CREATED 4/30/2013
 USAWARNING:
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
Social Cost Forum
The Social Cost Forum was an almost last-ditch effort by Philip Morris USA (the domestic company) to create a large coalition of companies and industries in support its constant claims that much of regulatory science was "junk" — ie worthless, or poorly done.
The issue of 'social cost' had first arisen in the anti-smoking debates, where it was argued that cigarette excise taxes were legitimately imposed by governments to compensate for the additional costs to the society of tobacco-initiated problems — extra health care, welfare costs, absenteeism, fire hazards, cleaning and the like. The tobacco industry countered these claims by having their tame economists either ignore or discount the costs, and by labelling them as 'sin taxes' and linking them to unsuccessful measures like the 1930s attempt at alcohol prohibition.
The fact is that almost everything that an individual does, not equally done by others in the society, can be labeled a 'social cost'. The AMA, for instance, calculated that obesity costs American society over $100 billion a year — and skiers, must cost many millions through their ski accidents. The point about social costs of smoking is more related to passive smoke — the externalities, or additional costs associated withthe impact on non-smokers and their facilities.
As with many of these economic concepts, you can choose whatever assumptions you like, and argue to prove your point. The elacticity of this concept, however, allowed the smoking issue to widened to enmesh other industries in a fight-back program against consumer activists in general — the much-hated "liberals".
Government safety and environmental regulations of many kinds also impose a form of additional 'tax' on the cost of certain products. Such Naderesque requirements as air-bags, seat belts, and catalytic converters (which needed lead-free gasoline) carried the 'social cost' arguments into the purview of the automobile, oil, road-transport industries — and the regulations imposed on food-processing and drug companies, added additional 'social costs' to these industries.
For these reasons the tobacco industry was able to develop coalitions of industries to attack the regulatory agencies — the EPA, FDA, and OSHA — and to charge them with not using 'sound science' in their 'risk determination'. As a consequence, the social-cost problem of the tobacco industry became a general coalition battle-ground involving numerous industries with poisoning or polluting problems.
The fight was conducted on two main fronts: - Risk assessment/management — with the main corporate lobby through John D Graham and his Harvard Center of Risk Analysis (HCRA) and the Risk Assessment Institute and Toxicology Forum of the ILSI.
- The 'sound-science/junk-science' labeling movement through Elizabeth Whelan's American Council on Science & Health (ACSH) [which gained its credibility by blaming the tobacco industry] and Steve Milloy's The Advancement of Sound Science Coalition (TASSC) which was initially, entirely a Philip Morris operation.
These science-lobbying operations widened their attacks on the regulators by extending the scope of their science-repudiation activities. Eventually they led the attacks on the global efforts to counter the ozone-hole problem, and then focussed in the 2000s on general anthropomorphic climate-change denial.
The Social Cost Forum: This was originally planned for August 1997, which was in the year when the upper echelons of the cigarette companies were negotiating with the Clinton Administration and the States Attorneys-Generals over repayments of Medicaid costs, in what became the "Master Settlement Agreement". In late 1997 and 1998, this negotiation resulted in a massive compensation payment of over $300 billion, and the release of 7 million documents from the tobacco industry's most secret files (after they'd been hurridly culled).
The point is that the participants in this Social Cost Forum scam were acutely aware that any document trail left in tobacco company files needed to have the appearance of being clean and above-board. So they inserted 'Notes for the File" into the filing cabinets in order to have documents that coule be safely 'discovered' in any future court-case.
However enough of the real documentation has survived for us to see what really happened. And this makes the Social Cost Forum one of the best study-examples of how the corruption process operated — of how giant corporations and different industries can be put together into coalitions that operate for the benefit of a pariah industry like tobacco. It also shows how these coalition troughs attracted the snouts of greedy university academics, and why these same academics held 'fellowships' and other positions with ultra-right-wing think-tanks funded by Croesian family foundations to promote unfetted free-market ideologies.
Those involved from the Phillip Morris Management Corp (the later name for the domestic company PM USA)
- Steven C Parrish a lawyer with tobacco law-firm Shook Hardy & Bacon, transfered over to Philip Morris as Senior Vice President in charge of Corporate Scientific Affairs, running both the domestic and international disinformation campaigns — their fight-back operations
- Ellen ('Czarina') Merlo was Senior Vice President, Corporate Affairs at PM USA. She had run the domestic company's previously highly successful "junk-science" scam called The Advancement of Sound Science Coalition (TASSC)
- Tom Borelli, ran the Science and Technology operations (later 'Scientific Issues') for the domestic company. He also worked closely with Steve Milloy who ran TASSC, and was a key contact with many think-tanks.
- Joshua 'Josh' Slavitt, was a Senior Issues Manager and head of PM's Issues Management Team
- John Dunham, was the Manager, Fiscal Issues (US domestic)
- David Cooper was Manager, Policy Isssues
- Sheila Flowers was an organiser and assistant
External:
- Walter E Williams was a noted African-American Professor of Economics at George Mason University. He was also a syndicated columnist and a long-term cash-for-comments lobbyists working for the Tobacco Institute, and probably also for industries other than tobacco.
- Professor Robert Tollison was Williams associate in the Economics Department at George Mason. Tollison, along with the Ogilvy & Mather PR lobbyist, James Savarese, ran the Tobacco Institute's cash-for-comments network which employed at least one prominent academic economist in each state to write op-eds to local city newspapers, or to appear as pro-tobacco witnesses in ordinance hearings. This operation used staff at the GMU's Center for Study of Public Choice, which Tollison directed. Williams, Stroup, and Holcombe were all members.
- Richard Rue was a professional think-tanker and lobbyist. He was a former Vice President of the Heartland Institute's health care division who had set up in Washington DC as a freelance coalition-builder and fund-raiser.
At the time of this forum he had become Senior Vice President at The Annapolis Center but he appears to have run this operation on the side for some extra pocket-money. Over the years, Rue has had periods with many lobby groups and think-tanks including the Metro Milwaukee Association of Commerce, the Chicago-based Heartland Institute, the Property and Environmental Research Center (PERC)at Montana, the Annapolis Center/Institute, and Richard Mellon Scaife's Foundation of American Communications. He now runs a couple of so-called Eco-friendly corporations.
| Walter Williams and the "Social Cost Forum" scam |
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In 1997, Walter Williams became embroiled in Philip Morris's project to create a major multi-industry forum to attack the concept of "social costs" and to promote the idea that regulators often used "junk science".
In summary: - A number of attorneys-generals of US states had joined forces to sue the tobacco industry for the additional costs that smoking created on their Medicare and Medicaid budgets. This was known to economists as a "Social Cost" — and the industry attacked the methodology used by regulators as "junk science".
- John Dunham, the Manager of Fiscal Issues at Philip Morris received approval to secretly run a major conference, using 15 tame economists, to promote the industry's propaganda line that any extra costs that smoking imposed on the community was already well funded by cigarette excise taxes, and that the science used by the regulators was shoddy and "junk".
- The Forum and associated research projects were to be funded and directed by Philip Morris, but the cigarette company's control would remain hidden.
But by 1997, few other companies or industry groups were willing to openly associate their own scientific/academic lobbying efforts with project being run by the tobacco industry. Tobacco was a pariah industry.
It was therefore important for credibility that any other companies associated with the Forum were also unaware that Philip Morris was in control. To have the necessary credibility, these other companies were needed as front-row participants and part-funders both of the Forum and the research projects they planned to commission.
- The Cato Institute was initially selected to provide the 'front', but after some consideration, Cato decided that it was too risky for them to be involved in a project which involved fooling corporations which provided Cato funding, so they withdrew.
- Dunham then approached Walter Williams at George Mason University, and paid him $30,000 (via the George Mason Foundation) to provide the front, and to recruit a group of compliant economists.
Under this arrangement, Williams was to pretend that the project originated with him and the university; so they decided to create a false document trail to 'prove' this pseudo-fact in case of future legal discovery.
- Philip Morris needed to have the best part of the $145,000 overall budget contributed by others — with its own secret pump-priming and research funding as well. So Dunham approached the Annapolis Center to act as the Forum fund-raiser. Annapolis specialized in pseudo-conferences and campaign strategy training for the Republican Party, so it had the desired corporate contacts.
But Annapolis was also wary of tobacco involvement, and finally rejected the approach.
- Richard Rue, the Annapolis Center's Vice President, then decided to contract for the Forum fund-raising services himself and helped rewrite the public proposal, all for $15,000 on the side in pocket money.
- Williams and Dunham approached a number of 'compliant' economists to speak at the Forum on the promise of substantial grants for research projects. Many of these economists were from the Tobacco Institute's cash-for-comments network of university professors — others were friends of Williams or consultants to Philip Morris.
- Fake letters for the files and proposal documents were then created to provide the reverse-order trail of documents. To an outside observer, these established that the initiative had come from George Mason University, and that Philip Morris was only one-of-many corporations putting some funding behind a worthwhile public interest project.
- The tobacco industry had been hammering the "social cost' argument for years, and it was so much on the nose by this time that it is probable that every company approached smelt a rat. After numerous fund-raising attempts and many rewrites of the proposal documents, the project was simply abandoned.
- All was not in vain, however. Walter Williams made $30,000 for writing a couple of letters and recruiting a couple of economist friends to exploit their personal credibility, and Richard Rue made $15,000 in pocket-money.
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Some key documents 1994: The Indiana Attorney-General was considering a lawsuit against the tobacco companies to recover Medicaid costs in treating smokers. The tobacco industry's law firm Covington & Burling advised that the action would not be cost-effective, because the industry had more legal defence resources than Indiana. However this threat raised their concerns.
See note on Medicaid liability  
Background While the cash-for-comments economists network was run by the Tobacco Institute on behalf of the whole industry in America, Philip Morris also had its own aggressive strategic group working on counter-measures to deflect or defeat the growing anti-smoking public and political sentiments.
In fact, they had both a domestic group under Ellen Merlo with focus on the USA, and an international group made up of Corporate Affairs directors from national companies, which evolved constantly under the name Worldwide Regulatory Affairs (WRA). The ex Shook Hardy & Bacon (SHB) tobacco lawyer, Steve Parrish, had ultimate control over both,
In 1997 and 1998, the Clinton Administration and some of the States Attorneys-Generals were negotiating with the industry (led by Geoff Bible of PM) over what became the $368.5 billion national tobacco Master Settlement Agreement (MSA). This resulted in an associated order to release seven million documents from cigarette company files that today form the tobacco archives.
However, dating back to the 1988 Cippolone court case. it had become clear to the companies that documents could be 'discovered' by lawyers during court cases — and that the tobacco industry lawyers could be implicated as 'co-consiprators' with the companies, and therefore unable to use attorney-client privilege to protect them. So the lobbyists and executivesprogressively had become more and more circumspect and devious in their correspondence, and careful about what documents they retained in their files. Files were supposed to be culled constantly to remove anything incriminating
This was organised internationally by arrangement with all the companies, and it became known by the inverted euphemism 'Document Retention Policy.' However their staff were not as careful as the companies hoped... or their lawyers believed; they were too large and cumbersome for files to be totally managed in this way.
It was in this later climate that the Social Cost Forum was organised to help the companies counter claims being made by the states Attorneys-General which were based on the additional costs that smokers imposed on Medicare and Medicaid.
Social CostAlthough this was called a Social Cost Forum, it also had characteristics of a "junk-science" symposium.
Tame economists were employed by the Tobacco Institute to promote the idea that the cigarette industry and its ailing smokers — who had increased absenteeism, lower productivity, greater health-care costs and the like — imposed no more costs on society than non-smokers because: - they paid high cigarette excise taxes.
- the industry boosted employment
- smokers died young, and therefore cost less in aged health care and welfare.
The overt theme proposed for this forum was to allow economic discussions on the claim that unnecessary costs were imposed on American industry by overzealous regulators. The tobacco industry had long fought the OSHA and EPA on this Social Cost argument, and they secretly employed over a hundred academic economist from universities across America (in the cash-for-comments network) to counter these argument.
None of this was central to the so-called Social Cost Forum. Beneath this academic-discussion image, were lobbying and public relations drives intent on attacking the overall science used by regulatory agencies like the EPA, FDA, OSHA, etc. So this forum was, in fact, a general science-denial project. It was designed to attck the regulatory agencies' bans on public and workplace smoking, toxic chemical dumps, air pollution from leaded gasoline, nuclear power station emissions, radioactive waste disposal, and the like. It also encompassed agricultural chemicals and food processing — where there were serious questions about residual pesticides, artifical flavours, colors, preservatives and taste enhancers.
Overall, by hiding behind a compliant George Mason University, this breadth of industries enticed to join the coalition, gave the tobacco industry cover they needed. They couldn't be seen as the main organizer because by 1997, the cigarette companies were viewed as pariahs by many of their potential collaborators. It was therefore important for Philip Morris to keep its name out of the picture and only join the coalition as one of the supporters,.
1996 Oct: At this time a number of important changes occurred which worried the tobacco industry: - Biomedical researchers had discovered a cellular-level link between a noxious component of cigarette smoke and the gene which regulated DNA replication — clearly a new level of 'proof' that smoking caused lung-cancer.
- The cities of San Francisco, Los Angeles and New York had all decided to file suits against the tobacco industry.
- A convention of medical delegates at the Indiana State Medical Association moved a resolution to ask state attorneys generals to sue tobacco companies. Some were already seeing the potential.
- Officials in many US states were viewing cigarette and alcohol excises as a ready source of funds to prop up their health and welfare budgets.
- A change had taken place in the public attitudes: the majority now believed that smoking was inherently unhealthy, and that smokers imposed additional medical costs on the non-smokers. Therefore they should be made to pay their way.
1997: John Dunham, who was the Manager of Philip Morris's Fical Issues, had produce his plans for the coming year. The key issues he saw included the "Need to build an Economic Voice for Philip Morris." In 1997, it is expected that we will face excise tax battles both at the federal level (tobacco and beer) and in at least 39 states.
In order to minimize the impact of the tax proposals, we will need to hone our arguments, and make them available to state and federal Government Affairs [Divisions] in a timely manner. Much of the added pressure to raise excise taxes is the direct reflection of the need by governments for added revenue. As the nation's largest tax generator, Philip Morris should have a strong say in the public finance debate at all levels of government.
In developing this new "economic voice" for the company, our primary objectives will be to: - Double the number of economic consultants that we use on a regular basis, mainly with regional firms.
- Establish a process of continuous improvement for all excise tax argumentation
- Establish relationships with at least 5 left-of-center or centrist think-tanks
- Sponsor economic forums and meetings of American Economic Assn. and National Assn. of Business Economists
- Expand PM presence at economic forums such as meetings of the National Assn. of Business Economists
- Where possible, submit research for publication in journals or presentation at economic conferences
Dunham also has ambitious plans to: - Expand cadre of experts developing Social Cost argumentation
- Fund and assist in the distribution of a report by the National Conference of State Legislatures (NCSL) [They would circulate propaganda if paid] focusing on the public policy implications of different types of taxes.
- Support a study on the history of state and local taxation by the Heartland Institute. [They were easily bribed to do anything]
- Fund at least three other reports by public policy groups on the principles of taxation
- Hold the excise tax forum and publish a synopsis and four research reports focusing on various aspects of excise taxes
- Identify six new economists to assist the company or third parties with tax and social cost policy research
- Hold two academic forums to develop new social cost argumentation
- Where possible, submit major excise tax studies to academic journals for publication
1997 Feb: The State of Indiana filed a health care cost recovery action in Indiana state court. State of Indiana v. Philip Morris Incorporated, et al., Marion County Superior Court, Indiana, Case No. [49D07-9702-CT-0236.]
[At about the same time the tobacco industry managed to defeat an Indiana ballot initiative because a study done by a local university showed that Indiana was loosing tax revenues because of bootlegging.]
John Dunham's original proposal for Social Cost Forum
The Cato Institute will provide the front. (Rue not involved)
1997 Mar 12: John Dunham, the Fiscal Issues Manager, in the Issues Management division (the Philip Morris disinformation group), has written to the senior group: RE: Indiana Medicaid study
This is just the kind of stuff that we need to do as part of the "economic voice" I would suggest the following: - If the study can be done quickly and be used in the current tax fight we should find it now and get it done.
- If the study will take a longer time, we should incorporate it into the "social cost forum" that we are planning for the summer.
- Either way, we should sponsor the study with an"unrestricted research grant"
[It appears as if a special Indiana Medicaid study wasn't done, and they concentrated on the forum.]
1997 Mar 12: John Dunham, the Fiscal Issues Manager on the Philip Morris disinformation staff, wrote to his senior group:
RE Indiana Medicaid study
This is just the kind of stuff that we need to do as part of the "economic voice" I would suggest the following: - If the study can be done quickly and be used in the current tax fight we should find it now and get it done.
- If the study will take a longer time, we should incorporate it into the "social cost forum" that we are planning for the summer.
- Either way, we should sponsor the study with an"unrestricted research grant"
1997 Mar 17: Associate Press story: A Florida law that makes it easier for the state to sue tobacco companies for Medicaid money spent to treat smoking-related illnesses survived a Supreme Court challenge today.
The court, without comment, turned down industry arguments that the law unfairly seeks to "stack the deck" against tobacco companies. The state's lawyers replied that the law is a reasonable effort to force tobacco companies and others to pay the social cost of their behavior.
The case is Associated Industries of Florida vs. Agency for Health Care Administration,
[ Associated Industries in Florida was controlled by the family of Thorne Auchter, a tobacco industry lobbyist and ex-Reagan head of the OSHA.]
Florida is one of about 20 states that have sued tobacco companies in attempts to get reimbursed for Medicaid funds spent to treat smokers. Florida's claim is aided by a 1994 state law intended to help the state recover money from anyone believed responsible for a Medicaid patient's illness.
The state law, believed to be the only one of its kind in the nation, lets officials combine into one lawsuit thousands of Medicaid patients suffering from tobacco-related health problems.
1997: (early) John Dunham's draft of his speech outline the role of the Issues Managment division. His main points are: - What is the Issues Management division is doing to help defeat Excise Taxes? Issues Management serves as an internal think tank to the company. We are responsible for developing tools that others can then use to fight the excise tax debate.
- Research: Our standard research arsenal contains a number of "types" of studies that we can perform for varying states and circumstances. We coordinate a lot of this effort with the Tobacco Institute, and sometimes are supplemented by the work of the other tobacco companies (especially in the smuggling, black market and youth areas).
- Tax Policy Research: Generally coordinated with third party groups (NCSL, Heartland).
- Third Party Groups: Issues Management has developed relationships with a number of third party public policy groups, and we are currently in the process of commissioning a constituency development plan to help expand on this cadre.
- Economists: We are now coordinating with the Tobacco Institute to provide better and more available expert testimony at public hearings, or for quotes, news releases, etc. More importantly, we have initiated a series of academic forums, bring together leading academics to discuss specific issues relating to excise taxes.
Our first forum on excise taxes took place in January and brought together a dozen economists to discuss the economic theory behind excise taxes. Academic papers from the forum have been published and are available as reference materials (discuss why we are doing this — antis cite JAMA, we cite the Washington Times)
[The Washington Times was a Moonie-owned publication]
1997 Mar 31: John Dunham, the Fiscal Issues manager at Philip Morris has prepared a draft proposal for a 'Social Cost Forum.' The purpose is to construct a defense against: Outlandish claims made by some anti-industry advocates pertaining to so-called costs that products such as automobiles, beer, tobacco and other products impose on society as a whole are generally deemed credible by much of the general public, and are often used as excuses for increased taxes and regulations.
This occurs despite the fact that the entire idea of a social cost is generally spurious. He proposes that an inter-industry coalition sponsor an academic forum to discuss the idea of social costs-and social cost theory. This forum will bring together academics, corporate research managers and decision makers to discuss the current state of research concerning these [Social Cost] theories and to propose and promote additional academic research to fill in existing gaps in knowledge and answer current questions.
This forum will be a non-partisan event, focusing on research rather than policy, and will bring together representatives from a number of different constituencies. The proceedings of the forum will be published, and new research commissioned. In addition, the forum will provide an opportunity for those in the economic community to get together socially to discuss the current state of the debate, along with problems and solutions.
Sponsorship: The main sponsor of the Social Cost Forum will be the CATO Institute. This Washington based think tank is internationally recognized for its research and is one of the oldest and most respected institutions of its kind.... [The elipse indicates the tentative nature of his suggestion about the choice of sponsoring institution. Cato obviously hadn't yet been approached (and never was).]
Corporate funding for the forum will come from [SPACE LEFT] This organization brings together representatives from industries dealing with problems related to the social cost debate. While [SPACE LEFT] will fund the forum, all control over content will rest with CATO.
[The spaces indicate that Dunham hadn't yet decided who will nominally fund the forum (obviously not to be obviously Philip Morris). However he is confidence that whoever [nominlly] sponsors it, they would obviously claim not to have control over the content.
This spurious fill-in-the-blanks claim, in fact proves that control over the content was exactly what Philip Morris had in mind. It also shows how much confidence the company had that Cato would go along with providing the front for their dubious project if generously compensated..] At this stage the projected conference was much bigger and more costly than the later proposals and Durham notes that they would need a "professional conference management firm" to organize it.
[Cato, apparently, wasn't up to the task.]
Also, at this stage he didn't have a list of actual participants, but he suggests the academics will be paid a 'small honoraria' and receive research grants, and that: the forum will bring together approximately:
15 Leading Academics
10 Industry Representatives
5 Decision Makers
5 Representatives from the Public Policy Community He provides an hour-by-hour agenda, with the topics to be discussed. The event is to be held in late July 1997 at a venue in the mountain/snowfield resort of Vail Colorado, or Lake Tahoe, or Montreal.
[Where else would a prominent academic want to spend a paid holiday in the midst of July ?]
1997 May: /E Philip Morris's Issues Management Team have presented their budget proposals to the company heirarchy for the year. John Dunham's contribution is a "Major Fiscal Issues Projects for the Second Half of 1997." Among his proposals is:
Hold The Social Cost Forum:
Key Elements: - Develop A Fundraising Plan
- Complete the Logistics
- Invite Economists/Participants and Award Grants
- Hold Forum
- Publish Papers
- Publicize and Follow-up.
Purpose: Develop Company's Economic Voice, Defeat Excise Tax Proposals
Responsibility: [John] Dunham, [David] Cooper [Both on the Issues Management Team] [Note that the plan is to award grants to the participants before the Forum — and then claim that they had no influence over what was said.]
1997 May 20: John Dunham at Philip Morris has sent this concept proposal to his boss Josh Slavitts (multiple copies in both files). It has now been modified and effectively is for a major "junk-science" conference with the social costs issue just one aspect. The Cato Institute has now disappeared as the sponsor; It is now to be .. the Economics Department of George Mason University, under the auspices of Dr Walter Williams. Dr Williams, and George Mason have long been in the forefront of public choice theory in economics, and are well suited to hold this sort of symposia.
Corporate funding for the forum will come from a minimum of five separate firms, including Philip Morris, which will cover one-fifth of the costs of the symposia. While corporations will fund the forum, all control over content will rest with George Mason University and Dr Williams. Included is a list of the 15 Academics who would be invited and a strike-out indicates that their old favourite academic lackey, Dr Kip Viscusi from Harvard Law School has had to drop out.
- Dr Walter Williams, George Mason University (network economist)
- Dr Roy Cordato, Campbell University (also the fake Institute for Research on Economic of Taxation (IRET))
He would write and speak on "The Economics of Social Costs and the Abuse of Public Policy" -
Dr Kip Viscusi, Harvard Law School (a long-term tobacco lackey) - Dr Richard L Stroup, PERC & Montana Uni (also a network economist)
- Dr Randall G. Holcombe, Florida State University (network economist)
- Dr Russell Sobel, West Virginia University (ex Frances Marion College and associate of Holcombe)
His offering was "Public Policy Towards Pecuniary Externalities" - Dr Fred Foldvary, California State University, Hayward (a relative, Tim Foldvary, was anti-FDA lobbyist)
His contribution would be "Social Costs and Territorial Rents" - Dr Donald Boudreaux, Clemson University (also Cato Institute)
[Clemson was a breeding ground for lobbyists for Big Tobacco. Cato was where they published.] - Dr Roger Meiners, University of Texas, Arlington (neo-con anti-environmentalist, ex-Clemson University)
He would speak on "The General Irrelevance of Externalities" [ie ignore environmental damage] - Dr Charles Rowley, George Mason University (a UK tobacco lackey on sabbatical, who had a tame publisher)
His contribution would be "The Myth of Social Cost" [ie It doesn't exist — or everything has a social cost] - Dr Francesco Parisi, George Mason University Law School
[His association with GMU was probably enough.] - Dr Willard Manning, University of Minnesota (+ Rand Corp0)
Manning was the odd-man-out; he had done legitmate research and concluded that the social costs of smoking weren't excessive. Later, it became evident, that this was a mistake in calculations. - Dr Steven Cheung, University of Hong Kong (also Hoover Institution. Cheung was on the academic advisory board of the Thatcherite Institute for Economic Affairs which had very strong tobacco connections (Lord Harris of High Cross, FOREST and ESEF, a Euro-TASSC). He had also written an article "The Myth of Social Costs" published by Cato Institute in 1978]
- [Added later] Dr James D Gwartner, Florida State, (a tobacco supporter and associate of Stroup and Wagner)
This is is obviously put together by Williams and Dunham, because it lists both old friends and associates of Williams and a couple from the Tobacco Institute's cash-for-comments network.
[Which was run through George Mason University]
The date proposed has now gone back to the first weekend in August 1997 but the possible venues proposed were the same: Vail Colorado, Lake Tahoe, or Montreal.
Under the heading "Deliverables:" Dunham includes what are the most important aspects of the forum to the cigarette company propaganda efforts: - a special journal supplement and related articles summarizing the proceeding, which would be published in a scholarly economic journal
- Press material and a video summarizing the meeting and its findings
- participants in each workshop will determine at least one area for additional research.
- the result of these research projects will be an academic journal article and related press materials
He even suggests a list of the speakers topics which includes such gems as "The Myth of Social Costs" and a few others in similar vein. The conference will now cost about $145,000 — with conference management personnel from Philip Morris now doing some of the organisation to cut costs.
[This outline is word-for-word duplicate of Dunham's origianal proposal, except that Cato has been replaced by Walter Williams and George Mason University, and a list of "15 Leading Accademics" and the "Deliverables" sections have been added.]
Economist Walter Williams has been recruited.
George Mason University will now provide the front.
1997 May 22: Walter Williams faxes Dunham a tentative schedule — the barest of outlines — for a two to three day program. He writes, This is a Very Rough Draft !!
Actual document
Also attached is a rough discussion paper promoting the junk-science approach. It is for a three day conference consisting of ten scholars and five discussants — with the purpose of developing research projects
[Later this is drastically changed to create a more normal conference, where the sponsoring companies can send along their representatives.]
On the same day he faxes Dunham a list of Participants. For those not already well-known to the tobacco industry, he includes a Working Title and Description of the Paper they propose to present so they can gauge its potential propaganda value. He has already made contact with his own proposed group of speakers. - Roy Cordato, Campbell University
"The Economics of Social Costs and the Abuse of Public Policy"
- Kip Viscusi, Harvard Law School (tentative) [Well known to PM]
- Richard Stroup, PERC (and Montana Uni) [Well known to PM]
- Randall Holcombe, Florida State Uni [Well known to PM]
- Russell Sobel, West Virginai Uni
"Public Policy Towards Pecuniary Externalities"
- Fred Foldvary, California State, Hayward
"Social Costs and Territorial Rents"
- Donald Boudreaux, Clemson Uni [Clemson is very well known by Big Tobacco]
- Roger Meiners, Uni of Texas, Arlington
"The General Irrelevance of Externalities" [ie ignore environmental damage]
- Charles Rowley, George Mason
"The Myth of Social Cost" [ie It doesn't exist, so why hold a Forum?]
- Fancesco Parisi, George Mason [His association with Williams was enough.]
- Willard Manning, University of Minnesota (tentative) [Also Rand Corp. An honest economist who had published a social cost argument based on the 'death benefits' of smoking (which Kip Viscusi recalculated) and the industry then promoted.]
- Steven Cheung, University of HK (invited) [Meaning, not yet accepted. He was on the academic advisory board of the Thatcherite IEA which had very strong tobacco connections (Lord Harris of High Cross, FOREST and ESEF, a Euro-TASSC). He had also written an article "The Myth of Social Costs" published by Cato Institute in 1978]
1997 May 23: Walter Woodson at the Tobacco Institute has called a meeting of the various Fiscal Issues managers of the various cigarette companies to "think carefully about tax message development and delivery programs." John Dunham represented Philip Morris USA.
Richard Rue has been recruited to run the fundraising
He is freelancing, while also Vice President of the Annapolis Institute
1997 June 5: Richard Rue has sent a personal letter-of-agreement (contract) to John Dunham for "Consulting project for Social Cost Forum." He does not mention that he is employed by The Annapolis Institute. (although he is using their facilities, and their corporate funding lists).
He will - redraft the proposal
- send it to Philip Morris for their agreement
- then Walter Williams will want to review it (after PM agrees)
- he will then identify and approach various potential funders.
All funding requests will solicit funds on behalf of George Mason University for the Forum. The proposal will be on George Mason University stationary. Dr Williams will sign funding request letters. [Many of the proposed sponsors wouldn't have been involved in an overtly Philip Morris project — tobacco companies had pariah status by this stage.]
Philip Morris, however, was to have control over the choice of venue, with GMU managing the conference itself. Philip Morris would pay Rue $15,000 plus expenses for his role in this project.
1997 June 6: /E Dunham at Philip Morris has prepared a "To Do" list of logistics for the Forum. He is working with another Issues Manager, David Cooper, and their assistant Sheila Flowers - Site selection, accommodation, entertainment — the Philip Morris team
- Identification of Attendees — responsibility of Dunham and Walter Williams
- Invitations from Cooper, Dunham and Williams
[Which indicates that some of the participants weren't in the pay of the tobacco industry.]
- Event control — Rue, Williams, Cooper and Flowers
- Materials development and distribution — Cooper, Dunham and Williams.
- Follow-up studies — Williams and Dunham
Clearly Rue was limited to fund-raising and keeping their representatives happy at the forum.
1997 Aug 24: | Richard Rue and the Annapolis Institute |
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Albion Montior and Kansas Ciry New Times: "Foul Air" Industries Lobbying Hard to Kill New EPA Pollution Regs" by James Terry A number of groups have emerged from the shadows of private-sector power to fight the EPA on behalf of the moneymen in polluting industries. Buying TV, radio and newspaper ads to sway the public, and paying lobbyists to sway Congress
They are waging an intense lobbying and PR campaign to prevent cleaner air from becoming a reality. The campaign relies on stealth and obfuscation, and involves the usual assortment of dishonest ads, phony front groups with Orwellian names (in Florida the Florida Coalition for Clean Air is opposing cleaner air), scientists-for-hire and mega-dollar PR flacks.
For example:
- The Air Policy Standards Coalition, an umbrella organization created last year by the National Association of Manufacturers and the American Petroleum Institute. The Coalition consists of over 600 companies and trade associations, each expected to give from $5,000 to $100,000 to the cause. The money is buying TV, radio and newspaper ads to sway the public, and paying lobbyists to sway Congress.
- The Foundation for Clean Air Progress, which is opposed to clean air progress. The foundation is a creation of the American Petroleum Institute and PR agency behemoth (and veteran green-washer) Burson-Marsteller. Members include such notable tree-huggers as the Asphalt Institute and the American Trucking Associations.
- National Environmental Strategies, an anti-environmental consulting firm that was founded by Republican bigwig Haley Barbour and National Mining Association lobbyist Marc Himmelstein.
- Citizens for a Sound Economy, funded by industry, conservative foundations and flush members. The group's chairman, C. Boyden Gray was a White House counsel to George Bush.
- The Annapolis Center, a "scientific think-tank" opposing tighter air standards. The center was started by the National Association of Manufacturers and is funded by polluters, including electric utilities and oil refiners. The center's gang of compliant scientists has been finding — or rather, inventing — fault with the EPA's scientific studies.
Richard Rue, Annapolis Center vice president, told Gannett News Service that it was "laughable" to suggest that scientists could "be bought off by industry." Fortunately we have the example of the tobacco industry's white-smocked doxies to remind us that scientific integrity can be bought and sold like widgets, and that wholesale quantities are available when the PR requirements prove sufficiently grave. And in this case the PR requirements are very grave indeed.  |
1997 Aug 27: John Dunham, who is organizing the Social Cost Forum with Walter Williams, has sent him $33,000 in pocket money via the George Mason Foundation. Presumably this was a down-payment on his fronting services.
[This payment is quite distinct from Rue's $15,000]
1997 Sep 5: Richard Rue has sent this note to John Dunham and David Cooper at Philip Morris RE: Walter William's Project To review our fund raising strategy — I have broken the effort into two phases. - Phase 1) covering the costs of the event This target amount is $70,000. We need quick decisions for funding. I have, therefore, concentrated upon firms and associations where I have established contacts that are likely to have a high interest in the subject matter and a knowledge of Dr Williams professional abilities. [This probably means Williams works for them also on commission]
- Phase 2) coverage of the costs of production of scholarly papers and publication. The target amount here is $95,000. The target audience here is foundations and some corporations that will require a longer time frame for decision making.
The following are the firms that have received proposals and the amounts requested :| GM [auto] | $25,000 | Philip Morris [cigs] | $35,000 |
| API [paper] | $20,000 | BHP [mining] | $10,000 |
| FMC [chemicals] | $10,000 | Pfizer [drugs] | $25,000 |
| Texaco [oil] | $20,000 | Deutsch Morgan [finance] | $ 5,000 |
| Beer Institute [alcohol] | $10,000 | EPRI [electricity] | $10,000 |
| P&G [soaps, etc] | $10,000 | APC [packaging] | $10,000 |
| Mineral Tech. [synthetics] | $10,000 | Clorox [home chemicals] | $10,000 |
| Citizen's Against Government Waste and the International Center for Alcohol Policy were also asked for $500 contributions. |
[By sheer coincidence, the above list reads remarkably like the main funders of the Annapolis Center operations.]
The Big Lie |
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1997 Oct 3: A note from Williams: he has sent Dunham what purports to be A slightly revised version [of the pseudo proposal] taking into account the conference will not take place October 16-18, 1997.
[They are now into the 'covering tracks' phase.
This 'Letter for the Files" is designed to leave a documentation trail that reverses the order of the proposal, making it appear to be from Walter Williams to Philip Morrs, rather than from PM to Williams.]
This letter pretends that the Social Cost Forum is a new idea, and that this letter is his initial approach to the cigarette company... to vaguely inquire if they are interested in becoming involved.
Williams says that he is associated with Richard Rue [he doesn't give the Annapolis Center afiliations] in creating a conference and research projects on "how the issue of social cost is misused in the formulation of public policy"
[He suspects that Philip Morris ] "may be interested in participating in our project."
This letter also encloses the now-much-modified, previously agreed, version of the funding proposal which is deliberately quite misleading and vague, except for the request for funds. Following the conference, the proceedings and papers will be prepared and published for wide distribution. Over the course of a year, individual academic participants will complete their research projects and submit them to refereed academic journals for publication. Several small grants will be provided for this purpose. In addition, there will be a collection of the research papers published in a book form. [The costs of this project are to be shared among a number of companies in different industries, and it is estimated that: ] Conference Costs (including honoraria, travel, accommodation and conference site costs) $70,000
Grants for follow-up research $45,000
Publication Costs. Distribution & Misc Costs $50,000
TOTAL $165,000
There is no indication now of an exotic venue in Lake Tahoe or the Bahamas, nor is there a list of participants — however they have invited John Stossel of the ABC TV as a guest speaker. [He would do anything for a healthy fee.] |
1997 Oct 6: Richard Rue's unsigned memo to John Dunham "RE: Redraft of Proposal." They have pushed the conference date back once again — now to [May] 1998 — and he wants to clarify some of the changes made. He suggests that: - Grants should be given for research papers to be done before the conference (the normal pattern) rather than after. [Which means they know what results they are after, anyway]
- Allow those companies being asked to provide funding to have their own favorite economists included as speakers.
- Redraft the budget papers to reflect the change in grant-order and the Spring 1998 conference date.
- Find an academic venue for the event to give it more credibility.
He recommends that they approach drug company Pfizer and General Motors for $5,000 each this year — with the expectation that they will give $20,000 in the following budget year. He also wants to 'revisit' whether the multi-millionnaire family foundations like Olin, Scaife, Bradley, Ricahrdson and Koch would put in money also.(Obviously this had been rejected by Philip Morris, because they already have such arrangements in place for other projects). Can we at least pick one or two to approach for funding without conflicting with other proposal? Particularly now that we are looking at a 1998 conference date?
In sending the new proposal to the list of potential contributors I would emphasize the level of interest expressed by the potential donors but the budgetary constraints a number were under. Your willingness to restructure the project is a very responsive and positive reaction to the input received from the donor community. Let's put it to our advantage.
[Philip Morris obviously worked so close to the mogul-millionnaire family foundations that they were sensitive to additional approaches.]
1997 Oct 6: Richard Rue's unsigned memo to John Dunham "RE: Redraft of Proposal." They have pushed the conference date back once again — now to [May] 1998 — and he wants to clarify some of the changes made. He suggests that: - Grants should be given for research papers to be done before the conference (the normal pattern) rather than after. [Which means they know what results they are after, anyway]
- Allow those companies being asked to provide funding to have their own favorite economists included as speakers.
- Redraft the budget papers to reflect the change in grant-order and the Spring 1998 conference date.
- Find an academic venue for the event to give it more credibility.
He recommends that they approach drug company Pfizer and General Motors for $5,000 each this year — with the expectation that they will give $20,000 in the following budget year. He also wants to 'revisit' whether the multi-millionnaire family foundations like Olin, Scaife, Bradley, Ricahrdson and Koch would put in money also.(Obviously this had been rejected by Philip Morris, because they already have such arrangements in place for other projects). Can we at least pick one or two to approach for funding without conflicting with other proposal? Particularly now that we are looking at a 1998 conference date?
In sending the new proposal to the list of potential contributors I would emphasize the level of interest expressed by the potential donors but the budgetary constraints a number were under. Your willingness to restructure the project is a very responsive and positive reaction to the input received from the donor community. Let's put it to our advantage.
[Philip Morris obviously worked so close to the mogul-millionnaire family foundations that they were sensitive to additional approaches.]
1997 Oct 7: Walter Williams has faxed Dunham biographies of the current list of participants [only minor changes from last] in support of his project for a "Social Cost Forum".
The majority of those on this list were from the first proposal after the recruitment of Walter Williams, so this is probably "For the Files" also...Viscusi and Cheung have disappeared from the participans list, and been replaced by Gwartney
[When you look at the brief biographies, it is obvious that they most now have close links to GMU and the cash-for-comments network.]
1997 Oct 7: Another outline of the proposal on Walter Williams letterhead at GMU [Faxed on this date, probably by Richard Rue] clearly indicates the junk-science foundations of the proposal. These claims of costs associated with private production decisions to use pesticides, flame retardants, or private consumption decisions to use an automobile, consume alcohol and tobacco are given considerable public credibility when presented by an often ill-informed media.
'Examples include research leading to bane on DDT and Red Dye no.2, asbestos removal, the saccharin and Alar scares and the uprooting of an entire community, as in the cases of Times Beach and Love Canal.
Someone at Philip Morris (probably Dunham) has edited the outline ready for publication as a brochure.
The nominal total cost for the project [discounting Philip Morris' preliminary payments of $33,000 and $15,000) will be $165,000.
[This retyped version comes from John Dunham's files at Philip Morris]
1997 Oct 7: The now-redrafted proposal, typed onto George Mason University letterhead, is a revamped version of the original Dunham project outline from May. However the phrases have been reshuffled to reflect the shift in viewpoint of the nominal proposer, from Philip Morris internal, to George Mason's request for funding.
They have managed to integrate tobacco's "Social Cost" idea with the much wider industry attacks on "junk science" (necessary to get other industries to participate): A number of organizations have put forward a body of research suggesting that the costs of private production and lifestyle preferences involve coets that are not fully borne by the decisionmaker. Much of this "research" conducted by private think tanks and universities is highly speculative and often of very low quality.
However, it provides the "intellectual" foundation for driving various social and political agenda. When this kind of research is published in academic and popular journals, it often receives considerable print and electronic media attention. These claims of costs associated with private production decisions to use pesticides, flame retardants, or private consumption decisions to use an automobile, consume alcohol and tobacco are given considerable public credibility when presented by an often ill-informed media.
Examples include research leading to bans on DDT and Red Dye No.2, asbestos removal, the saccharin and Alar scares and the uprooting of an entire community, as in the cases of Times Beach and Love Canal. [These examples were all promoted as unnecessary restrictions on legitimate industries, created by irresponsible scaremongering.]
Richard Rue and someone from Philip Morris (probably) have begun sub-editing this version, probably for use as text in a fund-raising brochure.
Stossel had now been confirmed as the speaker, and the date of the event has now gone back to May 1998 with the venue given as "near Washington DC."
[The letter shows that they had previously settled on, and probably reserved, the Vail Cascade Resort in Colorado for the October 1997 date.]
The costs (as claimed in this pseudo-proposal, which would be shown to prospective funders) had now gone up to $165,000.
Also sent in a separate fax are Biographical sketches of the participants
1997 Oct 8: Richard Rue (or possibly John Dunham) has prepared the text for a brochure to promote the Social Cost Forum to potential sponsors. It uses much of the phraseology of the original documents, but it now contains additional information: This project will generate five or six completed research projects that authors will submit to refereed academic joumals. We will also develop media materials based on the completed research.
While the is no formal agreement, it is possible that Edward Algar Publishing Company (United Kingdom), with whom Professor Charles Rowley, a form participant, his previous extensive relations, will publish a collection of the articles.
[Rowley has proved his worth already.]
Phase 1:The Academic Papers The History of Social Costs Economics of Social Cost and Public Policy Externalities Myths of Social Cost The costs were this phase were $45,000.
Phase 2 Forum
The forum will be sponsored by the Economics Department of George Mason University, under the auspices of Dr Walter E. Williams, who is also department chairman.
[Note the Forum now follows the Academic Papers]
The costs for the conference were now estimated at $70,000 and the publication of proceedings, etc added $50,000. The total was still $165,000.
[All mention of Philip Morris picking up the costs of publishing the papers has disappeared.]
As the Forum planning proceeded, witnesses were beng deposed in the State of Mississippi vz. American Tobacco Companies (Mike More and Scruggs) which kicked off the rush to the eventual $300 billion settlement of the damages claims by the tobacco companies. Central to this case was the cost to Mississippi of smoker-related Medicare and Medicaid — which was, essentially, a Social Cost argument.
1997 Nov: /E These are the annual 'grants' or 'donations' which were made by Philip Morris in 1997 to think-tanks and policy institutes which provided useful services. The payments were handled by the Issues Maangement staff: Roy Marden, Josh Slavitt, John Dunham, Tom Borelli and a few others.
The Tobacco Institute and some of the other companies also contributed annual donations to the same organizations. Such annual donations were quite distinct from payments made for commissioned lobby projects.
These are relevant to the Social Cost Forum. - Cato Institute which was initially to front the Social Cost Forum was given a grant of $175,000
- The Heartland Institute (also peripherally involved) only received $50,000.
- George Mason's Law and Economics Center, which houses Walter Williams, has been receiving $10,000 a year from PM alone.
- The Institute for Research on the Economies of Taxation (IRET) (a subdivision of Citizens for Tax Justice), run by Ogilvy & Mather PR for the tobacco industry, received $50,000. Walter Williams was chairman of the advisory board.
- The Annapolis Center received $25,000.
[Note: Page 6 is a sideways extension of Page 1, and so on. Page 7 is part of page 2, etc.
This gives you the information about which Philip Morris staff lobbyist maintained the connections]
1997 Dec: 1998 Issues Management Operating Plan of Philip Morris still has a listing for the forum but it was low in priority and the date was vague:
Hold "social costs" academic forum 2Q-4Q
The end of the Social Cost Forum
It just evaporated.
1998 Oct 29: Annapolis Center Strategic Planning Committee has lobbying executives from most of the companies who were being asked to provide funds for the Social Cost Forum. It is obvious that Rue simply approached the Center supporters.
Philip Morris's Scientific Issues manager, Tom Borelli is on the list also.
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WORTH READING
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