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CREATED 2/26/2013


WARNING: This site deals only with the corporate corruption of science, and makes no inference about the motives or activities of individuals involved.
    There are many reasons why individuals become embroiled in corporate corruption activities - from political zealotry to over-enthusiastic activism; from gullibility to greed.
    Please read the OVERVIEW carefully, and make up your own mind.


Smoking-Gun docs.

James Savarese
Robert Tollison
Anna Tollison
Richard Wagner
James C Miller III
economists networks
Carol M Robert
Elizabeth A Masaitis
Com. on Tax & Economic Growth
Social Acceptability Working Party
Harold Hochman
Kenneth V Greene
Fred McChesney
Thomas Borcherding
Delores T Martin
Dennis Dyer
George Minshew
Ctr.Study Pub.Choice
James Buchanan
William Prendergast
Bill Orzechowski

Dominick Armentano Burton A Abrams
Lee Alston
Ryan C Amacher
Gary Anderson
Lee Anderson
William Anderson
Terry Anderson
Scott E Atkinson
Roger Arnold
Richard W Ault
Michael Babcock
Joe A Bell
Bruce L Benson
Jean J Boddewyn
Peter Boettke
Thomas Borcherding
William J Boyes
Charles Breeden
Lawrence Brunner
Henry N Butler
Bill Bryan
Cecil Bohanon
John H Bowman
Dennis L Chinn
Morris Coates
Roger Congleton
Jeffrey R Clark
Michael Crew
Allan Dalton
John David
Michael Davis
Arthur T Denzau
Clifford Dobitz
John Dobra
Randall Eberts
Robert B Ekelund
Roger L Faith
David Fand
Susan Feigenbaum
Clifford Fry
Lowell Gallaway
Celeste Gaspari
David ER Gay
Kenneth V Greene
Kevin B Grier
Brian Goff
Sherman Hanna
Anne Harper-Fender
Kathy Hayes
Dennis Hein
James Heins
Robert Higgs
Richard Higgins
F Steb Hipple
Harold M Hochman
George E Hoffer
John Howe
Randall G Holcombe
William Hunter
Stephen Huxley
John D Jackson
Joseph M Jadlow
Cecil Johnson
Samson Kimenyi
David Klingaman
Michael Kurth
David Laband
Suuner Lacroix
Dwight R Lee
Dennis Logue
James E {Auburn} Long
C. Matt Lindsay
Donald P Lyden
Craig MacPhee
Mike Maloney
Delores Martin
Chuck Mason
Charles Maurice
Fred McChesney
James E McClure
William McEachern
Richard McKenzie
Robert McMahon
Arthur Mead
Paul L Menchik
John F Militello
William C Mitchell
Greg Neihaus
James A Papke
Allen Parkman
Mark Pauly
William Peterson
Harlan Platt
Michael D Pratt
Thomas Pogue
Barry W Poulson
Edward Price
Robert Pulsinelli
Raymond Raab
Roger Riefler
Terry Ridgeway
Mario Rizzo
Morgan Reynolds
Simon Rottenberg
Randy Rucker
Richard Saba
Todd Sandler
David Saurman
Mark Schmitz
Robert Sexton
Gordon O Shuford
William Shughart
Robert J Staaf
Thomas Stimson
Wendell Sweetser
Mark Thornton
Mark Toma
David G Tuerck
Richard Vedder
Bruce Vermeullen
Richard Wagner
J Keith Watson
Burton Weisbrod
Walter E Williams
Thomas L Wyrick
Bruce Yandle
Boon Yoon
Richard O Zerbe




economists and other networks    

A number of different clandestine networks of secretly-paid experts and prominent academics were financed and managed by the Tobacco Institute.

The specialist in this technique of lobbying and special interest advocacy was James Savarese who originally worked for Ogilvy & Mather, then later struck out on his own with James Savarese & Associates. His small company specialised in running these networks and laundering the payments being made to the experts.

Economists Cash-for-comments Network:
The first and largest of the networks was that of the academic economists — selected Professors of Economics from universities all over America.This grew to be a network of between 60 and a hundred economists at various US State-run and private universities.

The Professors were signed up to work behind the scenes for the tobacco industry by Professor Robert D (Bob) Tollison and his associate Jim Savarese. Most did so with the proviso that their links to the industry were protected from discovery, so payments needed to be laundered through one or more corporate bank-accounts.

The concept of this network was initiated by an economics-trained labor lobbyist, James Savarese working for the tobacco industry through Ogilvy & Mather Public Relations [later called Ogilvy Adams & Rinehart).

His associate/partner, Professor Robert Tollison, was an economist at the Virginia Polytechnique and later the George Mason University who also ran (with Nobel Prize winner James Buchanan) the Center for the Study of Public Choice (largely tobacco funded) as an externally-funded think-tank. Tollison was both a University professor or economics and the Director of the Center; he also became the President of the Public Choice Society which promoted the "greed is good"/deregulate/small-government message and provided them with a fertile recruitment vehicle.

Tollison had also set up a small group of economist which he grandly named the Committee on Taxation and Economic Growth (CTEG). This had been the original network designed to help the tobacco and alcohol industries fight political threats to raise excise taxes to pay for health care.

A few members of this group met with executives from the Tobacco Institute in a 'brainstorming' session, and it was decided to expand the CTEG exponentially by recruiting at least one academic economist in each State and put them to work trying to influence their local politicians. Many of the support services would come from the Center for the Study of Public Choice, along with a number of recruited graduate students and research associates.

These cash-for-comment State-based academics would be paid for writing op-ed articles for their local newspapers, and also for acting as pro-smoking witnesses at various tribunals, ordinance, and legislative hearings. They would also be well compensated for giving speeches at academic conference — both on 'the regressive nature of excise taxes', and the economic question involved in attempts to ban 'public smoking' which they said would devestate local economies.

It worked this way:

  • The economists were commissioned when needed and often sent outlines and points-lists.
  • They then drafted their op-eds and sent them back to Savarese and Tollison for embellishment and checking,
  • If they weren't rejected or returned for a rewrite, these 'improved' articles would then be sent to the Tobacco Institute for further checking and improvement,
  • The articles needed to be cleared for legalities by tobacco industry lawyers at Covington & Burling.
  • Savarese
    returned the articles to the economists with instructions to send them to designated newspapers.
  • Copies were also to be sent (on university letterhead) to a list of Congressmen in their home State [usually those on key Congressional Committees].

This was a transparent attempt to influence Congressmen and the public through the media by unethical use of the local university's academic status and its reputation as a 'public good'.

A few of the more money-hungry of these economists were willing to go on two- or three-day media tours if some excuse would be found for them to give interviews to regional print journalists, or to appear on various radio and TV shows. The were never announced as tobacco industry lobbyists — and they often bolstered their credibility by proclaiming themselves to be non-smokers (and sometimes even anti-smokers). Their claim was always that they had the highest motives in disputing only the economic ideology of regulation or taxation.

To expand and develop these 'media tours', the Tobacco Institute retained a national public relation company, Fleishman-Hillard. This PR company already had in place a state-by-state network of professionals who specialized in promoting national 'media tours'. They specialized in promoting academics and scientists, and for the tobacco industry they created a special circuit of ventilation-company executives who were paid to created the 'sick-building-syndrome' scare [a tobacco diversionary tactic] and promote the idea that workplace smoking bans wouldn't solve the problems that many air-conditioned buildings faced, since fungus and bacteria was the cause, not smoke.

With the economist network, the Regional Managers working for the Tobacco Institute also contracted local PR companies to amplify these messages in their own administrative areas. Speaking engagements for these local and out-of-town economists were actively sought from various business and professional associations, and these speeches were then reported as news by press-releases.

By means of this self-generation PR process some economists became minor celebrities in their home towns which both enhanced their value to the tobacco industry while becoming a supplementary benefit to the economist's personal reputation at his local university.


In order to manage such a dispersed group, Anna Tollison [wife of Robert Tollison] and two staffers from the Center for the Study of Popular Choice, began to work part-time with James Savarese's new company. James Savarese & Associates acted as the front and cut-out between the economists and the Tobacco Institute. [The company also independently provided labor lobbying services with the AFL-CIO and unions to the tobacco industry.]

It is not entirely clear how individual economists was paid, and this obviously varied at different times — some had their own consulting firms. Initially the payments were passed through Savarese & Associates, but an audit conducted by the Tobacco Institute later discovered that the company was skimming an unconscionable amount off the top — and the system was changed.

The auditor's report says that some payments were marked up by 'up to 100%.' and clearly the Tobacco Industry wasn't happy with this arrangement. Some economists also had a specific prohibition against Savarese & Associates revealing their names even to the Tobacco Institute auditors, so the auditors found it impossible to check on these payments.

We know that most economists initially earned betweem $400 and $1000 (rising to perhaps $2500) for each article planted in a local newspaper — which appears to have averaged about $3 - $5,000 per economist p.a. over many years. They also earned much the same fees for appearances at local public ordinance hearings, and roughly $2 -$4,000 (plus expenses) for making speeches at economists' conferences or giving evidence to Congressional hearings. [This is at a time when academic salaries were in the $20-30,000 range. And remember, they probably also worked as mouth-pieces for other industries.]

Some of the network's key academic helpers, such as Richard Wagner, William Shughart, Henry Butler and Dwight Lee, played a greater part in this operation than the others and probably had independent payment channels and higher pay-scales. Lee, in particular, worked on a range of projects for various cigarette companies, and Wagner co-wrote and edited a number of booklets, articles and compilation books with Tollison on Tobacco Institute commissions.

The Center for the Study of Public Policy

The Center for the Study of Public Policy (CSPP) had originally been translocated from Virginia Polytechnique to George Mason University by the 'Public Choice' guru, James Buchanan. Tollison had been its Director, and Wagner, Shughart and a few others had been academic associates who all walked out of the Virginia Tech simultaneously and established this new economics operation at George Mason Univeristy (GMU).

The GMU had been established as an right-wing ideologically-based university (something unknown in other parts of the world) on the theory that it was necessarily to counter the "liberal biases" of other universities. Being next door to Washington DC and having its catchment among the 'beltways commuters' it naturally became generously funded by big corporations, and the favourite academic institute for lobbyists and political apparatchiks.[A recent study of petitions signed by economists, listed the at George Mason University economists at the top of their list]

In effect, the Center for the study of Public Choice was a privately-owned think-tank funded by major corporation, and available for them to use as cover. The C/Vs of many economists in the economists network shows that the had short stints ('fellowships') at the CSPP or were closely associated with it in some way. So it is reasonable to assume that the fellowhip system was funded by the tobacco industry (among other industries) as a selection mechanism to identify those academics most suited for cash-for-comment network involvement.

As with the scientific whitecoats, most of these economists were not paid retainers, but were only compensated for work done. Many work payments appear to have been channelled through the Center for the Study of Public Choice, at other times through James Savarese & Associates. Gaps in payment records probably mean that the compensation was laundered through tobacco lawfirms.

The financial records also reveal many (almost token) payments made directly to Tollison. These aren't consolidated, and they don't add up to recognisable figures, so they are probably out-of-pocket expenses incurred by the economists which Tollison then passed on to the Tobacco Institute. [Many records have clearly been destroyed, but obviously he provided a personal money laundry service.]

Why Economists?

The tobacco industry had constant problems trying to recruit medical, epidemiological, and biological research witnesses to bolster its case. From the 1950s they relied on special recruitment teams put together by scientific and medical headhunting companies (see Weinberg Group/WashTech) and on a small group of lawyers at the tobacco industry's favorite legal firm, Covington & Burling.

Cervantes (Don Quixote)
Witnesses tended to drop out of these projects because publicized appearance at ordinance hearings often earned them pariah status at their universities.

So each year the tobacco industry needed to identify replacements who were willing to support socially and ethically untennable positions. Only a few of the top professional academics from the scientific disciplines were willing to risk facing ostricism in their professional lives. However the recruitment of professionals from economics and statistics proved to be easy because of the highly politicize nature of the Hayek/Austrian/Chicago-school/supply-side ideology and this was embraced by Public Choice economists. They were therefore a ready-made network of right-wing academics willing to support any industry, and they felt that they were able to do this while maintining an 'independent academic' stance.

Tollison and Savarese found it easy to recruit these academics in the smaller regional universities since they needed both the money and the recognition, and they formed a recognised faction within their profession.

Were these articles distortions of their beliefs?

Most of the op-eds written by these paid-for-service economists reflected a common, fashionable, simplistic views which was expoused by unfettered free-enterprise market-ideologues following the Reagan and Thatcher libertarian era. These are the same economists who gave the world the 2009 Global Financial Meltdown.

The point is that these articles were written at the express request of the tobacco industry for propaganda purposes. They were also edited, modified and checked by Tobacco Institute staff and lawyers, and then sent to Institute-selected local newspapers — yet they purported to be the 'personal opinion' of 'independent academic experts.' So the public and the media were deceived, since none of these creations carried any admission that the author was in the pay of the tobacco industry.

These Professors already had reasonable salaries from their universities to act as scholars, to educate students, and to provide their expertise in ways that promoted the public good. That is, after all, the reason why universities and their academics exist, and why they are given special recognition and high public status.

So it is this 'cash-for-comment' aspect of this operation that stands condemned — not the content of the articles. These Professors were mis-using their university-bestowed status by sprouting what was, at best, Economics 101-level propaganda polemics, as policy advice.

Of course it is not a crime to be unsophisticated, untutored in the complexities of economics, or ignorant of public-health problems — but it becomes something close to fraud when a Professor takes the tobacco-industry's silver while pretending to be an 'independent expert' expressing his own opinions.

Public Choice theory
Public Choice theory is more politics than economics — which even their practitioners sometimes admit. Not all public choice economists believe in the totally unfettered free-market, but the extreme position is practiced and preached by a group of Randian economists who liked to dabble in far-right wing politics. These are the people who gave the world the 2010 Global Financial meltdown.

They also saw nothing wrong in deceiving their public benefactors (the tax-payers) and their universities, by secretly working for the tobacco industry. See the brief explanation in Wikipedia

Network beginnings:
  • 1979 Jan: Academic economists Professor Robert Tollison and Richard Wagner have been recruited by George Berman of Devon Management Resources to provide material supporting the International Committee on Smoking Issues (ICOSI... later INFOTAB)
  • 1980: Tollison and Wagner had been commissioned by ICOSI's Social Acceptability Working Party (SAWP) to write a monograph "Consumer Protection, Public Policy and Cost-Benefit Analysis"
  • 1982: Under Tollison and Public Choice guru James Buchanan, the team of Public Choice economists at Virginia Polytechnic/State University resign en masse and migrate over to the break-away, corporate funded, George Mason University (including their think-tank Center) — thus providing the tobacco industry with a Washington DC pool of unfettered free-market Randian-political economists who are all looking for outside commissions.
  • 1982 Nov: A labor economic lobbyist working for his own company (through via Ogilvy & Mather PR), James Savarese, proposes to the Tobacco Institute that they use academic economists (mainly Kenneth Greene of SUNY and Harold Hochman of CUNY) to prepare papers opposing cigarette tax excise increases in New York State.
  • 1983: The Tobacco Instittue puts the Tollison/Wagner team (which has the resources of the Center for Study of Public Choice, together with Savarese and Ogilvy & Mather PR to prepare a book "Free to Smoke" and later a propaganda booklet Smoking & Society
  • 1984 Jan /E. The Tobacco Institute is now expanding the Savarese-run network of economist to other States — mainly recruiting academic economists to write op-eds for their local newspapers. Tollison is able to provide the recruitment services through his Center for the Study of Public Choice and the Public Choice Society.
  • 1984 April: The Tobacco Institute has again put Tollison together with Savarese and his associates to prepare a pseudo-study which will become their economic defence against proposed smoking bans in New York resturants. The TI's Excise Tax Plan for this month lists 14 Public Choice economists in other States who have been recruited to help in the fight against excise increases.
  • 1984 Jun: The network has now been formalised under the name Committee on Taxation and Economic Growth. with Savarese as administrator. They have about 15 members overall and 10 active op-ed writers.

Some key documents

• See also the full list of the cash-for-comments economists and the Committee on Taxation and Economic Growth also run by Tollison.

1979 May: The Social Cost — Social Value paper by George Berman [tobacco PR consultant] for the International Committee on Smoking Issues (ICOSI). He points out that there is a the rising clamour in various countries about the cost of smoking-related diseases, and how this is effecting their health-care budgets. He says that this is...

"... a bill of smoking costs which are paid for by society.

    It would be pointless to just dispute these arguments with similar data, to attack their numbers with our numbers. Instead, our strategy is to attack the concept of social cost analysis.

    We have found that these concepts are most vulnerable. If we can undermine the concepts, then we do not have to enter into public debate over specific numbers. Our attack consists of four major themes:
  1. These Social Cost concepts are bad economics
  2. They do not fit into a philosophy of personal freedom and civil liberty.
  3. Smoking benefits society and its members in many complex ways
  4. Anti-smoking programs and groups are harmful to our society.
He goes on to develop arguments about the necessary countermeasures needed. He specifically attacks the current cost-benefit analysis, saying:
The application of social cost analysis to smoking is defective economics applied to uncertain data. To develop this point we have called on two leading economists from the Center for the Study of Public Choice, at Virginia Polytechnic Institute.

[This is before the Center and the two economists moved to George Mason University]

  • Dr Richard Wagner is the author of 11 books and monographs and over 20 articles. During the last six months he was visiting Professor of Economics at the renowned University of Konstanz.

  • His colleague, Dr Robert Tollison has served as a consultant to the US Government Treasury Department, Commerce Department, Office of Technology Assessment, and the Council on Wage and Price Stability.
These two gentlemen are co-authors of a forthcoming book called "Personal Liberty, State Action and Economic Coordination", a title which certainly covers the subject of this project. The economist working on this project are first developing a "Layman's Guide" to social cost/benefit analysis [which] will address three key questions:
  1. When is social cost/benefit analysis called for?
    If I agree to pay the price of a pack of cigarettes, I am saying that the benefits I get are at least as large as the cost of the resources used to make the cigarette. Thus, there is no justification for the larger society to intervene.

        [T]here may be a few cases where smoking creates uncompensated costs for non-smokers. But the economists are quite certain that most of the alleged medical expenses do not qualify as social costs. And the much larger charges of absenteeism and lost productivity are not social costs at all.

  2. What should be analyzed?
    It does not make sense to analyze an entire industry's social costs. The only valid and useful analysis is one that focuses on a proposed government action.

        If the government is going to restrict smoking in restaurants, the benefits to individuals of these actions must exceed the cost to other individuals.

  3. What is the proper objective of the analysis?
    From the point of view of economics the objective of government intervention is to resolve uncompensated costs... in a way people at large would, if they could negotiate with those getting the benefits.

        The proper aim of cost/benefit analysis would be to help find a solution which is "fair" to both sides.
They have also asked others to contribute:
  • Dr Robert Nozick, Professor of Philosophy, Harvard University [A prominent guru of Libertarianism]

  • Sherwin J Feinhandler, President of Social Systems Analysts and lecturer at Harvard University Medical School [How smoking defines your personal space!]

  • Dr Peter L Berger, Professor of Sociology at Rutgers University [who notes that many techniques which strengthen the position of the religious advocate are found among anti-smokers: Elitism, Messianic Drive, Punishment... Class Antagonism.]

  • Dr Aaron Wildavsky, Chairman of the Political Science Department, University of California, Berkeley and President of the Russell Sage Foundation [to isolate and define the motivations and the alliances of the active anti-smoking leadership. They are anti-capitalist, anti-industrial, anti-multinational and countermodern.]

[These four were also enthusiastic acceptors of the tobacco industry's cash hand-outs over the years, and willing to do almost anything to keep the money flowing.]

1982 Nov 18: James Savarese is writing to Michael J Kerrigan at the Tobacco Institute. This is obviously very early in their relationship. He is proposing a new way to counter state excise taxes:

Dear Mike:
It was good meeting with you again last week. Per your request, I will attempt to lay out a strategy for "dealing with the cigarette excise tax problem in the state of New York.

    As we discussed, the potential for increased bootlegging activities as a result of self-extinguishing cigarette legislation — and its implications for reduced excise tax collection may present the TI with an opportunity to take the offensive in both of these battles.

    The mission is to target groups that are intensely interested both in the staters revenue-raising capacity and in the overall "fairness" of the state!s tax structure.

    It seems obvious that government employee unions in New York State uniquely fit this description: teachers, firefighters, police, state workers, and employees of local government jurisdictions.
New York state was having financial problems at that time, as was New York City under Mayor Koch. Both Koch and the Governor-elect Mario Cuomo were likely to support increases in cigarette excises.

    Savarese had been the Executive Director of the American Federation of State, County and Municipal Employees (ARSCME) which...
... has 400,000 members in New York state and is a legislative and political powerhouse in Albany. We are on retainer with AFSCME to work on state and local government.finance problems.
Savarese suggests that the Tobacco Institute should promote the "recessive" tax line — that such taxes fall most heavily on blue-collar workers. He also suggests targetting liberals ('fairness') and labor-union communities as potential allies.

    His friend Richard Pomp is in charge of the New York commission studying the tax structure, and he will assist the TI in establishing working relationships with the union movement.
Marcia McGill, our firm's vice-president, served as AFSCME's director of economic affairs and has worked extensively with nearly all of the ad hoc coalitions that have been set up since the mid-1970s to deal with state revenue questions.

    Two of our firm's associates are based in universities in New York state.
  • Ken Greene, a public finance specialist, is Chairman of the Economics Department at SUNY, Binghamton
  • Harold Hochman is Director of the Center for Business and Government at Baruch College, CUNY

[This appears to be the foundation document for the cash-for-comments economists network, before Robert Tollison and his Center for the Study of Public Choice at GMU was enlisted to help them develop it nationally.

    James Savarese & Associates had a close relationship (later a merger) with Ogilvy & Mather PR.]

1983: The records of the economist network have an obvious gap between the suggestion of the conspiracy to mislead by Savarese in November 1982 and the evidence of substantial operations in January 1985.

    In 1984, however, Savarese, Tollison and a number of the later cash-for-comment academics were employed in writing and editing a book "Free To Smoke."

1983: Planning document by Brown & Williamson has a section

Panel of well-known economists.
It is recommended that one, two, or three publicly known economic authorities be used as a continuing resource, to write usable public analyses of proposals, to join the lobbying effort at highly targeted points, and as expert witnesses. Their work should be year-round, probably not requiring much activity most of the time but substantial work at certain peak times.

1983 Jan 3: Savarese outlines his plans in a further letter to Michael Kerrigan at the Tobacco Institute. The focus at this time is still on the State of New York which is under Democrat control and likely to increase cigarette excise taxes. He offers a three-element plan using staff economists [Hochman and Greene work for him]

Our customary method of billing is at an hourly rate of $90 per hour for senior associates with a sliding scale to $70 per hour for work performed by staff economists. We expect the project defined above will take roughly two months with an estimate of between 200 and 250 billable hours.

1983 Jan 4: Savarese is collecting fees from both sides: This internal Tobacco Institute memo reveals that he is also working on revenue alternatives for the State of New York, while charging the Tobacco Institute for making proposals for sources of revenue which do not include cigarettes.

The Savarese firm is currently retained to do research for alternative revenue sources in the state of New York and believes that he can produce materials on the subject of cigarette tax which will help to persuade labor in that state to oppose further attempts to increase cigarette tax.

    Additionally he proposes to utilize his close contacts with labor in New York as the means to deliver anti-cigarette tax information and to serve as a bridge between us and labor in developing a workable coalition (which could even be expanded he believes into support on the self-extinguishing issue).

    between us and labor. It must be kept in mind that a quid pre quo will be expected for labor's support of our position.   • That will probably take the form of industry support for alternative revenue raising measures, such as an income tax surcharge. Jim believes that common ground can be found with labor without doing harm to our traditional business allies.

    I believe that this is one of the best ideas we have seen in the area of adding useful and effective tools to our lobbying arsenal. I also believe that if it could work" in New York the.-idea is transferable to virtually any other state.

    The price tag for the New York Excise Tax Coalition program is $18,00 to $22,500. Savarese is prepared to begin immediately. However, Jim is flexible in terms of retainer arrangements other than billable hours.

1984 Feb: /E Remnants of a Tobacco Institute report with information about the Savarese cash-for-comments economists network. [Dated by other documents].

First, the scorecard cn the project to get our economic consultants pitching op-ed letters on tax policy, including low-rating of excises: — 31 drafts completed; nine delivered to editors; six published or accepted for publication.
They have also been writing material for Sam Howard, Vice President of the Hopital Corpororation which was published by the US Chamber of Commerce (or National Chamber Foundation)
Back to our economists, some ten of them have started running economic seminars and pitching the resulting papers for publication in professional journals.

1984 Apr 30: This 109 page DRAFT Tobacco Institute "Cigarette Excise Tax Plan" which was aimed at the Reagan Administration They had an immediate requirement of

  • One public finance economist for 10 days @ $1,000, [Total $ 10,000 ] including meetings with coalition members and/or the Governor's staff; research and preparation; and testimony.
  • One economist for a union workshop on the tax issue, [Total $5,000] including 3 or 4 training sessions over the course of a convention.
  • Six economists @ $5,000 and one senior economist 53,000 @ $20,000 for a tax symposium, including publishing of the proceedings at $3,000. [Total $53,000] The senior economist would play an oversight/organizational role and would be responsible for editing the proceedings. Such a symposium would be staged for regional or national impact.
  • One economist provided to a public employee union to do original research on the need for adequate services to be funded by broad-based taxes; this would include the final report and testimony. [Total $ 25,000]
It has draft copy and designs for a couple of different booklets aimed at different states, and at labor/union and racial groups.
    It also identifies the targetted Congress Committeemen and state Assembleymen most likely to be influenced, and adds an appendix which lists economists who can be enlisted to help.
Potential Economic Consultants
    Following is a list of economists in key states who might assist us as consultants. We have begun contacting them to ensure their willingness and expertise. We are asking each about past experience; work with similar issues; previous work with the indusry; published articles or research; and speaking availability.

    As discussed in the body of this program, our intent is to have a group of individuals who we can call upon regularly to testify, conduct special research projects, and discuss their research and/or views on excise taxes with the media.
  • California, Thomas Borsherding, Claremont College
  • Connecticut, William McEachern, University of Washington
  • Florida, Richard Wagner, Florida State University
  • Georgia, Fred McChesney, Emory University Law School
  • Illinois, James Heins, University of Illinois
  • Massachusetts, Harlan Platt, Northeastern University
  • Minnesota, Thomas Stimson, University of Minnesota (St. Paul Campus)
  • New York, Harold Hochman, City University of New York
  • Ohio, David Klingaman, Ohio University
  • Pennsylvania, Mark Pauly, University of Pennsylvania
  • Texas, Charles Maurice, Texas A&M University
  • Washington, Yoram Barazel, University of Washington
  • Washington, D.C. Robert D. Tollison, George Mason University
  • Wisconsin, Burton Weisbrod, University of Wisconsin

    Tollison is the most influential and prestigious on this list; he would be hired to consult on federal tax situations and to oversee efforts of the others throughout the country.

See last page
Yoram Barazel is the only name on this list who appears to have resisted the Institute's overtures.

1984 Oct 31: [In the 447 page Final Opinion in the case USA and others vs Philip Morris et al]

During 1984, the Tobacco Institute paid $70,000 for one half the cost of a monograph commissioned by INFOTAB, edited by Robert Tollison, Professor of Economics at Virginia's George Mason University, titled "Smoking in Society."
It was planned to enlist many known tobacco-friendly academics to write chapters.
  • Hans Eysenck, University of London
  • Charles D Spielberger, Uni of Southern Florida
  • Domingo Aviado, Atmospheric Health Sciences
  • Sherwin J Feinhandler, Social Systems Analysts
  • Douglas Den Uyl, Bellarmine College
  • William Shughart II, Clemson University
  • Peter Berger, Boston University
  • Ingo Walters, New York University
  • Stephen Littlechild, Uni of Birmingham,
  • James Savarese [Later Tollison's partner]
  • Jean Boddewyn, Baruch College, CUNY
  • James Buchanan, George Mason University.

Tobacco Institute Memo
Tollison's Project Outline
Final Court Opinion page 297

1984 Dec 19: Andrew Whist's presentation to the Board of Directors at Philip Morris on the operations of Corporate Affairs, admitted

A monograph on excessive sumptuary taxation with inputs from leading economists has been undertaken. This cadre of academicians will serve as a task force of expert witnesses who can be sent to various countries to lend credence and authority to our arguments against undue tax increases.

    The intent of this publication is to be a useful and respected source document for writers, opinion leaders, government officials and others concerned with the problem of taxes.

    For example, Professor Ingo Walter, at the request of Philip Morris, recently made a persuasive presentation to Hong Kong government to adjust the duty structure and equalize the duty between imported cigarettes and imported leaf. This is particularly important to Philip Morris which imports over 95% of its total sales in that market.

1985 Jun 25: Tobacco Institute Media Relations Plan: Taxes project (supervisor was Panzer)

Op-ed articles from 42 economists [in the network] 17 drafted; 9 appeared; 4 promised.
  • Federal Relations [division] asked [the economists] to send to members of Congress for insertion [in the Congressional Records].
  • State Activities Division (SAD) asked [for them] to send to State legislators.

1986 Mar 11: Bill Kloepfer, the Vice President in charge of Public Relations at the Tobacco Institute send a memo to President Sam Chilcote on "Consultant Economists' Tax Issue Advice." He says:

As you suggested, I met March 5 in a hotel room with five economists to discuss approaches by the industry to tax issues. Pete Sparber participated. Attending were:
  • James Savarese, Ogilvy & Mather
  • Dennis Logue, Dartmouth
  • Dolores Martin, University of Nebraska
  • Dwight Lee, University of Georgia
  • Henry Butler, University of Chicago
The advice we received was to consider carefully any earmarking proposals, perhaps accepting those which present a coalition probability and protesting those which do not.

    They understand that The Institute does not have an economic research budget per se, but that we would welcome any suggestions which we might consider on their merits.

    The discussion lasted for about five hours. It was quite worthwhile. We should take appropriate steps internally now to consider the major points which emerged.

1986 May 6: The Monthly Status Report from Ogilvy & Mather to Susan Stuntz at the Tobacco Institute show that they are working on:

  • Labor Management Conference at Loew's L'Enfant Plaza Hotel [owned by Lorillard]

  • Preparing a "Smoking in the Workplace Kit"

  • Locating a suitable building in San Francisco tor "Indoor Air Quality Assessment" [which was later done by ACVA/HBI then used as evidence that anti-smoking measures aren't needed in the workplace.]

  • Black Coalition building. [They managed to convince many black leaders that anti-smoking measures had racial overtones, partly by use of the economist message that excise taxes hit the poor the hardest]

  • Meetings with ACL-CIO union leaders [As with the Black leaders — they promoted the 'right to smoke at work' and 'regressive tax' message.]

  • Generated eight proposals for research by economists on the Social Cost Issue.

  • Executed Op-Editorial Program for 19 economists in states with Senate Finance Committee Members, including personal letters to all Senators in these states.

Academic Lawyers Network

1986 Aug 12 James Savarese writes to Fred Panzer at the Tobacco Institute who has complained that the tobacco industry needs more academic lawyers willing to provide comment in the media in support of the industry. [They are beginning a new project, so Savarese deals with the top man rather than at the middle-manager level (Peter Sparber and Susan Stunts).]

    See the resulting cash-for-comment academic lawyers network.

1987 Feb 6: The leaders of the economists network, Jim Savarese, Bob Tollison and Henry Butler write to "Participants in advertising op-ed project." This appears to be the same group of economists, but with a few marketing academics and some academics who specialised in the advertising industry added.

We are finally ready to get this first op-ed project off the ground. I am asking you to review the attached materials and write an editorial for a major newspaper in your state. This article should support the basic right to advertise legal products and oppose attempts to restrict advertising either by outright bans or by punitive use of the tax code.

    Obviously, the point of this exercise is to support tobacco's right to advertise on basic constitutional grounds. Arguments which touch on issues such as censorship, cutting off the free flow of information, and even the experiences in other countries with such bans might be useful.

    Upon completion of a draft op-ed, please send it to me immediately via Federal Express. I will go over the article and return it to you for submission to a newspaper. At that time you will be given some guidelines for submitting your editorial to a newspaper and an appropriate newspaper in your state.

    If you have any questions, please feel free to call Anna Tollison, Jim Savarese, or Linda Prichett at 202-466-7590. You can also direct any technical questions to Bob Tollison at 703-323-3771 or Henry Butler at 703-841-2665.
[Note this letter gives us a detailed account of how the op-ed system worked, and how much these "independent" academics were expected to conform to tobacco industry control in return for their generous payments.

    Note also, that this is directed to new academics — economists, marketing and advertising professors. The next letter [below], appears to have been intended for the established cash-for-comment academics. ]

1987 Feb 6: [Same day as above] a letter to "Economists" from Jim Savarese, Bob Tollison and Dwight Lee Re" Excise Tax Op-ed" says:

We have received our first op-ed project of 1987 and for many of you it is a familiar one. The issue once again is opposition from any and all reasonable angles to an increase in cigarette excise taxes.

    We are attaching some materials which may be of help in formulating your argument and generating relevant data. Some of the more salient points are listed below:
[This list gives figures, promotes the regressive nature of such taxes, and requests "earmark" arguments against the use of excises to fund Medicare, health care, environmental protection.]
It is important that we generate a generalized opposition to the principle of earmarking revenues.

    Upon completion of a draft op-ed, please send it to me immediately via Federal Express. I will go over the article and return it to you for submission to a newspaper. At that time you will be given some guidelines for submitting your editorial to a newspaper and an appropriate newspaper in your state.

    If you have any questions, please feel free to call Anna Tollison, Jim Savarese, or Linda Pritchett at 202-466-7590. You can also direct any technical questions to Bob Tollison at 703-323-3771 or Dwight Lee at 404-542-1311.

[Note: Dwight Lee is the contact for the old economists, while Henry Butler is listed as contact for all of the new recruits.]

Academic Adverising Network
1987 April 14 Tobacco Ad Ban Project begins. Savarese created a cash-for-comments advertising academics network by recruiting business, marketing, law and advertising professors and lecturers. This was a project to fight against the threatened bans on cigarette advertising.

    It involved many of the same people, including some economists. See the cash-for-comment academic business/law/marketing network

The auditors step in...

1987 May 16 /E The Tobacco Institute had James Savarese & Associates's accounts audited because of "possible improprieties noted during the examination of the initial two-month period." The auditor found that:
  1. It was a one-employee operation — Savarese billed at a rate of $150 per hour, or approximately $300,000 a year, just for himself.
  2. He only keeps rough accounts and has no formal contract with the Tobacco Institute.
  3. He marked up the conveyed cost of all subcontracters by varying amounts... up to 100%.
  4. Often the name of the subcontractor was not disclosed or [their existence] establishable... because of concerns that disclosure of their remuneration by the Tobacco Institute could harm the credibility of the work they produce."
The examination of the books revealed to the auditor that:
  • The inital "Economic Impact" research was done by Robert and Anna Tollison, with help from William F Shughart, and EA Masaitis.[Elizabeth A Masaitis's day job was Executive Assistant at the Center for the Study of Public Choice.]

  • The Economists list was put thogether by Robert and Anna Tollison, with help from Carol Roberts and DRL Inc.[Carol M Robert's day job was as Secretary to the Center for the Study of Public Choice. DRL Inc. was the family company of economist Dwight R Lee.]

  • A so-called "Prohibition Video project" done by Mary Claire Sanders (charge at $300 per week — totally $4,700) seems to have been a hidden supplementary payment made under directions of senior staff at the Tobacco Institute. Ms Saunders was employed by the TI through a temporary employment services to work with the TI on Federal Relations.
Recommendations: That "independent consultants and subcontractors working under Savarese's direction, bill to, and be paid directly, by The Institute unless there is an important business reason to do otherwise."
[There is no record that economist-contractors were paid directly, so the TI must have found "important business reasons to do otherwise."]

1987 May: The Tobacco Insititute auditing of the books of the James Savarese/Robert Tollison partnership had further repercussions:

  • The Tobacco Institute's regional directors were told to make contact with all the compliant economists in their region and prepared a formal recommendation for the TI, whether to retain them or not.
See example Region VIII

1987 May 18: On the same day as the audit report, James Savarese & Associates were placed under contract with the Tobacco Institute for two years. There is nothing unusual in the contract except that:

  • The Tobacco Institute wanted approval rights over all staff.
  • They attached a list of billing rates for various staff and services.
  • Approval was now with TI's "Vice President for Issues Management." [ Susan Stuntz]
  • Robert Tollison was formally recognised as a primary subcontractor of James Savarese & Associates, to be paid at $100 per hour.
  • Leslie Dawson, Savarese's full-time employee, was paid at $95 per hour.
  • William F Shughart [an economist], Anna Tollison , and both EA Massitis, and Carol Robert [Both employed by the Center for the Study of Public Choice] were approved as subcontractors, but they were now to be paid at (unspecified) amounts.
[Note that, despite the auditor's recommendations, there was no suggestion that the Tobacco Institute would now pay the contract academics directly.]

1987 June 9: The Tobacco Institute's Phase II - Excise Tax Op-Ed project involved an article-writing campaign by cash-for-comment economists.

    It involved the same principles and same academic economists. But in the mid 1987 period, the whole operation at the Tobacco Institute was placed under the control of Jeff Rose [who worked under the supervision of Peter Sparber]. It now focussed on defeating cigarette excise tax increases — and especially the threat of such taxes being 'earmarked' to bolster health-care budgets.

Anna Tollison, the wife of Bob Tollison, was still employed by James Savarese Associates to keep a record of the articles generated by the large contingent of academic economists and to organise payment. She reported that

"In sum, 41 economists were solicited to write editorials. We have publications in 20 states, 14 articles have been written and submitted, and 7 articles are still outstanding." [Others were in the offing]
[She included a long list of the economists who wrote the articles, the newspapers in which they were published together with their circulation figures.]

1987 Aug 31: Peter Sparber [Issues Manager] to Bill Kloepfer [PR head] at the Tobacco Institute:

Jeff [Rose] has done a good job of summarizing the economic consultant situation and I am attaching my copy of his report with some marginal notes.

    I think he should consider sending a collection of all of the published op-ed pieces to each of the consultants for the sake of inspiration.

    In the case of those who have not had an article accepted for publication I would like to know whether they submitted one.
[There is no room for doubt that these economists knew precisely who they were working for, and why they were being paid (about $1000 per article) by the tobacco industry.]

    The economists were visited by State [regional] tobacco staff, and subject to an evaluation of their work and their prospects. Not all measured up. Jeff Ross reported:
Two general comments from field staff warrant some consideration. Michael Brozak recommended a political orientation to prepare witnesses for potentially politicized hearings.

    We agree, and recommend that State Activities consider advising field staff to conduct such briefings as appropriate. Richard Scanlan suggested that an economist from the state capital city is much more valuable. We have asked Savarese and Tollison to see if they can identify a candidate.
The "Economists Evaluation" were conducted on a state-by-state basis, and as an example, this is the slightly cryptic reference for network member Wyrick:
Professor Thomas L. Wyrick Southwestern Missouri State University Springfield, MO
  • Excise Tax Op Eds: The News-Leader — 06/28/87 IM
  • Economic Witness/Testimony: [hand note says "Enquire"]
  • Field Staff Contact: Phone contact with previous economist. No contact with Professor Wyrick.
  • Field Staff Evaluation: Recommend retaining an economic witness.

1988 Feb 2: James Savarese reports to the Tobacco Institute on a meeting with a "core group of economists"...

To exchange thoughts and ideas on the social cost issue with the goal of determining projects and making assignments for 1988.

    [In order to attack] Anti-smoking activists [who] have distorted the issue of social cost. Even though economists ridicule their statistics, politicians and the press believe them.
The core group consists of
  • Gary Anderson
  • Bob Ekelund
  • Richard Higgins
  • Dwight Lee
  • Jim Savarese
  • Bob Tollison
  • Richard Wagner
with the support of PR/lobbyists from
  • Leslie Dawson, Karen Hochberger, Richard Marcus.- from Ogilvy & Mather and James Savarese & Associates
  • Mike Forscey - lawyer from Wunder and Diefenderfer, working for the Labor Management Committee of TI
  • Jeff Ross, Carol Hyrcaj and Paula Duhaime from the Tobacco Institute
Conclusions: This is lobbying pure and simple: The conclusions of their report expose numerous outright admissions as to the scientific and academic subterfuge these people are knowlingly engaged in.
  • The higher rate of illness of smokers is a 'private cost' not a social cost [and therefore should be ignored.]
  • It is not politically useful for us to argue the primary health statistics.
  • Up to this time, ETS has not been translated effectively by the opposition into cost numbers. Rather, it is a regulatory issue. We cannot afford to lose the argument among people who think they are being harmed by ETS. If ETS causes harm, it becomes a classic case of real social cost.
  • We must make sure that primary costs of smoking be kept out of any social cost calculation. We must separate primary smoking statistics from ETS statistics.
  • More research is needed on ETS in order to deny health consequences
Primary assumptions that need to be countered.
  • Insurance and Health Costs: Health problems exist for smokers. The cost for health care due to excess illness or death of smokers equals smokers' cost to society.
    • Insurance premium — Discounts for non-smoker (not justified?)
    • Pension Plans — Increased mortality rates saves money
  • Productivity and Absenteeism: Smokers are absent more frequently than non-smokers.The time spent by a employee smoking on the job is time spent not working. These factors make the smoker a less productive member of society than a non-smoker.
    • The worker bears the cost of absenteeism via fewer raises, less advancement, or termination. Society bears no burden.
  • Social Security and Medicare: [Death benefits argument]
    • Based on lifetime calculations, smokers should be getting a rebate. We should propose a rebate program, rather than a tax program.
    • If non-smokers live longer, when the baby boomers reach retirement age, very high tax rates will be necessary to finance Medicare and Social Security. If smoking is banned, it would cause some serious problems in future years.
  • Fires: It is not a social cost for a smoker to burn his house down, just a private cost. Social cost only exists if a neighbor's house burns down (a much smaller number).
  • ETS: Blanket smoking.restrictions raise costs to private employers. If restrictions are cost effective, individual companies will adopt them.
    As a result of this meeting, we should devise a specific plan and timetable- of implementation with assignments for specific projects.

    We need to review and critique existing materials and develop our own core of research.
They then allocated Research projects to the economists and disussed additional research ideas which might prove useful to the industry. Both the Southern and Eastern Economic Association presented forums at which the economists could present papers and...
    Tollison is looking for one or two others. Major session of a university to bring together all relevant research on social cost will be planned after research projects are completed. Proceedings will be published in a monograph.

1988 June 16: Tobacco Institute's speech by Jeff Ross on the activities of the Tobacco Institute in the area of "Social Cost". [He works under Susan Stuntz]

A few months ago we initiated a comprehensive new program to address the social cost issue.

    The overall objective of our program is to show there are no social costs of smoking. And, as a corollaroy objective, to reveal the absurdity of social costs economics and its implications on individual choices. We're off to a good start in implementing this new program and we'd like to go well beyond what we originally planned. Let me summarize these new activites:

Firstly, we've established a core group of social cost economists from respected academic institutions across the country. They will take the lead in arguing against social cost economics — testifying; dealing with the media; conducting briefings; and producing research.

    A new wave of research will be ready by the end of August. For example:
  • A report using Japan as evidence against the social cost argument. Japan is considered one of the most productive countries in the world yet they have one of the highest smoking populations. How can Japan be so productive if smokers are not producing their fair share?

  • A study which shows how dangerous social cost methods could be to other industries such as sugar, coffee and beef. We anticipate this research will help us generate support from other industries to oppose social cost economics. And

  • A study on Absenteeism & Smoking to demonstrate that absenteeism is related to job characteristics and income levels, not smoking behavior.
We'll also be promoting these studies as well as other material produced by our economists — such as the Tollison/Wagner book that you've all probably seen by now — which analyzes social cost economics and its application to tobacco.

Promotional activities already underway include an author media tour, promotion to academic publications and economists' book reviews.

Our team of economists will be addressing their colleagues at the Atlantic, Southern, and Western Economic Association meetings. We will promote the final reports from these meetings.

    Also an Academic Symposium on the social cost issue will be held this fall at George Mason University. This symposium will feature findings of research project currently underway.

1988 Dec 1: James Savarese & Associates reports to Susan Stuntz at the Tobacco Institute about their activites during November (for himself and his employee, Leslie Dawson). Savarese's consultancy specialises in coopting labor and economists, and also on projects which can be used to counter the next Surgeon General's report.

  • met with officials of the Economic Policy Institute (EPI) to discuss tax strategy.
  • continued discussion with Coalition of Labor Union Women (CLUW) re national convention
  • continued work with National Energy Management Institute (NEMI) on development of training program and brochure.
  • meetings with Citizens for Tax Justice, Leadership for the New Century, Citizens for Tax Justice, National Economic Commission.
  • on the task force for Airline Cabin Air Quality (weekly meetings/ writing op-eds)
He also lists successes he has had with getting economists to plant op-eds on various local newspapers.
  • Prof David Saurman - op-ed on Prop 99 with San Jose Mercury News
        He had also commissioned and placed numerous reviews of the Tollison/Wagner book "Smoking and the State".
  • Prof Ryan Amacher (Clemson Uni) in The State.
  • Joseph Jadlow (Oklahoma State Uni) in Tulsa Tribune.
  • Todd Sandler (Iowa State Uni) in Fort Dodge Messenger.
  • Robert B Ekelund (Auburn Uni) Montgomery Advertiser.
  • Dwight R Lee (Washington Uni) Regulation Magazine.
  • Samson Kimenyi (Uni of Mississippi) in Jackson Clarion ledger.
  • David ER Gay (Uni of Arkansas) in Arkansas Democrat.
Also attached are the accounts of $114,589 for the Tobacco Industry Labor Management Committee disbursement.

1989: Social Cost Issue, Consulting Economist Team. This document is assumed to be the Tobacco Institute informing their litigation team about the facts of the cash-for-comments academics network — and its offshoot, the core team trained in Social Cost Issues.

The social cost economic team includes: Robert Tollison, Richard Wagner, Dwight Lee, Richard Higgins, Gary Anderson and Michael Davis,
These six consulting economists are specifically trained in the social cost issue, and are "prepared for a variety of assignments, from presenting testimony to conducting research."
How we use them
  • Conduct research.
  • Prepare op-eds and letters to the editor.
  • Review and comment on (government and private sector] social cost studies and reports.
  • Media tours to promote Smoking and the State.
  • Conduct briefings on the issue/arguments with legislators, staff and lobbyists.
Kinds of things they do
  • Conduct and publish economic research (constituting the basis of the social cost program).
  • Write and place op-eds on discrete topics.
  • Prepare and submit letters to the editor.
  • Available to present testimony.
  • Media tours.
  • Make presentations to academic/economic peers.
  • Conduct briefings on the issue (during social cost economist network meeting with PAD, SAD, lobbyists and legal counsel).

1989 Jan 11: This is the Tobacco Institute's list of economists and their state and university affiliations. The list is being made available to their State and Regional Directors as a resource, to identify potential witness services, or to write op-eds, etc.

    This list is also referenced in the second document as "Other Network economists" (see attached list) It comes from the Tobacco Institute storage box on "Tax Hearings Readiness" and is labeled "Economists." The associated document on Tax Hearing Readiness outlines all the arguments that economists can use to counter any proposed legislation to raise tobacco taxes. Such ideas as:

  • Excise taxes are regressive and take away tax reform for low- and middle-income Americans. As a percentage of income, low income families pay as much as 27 times more in federal excises than high-income families.
    [Only if they are addicted]

  • Cigarette excise taxes are discriminatory. They fall disproportionately on Blacks, Hispanics and other minorities.
    [As do medical costs]

  • Excise taxes are unfair. Tobacco consumers are forced to pay more than others for government services benefitting everyone. Why should smokers pay more for national defense than nonsmokers?
    [Why should bankers and stockbrokers?]

  • Excise taxes are not a reliable source of revenue. When excise taxes increase, sales, as well as tax revenue, decrease.
    [Which is what made excise a good health measure]

  • Earmarking cigarette excise taxes is unfair tax policy. It is an indirect way to make smokers pay for government services that benefit the entire community.
    [Like health care, police, defense, welfare, etc. etc.?]

  • Excise taxes have a negative impact on the nation's economy. When sales decrease, the result is lost jobs and revenue.
    [It's the same with the demise of horse carriages]

  • An increase in excise taxes will not significantly reduce the federal deficit. Smokers should not shoulder the burden of the federal deficit.
    [What is 'significant'? How did this become "shouldering" the debt?]
  • Overall cigarette excise taxes, as a percentage of price, have not decreased.
    [Nor should they]
This document also has a list of witnesses from different areas of business.

See tax outline & witness list:

1990: Paper outlining the Tobacco Institute's successes in countering Federal Excise Tax (FET) increases in association with a number of its coalitions:

We are implementing a new consulting economist op-ed campaign to increase the visibility of the case against using excise taxes for deficit reduction, while bringing the anti-consumer excise message to a wide audience. Twenty economists are preparing anti-excise articles for placement in newspapers in select congressional districts.

    Articles from the earlier op-ed campaign which debunk the excise tax/user fee connection, continue to appear in print. An op-ed prepared by consulting economist David Gay appeared recently in the Arkansas Democrat. The authors of other published articles have sent copies to their congressional representatives.

1990: Tobacco Institute's Public Affairs budget plan. says about "Social Cost" problems:

"Social cost" arguments are utilized by anti-smoking groups to counter any effort by the tobacco industry to demonstrate the positive economic impact of tobacco on the nation's economy,

    Last year was the second in which the Public Affairs Division implemented the Institute's comprehensive plan to manage the "social cost" issue.
    The 1989 plan included
  • social cost economic consultants,
  • initiated media tours,
  • commissioned and promoted "social cost" research and
  • commissioned a book on "user fees."
It also established a social cost coalition with other industries concerned about excessive government regulation and the misuse of economic principles. Other industries, ie, dairy, meat, alcohol, chemical producers, nuclear power, hazardous wastes management, and small aircraft are also vulnerable to similar "social cost" attacks.

  • Develop a pro-active plan, complete with well-defined media strategy, to counter release of state-specific social cost reports.

  • Support economic consultants familiar with the "social cost" issue to review and maintain literature, to conduct research, to prepare articles, legislative testimony, letters to editors and op-ed pieces.
        When possible, utilize existing tax issue economists' network. Conduct periodic meetings in central location.

  • Publicize economic reviews of "social cost" arguments and encourage publication in newspapers, economic journals and economic conference proceedings.

Outreach Through Consulting Economists and Allies/Grassroots Efforts
    Consulting economist network:
  • Op-eds on reports that budget negotiators are considering excise tax increases (May)
  • [Dwight] Lee's social cost rebuttal in the Journal of the Medical Association of Georgia (March)

1990 Jan: This is yet another list of the work that scientists and academic consultants for the Tobacco Institute have achieved over the past year.

Brennan Dawson, the public affairs head of the Tobacco Institute, reports on their activities to the TI's Communications Committee She gives details of their work in planting contracted academic/op-ed pieces for the tobacco industry. Some of the economists managed to sell these tobacco-funded articles to a number of newspapers.

  • Robert Tollison, Duncan Black Professor of Economics, George Mason University
    Letters to administration officials debunking excise tax/"user fee" connection Jan 1990
  • Richard Wagner, Chair and Harris Professor, Department of Economics, George Mason University [a close associate of Tollison]
    Letters to administration officials debunking excise tax/"user fee" connection. Jan 1990
  • Dwight Lee, Ramsey Professor of Economics, University of Georgia
    Op-ed on excise taxes and user fees published in Macon Telegragh News Jan 1990

On the Tobacco Institute list the names below are marked "Consulting Economists, not on Philip Morris' List" which suggests that many more economists were doing the bidding of the tobacco industry.
  • David Gay, Professor of Economics, University of Arkansas
    Excise Tax/"user fee" op-ed published in Arkansas Democrat April 1990
  • Barry Poulson, Professor of Economics, University of Colorado
    Excise Tax/"user fee" op-ed published in Aiamosa Valley Courier May 1990
  • Dominick Armentano, Professor of Economics, University of Hartford
    Excise Tax/"user fee" op-ed published in New Haven Register Jan 1990
  • Michael Babcock, Professor of Economics, Kansas State University
    Excise Tax/"user fee" op-ed published in The Topeka Capital-Journal March 1990
  • Thomas Wyrick, Professor of Economics, Southwest Missouri State University
    Excise Tax/"user fee" op-ed published in News-Leader May 1990
  • Clifford Dobita, Professor of Economics, North Dakota State IIniversity
    Excise Tax/"user fee" op-ed published in Grand Forks Herald Mar 1990
  • Richard Vedder, Professor of Economics, Ohio University
    Excise Tax/"user fee" op-ed published in Plain Dealer Jan 1990
  • Joseph Jadlow, Professor of Economics, Oklahoma State University
    Excise Tax/"user fee" op-ed published in The Tulsa Tribune Apr 1990
  • Ryan Amacher, Dean of the College of Commerce and Industry, Clemson University
    Excise Tax/"user fee" op-ed published in The Anderson Independent-Mail Feb 1990
  • J R Clark, Hendrix Professor of Economics, University of Tennessee
    Excise Tax/"user fee" op-ed published in The Paris Post-Intelligencer, The Weekly County Press, Kinusoort Times-News, The Commercial Appeal, the Jackson Sun. May 1990
  • John David, Professor, West Virginia Tech
    Excise Tax/"user fee" op-ed published in The Charleston Gagette Feb 1990
  • William Hunter, Associate Professor of Economics, Marquette University
    Excise Tax/"user fee" op-ed published in The Milwaukee Journal Feb 1990
  • Todd Sandler, Professor of Economics, Iowa State University
    Anti-excise tax/"no taxes" op-ed published in Fort Dodge Messenger Jun 1990
  • William Mitchell, Professor of Political Science, University of Oregon
    Anti-excise tax/"no taxes" op-ed published in The Register Guard Jun 1990
Clearly dozens of the tobacco industry's recruited academic economists have planted essentially similar articles as op-eds [personal opinion pieces] in their local newspapers. In fact, they were acting as paid tobacco industry cash-for-comments lobbyists.

[This is only a small section of the Economist's Network list. Many other economists are listed as providing other similar services through the Tollison/Wagner "economists network", while some worked directly to the tobacco companies and the Tobacco Institute.

See document.

1991 Jan: Public Smoking report of the Tobacco Institute lists 39 pages of their activities. It includes many major and minor activities to counter the "Social Costs" claims, including:

  • We continue developing resources to rebut social cost claims: Dwight Lee's social cost research paper has been published and consulting economists submitted the social cost treatise manuscript to a publishing house. A critique of the Health and Human Services social cost report is underway.

  • Consulting economist Dwight Lee's social cost paper, "Social Cost and the Cigarette Excise Tax: A Misguided Rationale for an Ineffective Policy," was published in the Journal of Private Enterprise. Lee examines the economic efficiency of raising the tobacco tax based on social cost claims. He asserts that increasing the tax based on these arguments "rests on extremely weak grounds, both theoretically and empirically." We plan to prepare the article in reprint form for further distribution.

  • Another Lee article appeared in print recently. "Economics and the War on Smoking, published in the December issue of The Margin, challenges claims that smokers should be taxed more than nonsmokers and that smokers are less productive than nonsmokers.

  • We completed the review process for the new draft social cost treatise, The Economics of Smoking. This involved intensive working sessions with the team of reviewers and subsequent meetings with the authors. The manuscript has been returned to the authors to be forwarded to the publisher.

  • We approved funding for a proposal to critique the Health and Human Services (HHS) report, National Status Report in Smoking and Health. Consulting economists Richard Ault and Robert Ekelund will examine the underlying methodology HHS used to derive its social cost estimates. We plan to aggressively promote the findings of the evaluation.

1991 May 30: James Savarese & Associates is now working with Powell Adams & Rinehard. They are writing to Carol Hrycaj at the Tobacco Institute about the Institute's 1992 Social Cost Plan.

At this time Ogilvy & Mather were in the process of merging with Powell Adams & Reinhard to create Ogilvy, Adams & Reinhart.

    This was a period when the public-relations, advertising agencies, campaign management, polling companies, and media-marketing firms were beginning to consolidate into three very large global conglomerates. O&M + PA&R became OA&R, then was subsumed into WPP Group along with Hill & Knowlton, Buston-Marsteller, J Walter Thompson, and literally dozens of other highly recognisable names.]

1991 June 26: Powell Adams & Rinehard (with Jim Savarese and Leslie Dawson) have a conference with Brennan Dawson, Martin Gleason and Carol Hrycaj at the Tobacco Institute. The comments and decisions made were:

  • The 'social cost' activity has become more intense in past two year — it hasn't improved.

  • Hrycaj stated that the Institute currently battles the 'false social cost claims' by promoting a series of white papers and books written by Savarese & Associates' economists. These materials are promoted through media tours and presentations featuring TI spokespeople and consulting economists.

  • Hrycaj pointed out that the Institute has sponsored eight pieces of social cost research since 1988. All eight were submitted to reknowned scholarly journals and four have been published. Hrycaj added that the heart of the current program is the consulting economists who produce the studies, get them published and promote them in academic circles.

  • Savarese noted that the Institute has sponsored five books on the social cost issue but no new social cost research has been commissioned in three years. He noted that the research is essential to establish credibility for the social cost programs.

  • Savarese said that the media tours and presentations have been successful and that the [earlier] research has been exploited.

  • Hrycaj suggested that we concentrate on promoting each individual piece of research to hit individual target audiences starting with select papers.
  • Moeller, Hrycaj and Rinker suggested exploring the possibility of having the consulting economists conduct briefings before business groups and targeted legislators.

  • Savarese recommended that the consulting economists be asked to identify speaking opportunities for themselves. He also recommended pursuing a program with consulting economists based on the critique of HHS social cost model.

  • Dawson agreed with this strategy. She recommended that consulting economists meet with influential national media outlets to explain weaknesses and flaws of HHS model.

  • Savarese will prepare a proposal to attack government "over-regulation."

  • Dawson recommended preparing and attempting to place an op-ed piece on government over-regulation in major papers.

  • Hrycaj recommended allowing D[wight[ Lee to identify opportunities to give social cost presentations before appropriate local level business organizations.

  • Savarese and PA&R will prepare a short proposal based on three-tiered program:
    • consulting economist produces a white paper questioning HHS methodology;
    • major paper op-ed on white paper; and
    • consulting economists' op-ed program based on white paper.

1991 July 26: A summary of the current "Proposals from Economists" at the Tobacco Institute.

  • Productivity: A popularized version, including discussions of health costs, insurance, and general costs of everyday life [proposal from Wagner & Grier].
    • 20-25 pages for management/business journal — cost $18,500

  • Earmarked Excise Taxes for Health Care: A Fiscal Mismatch (Grier & Wagner)
    • Sent to Marty Gleason and Carol Hrycaj at the TI on the 9 April 1991 — total fee $32,500.
    • Resent 15 May 1991 - tentative approval.
    • Resent once more on 17 July 1991 — total fee $42,000

  • Smoking & Workplace Efficienty: An Assessment of the Record
    (Productivity Study - Wagner/Grier)
    • Sent to the Tobacco Institute 7 March 1991. Approved 10 April 1991 — total fee $42,500.
    • Revised version sent to Carol Hrycaj on 19 March 1991
    [Note says "Tell them will pay next year" (must have overrun the budget)]

  • Excise Taxes and Excise Tax Increases: Effects on Rural Americas (Ekelund).
    • Sent to Cal George at the Tobacco Institute July 1 1991, — total fee $28,000.

  • Scientific Fraud and the Organization of Science (Wagner/Tollison)
    • Sent to the Tobacco Institute on 12 April 1991 — total fee $29,500

  • Sports Advertising: (Ekelund)
    • Sent to Shelia at the Tobacco Institute (approved) 19 Mar 1991 — total fee $26,500

  • Bootlegging Study II: (Ekelund)
    • Cal George and Carol Hrycaj were looking after it.
    • Sent to Tobacco Institute 7 March 1991 — total fee $27,000
    • Specific State studies were $4,500 each.
[Note: For comparison: the US Average Annual Salary in 1990-91 was $9,669]

1991 Aug: Tobacco Institute Public Affairs Management Plan, Progress Report says:

  • In an effort to close its budget gap, the Texas legislature considered a five-cent cigarette excise tax increase. Consulting economist Mike Davis submitted to the local press an op-ed arguing against increasing the cigarette tax.

  • An edited draft of "The Political Element in Science: SAMMEC and the Anti-Smoking Lobby," an in-depth examination of the statistical methodology underlying "social costs" figures promulgated by the U.S. Department of Health and Human Services, has been returned to the authors for revision and clarification.

        Consulting economists Robert Ekelund and Richard Ault are expected to provide their second draft in early September. At that time legal review of the document will be undertaken. In addition, issues staff will work with consultants to develop an executive summary of the Ekelund and Ault study for broad distribution to the media and policymakers. A promotion plan, including the potential for op-ed pieces and letters-to-the editor in selected media markets will also be developed.

1991 Aug 5: Martha Rinker (Issues Manager) to her superior Marty Gleason at the Tobacco Institute.

We have one productivity work in progress, the Wagner and Grier "event study." The first draft of this project is expected in September. Its $42,500 price was taken into consideration during the budget process. RJR [RJ Reynolds] is very excited about this study and are anxious to see the final report.

    Four proposed projects emerged from the meeting held a few weeks ago: a popular paper discussing the [Robert] Ekelund, et al results, a speaking tour, an op-ed program, and a possible health costs study.
  1. The preparation and publication of a popular article by [Richard] Wagner and [Robert] Tollison that would include a discussion of the Ekelund et al results, health care and insurance costs issues, and the social costs of everyday life.
          The proposal is more than we want or need. A 20-25 page paper like this would have to published in a university business journal. What we had in mind, and I've discussed this with Savarese, is a shorter article to be placed in the personnel or human resource trades. The article would be good for reprints and possibly a TI brochure.

  2. The preparation and testing of a speaking project for [Dwight] Lee and Tollison. The tasks would include the preparation of a standard speech and the solicitation of speaking engagements with Chamber of Commerce type audiences.

  3. An op-ed campaign based on the paper prepared by Wagner and Tollison listed in the first task above. The op-eds would be written by economists in the targeted areas identified by TI.

  4. A possible health costs study looking at the actual costs of smokers and non-smoker
The only task that has had a price tag attached to it is the "popular" article, $18,500. This should be less when the project is pared down to the size and audience discussed above. The speaking project would include the cost of preparation of the speech andtravel and expenses for the economists. The op-ed project costs would be the hourly fees for the economists preparing the op-eds. And, finally, the health care costs study would be the costs of recovering the information, research and writing of the study.[Projected total costs were $100,000]

    Work could begin in the first and last projects late in 1991 with delivery of the papers (and payment for the work) in 1992, The "popular" paper would mainstream the information we now have and need to circulate to counter the anti's. The other two tasks, preparation of a speech, solicitation of speaking engagements and writing op-eds could be started early in 1992.

1992 Apr 6: Ogilvy Adams & Rinehart is now offering the services of Tollison and his network of economists to general industry coalitions like the Coalition Against Regressive Taxation (CART), made up of tobacco, alcohol, hospitality, oil and energy lobbies.

    Their main thrust is to promote Robert Tollison and his economics network, now with the addition of Reaganite zealot, Jim Miller (ex-director of OMB, ex-chairman of the FTC), at that time, the president of Citizens for a Sound Economy.

As a coalition of major industries, CART is uniquely suited to carry arguments based on the negative impact excise taxes have on industry and on the American economy. [they should]
  • Commission a series of academic papers on the various negative economic aspects of excise taxes. They will be researched and written by respected academics in the fields of economics, public finance and tax policy. Professor Robert Tollison, the Director of the Center for Public Choice at George Mason University, will supervise this effort and author some of the papers himself.

  • CART National Conference on excise taxes. The series of academic papers will be presented for the first time publicly at a Washington, DC conference sponsored by CART and could be chaired by Jim Miller. The conference will provide exposure and credence to the intellectual underpinnings of our program. To strengthen our efforts, we will work to publish one or more of the articles in a well-known academic journal. Tollison and Miller have a long-standing record of success in placing such articles.

  • National Media Program. Using Miller and Tollison where appropriate, CART should conduct an aggressive, proactive national media campaign based on the themes developed through the papers and the conference.
    • op-eds (signed by Miller) placed in major daily papers (Wall Street Journal, New York Times, Washington Post, USA Today)
    • editorial board briefings by Miller and Tollison representing CART at major dailies.
    • CART-sponsored breakfast briefings in Washington, D.C. of key national reporters on research results.
    • story placement in leading business and decision-maker publications. OA&R will work with editors and reporters to generate interest in the economic dangers of excise taxes as developed by CART and by Miller and Tollison.

  • Targeted Media Markets State specific data will be promoted primarily through the state CART's and local business people who can speak to the impact on their business and the state's economic health. In some cases, it will be important to send in one of the academics who helped prepare the studies.
    • media tours — one academic and one local business person would travel to the top media market and the state capitol in a target state and conduct a series of interviews with local media. Print, television and radio outlets all will be targeted
    • editorial board briefings at local daily papers conducted by a local business person and an academic
    • placement of op-eds in local dailies by a local business person or academic.

  • Legislative Support Academics identified by OA&R (such as Miller and Tollison) will be prepared to testify before Congressional Committees or at agency hearings [and] conduct meetings with key Members of Congress, staff and others.
    • Members of the academic team also should be commissioned to testify at the state level and meet with state legislators.

1993 Apr 8: The economist's network is still functioning, but Savarese and Tollison have negotiated a different deal for the participants. Savarese now bills the Tobacco Institute for economist network op-ed commissions, half-down and half on delivery. They are being paid for preparing the articles rather than only when they succeeded in getting their articles published. This bill is for $37,000.

  • Op-ed article by Robert Tollison to be submitted to Wall Street Journal — $4,000.00

  • Rebuttal article by Bob Ekelund, Auburn Univeristy, to be submitted to the Birmingham News — $3,000.00

  • "Monster" tax op-ed project using twenty economists to submit articles in opposition to using excise taxes on cigarettes to finance health care reform - to be submitted to twenty newspapers in twenty different states. FIRST HALF = $30,000.00

[They now get $3,000 each per article — half on commission/half on deliver —, while Tollison gets $4,000]

1993 Apr 13: Calvin George writes to his Tobacco Industry boss Susan Stuntz asking for permission to spend the $67,000 for the 22 op-eds listed by Savarese.

As previously discussed, the 20 economists proposed for the comprehensive op-ed program in opposition to excise taxes for health care reform have been selected with two primary criteria in mind:
  • first, capacity to reach major media markets in states and Congressional Districts represented by key members of the Senate and House Leadership, as well as the Senate Finance and House Ways and Means Committees; and

  • second, the previous track record of the economists in being able to place successfully op-eds in the major dailies identified.
The cost of this project would be $67,000, which is consistent with previous experience for similar efforts. I am recommending approval of this proposal. Funds are available for this purpose under the line items for "Economists to deliver briefings, testimony, and write articles..." ($45,000) and "Op-eds on...health care costs" ($25,000).

1995 Aug 30: The Tobacco Institute is distributing a list of "Potential FDA Contacts" to all the US cigarette companies. [It has a code to distinguish those which the TI will handle and those with company links.]

Most of the groups listed below are likely to submit comments on FDA regulation of tobacco products. Many of these same entities also are quite likely to speak and act against FDA regulation through means other than comments.

    The industry has contacts with nearly all of these groups.
[See pdf for full lists]
  • Agricultural Groups [about 25 on list]

  • First Amendment Groups [Anti-ad ban — Commerical free speech]
    A number of industry personnel have working relationships with the following and others with a stake in the preservation of the First Amendment:

  • Advertising
    There are First Amendment and economic issues which can be addressed by a number of groups including the following.

  • Organised Labor
    The institute is well positioned to coordinate comments, media and congressional/other visits by groups under the umbrella of the Labor Management Committee. The companies are best positioned to coordinate any "march on Washington." The following are among key LMC contacts:

  • Economists
    Economists can be deployed to illustrate the dramatic costs associated with various elements of the FDA proposal. Through TI's economist network, op-eds can be drafted and submitted to papers in 30+ states.
    • Bob Tollison, past chief economist at the FTC and currently working with the Speaker of the House on an FDA-related project.
    • Dwight Lee
    • de Seve
    • economist network — [See cash-for-comment network]

  • Think Tanks
    Many of the following groups are prepared not only to submit comments, but also provide economic analyses of various sorts and play a role in the media and legislative programs, as well as general "atmospherics."
    • Alexis de Tocqueville Institution
    • Independent Institute
    • Business Leadership Council
    • Empower America (and their network of 800 conservative talk show hosts)
    • National Center for Policy Analysis
    • Institute for Policy Innovation
    • Capital Research
    • CATO Institute
    • Citizens for a Sound Economy [Later called FreedomWorks]
    • Citizens Against Government Waste
    • Heritage Foundation

  • Other Companies/Groups that have spoken out against the FDA or face its power down the slippery slope of over-regulation.
    A number of industries have spoken out on FDA abuses ; others are now likely to ioin the chorus. The industry has contacts with many of the specific groups or types of groups listed below.


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