You have to be kidding me??!!??
I would flat out tell her that I was not comfortable with her driving without the children secured in the appropriate restraints. And if that failed, I would WITHOUT HESITATION call the police with an "anonymous" complaint.
How has she not been pulled over for this before? I got pulled over for a mandatory carseat inspection last spring, and I had my daughter and one of the daycare kids with me. I was given $400+ of tickets because they felt that both the seat straps and the tether straps were "too loose". I even got one for having my daughter in a booster seat instead of a 5 -point full carseat. (Although I flat-out disagreed with that one as she was 4 yrs old and of the correct age and height!!) I had to go to a carseat safety clinic to get the tickets waived.