FC: Why Ralph Nader is a privacy hypocrite, by Aaron Lucas and Lizard

Michael Pugliese debsian at pacbell.net
Sun Jul 1 17:35:42 PDT 2001


Re: Opt-in, Opt-out, Privacy, data gathering and selling of financial info about all of us, and the 'effin California legislature! Michael Pugliese

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/06/27 /ED90139.DTL

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/06/26 /MN190245.DTL State privacy bill dies amid voting flip-flop Ferocious legislative blitz by opponents Robert Salladay, Chronicle Sacramento Bureau Tuesday, June 26, 2001 ©2001 San Francisco Chronicle

Sacramento -- An Assembly committee killed the Legislature's most important consumer- protection measure yesterday after a jaw-dropping scene in which a onetime supporter refused to vote and the bill's fiercest critic voted "yes."

At a two-hour hearing, legislators considered whether banks and insurance companies should be prohibited from selling personal financial information -- such as spending habits and bank balances -- without first getting a customer's permission.

After two dozen banking and insurance company lobbyists said the measure would wreck their industry, the Assembly Banking and Finance Committee sank the bill with a 5-to-3 vote, one vote short of passage. A much stricter measure died recently in the same committee.

After the bill died, its stunned author, state Sen. Jackie Speier, D- Hillsborough, turned to Assemblyman Carl Washington, D-Paramount -- who had abstained -- and asked him if he felt like voting. Washington said nothing, even though he was an original co-author of the Assembly version of the bill.

Her jaw clenched, Speier turned her back and rushed out of the committee.

"If you listen to the opposition," said Speier, reached later, "you would think we were somehow proposing horrific regulations, when in fact all we are trying to do is retain custody of our own information."

In another surprise, committee Chairman Lou Papan, D-Millbrae, dropped his heated criticism of the bill and voted for passage after a series of complex amendments were added. Papan has repeatedly complained about intense pressure he is getting on the bill. He said he'd received 3,000 e-mails, many of them nasty.

ABSTENTION A SHOCKER Washington's abstention was unexpected. Afterward, Washington said he felt too many amendments were brought forward that he didn't have time to absorb. But he later told Speier he didn't know the bill needed six votes for approval,

she said.

"I think Mr. Washington got confused," said Assemblywoman Carole Migden, D- San Francisco, who voted for the measure.

Another Democrat, Assemblyman Ed Chavez of La Puente, was not in the hearing room yesterday and did not vote. Assemblywoman Patricia Wiggins, D- Santa Rosa, abstained from voting on the measure, saying she was concerned about smaller community banks.

Others were skeptical of the entire scene, which effectively took pressure off Papan and killed the measure at the same time.

"It doesn't look good. It doesn't smell good," said Dan Jacobson with the California Public Interest Research Group, which supported the measure. "But there is no smoking gun. I would hope there would be some sort of rule waiver so this can be brought up again."

Papan said the bill would not be reconsidered. Speier nevertheless said she would appeal in writing. Either way, Papan is in charge of whether his committee hears the bill again.

'AN EXCEPTION'

"We never kill bills around here," said Papan, who has complained about the Legislature losing its backbone. "This was an exception."

Last month, a similar privacy bill was killed by the same committee after Papan let a long line of banking and insurance lobbyists speak against the measure at the start of the hearing, contrary to the usual practice of letting supporters go first. The entire five-hour hearing was dominated by banking and insurance lobbyists.

The Legislature recently entered the national debate over privacy rights, as more and more corporations are selling detailed information about their customers. Many people don't know that their bank balances, spending habits, bounced checks, credit payments, addresses and phone numbers are traded in huge databanks used by advertisers.

Speier's bill contained several compromises that financial firms had sought,

even though they refused to support the measure in the end.

"This bill has dozens and dozens of hidden problems that nobody around here with all of our IQ will find until well after the bill passes," said insurance industry lobbyist Alister McAlister.

LIMITED INFORMATION SHARING The Speier compromise essentially would have allowed corporations to share information with their sister companies but not with outside firms for a profit.

Banks, brokerage houses, insurance firms and loan companies would no longer have been allowed to sell financial information to outside telemarketing firms or other companies without your explicit permission up front.

The heart of the debate is over whether customers should have to give permission for a corporation to share or sell their private financial information. Currently, financial information can be sold unless a person decides to "opt out" by sending back a form.

Businesses hate asking people permission because it cuts off nearly all of their customers from advertising. Surveys by the Privacy Foundation, a Colorado-based nonprofit groups, show that only 5 percent of consumers send back permission forms.

After her measure failed, Speier said, "It was all about lost income and profit to the industry."

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PRIVACY MEASURE KILLED SB773 by Sen. Jackie Speier, D-Hillsborough, would require banks to get permission before sharing confidential information with other companies.

-- VOTING FOR

Elaine Alquist, D-Santa Clara

Wilma Chan, D-Alameda

Jackie Goldberg, D-Los Angeles

Lou Papan, D-Millbrae

Carole Migden, D-San Francisco .

-- VOTING AGAINST

Bill Campbell, R-Villa Park

Tim Leslie, R-Tahoe City

Tony Strickland, R-Moorpark .

-- NOT VOTING

Ed Chavez, D-La Puente

Carl Washington, D-Paramount

Patricia Wiggins, D-Santa Rosa

E-mail Robert Salladay at rsalladay at sfchronicle.com.



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