To Our MembersDavid Rosenfeld, Executive Director

Dear OSPIRG supporter,

We do things differently in Oregon.

Take health care reform. Lost amid the Fox News-driven misinformation that masqueraded as a real debate on health care in August was the fact that Oregon had just enacted the country’s first comprehensive effort to tackle skyrocketing health care costs. Our legislature overwhelmingly passed, and Gov. Ted Kulongoski signed, legislation that put Oregon at the forefront of reform—cutting administrative waste, limiting excessive insurance premium hikes and prioritizing preventative care.

On the one hand, there was nothing easy about this victory. Just as we have seen on the national scene, insurance industry lobbyists in Salem tried every trick in the book to kill a provision to stop rampant, double-digit premium increases.

On the other hand, I witnessed Oregon’s highly engaged population writing, calling, and sending e-mails to their representatives by the thousands, terrific allies in the public health community producing solid research, and some uniquely visionary leadership willing to buck the tide to pass real reform—despite the excessive rhetoric and hyperbole that tainted the national debate. (Read the details on pages 3 and 4.)

All of this sums up why I am proud to be an Oregonian and thrilled to lead an organization with such hardworking, capable staff, backed by generous, engaged members, and nose-to-the-grindstone volunteers.

But even in our unique position, we have big challenges ahead of us. We need to restore balance in the financial marketplace, modernize our public transportation system, and root out taxpayer-funded giveaways to special interests.

With your support, I know that we can meet these challenges head on—and continue making progress that will put the public first and keep powerful, special interests in check for years to come.

Thank you for all that you do.

ON THE COVER: OSPIRG Federal Consumer Program Director Ed Mierzwinski and President Barack Obama celebrate passage of a Credit Cardholders’ Bill of Rights; OSPIRG Consumer Advocate Matt Wallace and state Sen. Suzanne Bonamici work to address the foreclosure crisis; OSPIRG Federal Health Care Advocate Larry McNeely speaks to the media about advancing health care reform at the federal level; OSPIRG Executive Director Dave Rosenfeld, OSPIRG Health Care Advocate Laura Etherton and Gov. Ted Kulongoski discuss state-level health care reform; Matt Wallace appears on KATU to discuss the foreclosure crisis; and Laura Etherton joins small business owners to speak out for health care reform.

Public transportation got a big lift in February from Washington, D.C., lawmakers.

Historically, the United States, under pressure from the road-building lobby, has spent nine times more on highway projects than public transportation. These misguided priorities waste bil-lions of taxpayer dollars on projects that exacerbate road congestion and our oil addiction—leaving consumers with fewer transportation options.

OSPIRG is advocating for a 21st century transportation system that focuses on:

Expanding clean, efficient trans-portation choices for Americans by prioritizing new investments in light rail, commuter rail, rapid bus service, high-speed intercity rail, and dynamic communities that make it easier to walk, bike or take transit.

Fixing our crumbling roads and bridges by investing more in maintenance, not massive new highway projects.

Spending taxpayers’ money more wisely by focusing only on projects that will produce real results over the long haul.

High-Speed Rail And MoreAs Congress debated the president’s economic recovery package, OSPIRG and our allies made the case for more investment in public transportation.

Congress ended up commiting a historic $17 billion for public trans-portation and high-speed intercity rail

programs across the country.

More than $40 million of these funds will go toward valuable public transit projects across Oregon, such as building a park-n-ride facility in Milwaukie and improving the Wil-sonville Transit Center.

Still, there’s a lot of work left to do. Powerful interests are working furi-ously to protect the wasteful status quo, and Congress is behind schedule to reauthorize the nation’s current transportation spending law, which could allocate nearly $500 billion over the next 6 years.

21st Century TransportationSecuring Millions For Oregon Transportation Projects

Fiscal Year 2009 Report

Thanks to an infusion of federal funding, plans to build a high-speed rail line between Eugene and Vancouver, British Columbia, have been revived. Initial funds will be used by rail officials as a down payment to make improvements that will both speed up the current Amtrak Cascades line, and pave the way for faster, more powerful trains to barrel through the Pacific Northwest at speeds that could exceed 225 mph.

High-speed passenger rail can help solve many of our transportation problems, from congested airports to our dependence on oil, while creating thousands of high-paying American jobs. OSPIRG is working as part of the Federation of State PIRGs with leaders in Congress and the Obama administration to fully fund a long-term commitment to high-speed rail.

TriMet’s MAX Light Rail system, currently connecting Portland, Beaverton, Clackamas, Gresham, Hillsboro and the Portland Airport, will get a boost from increased funding.

Moving Forward

WA

Canada

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Eugene To Seattle In Under Three Hours?

Reforming Health CareLeading A Bold Effort To Control Costs For Oregonians

Oregon State Public Interest Research Group

Throughout 2009, OSPIRG advo-cated common-sense solutions to relieve Oregonians from

spiraling health care costs and unpre-dictable coverage, to ensure quality affordable coverage for Oregonians.

In June, we made headway when the Oregon Legislature passed a pair of OSPIRG-backed health reform bills aimed at addressing these exact goals. They passed at a key time, with soar-ing costs putting health reform efforts to the top of the agenda in Washington D.C., as well as at the state level.

Oregon Leads The WayOregon’s new health care reform repre-sents the nation’s first comprehensive effort to control rising costs and put con-sumers at the center of their health care.

In the coming years, insurance com-panies must cut their red tape and justify rate hikes. Meanwhile, doctors and patients will be provided with better, more up-to-date information on the most effective treatments and given more incentives to provide high-quality preventive care—all of which should make the system more accountable and cost-effective.

Seizing The OpportunityIn 2008, OSPIRG recognized that Oregon had an unprecedented oppor-tunity to advance real reform. The Or-egon Legislature created a task force of health care experts and business leaders charged with making recommenda-tions to the Legislature for how Oregon could turn our health care system from dysfunctional to world class.

Using Facts To Make Our CaseOSPIRG‘s Laura Etherton was appoint-ed to key committees to advise the task force, and she used that opportunity to advocate for consumers and small busi-nesses. Throughout 2008, she worked closely with dozens of medical profes-sionals, business leaders, lawmakers and advocates to hammer out a series of recommendations.

To keep the task force focused on sky-rocketing costs and the pressure they put on Oregonians across the state, Etherton used emerging research to highlight the potential to cut costs by cutting waste, boosting accountability, and focusing on prevention.

Bringing The Voices Of Oregonians Directly To Decision-MakersIn order to ensure that the voices of ordinary Oregonians were a part of the task force’s work, OSPIRG canvass-ers and student volunteers organized more than 4,000 Oregonians to write, e-mail and testify in person before the board. Key to this outreach was work-

ing as part of the leadership team of an innovative Robert Wood Johnson Foundation project, Consumer Voices for Coverage.

Pushing The Envelope For ConsumersWhen the board issued its draft recom-mendations—to implement $5 billion in cost cutting measures—Etherton urged the board to go further. She authored “More for Your Money,” an analysis that was featured on Oregon Public Broadcasting and widely read by political insiders. The board’s final recommendations in December 2008 incorporated many of Etherton’s ideas, including over $10 billion in cost sav-ing reforms over 10 years.

Teaming Up AlliesEtherton then turned her attention toward persuading the Oregon Legis-lature to enact the board’s recommen-dations. To do this, Etherton teamed up with advocates from dozens of organizations, such as AARP, Children First for Oregon, SEIU, Oregonians for

Oregon’s New Health Care Reform Law: Better Care, Lower Costs

Savings from Oregon’s new law:

$1.4 billion over ten years by reining in the growth in health insurance administrative costs.

$350 million over ten years by cutting red tape bogging down doctors in paperwork.

$990 million by year ten by encouraging adoption of effective health information technology.

$4 billion over ten years by giving doctors and patients the most up-to-date information about the most effective treatments.

Premiums On The RiseAn Analysis of Health Insurance Premium Increases Facing Individuals and Small Businesses in Oregon.

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Health Security and Oregon Nurses Association. Members of this broad coalition testified at numerous hear-ings and met several times with every member of the Legislature. At the same time, we collaborated with coalition partners to activate Oregonians in key districts to weigh in with lawmakers on the fence on the issue to make calls

and send letters, and come to the capi-tol to visit with their legislators.

Stopping An Insurance Industry Backroom DealWhen insurance company lobbyists attempted to cut a backroom deal to kill a key provision that would limit excessive premium increases, Etherton sprung into action. She re-leased another analysis. “Premiums on the Rise” showed that more than 400,000 Oregonians faced premium hikes 4 times the rate of inflation, and 133,000 were hit with increases over 21 percent, while insurance company administrative costs had increased at four times the rate of inflation. Ether-

ton worked with legislative champi-ons such as Reps. Chip Shields, Tina Kotek, Mike Dembrow, Chris Harker and Paul Holvey to press for the in-surance consumer protections to stay in the bill.

Etherton distributed her analysis to lawmakers, and The Oregonian fea-

tured it in a broader story on the cost of health insurance. At the same time, more than 2,000 OSPIRG members rose to the occasion, and called and sent e-mails to state officials to protest the cost of health care.

Model For National ReformThanks to Etherton’s quick action—and tough negotiating by our legis-lative allies—the final bill emerged as a landmark step forward on health reform, and a model for na-tional action.

Moving forward, OSPIRG will focus on ensuring the legislation is imple-mented swiftly and properly.

Executive Director David Rosenfeld and Health Policy Advocate Laura Etherton speak with Gov. Kulongoski shortly after he signed landmark health care reforms into Oregon law. In Their Own Words

“Working in coalition with OSPIRG to pass Oregon’s landmark health reform package in 2009, I saw how effective their advocates are in Salem. They do their homework, are well-respected by lawmakers, and can bring lots of different people to the table.”

Cathy Kaufmann, MSWManager, Oregon Office of Healthy Kids

OSPIRG’s Laura Etherton authored these analyses to help reporters shine the spotlight on how to lower health care costs for consumers, and counter insurance and drug company lobbying with facts.

To read the reports, visit www.ospirg.org.

More For Your MoneyHow the Oregon Health Fund Board’s Draft Health Reform Plan Reins in Skyrocketing Health Care Costs.

Research

Stabilizing The EconomyTaking On The Lending Industry To Slow Down Foreclosures

There are over 750 registered l o b b y i s t s i n t h e O re g o n Legislature—more than 8

lobbyists for every legislator. OSPIRG’s team of advocates and our allies work hard to make sure lawmakers look out for regular Oregonians.

The importance of having a watchdog for the public came into sharp focus as OSPIRG worked to pass a new state law that could slow the rate of foreclosures—and stabilize Oregon’s economy in the process.

Foreclosures Burden Oregon’s EconomyFor the last year, Oregon has had some of the highest foreclosure rates in the country. The high rate of fore-closures is dampening existing home values and putting a drag on Oregon’s economic recovery. According to the Center for Responsible Lending, the average Oregon homeowner will lose more than $8,000 on their home’s value between now and 2012 due to foreclosures in their community—$9.2 billion for all Oregonians.

Many foreclosures can be prevented. In many cases, lenders can make more profit from a slightly modified loan than from a foreclosure. For many borrowers who have been tempo-rarily hit by the recession, a slightly reduced monthly payment is all they need to stay in their homes.

Lenders Resist ChangeHowever, lenders have resisted any large-scale loan modification pro-gram, despite $75 billion in federal

incentives. According to a New York Times investigation, many loan ser-vices and lenders believe they can make more money from foreclosure-related fees than from even slight loan modifications.

Creating Policy Solutions With Our AlliesTo prod lenders to play a more active role to prevent unnecessary foreclo-sures, OSPIRG Consumer Advocate Matt Wallace teamed up with state Sen. Suzanne Bonamici (Portland), the Oregon Department of Justice, De-partment of Consumer and Business Services, Our Oregon, the American Association of Retired People (AARP)

and the Oregon Law Center. Together, the coalition drafted legislation and hatched a plan to persuade the rest of the Legislature to take action.

Standing Up To Unscrupulous LendersThroughout the effort, Wallace was a constant presence in Salem, testifying at committee hearings and meeting repeatedly with lawmakers to address questions and secure their support.

At the same time, powerful lobby-ists for the lending industry used their political connections to derail reform. Although many lawmakers in Salem had committed to vote for

Fiscal Year 2009 Report

State Sen. Suzanne Bonamici and Consumer Advocate Matt Wallace at the signing of a new law to help the foreclosure crisis. Sen. Bonamici was the original author and championfor the measure.

Using The Media To Win

When powerful lobbyists from the lending industry used their influence to stall progress on the foreclosure crisis, OSPIRG’s Matt Wallace worked with reporters from across Oregon to sound the alarm and shine the spotlight on Salem.

Wallace helped the Oregonian, Register Guard, Bend Bulletin, KATU and KOIN develop in-depth pieces that featured the human impact of the foreclosure crisis, and how the proposed legislation could help solve the problem.

This media coverage stirred public support and added momentum for Senate champions of the bill such as Sen. Suzanne Bonamici. Her tough negotiating, along with our coalition’s persistent lobbying and the hundreds of e-mails we drummed up from supporters, helped secure the bill’s passage.

OSPIRG in the news is available on our Web site newsroom, at www.ospirg.org/news.

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the bill, a handful of legislators sided with the lenders and used the politi-cal process to stall the bill.

Wallace then took a brief break from the insider politics of Salem and, working with reporters from the

Oregonian, KATU and KOIN on several articles and features, helped shine a spotlight on the issue for the public (see sidebar). Across the state, OSPIRG members sent sent hundreds of e-mails to lawmakers.

The Legislature ActsThanks to this public attention and the tough advocacy of Sen. Bonamici and our coalition, the bill passed the Legislature and was signed into law by Gov. Kulongoski.

The new law requires lenders to make a “good faith” attempt to avoid a foreclosure, at the borrower’s request.

The law also gives borrowers a chance to negotiate face-to-face with their lender, with the help of a certified housing counselor.

Next StepsThe bill went into effect in September.

Foreclosure notices now explain how borrowers can request a loan modifi-cation, and how to partner up with a non-profit housing counselor.

Unfortunately, lending industry lobbyists succeeded in adding last-minute amendments that might allow some lenders to avoid comply-ing with the law’s intent. To ensure that does not happen, OSPIRG and our coalition are tracking the lend-ing industry’s compliance with the bill and will urge the Legislature to tighten up any loopholes in the law when it reconvenes in Febru-ary 2009.

Strategy

Matt Wallace on KATU’s“On Your Side”

caption

The Cost of the Foreclosure CrisisIn August, Oregon had one of the highest foreclosure rates in the country; 1 in 458 homes was in foreclosure.

In August, 1 in 458 Oregon homes was in foreclosure.

By 2012, Oregon will lose $9.2 billion in home value.

Landmark Credit Card Law Passed New Protections Help Consumers Avoid Crushing Debt

Ed Mierzwinski, director of OSPIRG’s Federal Consumer Program, with President Obama at the signing of the Credit Card Accountability, Responsibility and Disclosure Act.

In 2006, the General Accountability Office of the U.S. Congress released the results of their own investigation into the credit card industry, widely citing PIRG research.

Still, the credit card industry was able use their influence to prevent both Democrats and Republicans from acting.

These events unraveled as the details of how the financial industry’s greed led to the economic collapse came to light. As public outrage over the crisis and the bailout intensified, our long-time allies in Congress, Rep. Carolyn Maloney (N.Y.) and Sen. Chris Dodd (Conn.), saw their

During Ed Mierzwinski’s first 18 years as a consumer advocate for OSPIRG in Washington,

D.C., no bill opposed by a credit card company was so much as scheduled for a vote by a congressional committee.

But, the events of the last year have helped loosen the credit card indus-try’s grip on Congress—and made very clear the need for reform.

This summer, we worked alongside our allies and many members of Con-gress to pass legislation that will stop some of the credit card industry’s most egregious anti-consumer practices.

Building A Strong Foundation Our work over the past two decades had positioned us well to seize the mo-ment. Under Ed’s leadership, OSPIRG and other PIRGs across the country re-leased dozens of exposés on the abuses of the credit card industry throughout the last 20 years.

Our reports consistently found that credit card companies engaged in practices that misled consumers (particularly college students) into signing up for cards they could not afford and then sprung hidden tricks that ensnared consumers in a spiral of debt.

Over time, our research spurred re-porters to delve even more deeply into the issue, sparking widespread media coverage in all 50 states and a series of in-depth features on news shows such as “60 Minutes.”

moment to reintroduce the Credit Cardholders’ Bill of Rights.

This time—with an outpouring of pub-lic support and a push by President Obama—the bill passed.

The new law, signed by the president on May 22, bans credit card companies from retroactively hiking rates on ex-isting balances, prohibits “universal default” in the first year of a contract (that’s the practice in which a card company changes the terms of your contract if it finds a new negative mark on your credit report), and protects col-lege students from many of the preda-tory marketing schemes witnessed on campuses in recent years.

Oregon State Public Interest Research Group

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Reforming The Financial IndustryPreventing Another Economic Meltdown

U.S. Sen. Jeff Merkley and Federal Consumer Program Director Ed Mierzwinski discuss strategy for passing financial industry reform.

Since the financial meltdown began in 2008, OSPIRG has been prodding lawmakers to get to the

root of the problem in order to prevent another crisis.

It’s painfully clear now that Wall Street placed excessively risky bets that they could not cover, and paid executive bonuses on profits that did not exist. Taxpayers, small investors, homeowners and our economy paid the price.

A Long Road To ReformBack in February, as Congress was giving away billions of dollars to banks through the Troubled Asset Relief Program (TARP) with inade-quate accountability, OSPIRG Federal Financial Security Advocate Nicole Tichon published “Failing the Bail-out: Lessons for Obama from Bush’s Failures on TARP.”

A month later, Tichon was the only public interest witness to testify at the Congressional Joint Economic Com-mittee hearing on TARP transparency, while Rep. Peter DeFazio and Sen. Jeff Merkley were among the few in Con-gress pressing for quick reform.

Several months later, however, mo-mentum picked up.The Congressional Oversight Panel, led by Harvard law professor Elizabeth Warren, issued a scathing report on the bailout this spring, and called for a wholesale re-form to the financial services industry.

With Professor Warren, Sen. Merkley and more than 200 other organizations,

Research

OSPIRG Federal Financial Security Advocate Nicole Tichon published a series of “bailout report cards” that highlighted the problems with TARP, and the path to longer term reform. For the full reports, go to www.ospirg.org.

Failed BailoutLessons for Obama From Bush’s Failures on TARP

“From the beginning, PIRG has been a tireless and effective advocate for fixing the financial crisis for good. Their state-based network is critical for getting the message outside Washington, D.C., and building public support for reform.”

Elizabeth WarrenHarvard Law Professor,Chair of the Congressional Oversight Panel

In Their Own Words

OSPIRG is calling for the creation of a Consumer Financial Protection Agency. It would have the power to regulate all credit card and consumer loan products, and to check predatory financial products, such as payday loans and risky mortgages.

Ed Mierzwinski, the director of OS-PIRG’s national consumer program, is helping to lead the effort—coor-dinating strategy meetings with our allies, testifying before Congress, and pushing reporters to keep focusing on the issue.

Citizens 96% Grants 4%

Program 86%Fundraising 10%Administration 4%

Financial Information

Charts reflect FY09 financialinformation for OSPIRG and OSPIRG Foundation.

FY09 Income FY09 Expenses

Google Government Comes To OregonBetter Disclosure Of Tax Dollars On The Way

In order for democracy to work well, citizens need easy-to-use tools to watchdog how their

government uses tax dollars. This checks corruption, bolsters public confidence in government and pro-motes fiscal responsibility.

In the private sector, Internet search technology has revolutionized the accessibility and transparency of information. We take for granted the ability to track deliveries, check cell phone minutes and compare real es-tate online, even to summon—at the click of a mouse—satellite and street-level views of any address.

Given Oregon’s reputation as an in-novator of ways to increase public participation in government, one might expect the state to be a leader in using the Internet for online bud-get transparency.

Instead, Oregon lags behind many other states on this front. While some tax spending is available online, it is diffused among many different government Web sites, and often buried within layers of links that average taxpayers would never find. And a great deal of information is still hidden—such as the details of which corporations receive the es-timated $400 million in tax breaks each biennium.

Setting The Stage For TransparencyIn light of both a staggering budget shortfall and an unprecedented windfall of federal stimulus funds, OSPIRG worked with a bipartisan group of legislators including Reps. Kim Thatcher (Keizer), Arnie Roblan (Coos Bay), Gene Whisnant (Sunriver) and Jefferson Smith (Portland), to launch a new, online transparency program for Oregon.

Starting in January 2010, Oregonians will be able to see how the state gov-ernment spends our tax dollars on a one-stop Web site, and a Transparency Oregon Advisory Commission, which

will be established to drive further improvements, thanks to the new OSPIRG-backed law.

Positioned For The FutureFollowing the law’s passage, OS-PIRG Democracy Advocate Jon Bar-tholomew was appointed by Oregon House of Representatives Speaker Dave Hunt to serve on the Advisory Commission, where he will focus on improvements that ensure that the Web site discloses companies that receive tax breaks and government contracts, and highlights correlations between those companies and politi-cal campaign contributions.

Better Budget Transparency Coming To Oregon

In January 2010, the state of Oregon will launch a new Web site intended to make it easier for Oregonians to see how their tax dollars are spent. Here’s a snapshot of what to expect—and what we will still need to advocate for.

Likely included:• The Tax Expenditure Report that shows every tax break in Oregon.

• The budget of every state agency.

• Information on campaign contributions to politicians (ORESTAR).

Likely not included:• Detail on contracts given to private companies with tax dollars.

• Detail on what companies receive tax breaks and the jobs created from those breaks.

• Easy ways to find links between campaign contributions made and contracts and tax breaks received.

Program 86%Fundraising 10%Administration 4%

FY09 Program Expenses Breakdown Design And Photo Credits

Photo Credits: All by staff except the following: Cover: credit card bills by Rudyanto Wijaya*; hospital patient by Monkey Business Images*; capitol courtesy of G. Meador. Page 5 photo courtesy of Respres. *under license from Shutterstock.

Design by Public Interest GRFX (215) 985-1113; Printing by Fowler Printing & Graphics. Printed on recycled paper. 10

OSPIRG Foundation, a 501(c)(3) organization, conducts research and public education on emerging public interest issues. Contributions to OSPIRG Foundation are tax-deductable. OSPIRG Foundation recently received grants from:

• Community Catalyst

• Ken and Colleen Lewis Fund of The Oregon Community Foundation

• Robert Wood Johnson Foundation

• The Oregon Progress Forum

The Oregon State Public Interest Research Group (OSPIRG), a 501(c)(4) organization, received support from Northwest Health Foundation.

Foundation Support

Other Ways To Give

Planned GivingOSPIRG gratefully accepts bequests and gifts of securities to support our work. Your gift will assure a legacy of activism that will stand up to powerful interests and revitalize participation in our democracy for decades to come. For more information, call 1-800-841-7299 or send an e-mail to plannedgiving@ospirg.org.

Workplace GivingOSPIRG par t ic ipates in workplace giving campaigns

through Earth Share. If your workplace giving campaign does not include public interest or-ganizations, please urge them to include Earth Share in their payroll deduction campaign.

Health Care 49%Consumer Protection 31%Transportation 13%Government Transparency and Democracy 6%Public Health 1%

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Contact us:

OSPIRG Staff (partial list)

Dave RosenfeldExecutive Director

Lee Obernberger Administrator

Phineas Baxandall Federal Senior Analyst for Tax & Budget Policy

Laura Etherton Health Care Advocate

Gary Kalman Federal Legislative Director

Chris LindstromFederal Higher Education Program Director

Jon BartholomewDemocracy Advocate

Ed Mierzwinski Federal Consumer Program Director

Liz HitchcockFederal Public Health Advocate

Sasha Rosen Organizing Director

John Krieger Federal Staff Attorney

Larry McNeely Federal Health Care Reform Advocate

www.ospirg.org | info@ospirg.org