Public Citizen and Liveable Arlington Comments Regarding the National Academy of Sciences Review of the Texas Commission on Environmental Quality’s Proposed Ethylene Oxide Risk Factor and Analysis

Please protect employees and consumers against forced arbitration.

Public Citizen and Liveable Arlington Comments Regarding the National Academy of Sciences Review of the Texas Commission on Environmental Quality’s Proposed Ethylene Oxide Risk Factor and Analysis

April 8, 2024

The Honorable Richard Durbin, Chairman
Ranking Member Lindsay Graham
Honorable Members, Committee on the Judiciary
United States Senate
224 Dirksen Senate Office Building
Washington, DC 20515

Dear Chair Durbin, Ranking Member Graham, and Honorable Members:

On behalf of more than 500,000 members and supporters of Public Citizen across the country,
we provide the following statement for your consideration relevant to the Senate Committee on the Judiciary hearing entitled “Small Print, Big Impact: Examining the Effects of Forced Arbitration” scheduled for April 9, 2024. We specifically write in support of the passage bills banning the inclusion of forced arbitration provisions in consumer and employment contracts, like the Forced Arbitration Injustice Repeal (FAIR) Act of 2023. We also support existing bills addressing specific issue-areas, like the Ending Forced Arbitration of Race Discrimination Act of 2023.

We thank the Committee for holding a hearing on this important and pressing issue. Forced arbitration provisions can be found in employment agreements and in the terms of service agreement of consumer products and services. For example, they can be found in agreements for nursing home care, cellular phone agreements, ticket purchasing agreements5, online streaming services,6 child and pet care services, public utility apps, and in buy now, and pay later agreements. They can also be found in terms of service agreements for a wide variety of consumer goods like car purchases, and children’s toys, among others. It is impossible to overstate the role these clauses play in keeping consumers from obtaining equitable and financial relief for corporate wrongdoings in the courts.

Forced arbitration clauses require consumers to resolve any disputes between them and the company or employer that might arise in the future through private arbitration, rather than in a public court. They also typically bar consumers from joining class action lawsuits – an especially onerous limitation in circumstances where a claimant has a small-dollar claim that is cost-prohibitive to file as a stand-alone case. Forced arbitration provisions almost always dictate the arbitration firm that will oversee resolution of any disputes between the corporation and the consumer. For this reason, in recent years, the number of class actions brought by or on behalf of low-income consumers has drastically dropped.

Academic experts agree that empirical research demonstrates that consumers cannot meaningfully consent to arbitration clauses because consumers do not generally comprehend the terms. This may be for a number of reasons including the length and complexity of the contract, the manner in which consumer contract is presented to consumers (as a click-through agreement or in small print), and the sheer impossibility of reading all of the terms of service agreements that consumers are presented with on a daily basis. For example, a July 2023 academic study found that over 97% of the study participants reported having opened an account with a company that requires disputes to be submitted to binding arbitration (e.g., Netflix, Hulu, and Cash App), yet most were unaware that they had agreed to arbitration. According to the study, over 99% of respondents who think they have never entered into an arbitration agreement have likely done so.

Forced arbitration provisions funnel claimants away from public courts and into privatized judicial systems with no public oversight. Private arbitration firms follow their own general arbitration rules and procedures, have their own filing and fee structures, and have their own standards for assigning arbitrators to oversee matters. Because arbitration firms rely on a return-business model to make a profit, the arbitrator has an incentive to rule in favor of the corporation to cultivate a happy return-customer relationship. Even when ruling in favor of a plaintiff, arbitrators tend to award less money than juries award to successful plaintiffs. Legal researchers have noted that structural features of arbitration firms make it difficult for arbitrators to be entirely unbiased in their decisions. For instance, from 2014-2018, only 6.3% of cases arbitrated by the American Arbitration Association (AAA) or JAMS, two of the largest arbitration firms in the United States, provided consumers with a monetary award. According to one report, “Americans are more likely to be struck by lightning than they are to win a monetary award in forced arbitration.” Forced arbitration provisions allow corporations to pick the arbitration firm and the arbitrator, to the detriment of consumers. Academic commentators have observed that corporate entities tend not to select women and BIPOC arbitrators, even when more diverse pools are made available. Intentional racism, implicit bias, stereotypes based on protected classes, and other harmful criteria may also contribute to limiting the number of women and BIPOC arbitrators serving on arbitrator rosters.

If not intentionally using bias in their favor, representatives for corporations may be using principles of risk-aversion to avoid choosing diverse arbitrators because “[d]eviating from the familiar can breed contempt if the result is a loss.”26 In this scenario, if a corporation prevailed using a white-male-heterosexual arbitrator, the corporation is likely to choose a similar arbitrator the next time and the next. This repeat-use of arbitrators who rule in favor of the corporation has especially negative effects on claimants belonging to vulnerable and marginalized communities, not likely to have their claim heard by arbitrators with similar life experiences.

Although they have largely succeeded in tipping the scales of justice in their favor by turning away from the use of public courts, corporations continue to develop and insert language in their arbitration provision that further impedes consumers from even filing arbitration claims or banding together to obtain large-scale relief. For example, some corporations require consumers to engage in “informal” dispute resolution proceedings before they can officially file an arbitration claim.

Other forced arbitration provisions contain confidentiality clauses prohibiting claimants from discussing the matter at arbitration, making it especially difficult for claimants to alert others about existing dangers or harms.28 Still other provisions prohibit claimants from filing mass arbitration claims by inserting “batch arbitration” provisions which limit the number of consumers who can file similar claims while being represented by the same attorney or law firm. Even when consumers have managed to successfully file arbitration claims, some corporations have blatantly refused to pay the up-front fees required to initiate an arbitration claim, in accordance with their own arbitration provisions.

Impact of Forced Arbitration on Vulnerable Consumers

Low-income communities of color are already reluctant to engage the courts for assistance. The problem of access to courts is made worse still by the prevalence of forced arbitration clauses in consumer contracts. Arbitration systems are further out of reach for low-income and otherwise vulnerable communities because they are procedurally inaccessible and lack the resources to accommodate vulnerable and marginalized communities. Financial service providers take advantage of the inaccessibility of arbitration forums. For example, an estimated 85% of all major credit cards use forced arbitration clauses in their terms of service agreements.32 Considering that in 2022 approximately 82% of adults in America had a credit card, forced arbitration agreements impact the vast majority of American consumers.

The Consumer Financial Protection Bureau (CFPB) has reported that subprime cards33 and private label credit cards (used widely by minorities and vulnerable communities with sub-prime credit scores) are more susceptible to late fee charges and that consumer residing in low-income areas (with a high concentration of Black residents) bear a disproportionate burden of late fees. A 2022 study, reported that low-income and Black consumers are more likely to pay credit card fees in comparison to white consumers and low income consumers of color are more likely to be offered credit cards at higher interest rates.

The lack of initial contract readership combined with claimants’ inability to access public courts leaves vulnerable consumers and employees open to exploitation via the use of lengthy contracts filled with legalese. Deceptive business practices are further likely to target non-English speaking communities who are more vulnerable due to a confluence of factors including their low bargaining power, limited or bad credit history, limited choices in financial providers, and obstacles to processing information (including language and accessibility barriers).

One of the most damaging effects forced arbitration clauses have on marginalized communities is that they keep lower-income consumers from joining in class actions, and other forms of aggregate litigation, as a means of bringing similarly situated, small-value, and cost-sharing litigation claims before the courts. Additional barriers exist for claimants who are indigent or who have accessibility needs. For instance, the AAA Consumer Arbitration Rules state that if a party “wants” an interpreter, they are responsible for making arrangements directly with the interpreter and are also responsible for paying for the costs of the service. This means that, without access to the courts, marginalized communities are actively kept from accessing monetary and equitable relief for valid legal claims, becoming aware of existing pitfalls in consumer products and employment, and ultimately from obtaining monetary relief that may otherwise help them escape the cyclical poverty.

Although far from perfect, public courts offer vulnerable and low-income litigants access to important resources that assist them in engaging the legal system and pursuing valid legal claims. First, court proceedings are public and subject to scrutiny from legislators, the media, bar associations, and the public. Second, depending on the jurisdiction, civil litigants have access to civil legal assistance programs, court pro se resources, and language access assistance. Finally, although not quantifiable, there is an element of empowerment civil litigants, especially members of marginalized communities, experience when they are able to see and interact with other claimants also seeking to assert their rights and obtain relief for legal claims.

Conclusion

Banning the inclusion of forced arbitration provisions in terms of service and employment agreements is simply the right thing to do. One of the most pressing challenges Americans have in accessing justice is the increasing numbers of claimants being funneled into privatized judicial systems lacking basic resources for claimants and public oversight. The only way to address the scourge of pre-dispute forced arbitration clauses in consumer and employment contracts is through the passage of legislation banning their use across the board. There are a number of bills Public Citizen has endorsed which would take steps towards this goal. They should be passed immediately:

• The Forced Arbitration Injustice Repeal (FAIR) Act of 2023, which would eliminate forced arbitration clauses in employment, consumer, and civil rights cases.
• The Ending Forced Arbitration of Race Discrimination Act of 2023, which would end the practice of forcing individuals who have experienced racial discrimination at work into arbitration.

Moreover, because consumer and employment matters are increasingly being handled by privatized arbitration firms, these firms must be required to report on the demographics of their arbitrators, the cases they are hearing, and the outcomes of those cases (equitable and financial relief). This data is crucial to understanding the impact privatized arbitration is having on our most vulnerable communities and how we can hold corporations and arbitration firms accountable for their roles in inequitable outcomes.

Thank you for the opportunity to provide comment on this legislation. For questions, please contact Martha Perez-Pedemonti at mperezpedemonti@citizen.org or Lisa Gilbert at lgilbert@citizen.org.

Sincerely,

Public Citizen

Public Citizen and Liveable Arlington Comments Regarding the National Academy of Sciences Review of the Texas Commission on Environmental Quality’s Proposed Ethylene Oxide Risk Factor and Analysis

In recent years, election workers and officials have been the target of ongoing threats and harassment.

The table below illustrates where states have passed or are in the process of debating legislation to protect election officials, as well as states that already had protections in their code.

Bills Introduced 2022 – Present 

Bills Passed January, 2022 – Present

Previously Existing Protections for Election Officials* 

*This list only includes states where election officials are referenced specifically. Many more states such as Idaho and Utah protect elected officials or people working as public officers. These protections apply to some election officials, and may apply to all election workers depending on the state.

Election Officials Are Under Attack

Free and fair elections are the necessary foundation of a healthy democracy, but across the United States, the people responsible for facilitating elections are increasingly under threat:

• Ongoing attacks against local election officials have hindered already underfunded election offices and jeopardized the ability to administer future elections.
• Since 2020, 92% of local election officials have taken steps to increase election security for voters, election workers, and election infrastructure.
• 38% of local election officials report experiencing threats, harassment, or abuse.
• 61% of local election officials who have been threatened say they’ve been threatened in person, and the same number say they’ve been threatened over the phone.
• 34% of local election officials know of one or more local election officials or election workers who have left their job at least in part because of safety fears, increased threats, or intimidation.
• 28% of local election officials say they’re concerned about their family or loved ones being threatened or harassed in future elections.
• 62% of local election officials are worried about political leaders engaging in efforts to interfere in how they or fellow election officials around the country do their jobs.
• 83% of local election officials say their budget needs to grow to meet election administration and security needs over the next five years.
• One in five election officials planned to leave their jobs before 2024.
• In some states, more than half the local election officials have left since 2020. In Arizona, 12 of the state’s 15 county election chiefs have departed. In Pennsylvania, nearly 70 county election directors or assistant directors in at least 40 of the state’s 67 counties have left their jobs.

Many States With Laws Protecting Election Officials Can Still Do More

It is important to note that many states that have laws protecting election officials can do more to provide protections. For example, many states have only protected election officials from doxxing, or the protections are only in the administration of the election and not for acts of retaliation against election officials who simply did their jobs on election day.

Protecting Against “Insider Threats” and Ensuring Elections Are Funded

In addition to protections for election officials, election offices and systems need investment and protection.  Due to the added pressures of administering elections, it is important that states increase funding and resources for election officials. Legislation to protect against “insider threats” from election workers such as the critical voting system architecture intentionally taken in Coffee County, Ga. and Mesa County, Colo. is also essential. For example, Colorado and Minnesota (HF 1830) have passed comprehensive protections to codify best practices for election system security, as well as detect, prevent and if needed to penalize actors who tamper with election systems.

See an error or want to share information on state legislation to protect election officials? Please contact Aquene Freechild at afreechild@citizen.org or Jonah Minkoff-Zern at jzern@citizen.org.

Last Updated:  May 9, 2024

Public Citizen and Liveable Arlington Comments Regarding the National Academy of Sciences Review of the Texas Commission on Environmental Quality’s Proposed Ethylene Oxide Risk Factor and Analysis

Key Findings

• Super PACs backed by the cryptocurrency sector have raised more than $102 million, the third-most of all super PACs engaged in the 2024 election, according data from Opensecrets.org. Only the super PAC backing Ron DeSantis’ failed presidential campaign and the super PAC backing Democratic Senate candidates have raised more money so far.
• More than half of the crypto super PACs’ political war chests – about $54 million – comes from direct corporate expenditures, primarily Coinbase and Ripple Labs, showing the sector is taking full advantage of Citizens United-enabled unlimited corporate political spending.
• Four of the eight corporate crypto super PAC donors have settled or are facing charges by the U.S. Securities and Exchange Commission (SEC) for alleged violations of securities laws. Ripple Labs alone is reportedly facing nearly $2 billion in penalties. Beating back regulations is among the super PAC backers’ stated goals.
• The rest of the crypto super PACs’ political war chest comes from billionaire crypto executives and venture capitalists, including $11 million each from the founders of venture capital firm Andreessen Horowitz, $5 million from the Winklevoss twins, and $1 million from Coinbase CEO Brian Armstrong.
• Out of the six 2024 primary races where the crypto super PACs intervened and which are now over, only one crypto-backed candidate has lost. Eleven primary races that include crypto-backed candidates remain.
• The crypto super PACs have pledged to spend in general election Senate races in the battleground states of Ohio and Montana, which are seen as essential for securing a Senate majority. Democratic incumbents in both races have been critical of the crypto sector.

Introduction

According to Pew Research Center, about 17% of Americans have ever dabbled in cryptocurrencies and an overwhelming majority who are aware of cryptocurrencies (75%) do not trust their safety and reliability.

Nevertheless, crypto corporations and executives are poised to spend more than $102 million elevating crypto-friendly candidates, who are expected to craft loose regulations, and attacking their opponents, who often have been more skeptical of the sector.

Corporations can’t vote, but, because of the 2010 U.S. Supreme Court ruling in Citizens United v. Federal Election Commission and related rulings, corporations and the ultra-rich can create super PACs to spend as much as they want to tilt elections toward their favored candidates.

The result is an unfair advantage in electoral races when it comes to the for-profit priorities of corporations and billionaires over priceless priorities such as protecting consumers and the environment.

During the 2022 midterm elections, then-FTX CEO (and now-convicted felon) Sam Bankman-Fried personified the cryptocurrency sector’s attempt to use campaign spending to maximize its political influence.

Now a fresh crop of crypto corporations, executives, and their allies are back in the political fray, spending millions attempting to tilt elections toward pro-crypto candidates.

Despite cryptocurrency marketing claims that digital assets herald a future financial system that promises to be decentralized, efficient, fairer, and more affordable, the Ponzi-like schemes and whipsaw volatility that have characterized the crypto sector have shown these experiments in artificial currency to be of dubious value.

Available records show that “SBF” – now just beginning to serve a 25-year sentence for his $8 billion crypto fraud – spent more than $40 million ahead of Election Day in 2022, primarily supporting Democrats. After the election, Bankman-Fried claimed he spent about the same amount backing Republicans, stating in an interview, “all my Republican donations were dark” and estimating he might have been the “second or third biggest” donor to Republicans in the cycle.^[1]

The “dark” donations Bankman-Fried mentioned are a reference to dark money groups – i.e.,  some organized under section 501(c)(6) of the tax code as business associations and 501(c)(4) as social welfare nonprofit groups. These groups can raise and spend unlimited sums on behalf of corporate donors without publicly disclosing the donors’ identities, as super PACs are required to do.

Such groups have raised and spent more than $2.8 billion to influence elections since the 2010 Citizens United ruling. Because of their secretive nature, it is not possible to know how much came from corporations or any particular interest group. According to analysis by Opensecrets, $162 million in dark money has already surged into the 2024 elections, putting this election cycle on track to surpass previous all elections in terms of dark money.

This means the disclosed super PAC contributions it is possible to attribute to particular corporations, individuals, and business sectors are inevitably an undercount.

Prosecutors alleged Bankman-Fried’s prolific campaign spending included illegal expenditures “to try to purchase influence over cryptocurrency regulation in Washington, D.C. by steering tens of millions of dollars of illegal campaign contributions to both Democrats and Republicans.” The campaign finance charge was ultimately dropped.

Fairshake Political Action Committee, the super PAC serving as the crypto sector’s primary political influence vehicle for 2024, has amassed a comparable war chest – and is similarly poised to purchase influence (albeit through legal means). Fairshake also has two affiliated PACs – the Republican-focused Defend American Jobs PAC and the Democrat-focused Protect Progress PAC. Together, the three crypto PACs have so far raised over $102 million, according to OpenSecrets.

“Money moves the needle,” Coinbase’s billionaire CEO Brian Armstrong told Axios. “For better or worse, that’s how our system works.” So far, Armstrong has contributed $1 million to Fairshake and Coinbase has contributed $23 million to Fairshake and its affiliates.

Table 1: Top ten super PACs in the 2024 federal elections by funds raised

Data Source: OpenSecrets.org

Just like fossil fuel corporations engaging in politics to thwart climate regulations or insurance companies engaging in politics to thwart health care reforms, the cryptocurrency sector’s political spending is part of the businesses’ strategy of combatting enforcement crackdowns and designing a regulatory system that meets the industry’s specifications.

“We need to make sure the [U.S. Securities and Exchange Commission] does not get weaponized with a political agenda,” Armstrong said in an interview. “To do that, the crypto industry is going to have to get a bit more sophisticated and powerful in terms of our lobbying efforts and our political power that we can bring to bear for the 2024 election.” This rhetoric echoes claims by Republican members of Congress, who in early 2024 created a “Select Subcommittee on the Weaponization of the Federal Government” to focus on familiar grievances of the right, especially the perceived unfairness in federal investigations into the alleged criminal misconduct of former President Donald Trump.

The crypto sector’s long-running frustration with the SEC is repeatedly echoed by crypto executives on social media, and in legal challenges to the SEC’s authority. Top contributors to crypto super PACs include several corporations that the agency has charged with violating securities laws, including Coinbase (which contributed $23.5 million), Ripple Labs (which contributed $23 million), and Kraken (which contributed $1 million).

Republicans are sometimes perceived as more friendly than Democrats to the crypto sector. The reality, however, is more complicated, with partisans on either side of the aisle numbered among both crypto advocates and skeptics, especially in the aftermath of FTX’s collapse and mounting evidence of rampant crypto crime. The SEC brought notable enforcement actions against cryptocurrency companies under both Trump and President Joe Biden.

With political volatility the only certainty ahead in the 2024 elections, the crypto sector’s attempt to exploit the lack of restrictions on corporations and billionaires influencing U.S. elections should come as no surprise.

Table 2: Top contributors (of $1 million or more) to Fairshake and affiliated super PACs

Data Source: OpenSecrets.org

Top Crypto Spenders

Coinbase

Coinbase is a leading cryptocurrency exchange offering users a platform for buying and selling digital financial products. In 2021 it became the first major cryptocurrency business to become publicly traded on the U.S. stock market.

Coinbase and affiliated individuals make up a disproportionate portion of contributions to Fairshake and its affiliated super PACs – more than $37 million. This sum includes $23.5 million from the corporation itself, $1 million from billionaire CEO Brian Armstrong, and $11 million from board member Marc Andreessen. Additional board members, investors, and an executive contributed $1.8 million.

Coinbase spends millions annually lobbying the federal government. The Commodity Futures Trading Commission fined the company $6.5 million for “reckless false, misleading, or inaccurate reporting as well as wash trading,” a form of illegal market manipulation. The company, which also was fined $50 million for compliance failures by New York state authorities, has been fighting SEC charges since 2023.

Ripple Labs

Ripple Labs is a financial technology company that, according to CEO Brad Garlinghouse, aspires to become “the Amazon of payments.”

The company contributed $20 million to Fairshake and $1.5 million each to its affiliated super PACs. Ripple and its executives have been fighting SEC charges of selling unregistered securities since the final days of the Trump administration.

Recent court filings show the agency is seeking nearly $2 billion in penalties for alleged violations of securities laws, while Ripple argues its penalty should be no more than $10 million. The corporation also resolved allegations of a criminal violation of anti-money laundering law with the Department of Justice in 2015 with a leniency agreement and a penalty of $700,000.

Andreessen Horowitz

Andreessen Horowitz is a Silicon Valley-based multibillion-dollar venture capital firm that invests in technology startups, including fellow Fairshake contributors Coinbase, Ripple, and Lightspark. Billionaire co-founders Marc Andreessen and Ben Horowitz each contributed $11 million to Fairshake.

Horowitz announced the firm’s foray into electoral politics with a blog post in late 2023 declaring “We believe that advancing technology is critical for humanity’s future, so we will, for the first time, get involved with politics by supporting candidates who align with our vision and values specifically for technology.” The post goes on to declare, “We are non-partisan, one issue voters: If a candidate supports an optimistic technology-enabled future, we are for them. If they want to choke off important technologies, we are against them … Every penny we donate will go to support like-minded candidates and oppose candidates who aim to kill America’s advanced technological future.”

What Horowitz appears to mean when referring to candidates who want to “kill America’s advanced technological future” is those who favor regulations that prioritize the public interest over the interests of those seeking to profit from the technology. Horowitz says “misguided regulatory policy” is the “primary thing” that can undermine America’s future and claims “we risk harming far more people than we save with our ‘safety’ measures.”

At a private dinner party in Andreesen’s Silicon Valley mansion, American Prospect reporter Rick Perlstein characterized his billionaire host as joking, “I’m glad there’s OxyContin and video games to keep those people quiet,” referring to citizens of rural America.

Other Crypto Businesses

Other crypto businesses contributing large sums to Fairshake and its affiliates include Jump Crypto, which contributed $5 million; Circle Financial, which contributed $1 million; and Kraken, which contributed $1 million.

Jump Crypto is a division of Jump Trading, a business engaged in algorithmic high-frequency trading. Circle Financial is a crypto business behind the digital “stablecoin” USDC, which is designed to maintain a value pegged to the value of actual U.S. dollars, and is currently in the process of trying to become a publicly traded corporation. The SEC fined its former subsidiary $10 million for operating an unregistered digital asset exchange. Kraken (formally Payward Inc. and Payward Ventures) is a cryptocurrency exchange that was fined $30 million for SEC violations and has been charged with making “hundreds of millions of dollars unlawfully facilitating the buying and selling of crypto asset securities.”

Additionally, Phil Potter, formerly an executive with Tether and Bitfinex, a “stablecoin” and cryptocurrency exchange, which together were fined $42.5 million by the CFTC for misleading claims and profiting from illegal transactions, contributed nearly $2 million to the crypto super PACs.

Other Venture Capitalists

Other venture capitalists contributing significant amounts to Fairshake and its affiliates include Cameron and Tyler Winklevoss, twin billionaire executives behind Winklevoss Capital Management, who together gave $5 million; Avichal Garg and Curtis Spencer, Electric Capital executives who together gave $500,000; Tushar Jain and Kyle Samani of Multicoin Capital who together gave $250,000 and Matt Huang, of Paradigm who gave $250,000. Paradigm, co-founded by Huang and Coinbase co-founder Fred Ehrsam, has a substantial Washington, D.C. presence, hiring both Republican and Democratic staffers and aggressively criticizing SEC regulation.

Crypto Targets

The narrow Democratic majority in the Senate and Republican majority in the House mean the crypto sector’s outsized influence in a small number of races has the potential to tip control of Congress toward one party or the other.

Fairshake spokesman Josh Vlasto, a former chief of staff for New York Gov. Andrew Cuomo and a top aide to Sen. Chuck Schumer (D-N.Y.), understands this. “We’ll have the resources to affect races and the makeup of institutions at every level,” Vlasto said. “And we’ll leverage those assets strategically to maximize their impact in order to build a sustainable, bipartisan crypto and blockchain coalition.”

Two statewide Senate races Fairshake PAC intends to target in the general election – Ohio and Montana – are particularly high stakes, as incumbent Democrats in both are defending seats in states that Trump won in 2020. Winning both is seen as essential to Democrats retaining their Senate majority.

So far, Fairshake’s greatest expenditure was $10 million against Rep. Katie Porter in the California primary race between candidates seeking the Senate seat filled for decades by Sen. Dianne Feinstein, who died in office in 2023.

Following Rep. Porter’s loss, the congresswoman criticized the “onslaught of billionaires spending millions to rig this election” and later clarified she was referring specifically to “A few billionaires” who “spent $10 million+ on attack ads against me.”

Fairshake’s Vlasto’s response: “Thank you, Katie Porter, for giving Fairshake credit for your loss.”

While cryptocurrency policy is Fairshake’s the central issue, the advertisements that the super PAC ran against Porter (which can still be viewed on YouTube) do not mention cryptocurrencies, regulation, or technology policy. The group’s backers may be “one issue voters,” as billionaire venture capitalist Ben Horowitz said, but their strategy shows Fairshake is uninterested in being forthright about its political priorities with the voters it seeks to influence. The campaign instead deployed a strategy of carefully worded attacks seeking to paint their target as an untrustworthy politician.

In Alabama, Fairshake affiliate Protect Progress intervened in the Democratic primary for the state’s 2nd district. According to OpenSecrets data, Protect Progress spent $2.4 million backing Shomari Figures, who pledged on his campaign website to “embrace the new landscape around digital assets, like cryptocurrency, to stimulate innovation and technological advancement.” The super PAC also spent nearly $240,000 against Figures’ primary opponent, Anthony Daniels. Figures prevailed in the primary.

In Texas, Protect Progress spent nearly $962,000 backing Julie Johnson in the Democratic primary for the state’s 32nd district. A section marked “Innovation” on the issues page of Johnson’s campaign website reads in part, “Americans can benefit from crypto innovation. We must establish clear rules of the road for the crypto industry to build technology that benefits everyday Americans, while protecting consumers and ensuring equitable outcomes for all.” Johnson won her primary as well.

Out of the six 2024 primary races where the crypto super PACs intervened and which are now over, only one crypto-supported candidate has lost so far, John R. Bradford III (R-N.C.).

Table 3: Completed primary races where crypto super PACs intervened

Data source: OpenSecrets.org

In the months ahead, 11 more candidates backed by Fairshake and its affiliates will compete in their party primaries, including Republican Senate candidates Jim Justice in West Virginia and Jim Banks in Indiana, each of which has received over $3 million in support from Defend American Jobs, the Republican crypto super PAC. Like the ad attacking Rep. Porter, the super PAC’s ad for Jim Justice makes no mention of cryptocurrency.

Table 4: Upcoming primary races where crypto super PACs have intervened

Data source: OpenSecrets.org

Fairshake also has pledged to engage in Senate Democratic primaries in Maryland, which will be held on May 14, and in Michigan, which will be held on August 6.

Rep. Elissa Slotkin, the Democratic Senate candidate in Michigan with the fundraising lead, has introduced legislation to strengthen oversight in Congress over lawmakers’ crypto holdings.

In Maryland, both leading Democratic Senate candidates – Rep. David Trone and Angela Alsobrooks – apparently felt compelled to express their “pro-crypto” views following Fairshake’s pledge to spend in their race. With the exception of a letter that Trone signed with 75 House members and 29 senators urging the Biden administration to crack down on crypto financing of terrorist organizations like Hamas, neither previously posted about crypto on Twitter or expressed much in the way of policy views about cryptocurrencies before Fairshake’s appearance.

The prospect of the crypto corporation and billionaire-backed super PAC spending millions in the general election in the battleground states of Ohio and Montana looms especially large.

In Ohio, incumbent Sen. Sherrod Brown (D) is seeking reelection, and in Montana, incumbent Sen. Jon Tester (D) is seeking reelection. Sen. Brown is Chair of the Senate Banking Committee, and Sen. Tester is a member of the committee. While Fairshake’s Vlasto told the New York Times the super PAC has not decided whether to  support or oppose either candidate, both senators have been outspoken about their cryptocurrency skepticism.

Sen. Brown’s many statements on the issue do not mince words. Before a hearing on crypto after the collapse of FTX, a statement Brown’s office released read in part, “[C]rypto catastrophes have exposed what many of us already knew: digital assets – cryptocurrencies, stablecoins, and investment tokens – are speculative products run by reckless companies that put Americans’ hard-earned money at risk. Not surprising from an industry that was created to skirt the rules.”

Protecting the public from scams and preventing the misuse of cryptocurrencies to facilitate financial crimes are Brown’s top priorities – and prioritizing safety puts Brown at odds with those who claim loose rules are good for innovation (to say nothing of the sector’s profits).

Sen. Tester’s crypto criticism has been even more blunt. “It’s all bullshit,” Tester told Semafor, and later elaborated on NBC’s Meet the Press, “[T]he problem is if we regulate it, and I pointed this out to some of the regulators here a week or two ago, if we regulated it, it may give it the ability of people to think it’s real. I think it’s — truth be known, my personal thought, and I’m not a regulator and I’m not a financial person that does regulation, but I see no reason why this stuff should exist. I really don’t.”

In other words, Tester sees a risk in passing new crypto-specific regulations tailored to the sector’s preferences in ways that could exempt the industry from strong, pre-existing financial safeguards.

“I wouldn’t say that there’s a target on their backs,” the head of US Policy at Coinbase told the New York Times regarding Sens. Brown and Tester. “What I would say is, there is, I think, an opportunity, and there is an important time period between now and the election where there are a lot of policymakers that have to make some decision: Do they want to be for clear rules and consumer protections? Or do they not?”

Tester’s general election opponent will be determined in a June 4 Republican primary, which is reportedly competitive.

Brown’s general election opponent, Bernie Moreno, has been described as a “crypto fan” and “blockchain businessman.” Unlike Fairshake, Moreno has made explicit statements seeking to contrast his crypto views with Brown’s. “A career politician like Sherrod Brown has absolutely no idea how digital currencies work and is the least qualified person possible to regulate the industry,” Moreno said. “Innovation is what built America into the greatest country on earth. Sadly, left-wing extremists like Brown want more government control to restrict the ability of Americans to invest freely in cryptocurrencies.” Moreno, who formerly owned a car dealership business, has launched a business that aims to digitize car-title transactions via blockchain technology.

Separately, Fairshake donors have given over $512,000 to federal candidates, according to OpenSecrets data. These contributions are relatively evenly split between Democratic and Republican candidates, including about more than $80,000 contributed toward candidates in the Republican presidential primaries who ultimately were defeated by former President Trump.

Table 5: Candidates whose official campaigns have received $10,000 or more from crypto super PAC donors.

Data source: OpenSecrets.org

Additionally, some in the crypto sector are backing what is seen as a long-shot campaign by crypto fan and Republican John Deaton against Massachusetts Sen. Elizabeth Warren (D). Deaton, a personal injury lawyer by trade, is seen as a hero among crypto enthusiasts for his role defending holders of Ripple’s cryptocurrency against the SEC’s accusations of securities violations, leading the judge in the case to rule the digital assets should not be considered securities. Top contributors to Deaton’s campaign include Fairshake backers such as Ripple Labs executives and Cameron and Tyler Winklevoss, and Anthony Scaramucci, who became a crypto booster following his brief stint as the communications director for the Trump White House.

Conclusion

The cryptocurrency sector is the latest in a long line of corporate interests seeking to distort our democracy by converting their financial power into political power.

While crypto super PACs are required by law to disclose their donors, they are not required to disclose in their negative campaign ads or any other political messaging the true intentions behind their efforts. Fairshake has already run ads that do not mention cryptocurrencies at all. Therefore, the crypto super PACs should be expected to continue the sleight-of-hand tactic of pushing messages fine-tuned toward their intended outcome – defeating or electing candidates who will prioritize the sector’s interests – while distracting voters from their true purpose.

Corporate special interests cynically manipulating the electorate – in order to cynically manipulate the makeup of our federal legislature – is deeply contrary to America’s democratic values. Elected officials should prioritize the interests of the public – their constituents – not businesses and billionaires whose fortunes empower them to abuse our electoral system, perverting the process toward their personal, private gains.

By Tyson Slocum

Public Citizen and Liveable Arlington Comments Regarding the National Academy of Sciences Review of the Texas Commission on Environmental Quality’s Proposed Ethylene Oxide Risk Factor and Analysis

Today in Federal Energy Regulatory Commission docket EC24-69 regarding the proposed private equity merger between Energy Capital Partners and Bridgepoint, we filed a joint protest with Private Equity Stakeholder Project regarding Blue Owl Capital’s ownership of seven different private equity firms that raise competition concerns. On April 11, two private equity firms, Energy Capital Partners and Bridgepoint, filed a second application under Section 203 after the Commission rejected the first application, with the Commission concluding that it had concerns about “potential affiliation between Blue Owl and Bridgepoint and that Applicants did not provide information as to the holdings of Blue Owl for the purposes of the Commission’s competition analysis.”^[1] The April 11 application must be deemed deficient, as the applicants omit Blue Owl holdings necessary for the Commission’s competition analysis.

We previously reported to the Commission that Blue Owl owns nearly 20% of Energy Capital Partners and 15% of Bridgepoint,^[1] and owns more than 20% of I Squared Capital and a significant stake in Stonepeak, private equity firms with Commission- jurisdictional holdings.^[2] While these Blue Owl holdings are disclosed in the April 11 joint application, it appears additional Blue Owl ownership of Commission-jurisdictional assets has been omitted:

• The Wall Street Journal reported^[3] that Blue Owl’s predecessor Dyal Capital Partners acquired around 20% of EnCap, which is affiliated with entities granted market-based rate authority.^[4]
• Forbes reported^[5] that Blue Owl’s predecessor Dyal Capital acquired 15% of Platinum Equity, a private equity firm affiliated with entities granted market-based rate authority.^[6]

• Blue Owl owns an unknown percentage of Starwood Capital, which in turn owns a 25-50% stake^[7] in Lotus Infrastructure, which is affiliated with many entities that have been granted market-based rate authority.^[8]

It is a material omission of the joint application to not include Blue Owl’s significant financial stakes in EnCap, Platinum Equity and Lotus Infrastructure. This is a case of first impression for the Commission, where intervenors have introduced evidence that an investor (Blue Owl Capital) with potential affiliation in a Section 203 application owns significant capital across seven different private equity firms that in turn control Commission-jurisdictional assets. The significant concentration of financial ownership across such a vast array of private capital structures threatens competition in Commission-jurisdictional power markets if Blue Owl is not deemed an affiliate. As a result, the Commission’s original concerns about the potential affiliation between Blue Owl and the applicants, combined with applicants’ failure to fully disclose Blue Owl’s holdings, render the Commission unable to assess the application’s potential harm on competition.

Access the .pdf filing here: Blue Owl

^[1] www.citizen.org/wp-content/uploads/ECPBridgepoint.pdf

^[2] See Public Citizen Comments, https://elibrary.ferc.gov/eLibrary/filelist?accession_number=20240318-5158

^[3] Juliet Chung, Neuberger Berman Unit Buys Stake in Energy-Focused Private-Equity Firm, December 23, 2015, www.wsj.com/articles/neuberger-berman-unit-buysstake-in-energy-focused-private-equity-firm-1450898490

^[4] See, for example, FERC Docket No. ER22-1103.

^[5] Nathan Vardi, How Clever New Deals and an Unknown Tax Dodge are Creating Buyout Billionaires by the Dozen, October 22, 2019. www.forbes.com/sites/nathanvardi/2019/10/22/how-clever-deals-and-an-unknown-tax-dodge-are-creating-buyout-billionaires-by-the-dozen/

^[6] See, for example, FERC Docket No. ER18-1106.

^[7] Lotus Infrastructure SEC Form ADV, March 28, 2024. https://reports.adviserinfo.sec.gov/reports/ADV/324015/PDF/324015.pdf

^[8] See FERC Docket Nos. ER11-2335-020, ER10-2615-016, ER11-4634-012, ER15-748-009, ER15-1456-012, ER15-1457-012, ER19-464-005, ER19-967-005, ER19-968-006, ER20-464-003, https://elibrary.ferc.gov/eLibrary/filedownload?fileid=A4047524-5177-C611-9A4C-8F158F500001

^[1] March 1, 2024 Order Denying Application for Disposition of Jurisdictional Facilities, Docket No. EC24-2, at ¶ 26, https://elibrary.ferc.gov/eLibrary/filedownload?fileid=85AE049D-B2FF-C808-8A22-8DFC50E00000

By Richard Anthony, Emerging Technologies Policy Advocate

Public Citizen and Liveable Arlington Comments Regarding the National Academy of Sciences Review of the Texas Commission on Environmental Quality’s Proposed Ethylene Oxide Risk Factor and Analysis

Public Citizen is deeply concerned about the rapid expansion of facial recognition technology by the United States Transportation Security Administration (TSA) at airports across the United States. This program would allow flyers to utilize facial recognition technology at airport security checkpoints to confirm their identity before flying, instead of providing paper identification.  

There are several issues with TSA’s plans for the expansion of its facial recognition program.

1. It sets a dangerous precedent for ubiquitous government surveillance of citizens. Once citizens accept routine facial recognition scans at airports, it becomes easier for the government to extend such surveillance to various public spaces, thereby eroding individual privacy rights.
2. There are serious doubts about the efficacy of facial recognition in enhancing security because there is little to no evidence demonstrating that facial recognition has made or will make air travel safer. 
3. The potential for false identifications, such as with black women being misidentified about 35% of the time, raises doubts about the civil rights implications of this technology. 
4. Although TSA says it destroys the facial recognition data it collects, there remains a possibility of mistakes and data breaches.
5. Against this, proponents claim only that facial recognition speeds up airport security lanes. It’s not clear that machines are faster than humans in checking IDs, but it’s all beside the point, because security delays are due to carry-on baggage screening and body scans, not ID checks.

In light of these and other issues, Public Citizen strongly supports the bipartisan efforts of Senators Merkley, Kennedy, Markey, Marshall, Cramer, Wyden, Daines, Warren, Braun, Sanders, Lummis, Van Hollen, Welch, and Butler to freeze the expansion of TSA’s facial recognition program to additional airports until Congress can thoroughly examine the implications and enact necessary safeguards to protect our civil rights and liberties.

The FAA reauthorization package presents an opportunity for Congress to implement oversight and rein in the unchecked expansion of facial recognition surveillance. It is imperative for Congress to prioritize the protection of privacy and civil liberties by enacting measures to restrict TSA’s facial recognition program until important civil rights questions are answered by the program’s administrators.

Public Citizen and Liveable Arlington Comments Regarding the National Academy of Sciences Review of the Texas Commission on Environmental Quality’s Proposed Ethylene Oxide Risk Factor and Analysis

Why are Americans paying more than ever before on our energy bills — even though domestic energy production is surging? One crucial reason is that big oil and gas companies are sending more American energy overseas than ever before. In particular, the rapid growth of natural gas exports has been a leading driver of energy inflation and price volatility in the United States.

Since 2016, when the United States first started exporting liquefied natural gas, domestic gas production has increased 45 percent. Despite the surge in domestic production, American households and businesses have seen their gas bills go up, not down. The United States has been exporting more and more natural gas, and is now the leading LNG exporter in the world.

By tying America’s natural gas prices to overseas markets, LNG exports have made U.S. natural gas consumers vulnerable to global market volatility and price shocks similar to fluctuating gasoline prices at the pump. As a result, oil and gas companies have reaped record-breaking windfall profits at the expense of U.S. households and businesses.

The results were particularly damaging in 2022, when U.S. natural gas price spikes reflected global price shocks after Russia invaded Ukraine. All told, American consumers spent $142 billion more on natural gas in 2022 ($269.5 billion) than they did in 2016 ($127.6 billion), according to federal data.

Across the country,  the price households paid for natural gas has increased 52% since 2016, according to the U.S. Energy Information Administration. Households in Massachusetts, Nevada, New Jersey, Nebraska, Colorado, and Wyoming have been hit especially hard,  paying at least 60% more in residential gas prices.

The price of natural gas was up 31% for industrial customers nationwide over the same time frame. Businesses in Nevada (94%), New York (84%), Utah (81%), Massachusetts (81%) and Colorado (73%) saw the biggest increases.

Prices for U.S. consumers were relatively stable when gas export volumes were relatively low, then trended upward starting in 2021 as the United States continued to add export capacity (Figure 1).  After price spikes in 2022 driven by global price shocks, industrial prices slid back somewhat last year. Residential prices have remained high (Figure 2 and Figure 3).

These price spikes have reverberated around the economy. Homes and businesses paid more for electricity bills because many power companies rely on gas. The price of natural gas used by electric utilities to generate power surged by 150% between 2016 and 2022 only to fall back in 2023. Even so, it was still up 17% from 2016 levels.  American families and businesses spent nearly $105 billion more on electricity in 2023 than in 2016.

Costs also spiked for the fertilizer industry, boosting costs for farmers and lifting prices in the grocery aisle. Fertilizer prices in North America, which are tied closely to natural gas prices, spiked across the U.S. due to global price volatility and LNG exports, with fertilizer prices soaring by more than 400%.

LNG exports have contributed to record energy debt for low-income households. One out of six households are behind on their home energy bills, and the amount they owe to their utilities has reached record levels.

Recent events underscore the link between LNG exports and domestic prices. In June 2022, 17% of U.S. LNG export capacity was knocked offline by a massive explosion and fire at Freeport LNG in Texas.  U.S. natural gas prices quickly fell 30 percent – demonstrating that high export volumes had made natural gas more expensive, and that reducing exports eased prices.

Oil and gas companies are proposing a massive expansion of LNG exports. The industry has already approved enough LNG projects to nearly double the current export capacity by 2028, and they hope to add even more.

Oil and gas companies stand to earn higher profits from selling gas to foreign buyers who typically pay much higher prices than in the U.S.  LNG exports also boost oil industry profits by lifting the prices paid by domestic consumers. As the Federal Energy Regulatory Commission has warned:  continued growth in exports, including from LNG terminals “will place additional pressure on natural gas prices.” According to a survey by the Dallas Federal Reserve of 134 oil and gas firms, 84% of oil & gas executives “expect the age of inexpensive U.S. natural gas to come to an end” as liquefied natural gas exports grow.

Additional approvals of U.S. LNG facilities will lead to higher energy bills for consumers in the long term and create greater energy price volatility. The latest official energy forecast from the U.S. government predicts that U.S. natural gas prices (Henry Hub) will be 33 percent higher if LNG growth continues unchecked, compared to a more constrained scenario. In Senate testimony, Deputy Energy Secretary David Turk warned about linking U.S. natural gas prices to global competition because natural gas prices in Europe and Asia have been five to six times higher than U.S. prices, and because “natural gas prices have been relatively stable in the U.S. compared to European and Asian markets, where benchmark prices for natural gas have been about 50-100% more volatile.”

More than 80 years ago, Congress wisely found that transporting and selling natural gas for public distribution is “affected with a public interest” and subjected interstate and foreign transportation of gas to federal regulation. In January, 2024, the Department of Energy announced that it will reassess the impacts of LNG on public interest. In his written Senate testimony, Deputy Secretary Turk wrote, “our updated economic analysis aims to ensure that we are accurately capturing the full economic impacts of LNG exports to all American consumers and manufacturers,” DOE’s analytical update is an important opportunity to scrutinize the potential impacts of expanded LNG exports on U.S. households, businesses, and farms.

Change in Gas Residential and Industrial Gas Prices 2016-2023

* Indicates 2016-2022 data, 2023 data is not yet available

Comment to the Federal Election Commission

By Craig Holman, Ph.D.

Public Citizen and Liveable Arlington Comments Regarding the National Academy of Sciences Review of the Texas Commission on Environmental Quality’s Proposed Ethylene Oxide Risk Factor and Analysis

Nov. 16, 2018

Public Citizen urges the Federal Election Commission (FEC) to proceed with this Petition for Rulemaking and apply the prohibition against personal use of campaign funds by a candidate or officeholder to the leadership PAC of a candidate or officeholder.

Whatever perceived distinctions between the two types of accounts that may have been used in earlier times to justify not applying the personal use prohibition to leadership PACs have since been shattered in a recent study by the Campaign Legal Center and Issue One, entitled “All expenses paid: How leadership PACs became politicians’ preferred ticket to luxury living.”[1] This research documents several disturbing trends about the realities of the financing and behavior of today’s leadership PACs. Among these findings are:

• Leadership PACs have proliferated in number and in fundraising, with 88 percent of House members and 98 percent of Senators having their own leadership PAC.
• Only a minority of leadership PAC spending (45 percent) is done for campaign contributions to other candidates, contravening what has always been the express purpose of leadership PACs since their existence in 1978.
• An exorbitant amount of expenditures by leadership PACs is for travel, wining and dining, country club fees, sporting tickets and clothing purchases for the candidate or officeholder, expenditures that are defined by campaign finance regulations as personal use and prohibited for campaign funds.

Previously, the Federal Election Commission has been reluctant to impose the prohibition against personal use to leadership PAC funds, largely because it was not clear how leadership PACs operated. Despite their immense growth in number and financing over the past few decades, leadership PACs have received very limited scholarly attention.[2] The notion that leadership PACs more or less served their original purpose – to provide members of Congress a means to support candidacies of their colleagues and thus boost their leadership roles – prevailed as recently as 2015, when the Commission declined to change course on the issue in an advisory opinion.[3]

The evidence that leadership PACs have not been living up to expectations began to trickle in during a 60 Minutes exposé in October 2013, documenting some luxury expenditures on vacation destinations. But the new study by the Campaign Legal Center and Issue One is the most condemnatory to date, and provides the empirical grounds for the Commission to reverse its previous rulings on personal use of leadership PAC funds. For many, if not most, candidates and officeholders, leadership PACs have become slush funds for wealthy special interests to pay for travel, entertainment, club memberships and even clothes for lawmakers – all of which pose very real opportunities for undue influence peddling and even corruption.

The data suggests that leadership PACs have changed their behavior over time. In case after case, leadership PACs have shown a decreasing interest in making campaign contributions over time. For example, Rep. Ann Wagner’s (R-MO) Ann PAC spent 60.4 percent of its funds on campaign contributions in the 2014 election cycle, but only 36.2 percent in the 2018 cycle. Rep. Bob Goodlatte’s Good Fund spent 55 percent of its funds on campaign contributions in the 2014 cycle, but only 39.8 percent in the 2018 cycle. Sen. Bill Nelson’s (D-FL) Moving America Forward PAC saw a drop in contributions from 58.5 percent down to 43.8 percent over the same time period. Altogether over the last five years spending on campaign contributions by all leadership PACs still only amounted to 45 percent of total spending.[4]

The absence of clear guidance by the Commission appears to have given the green light for growing abuses of how leadership PACs operate.

While spending on travel and entertainment by leadership PACs is sometimes defended on the grounds that the spending is for fundraising purposes, that defense does not seem to bear out in most instances. First of all, many of the leadership PACs spending the most on travel and entertainment simply are not making substantial campaign contributions. Sen. Saxby Chambliss’ (R-GA) spends heavily on membership and entertainment at golf clubs, yet still spends only a small fraction of its total budget on campaign contributions. This does not constitute efficient fundraising for contribution purposes. It appears to be much more fundraising for in order to spend even more on golf club memberships and entertainment.

Other travel and entertainment expenses by leadership PACs seem to be little more than travel junkets for the officeholder, family and friends. The average DisneyWorld vacation runs a family about $6,000. But Sen. Roy Blunt’s (R-MO) Rely On Your Beliefs Fund has spent more than $117,000 on travel and lodging at DisneyWorld’s Yacht Club Resort, awarding himself a world-class vacation at no personal expense.[5]

Still other leadership expenses veer straight into the territory of prohibited personal use expenses for campaign funds. Former Rep. Mary Bono Mack’s (R-Cal.) Mary’s PAC spent $10,000 in 2013 for membership dues to a private cigar club, while spending only $3,000 on campaign contributions that same year. Sen. Rand Paul’s (R-KY) Reinventing a New Direction spent about $800 on clothing for the senator, which is also expressly a prohibited personal use for campaign funds.[6]

It is worth asking whether leadership PACs should even exist. They are not recognized in the Federal Election Campaign Act (FECA) and play a limited role in the campaign finance system. Yet leadership PACs provide wealthy donors who max out to a candidate’s campaign a second means to send more money to the candidate or officeholder, in even larger amounts than permitted for a campaign account. The largest donors to leadership PACs tend to be individuals and corporate PACs with business pending before Congress.[7] And it is now known that leadership PACs are not serving their original purpose and are frequently used for the personal benefit of candidates and officeholders.

But this Petition for Rulemaking is narrower in scope, asking that the FEC take the simple step of prohibiting candidates and officeholders from using leadership PAC funds for personal use. This is the very least that the Commission should do. It is now evident that many candidates and officeholders are using leadership PACs as slush funds for travel, lodging, wining and dining, entertainment, club memberships and even purchasing apparel. The personal use of leadership PAC funds provides a golden opportunity for wealthy donors with business pending before Congress to foot the bill for such lavish personal expenses, often in the hope of endearing themselves to the lawmaker. If these second fundraising committees tied to lawmakers are allowed to continue to exist, the Commission should take appropriate measures to help ensure leadership PACs do not become an avenue for donors to seek favoritism and potential corruption.

Public Citizen strongly encourages the Federal Election Commission to proceed with the Petition for Rulemaking and apply the ban on personal use to leadership PAC funds.

Sincerely,

[1] Campaign Legal Center and Issue One, “All expenses paid: How leadership PACs became politicians’ preferred ticket to luxury living,” available at: https://campaignlegal.org/document/all-expenses-paid-how-leadership-pacs-became-politicians-preferred-ticket-luxury-living

[2] Marian Currinder, “Leadership PAC contribution strategies and House member ambitions,” Legislative Studies Quarterly (Nov. 2003).

[3] Advisory Opinion 2015-06.

[4] Campaign Legal Center and Issue One, “All expenses paid: How leadership PACs became politicians’ preferred ticket to luxury living,” available at: https://campaignlegal.org/document/all-expenses-paid-how-leadership-pacs-became-politicians-preferred-ticket-luxury-living

[5] Id.

[6] 52 USC 30114(b)(2)(A)-(I).

[7] Issue One, “Top 15 PAC donors to leadership PACs of current members of Congress,” (Oct. 24, 2018), available at: https://www.issueone.org/wp-content/uploads/2018/10/Top-PAC-Donors.pdf

Melinda St. Louis

Public Citizen and Liveable Arlington Comments Regarding the National Academy of Sciences Review of the Texas Commission on Environmental Quality’s Proposed Ethylene Oxide Risk Factor and Analysis

RE: Statement for the Record: The President’s 2024 Trade Policy Agenda, April 16 & 17, 2024

Dear Chairman Wyden, Ranking Member Crapo, Chairman Smith, and Ranking Member Neal:

Public Citizen, a nonprofit consumer advocacy organization with more than 500,000 members, welcomes the opportunity to submit a statement for the record in regard to the 2024 United States Trade Agenda. A mission of Public Citizen is to ensure that in this era of globalization, a majority can enjoy economic security; a clean environment; safe food, medicines and products; access to quality affordable services; and the exercise of democratic decision-making about the matters that affect their lives.

At the core of the discussions of both hearings was a rehashing of a long-settled debate over the direction of U.S. trade policy. Since the early 1990s, corporate-rigged free trade agreements (FTAs) have undermined domestic safeguards and perpetuated a global race to the bottom for the cheapest labor and lowest environmental standards, contributing to the hollowing out of U.S. manufacturing and increasing income inequality. Americans who have lived with the consequences of the North American Free Trade Agreement (NAFTA) and its clones have thus demanded that their representatives in government pursue a new path. As a result, a new FTA hasn’t successfully passed through Congress for over a decade, since 2012.

Biden administration officials have repeatedly stated that the President’s vision for trade will not repeat the past mistakes of prioritizing efficiency above all else, but will serve workers, consumers, and the environment. It is the right but difficult task to create a new model of trade policy that excludes problematic investment, intellectual property, market access, and procurement provisions in order to put people and the planet first.

The neoliberal model had decades to run its course. It is unreasonable to expect a wholly new model to be completed within only three years — and still, important improvements have already materialized.

Worker-Centered Trade

U.S. trade agreements since the George W. Bush administration have included labor and environmental standards in their core texts as part of the “May 10” standard. The ostensible goal of these terms was to raise standards in trade partner countries. But these terms have proven ineffective. The absence of effective labor and environmental standards created race-to-the- bottom incentives for U.S. firms to offshore production and slammed U.S. firms and workers with a flood of imports subsidized by environmental and social dumping.

The U.S.-Mexico-Canada Agreement (USMCA) however, thanks to the determination of congressional Democrats and labor unions late in the negotiations, included innovative labor provisions. The office of the U.S. Trade Representative under Katherine Tai has used the USMCA’s Rapid Response Mechanism (RRM) to ensure that companies cannot secure unfair advantages by shipping jobs out of the U.S. to exploit workers in Mexico. Public Citizen recognizes the efforts of Ambassador Tai to enforce these terms, as well as her role in the crafting of those provisions in Congress. As of April 2024, these labor provisions have directly benefited nearly 30,000 workers in Mexico by providing millions of dollars in backpay and benefits to workers, ensured wrongly terminated workers were reinstated, and helped secure free and fair elections in which workers selected independent unions to represent them. The labor provisions and RRM enforcement process in the USMCA are the new minimum standard that must be met for trade agreements going forward.

One of the top priorities in President Biden’s trade policy agenda is working toward an Indo-Pacific Economic Framework (IPEF). It appears this administration recognizes that it would be disastrous in terms of policy and politics to return to the failed “free trade agreement” model that made the Trans-Pacific Partnership (TPP) so widely unpopular. From the start of negotiations, USTR has been clear that IPEF is not an FTA, and that it excludes all of the most controversial aspects of the TPP.

The Biden administration did the right thing by not concluding the IPEF Trade Pillar last fall, as the standards in the labor chapter were lacking, and there is no ‘worker-centered trade’ without enforceable standards. It’s better to miss an arbitrary deadline than to ink a deal that fails to live up to the administration’s promise of ‘worker-centered’ trade, especially when rules governing 40% of the global economy are on the line. This move by the Biden administration and USTR broadcasts the message to the world that if a trade deal doesn’t meet standards to protect workers and the environment, it’s not worth concluding. We applaud the righteous decision to slow negotiations, prioritizing workers over scoring political points.

Similarly, Public Citizen calls on members of Congress and the administration to work together to ensure that strong and enforceable labor and environmental standards are at the center of ongoing and future trade talks, including Critical Minerals Agreement (CMA) negotiations. The U.S.-Japan CMA must not be the model, as the lip service around labor rights and environmental protections are unenforceable. The only binding language in the text concerns a vague commitment to share information on labor protections. All labor standards must be subject to swift and certain enforcement that include facility-specific enforcement mechanisms and meaningful penalties for violations. Public Citizen is encouraged that the U.S. Trade Representative appears to be responsive to the critiques from labor and Congress regarding the lack of transparency in negotiations and enforceable standards in the U.S.-Japan CMA, as negotiations with other partners have reportedly slowed. These new and foundational texts will play a major determining role in the green transition, and we look forward to improved processes with meaningful stakeholder engagement in future negotiations.

Reflecting on the lessons learned from the IPEF process, we call on the administration to center labor rights and environmental protections in negotiations for a U.S.-Kenya Strategic Trade and Investment Partnership (STIP). And we note that all of the negotiations over the past three years would have benefited from greater transparency and civil society participation.

Redefining Digital Trade Rules

Several representatives at the hearings disingenuously criticized USTR’s rethink of digital trade rules as if it shuts down all online sales and the internet itself. In reality, all that USTR did was remove U.S. support for four extreme “digital trade” provisions that the previous administration proposed at e-commerce talks on the sidelines of the World Trade Organization (WTO). These rules — on data flows, data localization, source code/algorithm non-disclosure, and anti-competitive nondiscrimination — came straight from the tech industry, which has picked up the pharma industry playbook to insert rules in trade agreements that would restrict governments’ ability to regulate them.

We commend Ambassador Tai for leading the update of digital trade rules to provide the policy space necessary for our nation to enact urgently needed policies that Congress and regulators are currently crafting: on Big Tech competition, gig worker rights, online consumer privacy and data security protections, and AI accountability measures. We are eager to work with the Biden-Harris administration to create new digital trade rules that promote worker rights, consumer privacy, civil rights, and data security goals.

The 2024 National Trade Estimate (NTE) Report on Foreign Trade Barriers shows continued progress on this front. This year’s NTE is not simply a hit list of other countries’ laws and regulations that large U.S. corporations dislike. Now, for the first time in memory, USTR is recognizing that it is not in the U.S. national interest to attack and threaten other nations’ consumer and worker protection measures. This is particularly apparent in the context of ‘digital trade’ barriers, many of which are actually privacy, anti-discrimination, and anti-monopoly safeguards.  As governments around the world, including our own, work to regulate the rapidly changing tech space, it does not make sense to list these new regulations as ‘barriers to trade.’ Still, there are 22 jurisdictions with sections on ‘digital barriers to trade’ (compared to 28 in Trump’s 2020 NTE) — revealing the lie behind Big Tech’s claim that USTR has dropped their interests entirely.

There is still more work to be done to ensure that the NTE does not inappropriately target other countries’ public health and development laws. This would be consistent with the Biden-Harris administration’s stated “worker-centered” approach to trade, that does not simply privilege large corporate interests over all else, but recognizes that trade policy should complement, rather than undermine, public interest goals.

Checking Corporations’ Power to Challenge Laws

Senator Sheldon Whitehouse and Ambassador Tai acknowledged at the Senate Finance hearing that for decades the United States was the driving force expanding the Investor-State Dispute Settlement (ISDS) mechanism. Yet at the end of 2019, the U.S. Congress, in a welcome act of bipartisanship, agreed to eliminate ISDS provisions with Canada and significantly reduce them with Mexico as part of the USMCA. This shift in U.S. policy sent a signal worldwide to the many countries also eager to exit the ISDS regime, especially after nations that terminated ISDS agreements saw no fall-off in foreign investment.

President Biden and USTR have thus far followed through on the promise to exclude ISDS provisions in new trade negotiations. The next step is to dismantle ISDS in the dozens of active U.S. agreements in which it still exists. Public Citizen is encouraged that, in response to Sen. Whitehouse’s impassioned plea to remove the mechanism in existing agreements, Ambassador Tai noted that USTR is actively looking into options to address ISDS in existing agreements. We look forward to working with the administration to make concrete progress on this as soon as possible, and would like to note for the record the growing support for this endeavor:

• 300+ Professors of Law and Economics Urge Elimination of ISDS in U.S. Trade and Investment Agreements
• 47 Representatives Call for Biden Administration to Reform CAFTA-DR, Remove ISDS
• Warren, Whitehouse, Cohen, Lawmakers Urge Biden Administration to Eliminate Investor-State Dispute Settlement from Existing U.S. Trade and Investment Agreements
• 200+ Labor, Environmental, Consumer, Human Rights, Faith and Community Organizations Urge U.S. to Exit ISDS
• UN Report: Paying Polluters: the Catastrophic Consequences of Investor-State Dispute Settlement for Climate and Environment Action and Human Rights
• Georgetown Law, Columbia & Rethink Trade White Paper: Turning the Tide: How to Harness the Americas Partnership for Economic Prosperity to Deliver an ISDS-Free Americas
• Center for International Environmental Law: Overcoming International Investment Agreements as a Barrier to Climate Action: A Toolkit to Safeguard Fossil Fuel Measures from Investment Treaty Claims

Access to Medicines

Too often, the U.S. government has sided with Big Pharma at the expense of access to medicines and vaccines in developing countries, contributing to suffering and preventable death during the early global AIDS crisis and accepting access delays at the height of the Covid emergency. In years past, the U.S. government sought to deter even consideration of pro-health patent policies in many other countries, under potential penalty of trade sanctions, and provided cover for far more aggressive opposition tactics by powerful prescription drug corporations.

But as with investment rules, USTR has changed course and excluded intellectual property (IP) rules from ongoing trade negotiations. Ambassador Tai has frequently spoken about the need to balance IP protections with access to affordable medicines and technologies.

Public Citizen applauds USTR for realizing that this balance has leaned heavily in favor of pharmaceutical company profits for far too long. For example, in the recent Special 301 Report, USTR states its “policy of declining to call out countries for exercising [WTO Trade-Related Aspects of Intellectual Property Rights] TRIPS flexibilities, including with respect to compulsory licenses, in a manner consistent with TRIPS obligations.”

This statement gives reason for hope. Countries struggling under the burden of high-priced medicine monopolies should know that the United States will not interfere with their efforts to make medicine affordable for their people, consonant with WTO rules.

However this progress is constrained by the still-onerous and pharma-authored rules of the WTO. And U.S. negotiators of a WHO pandemic accord have yet to accept forward-looking proposals from developing countries on medical patents. And the Special 301 report still supports harmful rules favored by drug corporations, including challenges to practices safeguarding India’s provision of generics to the world. This must change.

In 2021, the initial announcement from the Biden administration of support for a temporary waiver of IP barriers to facilitate more production of COVID-19 vaccines was a welcome change from the previous administration. The final outcome of the negotiations was ultimately inadequate to meet the scope of the tragedy facing the world, but shining a light on the deadly prioritization of intellectual property over public health in our global trade systems was an important first step.

Helpfully, the Biden-Harris administration acknowledged countries’ health interest in compulsory licensing to support production and access, and stepped down trade pressures against their use. The October 2023 USITC report found compulsory licenses are “associated with increased generics and lower prices, and increased access to pharmaceuticals.” The report cites evidence that patent protection “has little to no positive effect for innovation in developing countries and negative effects for access and affordability.

The world will never forget the critical time the WTO wasted or the untold lives lost because rich countries refused to share the doses and knowledge that scientists around the world and public funds helped produce. We sincerely urge the U.S. Trade Representative to learn from these missteps and act quickly and effectively in the next crisis, and look forward to the U.S. continuing the work to shift the balance towards access.

Health Letter, May 2024

Public Citizen and Liveable Arlington Comments Regarding the National Academy of Sciences Review of the Texas Commission on Environmental Quality’s Proposed Ethylene Oxide Risk Factor and Analysis

Note: Never stop taking a drug that appears on the product recall list without first talking to your doctor or pharmacist. Most recalls are limited to a single manufacturer and may not be related to the version of a particular drug you are taking. If a recall does relate to the version of the drug you are taking, you should not stop taking the drug until you discuss an alternative treatment with your doctor or pharmacist.

For Class 1 recalls, there is a potential for serious injury or death.

For Class 2 recalls, there is a potential for serious adverse events but a lower chance of the drug causing serious injury or death than in a Class 1 recall.

CLASS I

CLASS II

diltiazem hydrochloride extended-release capsules, 120 mg, twice-a-day dosage, 100 capsules per bottle. Manufactured for: Glenmark Pharmaceuticals Inc. Lot #: 17230304, exp. date: 12/31/2024.

divalproex sodium extended-release tablets, 250 mg, 100 tablets. Manufactured by: Amneal Pharmaceuticals Pvt. Ltd. Lot #: AR210704, exp. date: 04/2024; Lot #: AR210706, exp. date: 04/2024; Lot #: AR210707, exp. date: 04/2024; Lot #: AR210708, exp. date: 04/2024; Lot #: AR210709, exp. date: 04/2024.

febuxostat tablets, 40 or 80 mg, 30 tablets per bottle. Manufactured for: Northstar Rx LLC. Manufactured by: Sun Pharmaceutical Industries Limited. Lot #: DNE0865A or DNE0866A, exp. date: 06/30/2025; Lot #: DNE0894A, exp. date: 07/31/2025.

isotretinoin capsules, 40 mg, 30-count 3×10 blister packs per carton. Manufactured for: Teva Pharmaceuticals USA, Inc. Lot #: 100044259, exp. date: 06/30/2025.

lansoprazole delayed-release capsules, 15 mg, 14 capsules per bottle. Manufactured by: Natco Pharma Limited. Lot #: 411988, exp. date: 05/31/2025.

rifampin capsules, 300 mg, 30-count bottles. Manufactured for: Lupin Pharmaceuticals, Inc. Manufactured by: Lupin Limited. Lot #: A201064, exp. date: March 2024.

telmisartan tablets, 40 mg, 30 tablets per bottle. Manufactured by: Micro Labs Limited. Lot #: SFBG024 or SFBG025, exp. date: 05/31/2024.

Tri-Lo-Sprintec (norgestimate and ethinyl estradiol) tablets, triphasic regimen, packaged in carton containing 3 blister cards, 28 tablets each. Teva Pharmaceuticals USA, INC. Lot #: 100039678, exp date: 04/31/2024; Lot #: 100038111 or 100042277, exp. date: 07/31/2024.

For more information about the drug recalls listed above, please visit http://www.accessdata.fda.gov/scripts/ires/index.cfm.

CONSUMER PRODUCTS

For a list of recent recalls of consumer products, please visit the Consumer Product Safety Commission website at http://www.cpsc.gov/en/Recalls/.