CREATED 7/7/2011
 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.
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OPINION ONLY
Raymond Leonard Raab
[Prof PhD]
— A cash-for-comments economist from the University of Minnesota. — The 1985 Tobacco Institute document, "Federal Markets", which was sent to the Tobacco Institute's Regional and State Directors, provided a long list of the likely allies the industry had among academic economists in opposing the earmarking of cigarette excises for healthcare and for other purposes. The industry was particularly interested in attacking the Food and Drug Administration (FDA) which it always feared would attempt to regulate cigarettes as a drug.
The Tobacco Institute's contractors kept a registry of those academics available to write articles or letters on demand, provide witness services at legislative or local ordinance hearings, etc. or give lectures to various influential bodies — or have one-to-one meetings with legislators. They were never required to divulge the industry connections, and they were never required to make any outright statement in support of smoking ... in fact, the complete opposite. Those who could maintain proudly that they were non-smokers were seen to be more sensible, and to have more credibility with the gullible readers who thought that political influence involved brass-bands and flag waving zealots.
Writing economic and political op-ed pieces and letters to the editor were the easiest way for these academics to earn some quick cash without sticking their neck out enough to be noticed. In their articles they attacked the principle of cigarette taxes, not the taxes themselves. They attacked the idea of the FDA extending its mandate, rather than the question of whether nicotine was a drug.
Payments were laundered through a couple of channels linked to the George Mason University's Center for the Study of Public Choice and its director Robert Tollison, and also through a labor/economics lobbyist named James Savarese.
The purpose of the network was to provide propaganda and lobbying services to the tobacco industry in all 50 US States, utilizing trusted and prominent academics at the local universities, and the scam ran very successfully for a couple of decades. It was considered influential enough for the Tobacco Institute to continue its funding when other projects suffered budget cuts. As a result, hundreds of op-ed articles appeared in many dozens of influential newspapers across America.
| Content vs. Purpose? |
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| The question is not what was said in these articles, but rather the reasons why they were written. If your vision of economics is merely that it is a form of commercial bookkeeping which can be considered in isolation (a view that almost universally prevailed in academia until the global financial crisis), then ethics, morality, and human well-being doesn't figure strongly in your calculations outside the value of humans as production and consumption units. Clearly the early deaths of many older and disabled people [those who have passed their social usefulness and are a burden on the tax system] is of benefit to the survivors and therefore to the national economy as a whole. Smokers who are taxed during their smoking lives and then die young, in this calculus therefore benefit their communities by not becoming a burden.
It then follows that cigarette manufacture cannot be considered a social burden, but rather as pure economic benefit.
This sort of superficial analysis digs no deeper into the complexities of life, living and society than you would find in the preface of a Chicago University Economics 101 textbook written by the supply-sides and neo-cons. Of course the same arguments can apply to euthenasia of the disabled and the elderly ... and perhaps to the hanging of all academic economists who propound this sort of simplistic nonsense. |
Some key documents • Associate Professor of Economics, University of Minnesota at Duluth. Raab was only an Associate at the university, and he worked for a consulting company JP Consulting, in Duluth MN which was run by Professor Jerrold M Peterson from the same university. Raab took the front-running on all the tobacco industry activities; Peterson obviously prefered to keep his involvement quiet.
1984 Jul: The Tobacco Institute's Cigarette Excise Tax Plan. The plan augments our basic lobbying efforts by relying on groups outside the industry — some not regularly associated with the industry — to argue against excise taxes for us.
It is an ambitious program, based on the notion that many of the most effective protests against tobacco taxes will come from groups philosophically distant from The Institute. Many such groups agree with us on the excise issue, even though they disagree with us on other matters.
At the federal level, supporting Congressional members from the tobacco states is essential to our lobbyists. The tobacco members consistently vote as a unified group — something that is rarely seen in Congress today. They are our lobbyists' most important resource.
The program recommends that economic and other consultants assist us in developing, "packaging," and presenting our anti-excise arguments in legislative testimony or meetings with coalition members.
Resources:
Economic consultants with different areas of expertise will conduct research and act as spokespersons for The Institute and organizations supported by The Institute. Specific activities with economists are discussed throughout the tactics.
Tactics: - Stimulate reputable public finance economists at key state universities to determine the validity of state revenue forecasts, perhaps on behalf of state business organizations and present arguments against excise taxes in various forums; e.g., meetings with potential coalition members or budget officials.
- Encourage economists to make the case against regressive taxation in meetings with potential coalition members and legislators.
- Retain public finance economists affiliated with non-profit organizations to research the subject and use their findings in forums such as:
- Private meetings with state legislators or staff ;
- formal testimony before government bodies ;
- targeted media appearances;
- speeches before business, civic, labor, and other groups ;
- tax symposia in key states where the proceedings could be published for use in other states ; and
- articles which raise the visibility of key arguments in the business, academic, and popular press.
Strategies: - Presenting specific members of the House Ways and Means and Senate Finance Committees with arguments prepared by economists with whom they share some common interest; e.g college affiliation, service on the same commission.
- Gaining the support of Citizens for Tax Justice (CTJ), the most influential labor/liberal tax reform group in the country, in opposition to excise taxes.
- Relying on the AFL-CIO — via The Bakery, Confectionery, and Tobacco Workers Union — to ensure that the labor/liberal tax package that emerges in the next session of Congress does not include tobacco.
Appendix: A list of economists in key states who may be willing to act as industry and third-party spokespersons on the tax issue.
Following is a list of economists in key states who might assist us as experts receiving honoraria. 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 industry; published articles or research; and availability.
Our intent is to have a group of individuals whom we can call upon as needed to testify, conduct special research and discuss their research projects and/or views on excise taxes with budget officials, potential coalition members, legislators and the media.  
1985 Jan 31: A Tobacco Institute list of about sixty economists from the cash-for-comments network. It has been organise by State, and includes the names of Congressmen they wish to influence. This economist will be detailed to make the contact [by sending him/them the published op-ed]:
The details of the politicians the economist has been detailed to contact are: MINNESOTA (Rep. Frenzel, Sen. Durenberger)
Professor Raymond Raab, University of Minnesota - Duluth, Duluth, Minnesota
1985 Feb 21: Roger Mozingo of the Tobacco Institute is sending his state directors a list of resources available to fight against excise taxes in their states. Raymond Raab heads their list of available witnesses for Minnesota
1985 Mar: Tobacco Institute document "Federal Markets" on the likely allies the industry has acquired to oppose the earmarking of cigarette excises for healthcare. It also includes a record of their successful activities in each state
Market: MINNESOTA
Positive Actions by Local Allies:
Academics: Professor Raymond Raab (University of Minnesota) wrote an op-ed article on tax reform and submitted to the Minneapolis Star Tribune. Editor is considering for publication. Copies of the article were sent to Senate Finance Member Durenburger and Ways & Means Member Frenzel.
See page 4
See Success List
1985 Mar: /E Article "Excise taxes Unfair to Consumers" by Raab. This is the draft of a short op-ed type article sent to the Tobacco Institute. He maintains that 'sin taxes' don't reduce demand for cigarettes — which must have been unwelcome news for the tobacco companies that spent millions of dollars a year fighting against them.
1985 March: /E A State Activites (Tobacco Institute) report lists him as active in Minnesota on their behalf: Professor Raymond Raab (University of Minnesota) testified against Minnesota state legislation to increase the excise tax on cigarettes.
1985 May: Report from Regional Vice President Michael Brozek to Bill Buckley at the Tobacco Institute on legislative matters in Minnesota. On Monday, May 6, SF 776 was heard before a subcommittee of the Senate Finance Committee. Industry lobbyists, as well as University of Minnesota Professor Dr. Raymond Raab and [Washington DC tobacco lawfirm] Covington and Burling attorney, John Rupp, were on hand to present testimony in opposition to this legislation.
SF 776 would place a tax on cigarettes to fund sewer projects, as well as anti-smoking educational programs. Additionally, this measure contained specific language to ban all promotional cigarette sampling in the state of Minnesota.
After much discussion and testimony, the Committee agreed to delete all references to a prohibition on cigarette sampling, but placed specific language mandating that all promotional cigarettes have a Revenue Department stamp affixed to each pack.
On May 7, the full Senate Finance Committee met to affirm the subcommittee's recommendations, while adding several remedial changes in statutory references. It was this committee, in their zeal for purity, that passed an amendment to SF 776 banning the sale of candy cigarettes. In a discussion that stretched absurdity into the realm of legitimacy, several senators suggested that bubble gum cigars also be banned. He then details the extensive 'grass roots efforts' being made via mail, phone banks, petitions, etc. to block this bill.
1985 Oct 17: James Savarese replies to a query from Fred Panzer at the Tobacco Institute. In response to your question concerning our invoice of 1 October I have enclosed copies of the editorials written by B. Poulson (Colorado), J P Consulting (Raymond Raab, Minnesota), and William Anderson (Tennessee). The Rucker billing is for testimony in the Rangel/Rose Hearing on July 18.
Hope this clears matters up. Fred replies asking "Did these see print?"
The Invoice relates to the "Tobacco project"
- B. Poulson — "Unfortunate Side Effects of Current Tax Reform Proposals" & "Smoking Restriction Will Cost Business Tax Payers" — $1,500.00
- R. Rucker —Testimony presentation on 7/18 — $1,300.50
- J P Consulting Editorial (Raab) — $ 1,000.00
- William L. Anderson - Op-Ed Article on Excise Tax — $1,000.00
TOTAL $4,800.50
1985 Dec: /E President Ronald Reagan asked Senator Bob Packwood, chairman of the US Senate Finance Committee, to design a proposal for comprehensive tax reform which would reduce the highest individual income tax rate down to 35% from its current 50% level, but retain adequate incentives for business investment, and avoid inclusion of any new taxes.
In an attempt to do this without reducing the total amount of tax revenue that is currently collected, the Packwood plan proposes to offset reduced revenues from income taxes by what the Wall Street Journal has referred to as a "backdoor increase in excise taxes."
The Packwood plan proposes to eliminate the income tax deductibility of excise taxes and import tariffs paid by businesses [and it] would increase federal excise tax receipts by an estimated $75 billion over five years. Approximately $13 billion of this would be a result of a direct increase in excise taxes on motor fuel, wine, distilled spirits, and tobacco.
See also in this document James Savarese's report to Fred Panzer at the Tobacco Institute on the progress of his Packwood Excise Tax/Op-Ed project. This economist and 18 others are writing opinion pieces for their local newspapers, and sending letters to their congressmen.
[The Packwood Plan triggered a substantial increase in the activities of the cash-for-comments economists already employed by the tobacco industry and led to the creation of the very substantial network of academic economists in every state who could be called upon to help fight tax increases on cigarettes — and later public smoking bans.]
1985 Dec 12: Annual Report of the Tobacco Institute's Public Relations division lists him as having: We believe that the active and creative use of experts — our scientists in particular — gives us an edge. But without question, public smoking is our toughest challenge.
A close second is taxation. In 1985, most of our resources in this area were focused on the federal situation.
That being the case, we concentrated almost exclusively on the home districts and offices of the 56 members of the House Ways and Means and Senate Finance Committees.
We identified and utilized economists from universities in 48 of those districts. Some testified at the four federal tax hearings in which had interest. Others participated in academic symposia attended by Congressional staffers. Others communicated directly with their Congressmen.
And 34 of them wrote op-ed articles on the need to consider excises as part of tax reform. Many of these articles appeared in the principal newspaper in the targeted districts which have, by our estimation, a total circulation of nearly 4 million.
The economists were of great help. [SNIP]
Professor Raymond Raab (University of Minnesota) wrote an op-ed article on tax reform and submitted to the Minneapolis Star Tribune. Editor is considering for publication. Copies of the article were sent to Senate Finance Member Durenburger and Ways & Means Member Frenzel.
[Also] Professor Raymond Raab (University of Minnesota) testified against Minnesota state legislation to increase the excise tax on cigarettes.
1986: This is the Tollison/Saverese network list for 1986. It has 64 names, but it still doesn't cover all 50 States. Some States have two or three network members, so newspapers [and sometimes Congressmen] need to be specified for each member to ensure there is no accidental duplication.
Telephone numbers (office and home) are often included in case an urgent op-ed or ordinance hearing is needed. These are grouped by State: MINNESOTA
Professor Raymond Raab
J P Consulting, P.O. Box 3053 Duluth, MN 55803-3053, 218-722-2602 (affiliation: University of Minnesota)
Mr. Jack Militello
College of St. Thomas, P. 0. Box 6041, 2115 Summit Avenue ,St. Paul, MN 55205, 612-647-5646
1986 Jan: The Tobacco Institute's Public Relations Resource Catalogue for their Regional Directors, lists documents, booklets, article, posters and people who can help them fight local public smoking ordinances and threats to raise the excise taxes on cigarettes.
It provides a long list of economists who are willing to speak at hearings, write letters to the editor, or create op-eds for the newspapers to counter any threat to public smoking or possible increase in excise taxes.
The Tobacco Institute offered their Regional Directors the C/Vs of all of these economists, and said "Requests for economists should be made ASAP. Allow at least one week. PR approval needed." He is listed [along with 50 other economists] as a contact in: - Professor Raymond Raab
Department of Economics, University of Minnesota - Duluth, Duluth, MN
He is available on two weeks notice as a witness for hire. Public Smoking/Witness: Local economists are available on two-weeks notice to provide economic testimony on the public smoking issue. Those economists who have testified or prepared op-ed pieces on the economic effects of public smoking are marked accordingly. The others may be briefed on the potential cost to government of implementing smoking restrictions.
Tax witness: [He will] "explain why excise taxes are regressive and unfair to consumers and unsuitable and unreliable as a means to increase the federal revenue."
Those economists who have testified or prepared op-ed pieces on the economic effects of public smoking are marked accordingly. The others may be briefed on the potential cost to government of implementing smoking restrictions.
1986 Jan: The Tobacco Institute's Public Relations Resource booklet for their Regional Directors, lists documents, booklets, article, posters and people who can help them fight local public smoking ordinances and threats to raise the excise taxes on cigarettes.
It provides a long list of economists who are willing to speak at hearings, or write letters to the editor, or op-eds for the newspapers to counter the public smoking or excise tax threat.
It lists him as: - Professor Raymond Raab, Department of Economics, University of Minnesota-Duluth
Duluth, MN He is available on two weeks notice as a witness for hire. Public Smoking/Witness: Local economists are available on two-weeks notice to provide economic testimony on the public smoking issue. Those economists who have testified or prepared op-ed pieces on the economic effects of public smoking are marked accordingly. The others may be briefed on the potential cost to government of implementing smoking restrictions.
[He will] "explain why excise taxes are regressive and unfair to consumers and unsuitable and unreliable as a means to increase the federal revenue."
Those economists who have testified or prepared op-ed pieces on the economic effects of public smoking are marked accordingly. The others may be briefed on the potential cost to government of implementing smoking restrictions.
1986 Mar 20: Tobacco Institute document: Background Update Of the Estimated Effect of the Packwood Tax Plan On the Price Increase Necessary For Cigarettes
If the deductibility of the excise taxes is eliminated, then most, if not all, of this tax increase will be passed on to tobacco consumers as price increases to cover the additional corporate taxes they will be required to pay, plus the indexed excise tax requirement.
On the basis of 1985 sales, and the level of federal excise taxes paid on cigarettes, the level of taxable sales would be: $4.5 billion / $0.16 = 28.125 billion packs — the remainder are either sent overseas as exports or to armed services, or to government institutions.
If the Packwood plan is adopted, and if the effective tax rate on tobacco corporations is 35 percent as in 1983, the increase in corporate income taxes would be about $1.83 billion.
It must be assumed that this tax increase will be passed on to consumers in order to maintain net income. This will cause a decline in demand on the base level of 28.125 billion packs.
1986 Apr 1: A letter to Senator Packwood attacking his plan, and an "Open Letter" for publication (Written by network member William Mitchell) are being circulated, together with a list of network members — noting who have submitted their articles to a newspaper, and who hav written to their local Senators.
Raab is obviously tardy. He is notable for still having his article in the Writing stage.The others (with a couple of exceptions) have all sent copies of their articles and letter to the Tobacco Institute.
1986 April 3: Professors Joseph M Jadlow (Oklahoma) and Charles Maurice (Texas A&M) have prepared draft articles attacking the Packwood Tax Plan. James Saverese has sent them, together with clippings of articles already published, along to Fred Panzer at the Tobacco Institute for correction and clearance. (See page 10)
It lists many dozens of articles which the cash-for-comment economist on the network have now written, including one:
MINNESOTA
Prof Raymond Raab
Submitted to Paper: 3/25/86, St Paul Dispatch, Minneapolis Star, Duluth News Tribune
Current Status: [N/A]
Letters have been sent on 3/25/86 to Senators Boschwitz and Durenberger
The Tobacco Institute also keeps a record of his submissions and letters to his State Senators, which is circulated to the tobacco companies (here Lorillard).
One of the network economists, William Mitchell, has also written an "Open Letter to Senator Packwood" attacking his plan, and this is being circulated along with a letter from "Opportunities Industrialization Centers of America, Inc."
1986 April 4: Senator Dave Durenberger replies to Professors Jerrold M Peterson and Raymond Raab of JP Consulting, Inc. in Duluth Minnesota thanking them for their letter critical of the Packwood tax plan.He encloses a copy of the Congressional Record. BUSINESS DEDUCTIBILITY OF FEDERAL EXCISE TAXES
Mr. DURENBERGER.
Mr. President, I rise today to address an issue that is of great concern to me. In recent days, there have been reports that tax reform legislation may include a provision that would deny businesses the right to deduct Federal excise taxes.
Such an idea, especially in the context of reforming the Federal Tax Code, suggests how far we have strayed from the concept of making the Tax Code fairer and more equitable. etc. etc.
[They have sent this along to the Tobacco Institute to ensure their efforts are recognised.]
1986 Apr 11: The Tobacco Institute plans for State-by-State actions to generate further opposition to the Packwood Tax Plan.
1986 May: A bundle of information predominantly on Sick Building Syndrome and Indoor Air Quality is being circulated by the Tobacco Institute to its Regional Directors. However, Section 1 is headed List of sources. Local and national experts you can call for quotes or background information. This economists name and address are included under "Tobacco & Taxation (listed by state, alphabetically)".
1986 Mar 25: Jerrold Peterson and his junior partner Raymond Raab at JP Consulting Inc are jointly writing a letter-to-the-editor of the Duluth News Tribune & Herald. It attacks the Packwood tax plan to alleviate "the mounting Federal budget deficits. From a practical point of view the use of the Federal excise tax to raise significant amounts of Federal revenues seems ludicrous. At the present time the excise tax accounts for less than 6 percent of the total Federal revenue receipts. But despite the initial appearances, they aren't suggesting that these taxes should be higher. They are concerned that ... the major burden of the Federal excise tax falls on the working poor and lower middle income class. These tax payers have the least ability to bare the burden of additional taxes.
If such programs were to pass Into law, those economic, political and business leaders who supported its enactment will have caused grievous harm to those US citizens and tax payers already overburdened by rapidly changing economic conditions and social programs. In other words, under the Packwood plan, the poor will become poorer. In this highly commendable tome, these concerned economists manage to avoid the words 'tobacco' and 'cigarettes.'
1986 May 29: Jerrold M Peterson, the president of JP Consulting Inc, and Raab's partner in Duluth, is sending Congressman Frenzel a copy of a letter recently sent to the places listed with the letter.
We hope that you will give this letter serious consideration in your deliberations on any tax reform or tax increase bill. Also enclosed you will find the replies we have received from the named parties.
[No mention of Raab here, but the copy was sent to the Tobacco Institute]
1986 Sep: /E A Tobacco Institute report on "State Activities" credits Professor Raab as providing help in Minnesota, under the heading "Positive Actions by Local Allies." Professor Raymond Raab (University of Minnesota) testified against Minnesota state legislation to increase the excise tax on cigarettes
1986 Oct 3: A Tobacco Institute report on the economists network, lists the Congressmen they are expected to influence,and the economist's various academic specialities. Attached is a list of economists with their specialty areas and office phone numbers. They have been identified in several states by J. Savarese as available and hopefully capable to testify in our behalf or aid in our defense against proposed state or local legislation, from an economic aspect. This early list is probably the most detailed of all. A later section of this 43 page document also runs through the 28 main states giving the names and details of witnesses willing to speak to legislators on Taxes (almost exclusively economists), and those available as witnesses for the tobacco industry on Public Smoking issues (economists and a range of others)
A major effort had also been made recently to enlist fire officers and brigades to counter demands for a 'fire-safe' cigarette which had low ignition propensity.
MINNESOTA, (Rep. Frenzel, Sen Durenberger)
[Economist:] Professor Raymond Raab, University of Minnesota-Duluth , Duluth, Minnesota, 218-726-8508
[Speciality:] Industrial organization and public policy; natural resources; production of public services, and recreational demand.
| Tax Witnesses: | Materials available |
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| Raymond Raab | Minnesota data card
"Excise Taxes: The Fairness Issue"
"More Taxes on Tobacco...."
Earmarking topic sheet
Letter writing brochure. | | Public Smoking Witnesses: | Materials available |
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Al Vogel (productivity)
Steve Schlossberg (labor implications)
Lew Solmon (economics)
Bob Klotz (enforcement) | Voter survey
Economic survey
Labor assistance
Response Analysis summaries
Public Smoking topic sheet
"Some Considerations" workplace kits
"In Defense of Smokers" reprint
"The Other Side of the Smoking Controversy" reprint
Letter writing brochure
Advertising. | | Media Relations: |
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| Contacts are in place in Minneapolis. Contact Bill Toohey for assistance. |
1986 Oct 3: The State Directors for the Tobacco Institute have been reviewing all economics network witnesses in their territories, and culling those who are not actively participating. The Washington DC office is now circulating to its State Directors a list of the economists available who ... " ...have been identified in several states by J. Savarese as available and hopefully capable to testify in our behalf, or aid in our defense against proposed state of local legislation, from an economic aspect. This list differs from others in providing a list of the economic specialities of each network economist, along with the Congresmen they were designated to influence. He is listed as specializing in: MINNESOTA (Rep- Frenzel, Sen Durenberger)
Professor Raymond Raab
University of Minnesota-Duluth, Duluth, Minnesota, 218-726-8508
[Specializing in] Industrial organization and public policy; natural resources; production of public services,and recreational demand.
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. There are now 62 names on the list (Some states have 4 or 5) not counting himself and Bob Tollison. The details given for each consist of State, Regional Division [of the TI], Name, Address and Telephone number. Added to this is a list of the 'Projects' they have completed (in later lists, also the names of Congressmen they have contacted.)
Virtually all of these cash-for-comment academics have been generating op-ed articles for newspapers, or have, in some unspecified way, opposed the Packwood Excise Tax plan — or perhaps helped fake up one of the 'Chase' [Econometrics studies]. A few participants have attended Congressional or government inquiries ['Treasury I') or local ordinance hearings as 'independent witnesses' while secretly acting for the tobacco industry. Two of the 64 members (Ann Harper-Fender and Gary Anderson) were acting termporarily as advisors to Ronald Reagan's Advisory Council on Intergovernmental Relations— which sought to bring pressure on the FDA, EPA and OSHA and stop them being pro-active with smoking bans.
Other participants have been promoting the industry line at various academic conferences and fora [mainly as keynote speakers at economic society meetings] , and a few of the core-team were involved in brianstorming sessions with members of the tobacco industry looking for new angles for their PR, and for possible research project which might generate some economic propaganda for the industry.
Many of them have joined in with the industry's orchestrated letter-writing campaigns opposing workplace smoking bans. - 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: Minnesota
Professor Raymond Raab [ Region IV ]
JP Consulting, P 0 Box 3053, Duluth, Minnesota 55803-3053, 218-722-2602 (affiliation: Univ. of Minnesota)
Services rendered:- original excise tax op-ed
- Packwood
- testimony: taxes - Minnesota
- Ways and Means letter writing campaign
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 Old faithfuls:
Lee Anderson, Terry Anderson, Dom Armentano, Cecil Bohanon, Thomas Borcherding, Henry Butler, JR Clark, John David, Allan Dalton, Arthur Denzau, Clifford Dobitz, Robert Ekelund, David Gay, Anne Harper-Fender, Dennis Hein, John Howe, Wm 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, Wm Peterson, Thomas Pogue, Barry Poulson, Raymond Raab, Simon Rottenberg, Mark Schmitz, Richard Vedder, Richard Wagner plus a few new ones.[ Greg Niehaus, Mario Rizzo, Roger Riefler, and Boon Yoon.]
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. This simplistic analysis is accompanied by a list of the cash-for-comments economist from the network [to whom it will presumably be sent as an example (See note "at last ....")] together with handwritten notes as to the skills and value of each as witnesses at legislatures or local ordinance hearings.
Professor Raymond Raab:
"Yes, outstanding."
1987 May 22: Michael Brozek the Regional Vice President for Region IV wrote to George Minshew at the Tobacco Institute presenting his Economic Witness Evaluation He writes: Please convey to those in charge of the economic witness program; it is one thing to evaluate an economic witness over lunch, by telephone or over cocktails. But, it is quite another thing to evaluate these potential witnesses in the acrimonious, politically charged, circus-like disarray of a committee hearing. In essence, some of these guys (as in the case of Minnesota) fold under any unfriendly inquisition.
The ivory tower is different from the political trenches.
My recommendation, if we are to continue this economic witness program, a political orientation would be advisable in order to better equip these witnesses for potentially politicized circumstances. He then deals with each of them on a case-by-case basis: MINNESOTA: Professor Raymond Raab
I have met with Professor Raab and find him to be a knowledgeable, agreeable and affable witness. However, during his last stint as an economic witness, and in consideration of the fact that Minnesota committees are some of the biggest in the country in terms of sheer numbers, a more bombastic witness may be necessary.
Professor Raab comes from the right part of the state, i.e. cross-border issues, and would be a good witness in a controlled situation. TI counsel David Horasdovsky and I will be in Duluth to meet with him in conjunction with a firefighters union meeting in early June.
1987 May 27: In this document, Michel Brozek, the Regional Director of the Tobacco Institute, has been in contact with Professor Raymond Raab, who must already be enlisted as an available witness, to evaluate his ongoing value to the tobacco industry. He writes: [I]t is one thing to evaluate an economic witness over lunch, by telephone or over cocktails. But, it is quite another thing to evaluate these potential witnesses in the acrimonious, politically charged, circus-like disarray of a committee hearing. In essence, some of these guys (as in the case of Minnesota) fold under any unfriendly inquisition. The ivory tower is different from the political trenches.
My recommendation, if we are to continue this economic witness program, [is that] a political orientation would be advisable in order to better equip these witnesses for potentially politicized circumstances. [ie he only wants libertarian or neo-con partisan warriors.]
I have met with Professor Raab and find him to be a knowledgeable, agreeable and affable witness. However, during his last stint as an economic witness, and in consideration of the fact that Minnesota committees are some of the biggest in the country in terms of sheer numbers, a more bombastic witness may be necessary. Professor Raab comes from the right part of the state, ie. cross-border issues, and would be a good witness in a controlled situation. A tacked-on CV shows that Raab's main interest is in fishing, or in the fishing industry. There is absolutely nothing in his C/V to suggest he has any knowledge of the tobacco industry or of smoking and health. [See C/V attached]
1987 June 9: The Tobacco Institute's Phase II - Excise Tax Op-Ed project involved an article-writing campaign by cash-for-comment economists was run by James Savarese & Associates. It was secretly directed by Robert Tollison from George Mason University with Savarese as the organiser and front.
In the mid 1987 period, the project was controlled by Jeff Rose [under Peter Sparber] at the Tobacco Institute and it focussed on defeating cigarette excise tax increases — and especially the threat of such taxes being 'earmarked' to bolster health care budgets.
Saverese and Tollison appear to have been in some form of loose partnership, because Anna Tollison, the wife of Bob Tollison, was employed by James Savarese & Associates to keep a record of the articles generated by their 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 [eg. the potential number of readers they may have influenced] and the publication date. This economist is featured on her list.MINNESOTA, Raab, St Paul Pioneer Press, [circ.] 204,000 , [no pub date]
1987 July 1: Raab at JP Consulting, Inc. sends another letter to Senator Dave Durenberger and also Congressman Bill Frenzel along with a copy of an op-ed article "Increasing Consumption Taxes Undoing the 1986 Tax Reforms". This has just been sent to the St Paul Pioneer Press. He now lists himself as "Vice President and Economic Analyst" at JP Consulting Inc.
To his credit, he no longer uses the "Associate Professor - University of Minnesota" title on his letter (but he does in the article). However, he forgets to mention that this article was commissioned by the Tobacco Institute and outlined by tobacco lobbyists.
1987 Aug 21: Jeff Ross at the Tobacco Institute has prepared a consolidated summary of "Field Staff Evaluation of Economists" for his superiors, William Kloepfer and Peter Sparber. They have been asked to look at 34 of these academics. This includes an outline of their recent achievements. MINNESOTA
Professor Raymond Raab University of Minnesota Deluth, MN
Excise Tax Op Eds: None accepted for publication.
Economic Witness/Testimony: nil
Field Staff Contact: Yes.
Field Staff Evaluation: Knowledgeable, agreeable and affable, but may need someone more dynamic.
1989 Jan 11: The Tobacco Institute's Scientific Consultancy Activity 1988-89
This is an 80 page mixed bag of files dumped together [Well worth perusing]. The first document is from 1990 [ordered in reverse]
- Pages 3 to 23 begin with Witness Appearances in 1988 and 1989 involving both "Indoor Air Quality experts" who work for the Tobacco Institute, and three economists [Bob Tollison, Richard Wagner and Dwight Lee]
- Pages 24 to 31 Labor IAQ Presentations in 1988 and 1989 which involves key figures in the labor movement and a few "IAQ experts."
- Pages 32 to 39 IAQ/ETS conferences attended by tobacco industry disinformation experts in 1988 and 1989
- Pages 40 to 41 Academic and Unaffiliated Scientfic Witnesses
- Pages 43 to 53 Smokers Rights Legislation in various states.
- See page 54: Tobacco Institute "Confidential" memo on "Tax Hearing Readiness" which is their battle plan to counter earmaking of cigarette excise taxes to fund health programs. It lists a large number of organizations and a few congressmen who can be relied on to help. It also has both primary and secondary lists of economists from Tollison's "cash-for-comments" network willing to give testimony.
Economists: [Primary]
- Bill Orzechowski, Tobacco Institute
- Robert Tollison, George Mason University
- Richard Wagner, George Mason University
- Dwight Lee, University of Georgia, Athens
- Michael Davis, Southern Methodist University
- Gary Anderson, California State at Northridge
- William Prendergast (resource: Prendergast/Solmon papers)
- Other Network economists [see Secondary attached list below]
"Due by mid-year is a book examining earmarking and "user fees" from a public choice perspective. The treatise will contain 8-10 chapters written by respected economists, including, Henri LePage and Nobel laureate James Buchanan." The Tobacco Institute's list of cash-for-comments professors and senior academics who were available to write op-eds and give evidence at Congressional hearings, etc. had grown extensively. MINNESOTA
Prof Rayond Raab, (affiliation) Uni of Minnesota
Mr Jack Militello, College of St Thomas, St Paul
[TI budget papers show that each op-ed now earned the economists $3,000. Presentations to conferences earned them $5,000. Savarese was paid $70 to $100,000 pa for this project, and Ogilvy & Mather $250,000.] . See page 5
1989 April 18: Susan Stuntz (Issues Manager) at the Tobacco Institute memoes her boss Sam Chilcote. She is sending him material previously used for a two-day "Gerry Long" presentation. He wants to use it in a shorter one-day (unspecified) briefing session. [Gerald H Long was the CEO of RJ Reynolds who in 1988 had just taken over as Chairman of the Tobacco Institute's Executive Committee and wanted to make changes.]
This document has the speaker's powerpoints, including a list of network economists divided on a State-by-State basis. Note the document is 117 pages
The outline for the Powerpoint slides is here in full, together with the names of the politicians they were required to influence. It boasts that the.. Economists' Network 64 Strong [is] Targeted to Congressional Tax Writing Committees [and utilizing the] Production of Op-Eds on Federal Tax Policy.
[List of economists]
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WORTH READING
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