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NEWS RELEASE
Aug 27, 2003


CONTACT: Jerry Flanagan (415) 497-1710 or Jamie Court (310) 874-9989

Consumer Advocate Says Bush Cabinet Officials' Privacy Is For Sale, Bush Should Not Wipe Out CA State Privacy Protections

WASHINGTON D.C. -- A California consumer advocate will expose how President Bush was reneging on campaign pledges by quietly backing federal legislation to override new state privacy laws. California enacted such a privacy law, to be signed by Governor Gray Davis today, that allows consumers to stop the broad trade of private financial information between corporations and their affiliates.

"President Bush will have to choose between the commercial freedoms of corporations and the privacy rights of Americans," said Jamie Court, author of Corporateering: How Corporate Power Steals Yours Personal Freedoms And What You Can Do About It (Tarcher/Putnam). "Banks and insurers should not be able to go to Washington as an end-run around the most protective state privacy laws. The President should realize his campaign pledges to protect Americans' privacy are needed more than ever when I can buy the social security number of CIA director George Tenet on the Internet for as little as $26."

Court, the executive director of the Santa Monica-based Foundation for Taxpayer and Consumer Rights (FTCR), pointed to the Administration's support this summer for ongoing federal preemption of new state privacy laws under the Fair Credit Reporting Act, a clause due to expire January 1st.

That policy, promoted by banks and insurers, is embodied in HR 2622 -- which prevents states from having the authority to stop banks and insurers from trafficking in individuals' private information with their many affiliates. The hardly-noticed legislation passed out of the House Financial Services Committee in late July and will be on a fast track after Labor Day.

California's new privacy law allows consumers to prevent the trade in their private financial information among corporate affiliates not in the same line of business, such as between banks and insurers. That protection would be superceded by HR 2622. Court said limiting affiliates' access to private information is critical to protecting Americans' privacy because large corporations today broadly affiliate. Citigroup, for example, has 1700 affiliates who, under current federal law, cannot be stopped from trading individuals' private information, even when a consumer explicitly says no.

To demonstrate how almost everyone's private information is at risk without stronger state laws, Court said he purchased the social security numbers and home addresses of key cabinet officials over the Internet for as little as $26 due to the lack of financial privacy. These include the social security numbers of John Ashcroft, CIA Director George Tenet, Labor Secretary Elaine Chao, and FTC Commissioner Timothy Muris. President Bush's information was not for sale, Court said, because he is too famous.

Bush promised in his 2000 campaign to make it a criminal offense to sell a person's social security number without his or her permission, but has yet to deliver. [Associated Press, October 29, 2000, Q&A: Gore and Bush on Education, Trade and Other Issues] Bush also said: "I think there ought to be laws that say a company cannot use my information without my permission. We can live in a private world" [ZDNN Q&A with George W. Bush, ZDNet News, Jun. 21, 2000].

"Bush should live up to his campaign promises to protect Americans' privacy and oppose the efforts by banks and insurers to have the federal government override stronger state laws," said Court. "While Bush has the Secret Service to protect him, the 750,000 American victims of identity theft each year are counting on the President to identify more with their needs than the corporation's."

The reckless exchange of social security numbers and other financial identifiers among America's corporations has dramatically increased Americans' risk of identity theft. Identity theft led all complaints to the Federal Trade Commission in 2000, 2001, and 2002 and doubled in 2002.

"Banks and insurers know that without a federal bailout California's privacy protections will spread across the nation," said Court, who Publisher's Weekly said is "keeping the muckraking tradition alive" with Corporateering. "If President Bush remembers his pledges from 2000, consumers' demands for privacy will soon have new weight across the nation. Financial institutions across the country will have to follow the example they set in the world's fifth largest economy."

FTCR is a non-profit and non-partisan consumer advocacy organization. Visit us on the web at www.cosumerwatchdog.org or read about Corporateering at www.corporateering.org. For a press copy of Corporateering, contact Ken Siman at Putnam -- ksiman@penguinputnam.com or 212-366-2519.

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