USA

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.

OPINION ONLY

Professor Greg Niehaus became recruited into a clandestine network of academic economists who secretly worked for the tobacco industry through the Tobacco Institute. He was still an undergraduate at the time he first began to work with Savarese and Tollison in Michigan — although he wasn't then recognised as a formal network member.

Tobacco lobbyist James Savarese (working through his own company and Ogilvy & Mather PR) and Professor Robert Tollison of George Mason University collaborated in November 1982 to provide the tobacco industry, through the Tobacco Institute, with networks of academics in various disciplines who would be willing to write and sprout propaganda material ... always provided the payments for these services were not directly tracealble to the Institute or to any of the cigarette companies.

The idea was simply that these academic 'sleepers' would be available on a cash-for-services basis when needed to counter attempts to increase excise taxes or to ban public smoking ... or just to appear as 'independent experts' at Congressional hearings and promote the industry causes.

Economist were by far the most useful of the acolyte academics because the distinction between economics and politics was never clear: so support of the cigarette companies could always be portrayed as support for free-market economics including the rights of individuals to make public choices ... small government ... or even the first Amendment to the Constitution.

The economist working for Savarese, always claim to be 'independent' 'professionals' and ' academics', and they exploited the fact that they came from some credible university. They never revealed the source of their funding in their op-eds or letters-to-the-editor.

If ever put under cross-examination, they must be able to claim (with weasel-word imprecision) that they had "never received a penny from the tobacco industry". Therefore all payments were laundered, either through tobacco industry lawyers ( usually Covington & Burling),) the principle organisers James Savarese & Associates, or through Bob Tollison's Center for the Study of Public Choice at George Mason University.

The aim was to have, in each State, at least

• one academic economist,
  
• one academic lawyer, and
  
• one academic from a business management, business law, marketing or advertising discipline

The academics were always expected to wave their own and their university's credentials vigorously, and loudly proclaim their "independence' from any crass-commercial motives. And those who could boast of being 'non-smokers' were especially prized — since without this addiction, their non-dependent-on-tobacco status was thought to be proved beyond any doubt!

Unfortunately, it worked.

Some key documents

• Professor of Economics [actually Business], University of Michigan while he was working for the tobacco industry. [Later at South Carolina.]
    He also consults through economics-hire company, Nathan Associates Inc.

• Note that in the tobacco archives there are 25 documents with the spelling "Greg Neuhaus", and 24 with "Greg Neihaus" and 28 times where the name is actually spelled correctly as "Greg Niehaus" [77 in total] He doesn't appear to have used his full name "Gregory" in the archive documents.

• His later C/V is here

1982: MA Economics, Washington University

1984 Aug: /E Niehaus has produced, along with Robert Tollison, Economic Impact of Instituting Smoking Prohibitions in Michigan for the local Michigan Tobacco and Candy Distributors and Vendors Association. He doesn't claim any economic qualifications, but he does claim to be at the University of Michigan while Tollison was at George Mason University.

    This so-called 'report' is standard Tobacco Institute propaganda, quoting figures generated by other tobacco lobbyists like Theodor Sterling, etc.

Our conclusion is that the proposed bill would put serious fiscal pressure on certain segments of the private sector, and on the public sector as well. The costs of the proposed bill would be borne directly by private employers and indirectly by all residents of the state through secondary or multiplied economic effects.

1985: PhD Economics at Washington University, St Louis, Missouri

1985–90: Assistant Professor of Finance and Insurance, University of Michigan

1985 Dec: Economic Impact Of Instituting Smoking Prohibitions In Michigan by Greg Niehaus, PhD.

    The cover page has two notes: "Needs a good editor!" and "12/85, DRAFT - to be finalised after [Dennis] Muchmore & [James] Savarese discuss."
[Muchmore was from "Governmental Consulting Services" in Michigan]

    This is a minor rehash of the 1984 report prepared by Tollison and Niehaus for the Tobacco and Candy union — but now without Tollison's and the union's names attached. All of the tables and data are the same — and no attempt has been made to update the report with later material. Ed Battison, the Tobacco Institute's contract economist, has penned some rather scathing remarks on the report.

    From the attached memo dated Jan 16 1986 it was seem as am example of "Jim Savarese's work product." This means that Niehaus was contracting to Savarese and Ogilvy & Mather at the time, in working for various companies.
[Savarese specialised in labor-union matters at this time. Also this link to Niehaus suggests that Savarese and Tollison were possibly working together well before the date generally assumed.].

1986 Jan 26: Katherine Becker in her Weekly Activitiy Report at the Tobacco Institute, lists

Reviewed and commented on smoking restriction/economic impact studies by Greg Niehaus and Dwight Lee for 1/27 meeting with PR.

1986 Feb 3: Two years after it was originally cobbled together by Tollison and Niehaus, the Tobacco and Candy Distributors and Vendors Association put out a press release to promote their 'study' under the headling "Smoking Legislation Costs Michigan Business." At the press conference, Niehaus claimed that the Association "commissioned" the study — knowing full-well that it hadn't.

    Niehaus is now credited as a "Professor of Finance at the University of Michigan." and Tollison's name is back on the document itself. The report is being promoted by another old tobacco spruiker, Lew Solmon (of UCLA) who quotes the report as saying that

Restrictions on smoking in offices couid cost business $150-800 million.

    [And that] The methodology used by anti-smoking advocates is questionable. The often-noted correlation between cigarette smoking and high rates of worker absenteeism is not one of strict cause and effect [because] Absenteeism can easily be explained by other variables.

1986 Feb 14: Dennis Muchmore's lobbying company in Michigan, Governmental Consoltant Services Inc, report back to the Tobacco Institute that they had lined up a good cabal of pro-tobacco witnesses for a legislative hearing. Among those chosen were

• Mr Greg Niehaus of the University of Michigan, and
• Dr Phillip Witorsch, of Washington DC

1986 Feb 25: The Tobacco Institute's accounting details for his study of smoking restrictions in Michigan, modifying it to suit their requirments, and promoting it via a press conference. He is charging $125 per hour for his time:

Study that analyzed proposed smoking restrictions in Michigan.

December:

• Reading and changing initial paper — 6 hours
• Lunch in Brighton MI   — 4 hours
• Rewriting paper         — 4 hours

February:

• Preparation for press conference   — 2 hours
• Press Conference in Lansing, MI   — 6 hours
• Testimony at Committea hearing in Lansing,   — 5 hours
• Talking to reporters       — 1 hour

Total Time: — 28 hours

Amount Due ($125/hr)       — $3,500.00

Please make check payable to — Greg Niehaus Graduate School of Business, University of Michigan, Ann Arbor, Michigan

1986 Apr: A Tobacco Institute evaluation of the usefulness of the networks by the Regional Directors and Vice Presidents says about this economist. (While misspelling his name):

Greg Neuhaus (University of Michigan): Having participated in editorial briefings and testified on a Michigan smoking restriction bill, Neuhaus was considered an intelligent witness with a quiet, very effective delivery. Neuhaus was viewed as "excellent" in responding to leqislators' questions. He knew his material and did not have to search for the answers in the study.

1986 Apr 3: James Savarese writes to his stable of economists on the subject of "New Research Opportunities." [A sure-fire come-on with academics]

I would like to thank you for all of your cooperation and diligence in handling the projects we have worked on together. I am taking this opportunity to alert you to some new research opportunities that may be available in the upcoming weeks.

    The Tobacco Institute is interested in considering research proposals which would establish a much more realistic examination of the social cost issue as it relates to the smoking issue.

... rebuttals developed by Bob Tollison and Richard Wagner to the OTA report.

    The Institute would like to examine proposals for research that test, in a quantitative way, a number of propositions on the relevant cost considerations that apply to the smoking issue.

    If some aspect of this interests you, please provide me with a brief (1-2 page) description of any project you have in mind by April 30. Please include a cost approximation.

1986 Apr 3: This appears to be the approved copy of the letter on "New Research Proposals" that Jim Savarese sent to his long list of network economists. This letter leaves no doubt that these academic economist knew that they were being paid to protect the interests of the tobacco industry.

    The economist were also being given outline "rebuttals" developed by Tollison and Wagner to help them in writing their counter-attacks to an an Office of Technology Assessment (OTA) anti-smoking report.

I would like to thank you for all of your cooperation and diligence in handling the projects we have worked on together. I am taking this opportunity to alert you to some new research opportunities that may be available in the upcoming weeks.

As you know, the tobacco industry is exposed continuously to a barrage of attacks on economic issues. Many of these attacks involve a serious perversion of the concept of social cost. The Tobacco Institute is interested in considering research proposals which would establish a much more realistic examination of the social cost issue as it relates to the smoking issue.

I have attached a report prepared by the staff of the Office of Technology Assessment which is representative of the kind of "research" being put forth by anti-tobacco activists. I have also included the rebuttals developed by Bob Tollison and Richard Wagner to the OTA report.

The Institute would like to examine proposals for research that test, in a quantitative way, a number of propositions on the relevant cost considerations that apply to the smoking issue.

1986 Apr 8: The Tobacco Institute's administration wants some accounting and address details on paid lobbyists including Dennis Chinn, Greg Niehaus, James A Papke, Thomas Borcherding and many others in the network.

1986 July 23: [See page 5 of 33] File note from Katherine Becker at the Tobacco Institute " Resource Evaluation — Trisler Interview"

At Bill Trisler's (BT) request, Public Relations provided an economic impact study on pending smoking restriction legislation in Michigan.

Marketing Resources [Group Inc.] [the local lobbying company] and Gary Neuhaus [sic Greg Niehaus] used the study "to educate the public and legislators" about the potential costs of restrictions through newspaper articles and legislative briefings.

    In BT's view, if Tobacco Institute sponsorship is identified, "red flags go up." Reaction is good if Institute sponsorship is not identified or if our representative has a "good relationship" with a legislator.

    Legislative reaction to presentation of the TI study by an industry ally will elicit a different response than if presented by TI, depending on who the ally is and who are the legislator's constituent groups.

Economist Witness

• Dwight Lee (University of Georgia): A last-minute substitute to present legislative testimony, Professor Lee was rated by BT as having little, if any, effectiveness at the hearing on smoking restrictions. He was not familiar and/or comfortable with the obviously canned testimony he presented. Lee, apparently viewed as a "stranger" by some midwestern legislators, may be more effectively utilized in the southern states,
• James A. Papke (Purdue University): This economist testified on a tax bill before the Ohio House Ways and Means Committee. Described by BT as an "outstanding" witness with a good grasp of how this issue (tax hike) would affect the economy, he is rated as someone who could likely be used very effectively in any situation,
• Greg Neuhaus (University of Michigan): Having participated in editorial briefings and testified on a Michigan smoking restriction bill, Neuhaus was considered by BT as an intelligent witness with a quiet, very effective delivery. Neuhaus was viewed as "excellent" in responding to legislators' questions. He knew his material and did not have to search for the answers in the study.

    In Bill's view, it is very important for the economist witness to be a resident of the state in which he or she will testify. Industry opponents condemn The Institute for "big spending" when "outsiders" are brought into a state for a hearing.

1986 Aug: The Regional Vice Presidents (RVPs) and Regional Directors (RDs) of the Tobacco Institute in charge of various areas have supplied comments on their Economic Witnesses. Six of the RVPs thought it important that the economist was a resident of the State, "Ideally associated with the State University", while three did not, provided they were "presented to the legislators by a 'credible... organization' (e.g. chambers of commerce, labour union)." [Provided they hid their tobacco industry backing behind a front organization.] The consolidated and encapsulated comments included:

Region III
Dwight Lee (University of Georgia):

James A. Papke (Purdue University):

Greg Neuhaus [sic Neihaus] (University of Michigan):

1986 Dec 11: James Savarese sends Fred Panzer at the Tobacco Institute a summary of the activities of his network of economists. This is effectively the beginning of the main cash-for-comments economists network.

Dear Fred,
    I have attached a list of all the economists we have used along with the projects they have worked on in behalf of the Tobacco Institute.

• GSA = Government Services Administration.
• 'Ways & Means' = Congressional committee on finances
• ALEC = American Legislative Exchange Council (a formalised way for big business to directly influence Congressional and State politicians)
• Chase Econometrics = A company that did economic impact studies for the tobacco industry in various locations to 'prove' that smoking bans would destroy local economies.
  
      The references for this network member were:

Michigan [ Region III ]

Professor Greg Neihaus

Graduate School of Business , University of Michigan, Ann Arbor, Michigan 48105, 313-763-5932

Services rendered:
• economic impact study
• testimony: smoking restrictions - Michigan

1987 Jan 6: and 12 Jim Savarese advises the Tobacco Institute that some economists were no longer working for his network. However Neihaus is now being listed as their main Michigan economist-for-hire.

In order to keep this project straight with respect to the economists, we were specifically assigned to go back to all 42 names on the original list to check to see if the economists were still interested in working for us, still in the same state, and available to meet with representatives from state activities.

    We have 34 who fit this criteria and have been contacted. The list is attached. The states that we once had that are currently missing are Arizona, Maryland, Massachusetts, Nebraska, New Jersey, Vermont, West Virginia, and Wyoming.

    The attached invoice covers the project of re-contacting the original 42 economists and coming up with the present 34 people.

The primary purpose of this contact is to determine if a given economist is capable of testifying effectively before a legislative body.

    They have been informed that someone from TI will be in contact with them.

    We request that an initial contact be made by telephone immediately. Please let me know when this initial contact has been made. Personal meetings should be arranged and completed no later than May 1, 1987.

1987 Jan 6: Savarese is charging the Tobacco Institute $3,200 to update the cash-for-comments economists list (with Neihaus still active)

1987 Feb 6: James Savarese has finalised his list of compliant economists, and sends them to Susan Stuntz at the Tobacco Institute. It lists all the familiar cash-for-comment economists plus a few new ones.

• Old faithfuls: Lee Anderson, Terry Anderson, Armento, Bohanon, Borcherding, Butler, JR Clark, David, Dalton, Denzau, Dobitz, Ekelund, Gay, Harper-Fender, Dennis Hein, Howe, Hunter, Jadlow, Kurth, LaCroix, Dwight Lee, C Matt Lindsay, Dennis Logue, Chuck Mason [Masen], Charles Maurice, Fred McChesney, McMahon, Mead, Mitchell, Parkman, Peterson, Pogue, Poulson, Raab, Rottenberg, Schmitz, Vedder, Wagner
• New Recruits:

  • Prof Greg Neihaus, Graduate School of Business,
    University of Michigan
    Ann Arbor, Michigan 48105, 313-763-5932
  • Professor Roger Riefler, Department of Economics,
    University of Nebraska
    Lincoln, Nebraska 60588, 402-472-2327
  • Professor Mario Rizzo, 269 Mercer Street, New York
    University of New York,
    New York 10003, 212-598-7516
  • Professor Boon Yoon, Department of Economics,
    State University of New York - Binghamton
    Binghamton, New York 13901, 607-777-2689

1987 Feb 6: James Savarese has finalised his list of compliant economists, and sends them to Susan Stuntz at the Tobacco Institute. It lists all the familiar cash-for-comment economists. [See hotlinks on left]

Now well-established network economists:
Lee Anderson, Terry Anderson, Dom Armentano, Cecil Bohanon, Thomas Borcherding, Henry Butler, Jeffrey R Clark, John David, Allan Dalton, Arthur Denzau, Clifford Dobitz, Robert Ekelund, David Gay, Anne Harper-Fender, Dennis Hein, John Howe, William Hunter, Joe Jadlow, Michael Kurth, Suuner LaCroix, Dwight Lee, C Matt Lindsay, Dennis Logue, Chuck Mason [Masen], Charles Maurice, Fred McChesney, Robert McMahon, Arthur Mead, Wm Mitchell, Allen Parkman, William Peterson, Thomas Pogue, Barry Poulson, Raymond Raab, Simon Rottenberg, Mark Schmitz, Richard Vedder, Richard Wagner

• Greg Neihaus, [aka Neuhaus] University of Michigan, Ann Arbor
• Mario Rizzo, New York University NY
• Roger Riefler, Uni of Nebraska, Lincoln
• Boon Yoon, State Uni of New York, Binghamton, NY

1987 May 5: Cotton Mather ('Matt') Lindsay of Clemson University has written an article "Excise Taxes: Facist Finance" which is being circulated at the Tobacco Institute. He has discovered through his extensive research that:

it is difficult to achieve vertleal equity [equal burden on everyone] through excise taxes because the amount of the tax paid depends on purchases rather than income.

    Breweries and tobacco companies write checks to the government for the excise taxes on beer and cigarettes, but here economists agree; these companies pass these taxes on to consumers. One's share of the burden of the revenues raised by these taxes depends on how much beer one drinks and how much one smokes.

    The unfairness of these excises is manifest; it is not merely another economists' debating point. The tobacco excise tax, for example, is the most regressive tax in the federal system. It is paid only by smokers who are today predominantly lower-middle income earners, lower income working women and blue collar workers.

    Some have argued that these taxes are appropriate because the funds can be earmarked for expenditures like Medicare, environmental protection and even public employee pensions. Why beer drinkers and cigarette smokers ought to pay more for such things is far from clear, however. To the extent that these activities shorten life, they relieve the burdens of Medicare and pension funds by removing potential claimants from the eligibility roles.

    Viewed from another perspective, smokers and beer drinkers not only bear a disproportionate share of taxes because they pay excises on these commodities, but they get less for their money, too. Because they live a shorter life span, they collect less in retirement benefits and receive fewer Medicare benefits.

    This may be fine for Mussolini, but it is antithetical to tax principles in a free and open society.

Professor Gregory Neishaus:
"Yes, outstanding witness"

1987 May 22: Bill Trisler sent his evaluation of economic witnesses for Region III to George Minshew at the Tobacco Institute.

MICHIGAN
Professor Greg Niehaus, Graduate School of Business University of Michigan, Ann Arbor, Michigan
In 1986 I had a minimum of four one-on-one meetings with Greg, not including hearings. I had made one contact, by phone, in 1987 for him to be our scientific witness for Ohio HB-231, however he was going on vacation and had to decline. I have a great deal of respect for this individual and find him to be an excellent witness. I can make contact at anytime.

1990–96: Associate Professor of Insurance and Finance, University of South Carolina

1996–97: Chair of Life Insurance and Financial Services, Michigan State University

1997–99: Associate Professor of Insurance and Finance, University of South Carolina

1999–20: 07 Professor of Insurance and Finance, University of South Carolina

2001–20: 04 Chair, Department of Banking, Finance, Insurance, and Real Estate, University of South Carolina

2007: Associate Dean for Research and Academics, University of South Carolina

2013: He appears to now be teaching finance at the University of South Carolina

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