on excessive working hours for truckers and inadequatefuel economy regulations, and Congress stepped up to the plate to kill funding for a recklesspilot project that gave selected Mexico-based trucking companies full access to U.S. roads.Also, the administration issued a rule in September requiring automakers to protect occupantsin side-impact crashes. To meet it, manufacturers likely will install side head air bags. This rulewill help reduce the 9,000 deaths that are caused each year by side-impact crashes. Moreachievements are waiting in the wings. The House just passed a bill to protect children fromnon-traffic vehicle hazards such as strangulation in power windows, and the Senate vowed totake it up early in 2008. We fully expect the Bush administration to continue its recklessefforts to erode public protections, but Public Citizen is on the case. We refuse to quit … andin 2008, we’re not going to let up one bit.”

Robert Shull, deputy director for auto safety and regulatory policy, on 2007:

Fiscal Year 2007 Financials

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The Arca FoundationThe Center for Study ofResponsive LawClean Air Task ForceCommon Cause Education FundCS FundEdna Wardlaw Charitable TrustThe Educational Foundation ofAmericaThe Energy FoundationEnvironmental DefenseEqual Justice WorksThe Ettinger Foundation Inc. Ford FoundationThe Abraham Fuchsberg FamilyFoundationGrassroots International

Irene Diamond FundJanelia FoundationLitman FoundationMagnolia Charitable TrustThe Moriah FundPark FoundationThe Pittsburgh FoundationPloughshares FundThe Prentice Foundation Inc.Rockefeller Brothers FundAlfred P. Sloan FoundationSolidago FoundationBarbra Streisand Foundation Inc. Tamarind FoundationWallace Global Fund

Bequests

Jacqueline HallSusan HamillJack and Kay HansmaMiriam LukensVerna NormanStanley RappeportJames RasmussenRose Robbins

Thora RoseHelen SchmiegIrene SchmittAlfred SilvertonRichard TrexlerPauline VainsteinEve ViereggeYvonne WienerWayne Wiley

In sympathy for people who have lost a loved one and in deepappreciation for those who made an ultimate gift to protect our

health, safety and democracy.

We acknowledge with deep gratitude those annuitants who havemade gifts that will ensure the continuation of Public Citizen’s

work for the benefit of future generations.

Support From Foundations/Organizations

F I N A N C I A L S TAT E M E N TPublic Citizen Inc. and Public Citizen Foundation Inc.

Combined Statement of RevenueSupport and Expenses for the Year Ended Sept. 30, 2007

Revenue and SupportContributions and Membership fees ..................................................................$6,933,290Publications/Subscriptions ................................................................................$2,225,104 Grants.............................................................................................................$1,136,054Program Income*................................................................................................$146,313Rental Income** ..................................................................................................$253,038Other ...................................................................................................................$21,167Income from Investments......................................................................................$616,616Total Revenue and Support .............................................................................$11,331,582ExpensesPrograms ........................................................................................................$6,295,216Publications .....................................................................................................$2,660,061Support Services ..............................................................................................$2,347,965

General and Administrative .............................$1,579,883Development......................................................$768,082

Total Expenses ...............................................................................................$11,303,242Change in net assets***.........................................................................................$28,340

*Court awards**Net of Operating Expenses*** In accordance with Statement of Financial Standards No. 116, Accounting for Contributions Receivedand Contributions Made, Public Citizen is required to record all grants and contributions in the current fis-cal year even if the monies have not been received or related expenses have not been expended. As of Sept.30, 2007, Public Citizen had temporarily restricted net assets of $1,417,428, which represent restrictedgrants and contributions whose donor-stipulated time or purpose restriction has not been accomplished.Several of the net assets included in this amount are intended to be expended over several subsequent years.