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

OPINION ONLY

Professor Richard Wagner was both a 'founding' and a 'core' member of the Tollison/Savarese cash-for-comment economists network..

He and Tollison were tobacco's earliest recruits who had been trained by the ICOSI (International Committee on Smoking Issues - later INFOTAB) and the US Tobacco Institute to support and promote the industry's "Social Cost" arguments ... their fallacious claim that smoking imposed no external costs on the society.

He was associated with Tollison on jobs for the tobacco industry many years before the network became established. He was also a member of the fake Committee on Taxation and Economic Growth which was put together by Tollison to advise the tobacco industry on how to use economic arguments against excise tax increases. His name then appears in the 1984 and 85 network lists to write op-eds for newspaper and lobby local Congressment, and later in both the 1989 five-man core group of 'Consulting Economists Team; and in the 1990 Six-man core group.

In sum, Wagner is a totally scurrulous academic who had no compunction over supporting an industry that killed a large percentage of its customers — and engaged in active recruitment of rebellious teenagers.

The core group of the nationwide network or academic economists working for the Tobacco Institute was established by tobacco lobbyist James Savarese (originally with Ogilvy & Mather PR) and Professor Robert Tollison of George Mason University. They collaborated in the 1980s to provide the tobacco industry with academics willing to write propaganda material ... always provided their names were not linked to the industry or to any of the cigarette companies.

The idea was simply that the academic 'sleepers' would be available on a cash-for-services basis when needed to counter attempts to increase excise taxes or to ban public smoking — mainly through writing op-eds for their local newspaper — or just to appear as so-called 'independent experts' to promote the industry's interests at local ordinance hearings, or before Congressional committees, without admitting their paid support for special interests.

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

The economist always claimed to be 'independent', 'professionals' and they wre recognised 'academics' from some credible university. They never revealed the source of their funding in their op-eds or letters-to-the-editor.

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

The aim was to have, in each State, at least one academic economist, one academic lawyer, and one academic from a business management, business law, marketing or advertising discipline willing to jump into action and write op-ed articles for their local newspaper, or to appear at local ordinance or legislative hearings. Copies of these articles were always to be sent to a local Congressman who sat on some important (to the tobacco industry) committee.

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

The foundation document for the network still in the tobacco industry archives is the Draft plan (below) dated 30 April 1984

This 109 page DRAFT Tobacco Institute "Cigarette Excise Tax Plan" was aimed at countering the Reagan Administration's "Packwood Tax Plan" and the list of economist involved includes James Heins.

Some key documents

• Economist at Florida State University Talahassee then at George Mason University. Also a Research Fellow and on the Board of Advisors, Independent Institute

• As an indication of his relationship with the cigarette companies, note that 5,521 documents are found with a search of the tobacco archives using the normal variations of his name. Only a few of them refer to the composer, but quite a few were for the RJ Reynolds defence lawyer.

1941 Apr 28: Born, Jamestown, North Dakota

1942 Apr 28: Born

1963 June: BS University of Southern California

1966–68: Assistant Professor of Economics, University of California, Irvine

1966 June: PhD University of Virginia

1967: Co-writing with James Buchanan "Public Debt in a Democratic Society" for the American Enterprise Institute. (Many other similar pieces for AEI and with Buchanan also) See C/V. Buchanan is a guru behind the Center for Study of Public Choice at Virginia Polytechnic (later George Mason University)

    [In the following few year he co-writes a number of anti-Keynesian articles with Buchanan (a disciple of Frederick Hayek) which are published by the American Enterprise Institute. - then controlled by William Baroody (and behind the scenes by Irving Kristol) and funded by the larger manufacturers.

1968–72: Associate Professor of Economics, Tulane University

1968–72: Associate Professor of Economics, Tulane University

1972–73: Richard Wagner was also

• Senior Research Assoc: The Urban Institute He says he "spent a year as a resident scholar at the Urban Institute"
  
• On the editorial board "Cato Journal"
• Editor "Constitutional Political Economy"
• Board member of the Pacific Research Institute

1973–75: Associate Professor of Economics, Virginia Polytechnic Institute and State University

1975–79: Professor of Economics, Virginia Polytechnic Institute and State University [Robert Tollison was also there]

1978 Sep: - Feb 1979 (Winter 1978) Visiting professor at University of Konstanz (West Germany) [This date, from his C/V, must be wrong, unless he meant by 'visiting professor' dropping in for an afternoon coffee.!]

1979 Jan 30: Tobacco lawyer, Jacob & Medinger, presents a supplementary bill which adds a few new names and entries for ICOSI/SAWP operations:

• Dr Peter Berger — $750
• Edward Harris — $766 (additional payment)
• Prof Robert Tollison — $1200 (additional payment by SA1 Ck)
• Prof Robert McCormick — $1125 (by SAI Ck)
• Institute for Policy and Management Research $16,000

• Prof Robert Tollison — $957 paid through SA1 (April)
• Richard E Wagner — $1740 paid through SA1 (April)
• Edward Harris — $2,134 paid through SA1 (June)
• Peter Berger — $1500 paid through SA1 (June)

• SJ Feinhandler — $15,642
• Weiss/Watson — $8168
• Inst for Policy and Management Research $20,283

• SJ Feinhandler — $16,000
• Robert Tollison — $ 250
• Richard Wagner — $ 250
• Inst for Policy and Management Research $16,000

1979 May 14: George Berman, (Devon Management) who consults to the international tobacco industry lobby group, known at this time as ICOSI (later INFOTAB) has prepared a speech"Social Costs - Social Values" to introduce European tobacco lobbyists associated with the Social Acceptability Working Party (SAWP) to the concepts of economics — and to acquaint them with ICOSI's strategy to counter 'Social Cost' claims.

[These claims are that smokers impose an 'external' cost on society, and therefore high cigarette excises are justified. SAWP also encompasses the idea of non-smokers accepting the right of smokers to smoke.]

    Berman has put together a core team of US academics — and this speech is an attempt to widen his group out by recruiting European academics also.

    He has identified:

• Richard Wagner and Robert Tollison as two economists who are willing to help the industry.

  Dr Richard Wagner is the author of 11 books and monographs, and over 20 articles, in the field of public finance and economics. During the last six months he was Visiting Professor of Economics at the renowned University Of Konstanz.
  
      His colleague, Dr Robert Tollison has served as a consultant to the US government Treasury Department, Commerce Department, Office of Technology Assessment and the Council On Wage And Price Stability.
  
      These two gentlemen are co-authors of a forthcoming book called 'Personal Liberty, State Action And Economic Coordination', a title which certainly covers the subject of this project.
  
      The economists working on this project are first developing a "Layman's Guide" to social cost/benefit analysis. This Layman's Guide will include the participation of economist s from countries other than the United States. When a basic position has been established, the economists will examine closely the social cost.papers which have appeared in each country. A critique of each paper will be filed with ICOSI alongside the paper itself..
  
      This will provide us with a weapon against arbitrary, careles s attacks using "Social Cost" as a rationale.

• Robert Nozick — an eminent US philosopher.

  We have asked one of the leading philosophers in the US to develop a philosophical position which will, again, be further addressed by his counterparts in the UK and Europe.
  
  Dr Robert Nozick is Professor of Philosophy at Harvard University. He is best known for his recent book, "Anarchy, State And Utopia", a clearly-written statement of the Libertarian.position, which won the 1975 National Book Award.

• Sherwin Feinhandler - US cultural anthropologist

  Sherwin Feinhandler is a cultural anthropologist who has examined reports on the social role of smoking in over 180 different cultures. As a result of these studies, he is convinced that smoking provides certain universal benefits, although they may appear in different forms from time to time and in different societies
  
      Dr Feinhandler is President of Social Systems Analysts, a consulting firm which evaluates the ways in which various activities are important to society. he is a lecturer at the Harvard University Medical School, and his testimony before Congress on public smoking was most helpful.

• Dr Peter Berger sociologist and author.

  Dr Peter Berger has consented to advise us on this project, and Dr Aaron Wildavsky to manage the necessary research. Dr Berger is a professor of Sociology at Rutgers University, the widely-known author of a dozen books in his field, and innumerable articles. He has written of anti-smokers:

  The anti-smoking attitude is only one item in the consciousness of a specific group of people. it should be seen in relation to other items in that consciousness...

  
      Ask this simple question: what are other causes to which the anti-smokers are likely to be attracted? There is, probably most important of all, the various causes espoused by the Environmentalist movement.

  • Modern industrialism is perceived as a gigantic death machine.
  • Commercially produced foods are supposed to poison us, and the only salvation is in the return to some form of organic nutrition.

  
  Lots of people are concerend about Nuclear Power, Industrial Pollution, Population Growth, or Smoking and Health. But only a few dedicate themselves to public and legislative action.
  
      We need to isolate and define the motivations and the alliances of the active anti-smoking leadership. we need to do this in order to prepare effective countermeasures, but even more important, to expose this group as responding to a very different set of values than most people. To assist in this research, we have called on Aaron Wildavsky.

  
  
• Dr Wildavsky a UCLA, Berkely political scientist.

  Dr Aaron Wildavsky was Chairman of the Political Science Department at the University of California in Berkeley. He was Dean of the Graduate School of Public Policy there, and, more recently, President of the prestigious Russell Sage Foundation.
  
      Dr Wildavsky believes we are dealing with broad ideological themes — Anti-capitalist, Anti-industrial, Antimultinational and Countermodern. These views favor a return to a more primitive life while retaining all the expensive benefits of the Industrial Society.

  [Wildavsky was clearly convinced a rabid rouser against activists - convinced that anti-smoking activism was part of a Communistic plot organised as a worldwide web with some James Bond-type villain at the center pulling all the strings.]

When this research is completed we will have a foundation for dealing with the Social Cost issue. We will have attacked its economic reasoning. We will have looked at the dark side of its philosophy, and related that philosophy to the larger motives of the Anti-smoking Leadership. We will have explored the Social Benefits of Smoking, and the Social Costs of Smoking Restrictions.

    Hopefully, we will be able to stop this attack before it stops us.

1979 May 30: /E [Reference from George Berman testimony in Dec 1998]

Q. Did you, in terms of completing the project for SAWP on social costs, hire outside consultants yourself?
    A Yes

    Q You hired Dr Feinhandler, correct?
    A That's correct.

    Q The cultural anthropologist?
    A That's right

    Q You hired Dr Wildavsky, correct?
    A That's correct."
    Q Dr Wildavsky's role was to kind of present a profile of the anti-smoking groups and their leaders. Am I correct?
    A Yes.
    Q That was done with an eye towards somehow driving a wedge and I think your exact words were between anti-smokers and nonsmokers?
    A That's correct.

    Q You also hired Dr Wilder [sic Wagner] and Tollison who were economists to look at the issue?
    A That's correct.

    Q You hired Dr Nozick, who was a philosopher to kind of philosophy about the issue?
    A That's correct.

    Q Did these people all prepare papers pursuant to their consultancy and give them to you?
    A All but Nozick.

1981 Jan 7: The international (ICOSI) tobacco industry's Social Costs/Social Values: Progress Report has a series of notes:

• The report by Drs Tollison and Wagner, "Consumer Protection, Public Policy and Cost-Benefit Analysis", has been completed. The authors have requested support in preparing this for publication as a monograph.
• The Tobacco Institute has assisted Dr Peter Witonski with research on a manuscrupt, "The Social Costs of Smoking" which has been accepted for publication in the spring issue of Policy Review. Dr Witonski is adjunct professor of public policy at Georgetown University in Washington. He obtained his PhD at Oxford, and is the author of a great many articles and books, including a prize-winning (American Political Association) four-volume work entitled "The Wisdom of Conservatism".
• George Berman's paper before the Australian Association of National Advertisers was published, in its entirety in B&T.[Australian advertising journal]
• Dr Feinhandler has submitted two drafts for review - one about the soical role of smoking, and another about the use of anti-smoking activities to demark and promote social class distinctions. These have been reviewed for content and returned.
• The following have accepted invitations to speak at the Wharton Conference., Peter Berger, Stephen Littlechild (UK) Sherwin Feinhandler
• Alan Woodfield of New Zealand hopes to be able to present a paper, but cannot confirm this just yet. [He was working for the TI Australia],
• Anti-smoking Groups: Dr Wildavsky's draft has been cleared by legal counsel and is under review by the Project Team.
• Smoking Restrictions in the Workplace: The project team from AT Kearney [consulting firm] has been strenghtened by the addition of a research psychologist and an industrial engineer.
• Civil Liberties: We are working with Matrix Corporate Affairs of London to develop this project around academic consultants in two European countries.

1. "Through what organisation/s will ICOSI sponsor the Wharton Conference?" [They want to hide their involvement]
2. Approval to support Tollison and Wagner in publishing their text.
3. Strategy for countering the WHO program on the Social Cost of Smoking [under the headings] Surveillance, Communications, Preparation, and Action

1982 Aug 31: The lawfirm Jacob, Medinger & Finnegan, which ran the tobacco industry's secret "Special Project" accounts shows in this statement that Richard Wagner had received another $600 for Consutants Fees and/or Expenses.

1983 Feb 14: Tobacco Institute's William A O'Flaherty has written to Richard Wagner at the Florida State University asking him whether he will write an 'expository essay' for them on consumption taxation.

    This is Wagner's reply, outlining the structure of the essay.

He charges $500 per day for consulting, and $5,000 for a report in the 50-page range. He encloses a C/V.

1983 Apr: Wagner has written his expository essay for the Tobacco Institute "Economic Aspects of Selective Excise Taxation, with Special Reference to Tobacco Taxation"

    This appears to be mainly intended for tobacco industry consumption — an expert economist outlining possible lines of propaganda for non-experts in the lobbying business.

1983 Dec: /E A George Mason Uni/Center for Study of Public Choice attack on the World Health Organisation "WHO: No Rx for a Healthier World", by Tollison and Wagner.

    It follows the old tobacco line of promoting the idea that WHO budgets should be spent on vaccination, not on tobacco limitation. James Gwartney, Paul Dietrich, Thomas DiLorenzo, Petr Skrabanek, Robert McCormick, James Bennett, James le Fanu, Bill Niskanen, and many other tobacco lackeys are quoted

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

• One public finance economist for 10 days @ $1,000, [Total $ 10,000 ] including meetings with coalition members and/or the Governor's staff; research and preparation; and testimony.
• One economist for a union workshop on the tax issue, [Total $5,000] including 3 or 4 training sessions over the course of a convention.
• Six economists @ $5,000 and one senior economist 53,000 @ $20,000 for a tax symposium, including publishing of the proceedings at $3,000. [Total $53,000] The senior economist would play an oversight/organizational role and would be responsible for editing the proceedings. Such a symposium would be staged for regional or national impact.
• One economist provided to a public employee union to do original research on the need for adequate services to be funded by broad-based taxes; this would include the final report and testimony. [Total $ 25,000]

Potential Economic Consultants
    Following is a list of economists in key states who might assist us as consultants. We have begun contacting them to ensure their willingness and expertise. We are asking each about past experience; work with similar issues; previous work with the indusry; published articles or research; and speaking availability.

    As discussed in the body of this program, our intent is to have a group of individuals who we can call upon regularly to testify, conduct special research projects, and discuss their research and/or views on excise taxes with the media.

• California, Thomas Borsherding, Claremont College
• Connecticut, William McEachern, University of Washington
• Florida, Richard Wagner, Florida State University
• Georgia, Fred McChesney, Emory University Law School
• Illinois, James Heins, University of Illinois
• Massachusetts, Harlan Platt, Northeastern University
• Minnesota, Thomas Stimson, University of Minnesota (St. Paul Campus)
• New York, Harold Hochman, City University of New York
• Ohio, David Klingaman, Ohio University
• Pennsylvania, Mark Pauly, University of Pennsylvania
• Texas, Charles Maurice, Texas A&M University
• Washington, Yoram Barazel, University of Washington
• Washington, D.C. Robert D. Tollison, George Mason University
• Wisconsin, Burton Weisbrod, University of Wisconsin

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

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

1984 June: /E Tobacco Institute appendixes to some report. Page 5 is a list of "Potential Economic Consultants."

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 projects, and discuss their research and/or views on excise taxes with budget officials, potential coalition members, legislators, and the media.

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; previos 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.

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.

Cash-for-Comment Economists
State	Economist
California	Thomas Borsherding, Claremont College
Connecticut	William McEachern, University of Washington
Florida	Richard Wagner, Florida State University
Georgia	Fred McChesney, Emory University Law School
Illinois	James Heins, University of Illinois
Mass.	Harlan Platt , Northeastern University
Minnesota	Thomas Stimson, University of Minnesota (St.P)
New York	Harold Hockman, City University of New York
Ohio	David Klingaman, Ohio University
Penn.	Mark Pauly, University of Pennsylvania
Texas	Charles Maurice, Texas A&M University
Wash.DC.	Robert D Tollison, George Mason University.
Wisconsin	Burton Weisbord, University of Wisconsin
[This was the core group which established the cash-for-contents network. Over the years the numbers reached over 100.]

    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 early: "Wagner testified against public smoking legislation in
    Tallahassee, Florida, early in 1985."

1985: Tobacco Institute document "Federal Markets" on the likely allies the industry has in opposing the earmarking of cigarette excises for healthcare.
Market: Florida
Positive Actions by Local Allies:
Minorities: Hispanic groups signed letter opposing bill that would earmark tobacco excise taxes for indigent care.
Citizens: 50 Vietnam veterans from the Miami area wrote individual letters opposing cigarette excise taxes to Rep. Gibbons (Ways & Means Committee) and both Florida Senators.
Academics: Professor Richard Wagner (Florida State University) wrote an op-ed article on tax reform and submitted to the Tampa Tribune and the Washington Times. Although neither paper could use the piece; copies were sent to Ways & Means Member Gibbons.

1985: TOLLISON, RD "Smoking and Economics".

1985 Jan 31: Hurst Marshall has distributed this Tobacco Institute list of economists from the cash-for-comments network. It has been organise by State, and includes the names of Congressmen they wish to influence.

Attached for your information are the names of economists who have been identified by PR to assist TI on the federal cigarette excise tax issue.

These people are also available to testify at the state level.

    If you feel that this type of witness can be of assistance to you on state cigarette tax issues, please contact Fred Panzer for details and arrangements.

    Please notify your lobbyists as to the availability of these people. At the same time, you may wish to ask them for their ideas or suggestions for other economists within their states.

FLORIDA (Rep. Gibbons)
  •   Professor Richard Wagner ,
      Florida State University, Tallahassee, Florida

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. Richard Wagner heads their state list of available economic witnesses for Florida.

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: FLORIDA
Positive Actions by Local Allies:
Academics: Professor Richard Wagner (Florida State University) wrote an op-ed article on tax reform and submitted to the Tampa Tribune and the Washington Times. Although neither paper could use the piece; copies were sent to Ways & Means Member, Gibbons.

Minorities: Hispanic groups signed letter opposing bill that would, earmark tobacco excise taxes for indigent care.

Citizens: 50 Vietnam veterans from the Miami area wrote individual, letters opposing cigarette excise taxes to Rep. Gibbons, (Ways & Means Committee) and both Florida Senators.

See page 4
See Success List

1985 Mar 20: -23 [The report is dated Dec 18 1984] Jim Savarese, as subcontractor to Ogilvy & Mather, has set up seminars for some of the industry's cash-for-comments economists under the auspices of the Southwestern Social Science Association and the Eastern Economic Association. Jim Savarese writes to Trish Milita of O&M who refers this to the Tobacco Institute:

Attached are the panel sessions that were accepted by both the Southwestern Social Science Associations and the Eastern Economic Association in March, 1985.

    These are very strong academic panels and add a great deal of depth to our list of consultants for future use.

    I know all of these individuals personally except for Henry Butler who is a friend of Bob Tollison's at Texas A&M. They all understand their mission and will be submitting papers for us to review well in advance of the meetings.

• The SouthWestern Social Science Association seminar run by O&M in Houston (Mar 20) was on "Taxation and Social Process. It had Robert Ekelund in the chair, and papers by Henry N Butler, Joseph M Jadlow and Richard E Wagner. Keith Watson was a discussant.
  
  
• The Eastern Economic Association seminar, run by O&M in Pittsburgh (Mar 21) was on "Perspectives on Tax Reform". It had Robert Tollison in the chair, and papers by William Shughart, Gary Anderson, and a joint paper by John Bowman/Michael Pratt. The discussant was George Hoffer.

1985 Apr 25: Hurst Marshall at the Tobacco Institute has been advised about the "Florida Situation". A meeting of lobbyists had been held to prepar for Florida hearings with:

• Six fom the Tobacco Institute + a cigar retailer.
• Representatives from Florida banks, restaurants, retail and Chamber of Commerce.
• Three Scientific consultants, Jack Peterson, Nancy Balter and Myron Weinberg.
  • Dr Jack Peterson of the Center for Environmental Health who spoke on Environmental Tobacco Smoke exposure studies.
  • Dr Nancy Balter of the Center for Environmental Health who addressed conclusion of center and other workshops held on issue that evidence does not support claim that ETS is health hazard.
• Ed Beder from Covington & Burling
  • Ed Beder of Covington and Burling who spoke on constitutional problems with bill.
• Richard Wagner (economist) Florida State University
  • Dr Richard Wagner - FSU Economist - who spoke on his study showing costs of implementing such a law.
• Phil Downs (pollster) Florida State University
  • Dr Philip Downs of Kerr and Downs who presented the results of his random telephone survey of 525 registered voters in state indicating that a large majority of those polled were opposed to laws restricting smoking in the workplace.

1985 May 5: Ed Battison, who was a contract economist briefly employed by the Tobacco Institute has produced a summary of Tollison's book "Smoking and Society" which had used the proceedings of the 1984 Workshop in New York City to create 'an authorative textbook"

[This was a trial run of the Philip Morris technique of totally controlling the speakers at a supposed 'scientific conference' — then publishing the proceedings — which was later used in the McGill University ETS symposium in November 1989]

• Robert D Tollison
• Eysemek [probably Hans Eysenck]
• Charles D Spielberger
• Domingo M Aviado
• Sherwin J Feinhandler
• Douglas J Den Uyl
• William F Shughart & RD Tollison
• Peter Berger
• HP Grant & Ingo Walters
• Stephen C Littlechild
• Bill Shughart and James Savarese
• Jean J Boddewyn
• James Buchanan

'it should be pointed out that each paper contains much more detail and information on each subject than presented here. Some of these points present a structure for defense of [against] prosmoking views that are applicable to legislative hearings and lobbying during 1985 and 1986.

"List of Professional Persons who have potential to testify

• against excise taxes or antismoking bills;
• for smokers rights;
• against cooercion of smokers;
• against earmarking excise taxes for public health care"

[It includes]
RICHARD E. WAGNER,
economist
Florida State Univeresity

- has written two papers on the irrationality of earmarking cigarette & alcohol excise taxes for Medicare and Medicaid, one for the recent association seminar and one for the TI;
- among his several books and articles is a recent text on taxation;
- articles on Government Spending, Trends and Issues by Beck and Wagner in SEJ, 1982;
- Wagner's Law, Fiscal Institutions, and Growth of Government in National Tax Journal, v.30, 1977;

he would testify against earmarking excises for public medical programs.

1985 May 5: Ed Battison from the Tobacco Institute has summarised Robert Tollison/s 1984 Workshop papers on "Smoking and Society" and also lists scientists and academics who would probably "Testify Against Excise Taxes or Anti-Smoking Bills, for Smoker's Rights and Against Cooercion of Smokers and Against Earmarking Excise Taxes for Public Health Care".

    He says about this individual:

RICHARD E. WAGNER, economist Florida State TJ,,has written two papers on the irrationality of earmarking cigarette & alcohol excise taxes for Medicare and Medicaid, one for the recent association seminar and one for the TI;

    [A]mong his several books and articles is a recent text on taxation; articles on Government Spending, Trends and Issues by Beck and Wagner in SEJ, 1982; and Wagner's Law, Fiscal Institutions, and Growth of Government in National Tax Journal, v.30, 1977; he would testify against earmarking excises for public medical programs.

1985 May 5: A Tobacco Institute summary of "Smoking and Society" edited by Robert Tollison. It gives details of the main speakers enlisted for a New York City Workshop run to benefit the industry, and it outlines the ideas which were translated into chapters for this book "Smoking and Society".The speakers at this workshop all work for tobacco as paid consultants or lobbyists:

• Robert Tollison — professor of libertarian economics and organiser of the cash-for-comments economists network,
• Hans Eysenck (misspelled) — famous behavioral psychologist, and tobacco consultant,
• Charles D Spielberger — psychologist "Why People Smoke" (every reason other than addiction),
• Domingo Aviado — pharmacologist (also worked for pharmacuetical industry),
• Sherwin Feinhandler — sociologist and life-long tobacco lobbyist,
• Douglas J Den-Uyl — Philosopher and political scientist (ethics!),
• William F Shughart — Public Choice economist, associate of Tollison and Buchanan
• Peter Berger — sociologist
• HP Grant & Ingo Walter — business administration/finance,
• Stephen C Littlechild — Professor of Commerce UK,
• James Savarese — labor and economics lobbyist,
• Jean J Boddewyn — professional advertising effects denier,
• James Buchanan — guru of Public Choice Economics and partner of Tollison.

1985 June 10: Maureen Delanty (O&M)'s May Monthly Report lists her activities.

• Participated in luncheon meeting with Steve Schlossberg and Mike Forsey to discuss labor relations opportunities for TI. We are trying to confirm Schlossberg's recommendation of Forsey with other sources.
  [Both were later widely used by Labor Management Committee.]
• Briefly discussed with Pete Sparber use of economic consultants to promote Chase Econometrics' study of the tobacco industry. Once study is available, we would like to review and prepare recommendations for this project.
  [Chase did both a general and numerous State-specific studies, custom-designed to produce the results the tobacco industry wanted.]
• Briefly discussed with you use of economic consultants on public smoking issue. We should discuss some target states so we can make recommendations and get started on this project.
• Delivered brochure on health care financing. We also printed stationery for Committee on Taxation and Economic Growth for cover letter signed by Bob Tollison. Distribution list is being compiled and brochure will be mailed as soon as possible.
• Continued to prepare op-ed articles on tax reform and work with area economists to place in newspapers in home districts of members of House Ways & Means and Senate Finance Committees.
• With Fred Panzer and Jim Savarese, coordinated Bob Tollison and Richard Wagner's responses to OTA on the earmarking of cigarette excises for health care financing.
• Arranged for Citizens for Tax Justice and Hal Hochman, professor at City University of New York, to testify before Representative Rangel on the taxation of low-income wage earners. This involved coordination of testimony with the subcommittee and making final revisions on Hochman's statement.

1985 June 12: The formal "Committee on Taxation and Economic Growth" put together by the tobacco industry to support its propaganda, now has its own letterhead to write to Congressional politicians and aides. It claims to be a

"bi-partisan organization of public policy experts and public finance economists founded in 1984 to examine ways of creating a federal tax system which will provide adequate revenue in an efficient, equitable manner.

• Robert Tollison of George Mason Institute is Chairman,

• Thomas Borcherding, Claremont Graduate School
• Harold Hochman, Baruch College, CUNY
• Cotton M Lindsay, Clemson university
• Fred McChesney, Emory university,
• Dwight Lee, University of Georgia
• Richard Wagner, Florida State Uni.

[Note Delores Martin's name is not on the letterhead, even though she was involved initially, and later with the network.]

1985 June 19: Richard Wagner at Florida State University is making a statement on Cigarette Excise Tax Extensions to the Committe on Ways and Means.

I am Professor of Economics at Florida State University, and I am offering my views on the cigarette excise tax as an economist who has done extensive research on numerous aspects of government finance. I am grateful to the Committee for giving me this opportunity to appear here today.

1985 June 20: Richard Wagner, Professor of Economics,, Florida State University and David Wilhelm, Executive Director of the Citizens for Tax Justice (run by Ogilvy & Mather) were appearing for the tobacco industry before the Committee on Ways and Means:

1985 June 21: James Savarese submits his bill to the Tobacco Institute for the academics who have written articles, and those who have made speeches at important academic conferences promoting the tobacco industry line.

• Op Ed Project — $1000 each in 'professional fees'
  
  for Abrams, Alston, Armentano, Harper-Fender, T Anderson, Denzau, Bohanon, Jadlow, Wagner and Menchik.
  
  
  
• Southwest Social Science Meeting — Houston
  • Keith Watson ($1,000),
  • RB Ekelund Jr ($2,003)
  • Joseph Jadlow ($2,605),
  • Richard Wagner ($2,716)
  • Robert D Tollison ($5,000)
  • Henry N Butler ($2,070)
  
  
  
• Eastern Economic Assoc, Meeting — Pittsburgh
  
  • George E Hoffer ($1,431)
  • Gary M Anderson ($2,450)
  • Robert D Tollison ($6,375)
  • Bill Shurghart III ($2,529)
  • Michael D Pratt ($1,288)
  • John H Bowman ($1,000)

1985 Sep: Atlantic Economic Journal "Taxes and Incentives: Horatio Alger vs. The Tax Man" by Philip RP Coelho and William P Orzechowski. He is credited in this study as being from Ball State University and the US Tobacco Institute. Coelho appears not to be credited.

    Another article in the same journal is "Inferring Collusion from Pricing Behavior: The American Tobacco Case Reexamined"

1985 Dec: /E List of materials written for the Tobacco Institute during this year:

• WAGNER, RE "Smoking-Related Deaths and Financial Costs : A Critical Commentary ;" August 10, 1985-
• WAGNER, RE "Smoking-Related Deaths and Financial Costs : A Critique ;" May 16, 1985.
• TOLLISON, RD "OTA Report on Smoking-Related Deaths and Financial Costs : Further Comments ;" August 1985.
• TOLLISON, RD and WAGNER, RE "Cost-Benefit Analysis aud its Application to Smoking-Related Issues."
• TOLLISON, RD and WAGNER, RE "Consumer Protection, Public Policy, and Cost-Benefit Analysis."
• TOLLISON, RD "Economic Analysis of Proposals to Impose a Federal Excise Tax on Smokeless Tobacco Products ;" August,

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 Richard Wagner (Florida State University) wrote an op-ed article on tax reform and submitted to the Tampa Tribune and the Washington Times. Although neither paper could use the piece; copies were sent to Ways & Means Member Gibbons.

1986: Co-writing with Dwight Lee, "The Welfare State, Capital Formation, and Tax-Transfer Politics" for the Pacific Research Institute.

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:

VIRGINIA
Professor Henry Butler
    George Mason University, School of Law, 3401 North Fairfax Drive, Fairfax, Virginia 22201, 703-841-2665

Professor Richard E. Wagner
    Center for Study of Public Choice, George's Hall, George Mason University, Fairfax, Virginia 22 030, 703-323-3773

Professor Walter Williams
    Department of Economics, George Mason University, Fairfax, VA 22030, 703-323-2631

1986 Jan: Economist at Florida State University, Tallahassee. The Tobacco Institute's Public Relations Resources Committee lists him as "available to provide economic testimony on the public smoking issue" He is an op-ed writer and/or witness who is available at two weeks notice. [Page 9]

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."

• Professor Richard Wagner
  Department, of Economics, Florida State University, Tallahassee, FL,
  
  Wagner testified against public smoking legislation in Tallahassee,, Florida, early in 1985.

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 20: Chris Cory of PM Inc is trying to promote Robert Tollison/Richard Wagners pro-smoking book Smoking and Society: Towards a More Balanced Assessment:

"There is a serious and useful scholarly case to be made that the conventional wisdom about smoking behavior is either wrong, unproven, built upon faulty analysis, or pushed well beyond the point of common sense."

"International is keeping tabs on the book (INFOTAB supported the project somehow). I got my copy from Don Harris. Andrew Whist gave advance copies to the PM Board in December. "

Chase Econometrics = BULLSHIT

1986 Feb 26: Richard Wagner wrote a private note to his friend Robert Tollison. Here is a draft copy of my op-ed piece on the Chase bullshit.     There is some really wacko stuff in that model: increased employment increases wages, but wages have nothing to do with employment; higher wages increase inflation, but inflation has nothing-to do with wages, and money has nothing to do with inflation. Inflation has nothing to do with interest rates. And....     At any rate, I can live with the enclosed essay or some modestly revised version of it, but there is no way I can get any deeper into multiplier effects, interindustry flows, and the like [They were promoting a series of faux-economic impact studies on the effects of smoking bans which were done for the Tobacco Institute in specific cities, by Chase Econometrics.]

The economic importance of tobacco to Florida's economy has been documented in a study recently released by Chase Econometrics, a firm with an international reputation for measuring economic magnitudes and relationships. This two-volume study "The Economic Impact of the Tobacco industry on the United States Economy", examines the economic importance of tobacco to the nation as a whole and to individual states.

    The economic importance of tobacco to Florida's economy is perhaps astonishingly large in light of the small amount of tobacco farming and manufacturing in Florida. Only 743 people who earned $9 million were employed in tobacco farming in Florida at the 1983 date of Chase's study. This pales by comparison with Kentucky, where 36 thousand people earned $187 million in tobacco farming, and North Carolina, where 34 thousand people earned $210
    million.

1986 Mar 13: Savarese writes to Fred Panzer at the Tobacco Institute about the "Chase Study/Op-eds".
[These are promoting faux-economic impact studies on the effects of smoking bans, done in specific cities for the Tobacco Institute by Chase Econometrics]

• The St Louis article has been approved and submitted to the St Louis Despatch.
• The Baltimore article has been approved, but not yet submitted.
• John Militello's Philadelphia article is awaiting approval
• Richard Wagner's Miami article is being discussed.
• Four new articles are enclosed
  • Chicago (by Henry Butler)
  • (Another by Butler) for either Dallas or Houston
  • New York (by Michael Crew)
  • Atlanta (by Dwight Lee)
• In writing stages are articles for
  • Los Angeles (by Thomas Borsherding)
  • Cleveland (by Richard Vedder)

1986 Apr: /E James Savarese has circulated these instructions to his stable of cash-for-comment economists. He is asking them to write to the House Ways and Means Committee members in their states, and include a copy of their op-ed articles.

    He provides stamped and addressed envelopes, and strict instructions for what the letter should say:

Contents of your letter to the member

• Opposition to consumption taxes, especially federal excise taxes, and in particular alcohol and cigarettes (you may list others if you wish).
• Opposition to any tax increase as part of the budget reconciliation process; i.e., the need to comply with Gramm-Rudman target of $145 billion deficit limit. This deficit target should be reached with spending reductions.
• However, if the tax reform package that ultimately emerges generates some windfall tax revenues during the first year, FY 1987, these should take the place of any other tax increase that might be considered. (For your information, most analysts believe that the Packwood version of the tax bill is revenue neutral over a five year period, but that it raises between $15-$20 billion during the first year.
• One tax bill per year is more than enough. Whatever tax bill (if any) passed will create enormous uncertainty among the taxpaying public. The last thing that taxpayers — as investors, consumers, etc. — need is another tax bill one month after the major reform bill is passed.

1986 April 3: Savarese writes to his economists thanking them...

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

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

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

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

Chase Econometrics Studies

1986 May 19: Scott Stapf at the Tobacco Institute sent to Peter Sparber a "Final report on the Chase Econometrics project." It detailed the successes of the 'Chase Campaign' Press promotion: City press tours of Sacramento, Columbus, Albany (failed in New York City) Florida still to come. Letters to the Editor being generated through field staff and TI media team members. Economists op-eds (using Chase data) through the Savarese network Smaller business publications Major industry trade releases (Doremus & Co) Labor publications (they have briefed Ms Jacobsen) Materials production - all printed and readied for distribution (including slide show)

1986 May: A bundle of 72 pages of information is being circulated by the Tobacco Institute to its Regional Directors. The data is predominantly on the tobacco-industry beat-up known as Sick Building Syndrome and on the general problems of Indoor Air Quality [all down-playing the effects of smoking in confined spaces]

    Section 1 is headed

List of sources. Local and national experts you can call for quotes or background information. It promotes the services of three specialist lobbyists

• Lewis Solmon - an academic who discounts problems of workplace smoking
• Al Vogel - who claims to be an expert in public attitudes to smoking
• Mike Forscey, a labor lawyer/lobbyist who helped the tobacco industry keep the union movement on-side.

1986 May 22: James Savarese has written to his cash-for-comments economists requesting that they now...

... produce a follow up letter to the members of the House Ways and Means Committee in your state. You will note that we are asking that you send this correspondence by Tuesday, May 27, to the home district offices of these members.

    You should refer to your correspondence with the state's Senators and attach copies of your OP-EDs that were placed. In the event that your OP-ED has not yet been placed, please attach it and mention one newspaper to which it has been sent.

Contents of your letter to the member:

• Opposition to consumption taxes,
• Opposition to any tax increase as part of the budget reconciliation process;
• One tax bill per year is more than enough.

1986 May 30: Fred Panzer of the Tobacco Institute was contacting British-American Tobacco's PR executive, Tom Humber [also Burson-Marsteller and National Smoking Alliance] sending him some of the examples of the network economists.

Enclosed are: (1) The first wave of 27 op-ed reprints, (2) A second wave of 32 op-ed articles (21 published and 11 unpublished), sent out on Packwood's first tax reform proposal.

    I've also included one on the Chase [Economtrics] study. There are a few others being rounded up, as well as a syndicated excise tax feature series we developed. Out of all this should come something useful for your people.

• Florida — Wagner — Tampa Tribune and Washington Times
• Indiana — Bohanon — Muncie Star
• Maine — McMahon — Portland Press Herald
• Minnesota — Raab — Minneapolis Star & Tribune
• Missouri — Denzau — St Louis Post Dispatch
• Montana — Anderson — Billings Gazette
• New Jersey — Crew — Wall Street Journal
• New York — Greene — New York Times and Newsday
• North Dakota — Doblitz — Forum
• Oregon — Eberts — Oregonian, Statesman-Journal, and Washington Times
• Tennessee — Anderson — Knoxville Journal, Memphis Commercial Appeal, and Chattanooga Times.

1986 Aug: The Regional Vice Presidents (RVPs) and Regional Directors (RDs) of the Tobacco Institute in charge of various areas have supplied comments on their Economic Witnesses.

    Six of the RVPs thought it important that the economist was a resident of the State, "Ideally associated with the State University", while three did not, provided they were "presented to the legislators by a 'credible... organization' (e.g. chambers of commerce, labour union)." [Provided they hid their tobacco industry backing behind a front organization.] The consolidated and encapsulated comments included:

Region VI
Robert Tollison (George Mason University)
In his testimony on the District of Columbia workplace smoking legislation, Tollison's knowledge was "good but, [hisl presentation and persuasiveness [were] marred by his not admitting from the beginning that the study was sponsored by TI."

Richard Wagner (Florida State University)
    [He] was regarded as "more effective" than Tollison on knowledge, presentation and persuasiveness.

    Emphasizing the need to present the economic impact of smoking restrictions, RVP would like these witnesses again.

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.

    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.

FLORIDA, (Rep. Gibbons)

[Economist:] Professor Richard Wagner, Florida State University, Tallahassee Florida, 904-644-3811
[Speciality:] Policy science; public choice and public policy; government and public affairs.

Tax Witnesses:	Materials available
Richard Wagner	Ohio data card "Excise Taxes: The Fairness Issue" "More Taxes on Tobacco...." Earmarking topic sheet Letter writing brochure.
Public Smoking Witnesses:	Materials available
Applicable to state and local legislation
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.
Fire:
Fire Safety Education Grant to: Office of the Miami Fire Chief - Cristy Black Hickman St John's County Fire Services — Robert J Jones. New Tools for Volunter Fire Fighters
Media Relations:
Contacts are in place in Miami, St. Petersburg and Tampa. 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.

FLORIDA (Rep Gibbons)
Professor Richard Wagner
    Florida State University, Tallahassee. Florida, 904-644-3848
    [Specializing in] Policy science; public choice and public policy; government and public affairs.

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

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

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

Florida [Region VII]

Professor Richard E. Wagner

Department of Economics, Florida State University, Tallahassee, Florida 32306 904-644-5001

Services rendered:
• testimony: Smoking restrictions
  • Florida
  • taxes - Florida (written)
• academic forum
• economic impact study
• Chase
• Ways and Means letter writing campaign
• GSA letter writing campaign
• monograph with R Tollison

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

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

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

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

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

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

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

1987 Jan 20: Susan Stuntz, as head of the Public Affairs Division (PAD) of the Tobacco Institute has put together an overview of their 'readiness' for Federal Hearings on tax, advertising and public smoking bans. This is a 21 page detailed document worth reading. It includes many items related to the cash-for-comments economists network:

• Identification of witnesses from among appropriate ally and coalition groups.
• Development of arguments and identification of experts and coalitions to argue that excise tax increases are not an appropriate means of financing health care costs.
• Op-ed articles, letters to the editor, etc., from academic resources.
• Continue efforts to obtain copies of GSA comments, via Freedom of Information request.
• Identification of potential Congressional witnesses, and Congressmen who would be amenable to invite other scientists who support the industry's view on ETS to testify.
• Approval to proceed with economic impact studies and/or voter surveys. One-month lead time is requested on both. On the former, decision will be needed as to whether to seek labor sponsorship.

• Regressive
• Unfair
• Inefficient
• Inadequate
• Unconstitutional

• Robert Tollison, Professor at George Mason University and director of the Center for Public Choice.
• Richard Wagner, Professor of Economics, University of Florida.
• Darwin Johnson of Policy Economic Group to discuss his study of the excise tax burden on five specific demographic groups.

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

Greg Niehaus, Mario Rizzo, Roger Riefler, and Boon Yoon.]

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]

FLORIDA, Wagner, Miami Herald, [circ.] 412,000, [no pub date]

1987 June 22: The Tobacco Institute has been sent by Savarese a "Schedule of Payments — Excise Tax Op-Ed Project." It details the name of the cash-for-comment economist, the State, the targetted newspaper, and both past and current payments — with a separate column labled "Total Earned to Date".

In FLORIDA
Wagner for Tampa Tribune —Owed $1200, — Total to date $1200

1987 June 23: Savarese writes to Jeff Ross at the Tobacco Institute sending along a list of Democrat members of the House Ways and Means Committee...

... along with the economists we use in those areas. Nine of these are good, solid hits which we should be able to count on to do the job and get a publication. I have *ed these on the attached list. The remaining 6 are all people we have used in the past, but who have not been consistently successful.

    Since I'm under a new financial arrangement with the Tobacco Institute and I need to get these costs cleared in advance, I'll make my best effort here to budget this proposed project.

    If all 15 would get published, which is highly unlikely, the cost of Phase II Excise Tax Op-ed Project would run $45,000.

    More than likely we'll get 8-10 placements and 3 to 4 others who won't get placed, but will still send letters to their members on the Ways and Means Committee. In that case, the cost will be $37,000.

1987 July: a selected group of the economists have been commissioned to write op-eds about cutting the deficit — and to de-emphasise the value of excise taxes. Generally they follow the line of listing four possibilities approaches

• a general consumption tax (efficient but regressive)
• increased excise taxes (inefficient and regressive)
• a national lottery (regressive and competitive with State lotteries)
• increased income taxes (unpopular)

1987 Jul 23: A list of 26 quotes excerpted from major newspaper editorials and op-eds from the TI's cash-for-comments economists about the Packwood tax plan.

The Orlando Sentinel, July 23, 1987
"An increase in excise taxes would be the triumph of expediency over fairness."

Richard E. Wagner.. professor of economics, Florida State University

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.

FLORIDA
Professor Richard E. Wagner Florida State University Tallahassee, FL

Excise Tax Op Eds: None accepted for publication.
Economic Witness/Testimony: Prepared testimony.
Field Staff Contact: Yes.
Field Staff Evaluation: Good.

1988 Jan: The plans and budgets for various sections of the Tobacco Institute include a section on the "Social Cost Issue" to be handled by Jeffrey D Ross and Carol Hrycaj.

    This is an attempt to counter the argument that the society has a right to institute cigarette excise taxes and introduce public smoking bans because smokers impose a substantial additional burden on non-smokers through additional medical costs, cleaning, general pollution, etc.

Overview:
Implementation of our 1988 "social cost" plan is well underway. A network of "social cost" economists has been identified and held an organizational meeting in Washington, D.C. Also, several projects are underway to demonstrate the significant historical and economic contribution of tobacco to our nation's heritage.

Highlights: We have identified an initial group of economists to work on the "social cost" issue. They include:

• Bob Tollison, George Mason University;
• Richard Wagner, Florida State University;
• Dwight Lee, University of Georgia;
• Robert B. Ekelund, Jr., Auburn University;
• Gary Anderson, California State at Northridge;
• Richard Higgins, Howrey & Simon; and
• James Savarese, Savarese & Associates.

We held an organizational meeting to review "social cost" issues and to brief the economists on our issue plan.

    Research needs presented to the economists included:

• review and critique of existing "social cost" literature;
• productivity and absenteeism;
• insurance costs;
• social security/Medicare cost; and,
• application of "social cost" economics to other industries

. We will receive research proposals in the next few weeks and will select projects to begin immediately. Robert Ekelund already has submitted a proposal concerning absenteeism.

    Bob Tollison is preparing a proposal for an academic symposium on the "social cost" issue to be held once initial research is complete. The economists also are indentifying opportunities to deliver presentations on the issue before regional and national economic conferences.

    The Tollison and Wagner "social cost" book is scheduled to be published in March. We met with Tollison and public affairs counsel to discuss a media tour and other promotional ideas.

    We are negotiating with Chase Econometrics and other economic consulting firms on updating the Chase study on the economic impact of the tobacco industry. We will coordinate the project with State Activities Division's new economist once he comes on board.

1988 Jan 15: Jim Savarese and Associates, joint subcontracts with Ogilvy & Mather, is outlining the arragements for handling the economists and the labor unions to the Tobacco Institute..

Nineteen eighty-seven was a banner year for the Tobacco Institute in its fight against excise tax increases at the federal level.
    Through careful coalition building and effective message dissemination, the Institute was able to fight the battle on its own terms and secure a substantial victory.

    In reviewing your 1988 plans, we found many areas where Ogilvy & Mather and Savarese and Associates can continue to provide services. There are also new areas where we have expertise which have not been fully explored.

Our work with the network of forty-two economists should continue into 1988. In 1987, the network was effective in producing op-eds and submitting and presenting testimony. These activities should continue in 1988. In addition, the economists network can be used for editorial board briefings, presentations at conferences and the placement of articles on this issue with major media outlets.

    In order to make the most of the new opportunities for the economist network, several factors must be taken into consideration:

• only 7 or 8 of the economists within the network have the potential to make presentations to editorial boards and conferences.
  
  
• those economists selected to make presentations to editorial boards and conferences need a training program. This program may include media training through Michael Sheehan and briefings by Jim Savarese and Bob Tollison.
  
  
• the editorial board program is a limited strategy with applicability mainly at the federal level with some use at the state level.
  
  
• when implementing the editorial board program, Ogilvy & Mather can assist with pitch materials, press kits, and a placement program.

The opportunity exists to place economists on key economic programs, panels, and at national and regional tax policy conferences. As an addendum to this effort, it is possible to have their comments reprinted and distributed.

• Effects of an excise tax increase on the federal budget (and its fairness)
• on bootlegging "and come up with some strong conclusions" [predetermined!]
• In addition, Savarese and Associates can locate a conservative economist to make the argument that there is an acceleration of government spending when taxes are increased. The program will include placement in an economic journal.

Florida
Targeted paper: Tallahassee Democrat
Economist: Richard Wagner, Florida State University

[Why selected:] Senate Budget Committee Chairman, Lawton Chiles, is from Florida.

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

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

    [In order to attack] Anti-smoking activists [who] have distorted the issue of social cost. Even though economists ridicule their statistics, politicians and the press believe them.

• Gary Anderson
• Bob Ekelund
• Richard Higgins
• Dwight Lee
• Jim Savarese
• Bob Tollison
• Richard Wagner

• Leslie Dawson, Karen Hochberger, Richard Marcus.- from Ogilvy & Mather and James Savarese & Associates
• Mike Forscey - lawyer from Wunder and Diefenderfer, working for the Labor Management Committee of TI
• Jeff Ross, Carol Hyrcaj and Paula Duhaime from the Tobacco Institute

• The higher rate of illness of smokers is a 'private cost' not a social cost [and therefore should be ignored.]
• It is not politically useful for us to argue the primary health statistics.
• Up to this time, ETS has not been translated effectively by the opposition into cost numbers. Rather, it is a regulatory issue. We cannot afford to lose the argument among people who think they are being harmed by ETS. If ETS causes harm, it becomes a classic case of real social cost.
• We must make sure that primary costs of smoking be kept out of any social cost calculation. We must separate primary smoking statistics from ETS statistics.
• More research is needed on ETS in order to deny health consequences

• Insurance and Health Costs: Health problems exist for smokers. The cost for health care due to excess illness or death of smokers equals smokers' cost to society.
  • Insurance premium — Discounts for non-smoker (not justified?)
  • Pension Plans — Increased mortality rates saves money
• Productivity and Absenteeism: Smokers are absent more frequently than non-smokers.The time spent by a employee smoking on the job is time spent not working. These factors make the smoker a less productive member of society than a non-smoker.
  • The worker bears the cost of absenteeism via fewer raises, less advancement, or termination. Society bears no burden.
• Social Security and Medicare: [Death benefits argument]
  • Based on lifetime calculations, smokers should be getting a rebate. We should propose a rebate program, rather than a tax program.
  • If non-smokers live longer, when the baby boomers reach retirement age, very high tax rates will be necessary to finance Medicare and Social Security. If smoking is banned, it would cause some serious problems in future years.
• Fires: It is not a social cost for a smoker to burn his house down, just a private cost. Social cost only exists if a neighbor's house burns down (a much smaller number).
• ETS: Blanket smoking.restrictions raise costs to private employers. If restrictions are cost effective, individual companies will adopt them.

Goals:
    As a result of this meeting, we should devise a specific plan and timetable- of implementation with assignments for specific projects.

    We need to review and critique existing materials and develop our own core of research.

Tollison is looking for one or two others. Major session of a university to bring together all relevant research on social cost will be planned after research projects are completed. Proceedings will be published in a monograph.

1988 Mar 31:
1988 Mar 31 The Tobacco Institute's list of available economists, with details of their target for a review of Robert Tollison and Richard Wagner's "Smoking and the State" book (secretly funded and published by the tobacco industry). Jim Savarese writes to Jeff Ross who looks after the cash-for-comments network:

I have listed below potential areas where we could place book reviews for the Tollison/Wagner monograph.

1988 Mar 31: Jim Savarese is writing to Jeff Ross at the Tobacco Institute re the National Economic Commission (NEC) and their Excise Tax Op-Ed Project using selected members of the cash-for-comments economists network.

I have listed below areas that we should target that would be beneficial in reaching members of the NEC. Also attached are the materials that we will send out to the authors.

    Senate Budget Committee Chairman, Lawton Chiles, is from
    Florida.

Targeted paper: Tallahassee Democrat
Economist: Richard Wagner, Florida State University

1988 Apr 15: Bill Orzechowski, the staff economist at the Tobacco Institute is sending a list of their consultants to Randy Thompson, who is an Issues Manager at RJ Reynolds.

    This is for International Smuggllng and Cross Border Issues:
Potential Witness List (Alphaberical listing)
    .

Economics - Public Policy

• Mike Davis, PhD, Economic professor at the University of Texas, Dallas.
  Mike has testified on behalf of the Tobacco Institute on cross border sales and cigarette smuggling from Mexico in the context of a Texas cigarette tax increase on two or three occasions. He appeared before the Texas legislature in 1997 on behalf of TI to defeat a proposed 20¢ T'exas cigarette tax hike. He is a good witness and gets up to speed rather quickly.
  
  Contact: Bill Orzechowski, Rob Walker
  
  Relationship: Testified for TI on a few occasions and was media trained by TI.
• Dwight Lee, PhD - Professor of economics at University of Georgia.
  Ramsey Professor of Economics and Private Enterprise at the University of Georgia, a position he has held since 1985. He is also the current president of the Southern Economics Association. He has had full-time tenured faculty appointments at the University of Colorado, Virginia Tech University, George Mason University, and the University of Georgia. He is a well respected economist. He has co-authored seven books, written numerous articles and lectured extensively.
  
  Contact: Bill Orzechowski, Rob Walker
  
  Relationship: Has testified on numerous occasions for the industry on state and federal cigarette tax issues.
• Robert Tollison, PhD - professor of economics at George Mason University.
  He is past president of the Southern Economics Association. He is the author of numerous articles and books. He has had considerable experience in all phases of tobacco economics - a pioneer of sorts. He has testified on tobacco tax issues at federal and state levels. The "dean" of tobacco economics.
  
  Contact: Bill Orzechowski or Rob Walker
  
  Relationship: Dr Tollison has testified for the industry on numerous occasions.
• Richard Wagner, PhD - professor of economics in the Public Choice Center at George Mason University.
  The author of many articles and books. He is a leader of the public choice area of economics and is the editor of the Constitutional Political Economy journal. He has great deal of experience on state cross border issues and tobacco taxes.
  
  Contact: Bill Orzcchowski or Rob Walker
  
  Relationship: Dr Wagner has testified for the industry on numerous occasions on state cross border issues.
  
  [The four listed above are all members of Tollison/Savarese cash-for-comments network. The three listed immediately below are contractors via think-tanks.]
  
  
• Steve Entin - President Institute for Research on The Economics of Taxation (IRET)
  He has great deal of experience in the corporate tax arena. Has testified or appeared as guest speaker in front of "tough" audiences such as public health groups and done a very good job with our issues.
  
  Contact: Bill Orzechowski, John Dunham
  
  Relationship: Appeared at Tax Foundation seminars that PM has helped finance. Often calls TI for advice and materials on tobacco tax issues.
• Pat Fleenor/JD Foster - two economists at the Tax Foundation.
  Pat Fleenor is an economist with the Tax Foundation, and J.D Foster is the President and Chief Economist of the Tax Foundation, The Tax Foundation monitors tax and fiscal activities at all levels of government. The group supplies objective fiscal information and analysis to business, government and the general public. The group has done extensive research on cross border cigarette sales and smuggling.
  
  Contact: John Dunham, Wayne Winegarden
  
  Relationship: PM and Tl has given financial support to the Tax Foundation. The Tax Foundation did a study for TI on cigareite excise tax differences and cigarette tax evasion.
• John R McGowan, PhD - Gustave Klausner Associate Professor of Accounting.
  He has provided international tax consulting services to the Missouri Society of CPAs and is the author of many articles. McGowan is currently studying the issue of state excise taxes and their effect on interstate smuggling and crime.
  
  Contact: John Dunham or Wayne Winegarde.
  
  Relationship: Dr McGowan has participated in Tax Foundation seminars that PM has helped finance. His current paper is being funded by NAPO, which PM has financially supported.

International Smuggling and Crime Issues

• Mario Possamai - Vice President, Forensic Investigators Associates
• Rod Stamler - Chairman, Forensic Investigators Associates (Toronto)
• Jacob Sullum/Ed Carson - Reason Foundation,

Social and Crlme Aspects of Smuggling

• Ron Martel - former Mayor of Cornwall, Canada

Tax Administrators

• Robert Shepherd - Deputy Commissioner - Enforcement, New York State Department of Taxation
• Monte Williams - Administrator, Excise Taxes Division, California State Board of Equalization
• Bill Chamberland - Tax Specialist Washington Department of Revenue

Other Names

• Roger Overholser - Florida wholesaler affliated with Florida Tax. Watch.
• Jeff Groh, Jerry Bowerman, John McGaw - BATF smuggling experts
• Andre Reiman - A Senior Vice President for a PM subsidiary in Europe
• Adam Andre-Brown - Spokesperson for RJR subsidiary in Geneva.
• Per Brix Knudsen - Director Anti-Fraud Unit - European Union.

1988 June: /E Excise Tax Letter-Writing Fact Sheet. This is a list of points that the Tobacco Institute wanted the economists to include in their op-ed articles.

• Excise taxes are regressive
• Excise taxes are fundamentally inequitable
• Excise taxes are an unfair burden on minorities
• Government data demonstrates the unfairness of excise taxes.
• Excise taxes are arbitrary
• Excise taxes are hidden taxes
• Excise taxes are an unfair burden on businesses
• Excise taxes are bad economic policy
• Excise taxes are historically controversial.

• pages of data so that the economists got their facts right,
• a series of quotes that could be incorporated into the article.
• pages of State-by-State data including the number of jobs that the Tobacco Institute estimated would be lost by higher cigarette excises
• lost revenues for each State, due, it was claimed, to cross-state bootlegging and smuggling.
• a list of Congressmen to be contacted in every region.
• Tollison's C/V

1988 June: /E Co-writing with Robert Tollison, Smoking and the State: Social Costs , Rent Seeking and Public Policy. (Many other pieces with Tollison also)

    He is the Graduate Director of the Economics Department who joined the faculty of George Mason University in 1988 as the Holbert R. Harris Professor of Economics, after having held positions at Auburn University.

1988 June 13: James Savarese to Susan Stuntz at the Tobacco Institute:

Here are two more book reviews of the Tollison/Wagner book. I'll wait to hear from you before proceeding any further.

"Next stage? — Placement, Publication attempts."

These two are pretty good, I don't see much problem with them.

Does this mean Covington & Burling (the tobacco lawyers) clearance is unnecessary?

1988 June 14: Susan Stuntz at the Tobacco Institute and Debbie Shoonmaker are rewriting an Ogilvy & Mather 'review' of the Tollison/Wagner book "Smoking and the State" which is to be circulated for publicity. Susan writes:

" I don't like it [the O&M review] You're right — it reads like a book review.

    Summary should first knock down the anti-claims in the first 1 or 2 pages, [snip] The Tollison-Wagner stuff should come first — that's the point we're trying to get across."

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

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

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

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

    A new wave of research will be ready by the end of August. For example

• A report using Japan as evidence against the social cost argument. Japan is considered one of the most productive countries in the world yet they have one of the highest smoking populations. How can Japan be so productive, if smokers are not producing their fair share?
• A study which shows how dangerous social cost methods could be to other industries such as sugar, coffee and beef. We anticipate this research will help us generate support from other industries to oppose social cost economics. And
• A study on Absenteeism & Smoking [Ekelund & Long] to demonstrate that absenteeism is related to job characteristics and income levels, not smoking behavior.

    We'll also be promoting these studies as well as other material produced by our economists — such as the Tollison/Wagner book, that you've all probably seen by now — which analyzes social cost economics and its application to tobacco. Promotional activities already underway include an author media tour, promotion to academic publications and economists' book reviews.

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

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

1988 June 23: Debbie Schoonmaker at the Tobacco Institute receives a memo from contract organiser James Savarese with "an update status on the NEC Op-Ed Project: [NEC = National Economic Commission, the group they were trying to influence.]

As it now stands, 9 articles have been published, 4 articles (New Mexico, Missouri, Oregon, and Idaho) are forthcoming, 4 articles have been submitted for publication, and 2 articles are in the revision stage.

1988 July 27: Richard Wagner, writing on the letterhead of the Center for Study of Public Choice at George Mason University, writes to James Savarese [as surrogate for the Tobacco Institute] outlining a book editing project being mounted by himself and Robert Tollison. [Wagner must still be at Florida State Uni, but in the process of transfering over to George Mason University.]

    The tobacco industry is fighting to block the 'ear-marking' of cigarette excise taxes for Federal health programs. .

Bob and I both think we have an excellent chance of getting [libertarian journalist Henri] Lepage, as well as having a strong chance of getting [Nobel Prize-winner James] Buchanan.

    You may not know of Lepage. He is a prominent French journalist-economist, who several years ago had an international best seller that was translated into English as Tomorrow, Capitalism. Lepage is presently conducting a major research project into pricing in French utilities, and finds that the actual conduct of French utflities bears no relation to the normative economics of user-charging [actually a gross overstatement], but bears a strong relationship to the theory of public choice.

    I think you will agree that we have the makings of a strong and interesting book on user-charges and tax earmarking, one that will challenge very strongly the halo that seems to surround these terms in ordinary discourse about tax policy.

Chapter 1 — "Tax Norms, Fiscal Reality, and the Democratic State: User Charges and Earmarked Taxes in Principle and Practice," by Richard E. Wagner, George Mason University.
The editor explains "the benefit principle of public finance" and how some user charges violate the principle by using revenues from a smaller group to benefit a larger group.

Chapter 5 — "Subjective Cost, Property Rights, and User Charging," by Wagner

Chapter 7 — "The Political Economy of Tax Earmarking,"by Lee and Wagner

Chapter 12 — "User Charges, Earmarked Taxes, and Budgetary Process: A Constitutional Perspective," [The concluding chapter] by Wagner.

Several new excise tax-related studies are underway and will be completed by spring 1989. In addition, an update of the Chase economic impact study has been commissioned.

    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.

    Preliminary research has been conducted assessing public attitudes toward excise taxes.

See

Wagner and Tollison propose that the book contain 12 chapters individually authored by themselves and five other members of our economists network. While these economists are all credible and respected academicians, the treatise will almost certainly be enhanced by contributions from Henri LePage and Nobel laureate James Buchanan

1988 Sept 1: Jim Savarese is billing the Tobacco Institute for services rendered during August. He has been "working with economist on social cost research proposals"

1988 Oct: 6-7 Dwight Lee sends the Tobacco Institute a formal report on Atlantic Economic Association meeting in Philadelphia which has tobacco industry economists as speakers:

• Dwight Lee, Uni of Georgia
• Richard Wagner, George Mason University
• Bruce Yandle, Clemson University
• Henry N Butler, George Mason Uni Law School
• Robert Staaf, Clemson University

1988 Oct: Report on primary activites of the Tobacco Institute lists under the heading "Social Costs"

Due to scheduling conflicts, Tollison and Wagner's October media tours were moved to early next month. The authors of Smoking and the State will visit Detroit and Philadelphia in early November, and will be on the road to Cleveland/Columbus and San Antonio/Austin later in the month.

    We prepared supplemental materials for the Tollison and Wagner press kits to encourage discussion of the "slippery slope" arguments made by the authors

1988 Oct: This appears to be three papers from various journals republished by someone for the Tobacco Institute. It is labled Scelte Pubbliche - the quarterly Journal of Public Finance and Public Choice which has published the first monograph "Social Cost, Rent Seeking and Smoking: A Public Choice Perspective", by Robert D Tollison and Richard E Wagner of the Center for Study of Public Choice, GMU.

The war on tobacco is being waged on two fronts, one medical and one economic The medical front is filled with the images of war: of a continually spiraling body count along with many other smokers left with diminished physical capacities. The economic front is naturally less dramatic for it attempts to reduce the castulties of war to some dollar magnitude. What results is an effort to measure the social cost of smoking. The idea behind such measures is to construct some meaningful metric that can personalize the health toll thought to be exacted by tobacco.

    For instance, in its wide-ranging survey of scholarship on the medical and economic consequences of smoking, the Office of Technology Assessment (1985) reported that different scholars had estimated smoking-related deaths to lie between 186.000 and 398.000 in the United States in 1982. Among this wide range of estimates, the OTA report went on to pick out 314.000 deaths as a best estimate.

    The economic toll associated with these deaths have been estimated by various scholars to lie somewhere between $40 billion and $100 billion in 1985 dollars, according to the OTA survey. Within this range of estimates, the OTA report selected $65 billion as a best estimate of the social cost of smoking.

Bigger budgets, more grants, more notoriety, among other possible payoffs, would seem to fuel the efforts to resist smoking.

    We have gone into this matter in detail in our book (Tollison and Wagner 1988), but the point is actually quite simple. If we are correct, and we think that we are, that the social cost of smoking is zero, then the motivation to resist smoking either springs from considerations of ignorance or rent seeking. The most likely candidate theory to explain the public policy struggle over smoking, in our opinion, is the latter.

    For instance, regulations that restrict the ability of people to smoke in the workplace can be a means of transferring income from smokers to nonsmokers. Suppose smoking enhances the efficiency with which smokers work. A restriction on the ability to smoke will thus reduce the efficiency of smokers and increase the comparative efficiency of nonsmokers.

    Similarly, restrictions on smoking in restaurants can be a means of transferring income from smokers and from restaurant owners to nonsmokers. Those restrictions will reduce the demand for restaurant meals by smokers, who will thus shift to a less preferred consumption set.

    This decrease in demand will in turn reduce the net income of restaurant owners, as well as reducing the capital stock invested in restaurants in the long run. The reduction in demand caused by the regulation will, given the supply of restaurants, reduce the price of meals to nonsmokers.

Summary: Although the activities of physicians, as represented by the AMA, have long been viewed from a self-interest perspective by economists, public-health processes have not been subjected to such an examination. But just as the conduct of ostensibly charitable hospitals cannot be examined independently of the interests of the physicians who staff them, so too, we think, the conduct of public-health bureaus should not be examined in isolation from the interests of the medical community that they represent.

    An interest-group interpretation of public health would look to the ways in which public-health processes increase the aggregate demand for medical services, thereby generating quasi-rents for specialized input suppliers. We have explored in preliminary fashion some ways in which public-health agencies may advance the collective interests of physicians, though we would be the first to acknowledge that much work remains to be done on this topic.

1988 Nov 15: Wagner is on a promotional tour for the tobacco book in Texas. This is a transcript of one interview with Pat Rogers and Eliza Sunderland of WOAI-AM. He now says that the anti-smokers are claiming that smoking costs the society $60,000,000,000 to $100,000,000,000 each year.

    Unfortunately, Rogers, the main interviewer, was addicted smoker who had recently been hospitalised with pneumonia... which cost him $10,000 (on top of having to pay more for his health insurance). He prefered to compare the problem of second-hand smoke pollution with the chemical industry and its toxic waste dumps.

    Neither did Wagner's claim of the "death benefits" of smokers dying early go down too well. Nor did his claim that non-smokers could just quit their jobs if they didn't like a smokey workplace.

    He was then asked outright:

Are you on the payroll of the tobacco industry?

    WAGNER: No, I'm not. The trip was certainly sponsored by the Tobacco Institute. The book, "Smoking and the State," by Robert Tollison and myself, both of us at George Mason University, was something that we wrote in light of an interest in how economic arguments are used, or misused, in discussions of public policy. And we applied the case to smoking as what we think is one of the most important issues of the present time.

    And it's obviously a topic that's of great interest to the Tobacco Institute, and so...

    ROGERS: They didn't pay you to write this book, to do the research?

    WAGNER: Well, they — after we had developed the ideas, we approached them with the idea that they would sponsor us in the writing of the book, and as well as in the presentation of the ideas to the public afterwards. But the basic idea for the book is something that we had developed out of our interest, as economists, in trying to see how economic principles can be applied to different types of important public policy issues.

1988 Nov 20: Tollison and Wagner's book "Smoking and the State" is also being favourably reviewed by their network of tobacco-friendly Public Choice economists. Cliff Dobitz, a professor of economics at the North Dakota State University soundly endorses their...

"use of solid economics to expain the claimed direct and indirect costs of smoking in non-technical, easy to understand language. It is chock-full of insight, frequently supported by data, about the alleged economic consequences of smoking."

1988 Nov 28: Debbie Schoonmaker at the Tobacco Institute writes to Savarese about Social Cost Research Papers.

Enclosed are drafts of the Wagner and Ekelund social cost papers.
Each has been reviewed and will not need further clearance provided the recommended changes are incorporated into the final versions of the papers.

    The legal comments are fairly straight-forward. If you or the authors need an explanation or wish to discuss further, please call.

    You'll also see that I've enclosed a copy of the California Health Department's "social cost" study. We can discuss this example in our "SWAT team" meeting.

• Atlantic Economic Assn., Philadelphia, Oct 6-9 , meeting on User Charges: has
  • Dwight LeeChairman + paper, "Some Bureacratic Implications
  • Richard Wagner"User Charges: Principles and Practice"
  • Bruce Yandle, "User Charges: Evaluation and Critique.
  • Discussant: Robert Staaf.
• Western Economic Association, Los Angeles, June 30 — July 3 meeting on Tax Earmarking and User Charges.
  • Dwight R. Lee, "The Political Economy of Tax Earmarking"
  • Richard Wagner, "The Fiscal Politics of Tax Earmarking"
  • Paul Wilson,"User Charges and the Problem of Externalities"
  • Discussants: Thomas Borcherding and Benjamin Zycher, Rand Corporation [unknown relationship]
• Southern Economic Association, San Antonio, Nov 20-22 on Excise Taxation
  • Robert Ekelund, Chairman:
  • Dwight R. Lee, "Political Economy of Corrective Taxation"
  • Randall Holcombe, Auburn University. "Excise Taxes in Theory and Practice"
  • Richard E. Wagner, "The Fiscal Politics of Excise Taxation"
  • Discussants: Joseph Jadlow, and Henry Butler,

1988 Nov 29: Savarese bills the Tobacco Institute for:

Final third, book Review Project for Smoking and the State by Robert Tollison and Richard Wagner $20,000.00

1988 Dec 8: Savarese has billed the Tobacco Institute for

Phase II - Social Cost Research Project
First of three billings

• [Robert] Ekelund - "Revenue Substitution from Smoking Regulation and Taxation: An Econometric Analysis"         $14,000
• [Robert] Tollison & [Richard] Wagner - "Rent Seeking, Bureaucracy and Public Health Regulation"                                  $ 10,000
• [Dwight] Lee - a paper on "The Political Economy of User Charges and Tax Earmarking"                                               $ 9,500
• [Richard] Higgins - "The Excess Costs to Smoking Employees of Employer-Provided Retirement Benefits"                  $ 9,500

  TOTAL $43,000

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

The social cost economic team includes: Robert Tollison, Richard Wagner, Dwight Lee, Richard Higgins, Gary Anderson and Michael Davis,

How we use them

• Conduct research.
• Prepare op-eds and letters to the editor.
• Review and comment on (government and private sector] social cost studies and reports.
• Media tours to promote Smoking and the State.
• Conduct briefings on the issue/arguments with legislators, staff and lobbyists.

Kinds of things they do

• Conduct and publish economic research (constituting the basis of the social cost program).
• Write and place op-eds on discrete topics.
• Prepare and submit letters to the editor.
• Available to present testimony.
• Media tours.
• Make presentations to academic/economic peers.
• Conduct briefings on the issue (during social cost economist network meeting with PAD, SAD, lobbyists and legal counsel).

1989: One page biography of Richard Wagner as sent to the Tobacco Institute.

1989: Witness List [attached to 1993 June 1 Tobacco Institute list of "Witness/Expert Appearances — Scientific/Legal/Spokespersons."]
    The 1989 witness list with (in addition to above)
Dwight Lee, David Weeks, Alan Kassman, Bob Tollison, Richard Wagner, Jack Peterson, "Bestype Consulting", Dennis Vaughn,

    Also in the 1988 List (which includes most of above) + A Katzenstein, David Brenton (focus on airlines)

1989 Jan 11: Carol Hrycaj at the Tobacco Institute writes to Debbie Schoonmaker on the "Promotion of Economic Conference Papers."

Of the six papers presented during those sessions, only two that were discussed at the Western meeting may be suitable for public consumption: Lee's paper, "The Economics and Politics of Tax Earmarking;' and Wagner's paper, "Fiscal Norms, Fiscal Practice and Tax Earmarking."

Paul W. Wilson, Thomas E Brocherding and Bruce Yandle also submitted papers; their relationship with our consultants is unclear.

    Regardless, the Wilson, Borcherding and Yandle papers are technical treatments of the subject matter and would be difficult to repackage for the general public.

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.

  VIRGINIA
  

  • Prof Henry Butler, George Mason Uni, School of Law
  • Prof Richard E Wagner, Center for Study of Public Choice, GMU
  • Prof Walter Williams, George Mason University, Department of Economics.

1989 Mar 17-19: The Annual Meeting of the Public Choice Society together with the Economic Science Assocition. These are Hayek-oriented neo-con economists of the kind which gave us the Global Financial Crisis of 2008-9. The speakers list mentions many active members of the economists network: — some of whom spoke more than once. (William Hunter in particular.) It is clear that this society was a profitable recruiting ground for Tollison and Savarese.

    The large group of speakers connected with Tollison's Center for the Study of Public Choice at George Mason University completely dominated the conference session on Public Health.

• Robert Tollison
• Richard Wagner
• David ER Gay
• Dwight Lee
• William C Mitchell
• Burton Abrams
• Cecil E Bohanon
• Charles Breeden
• William J Hunter
• Bruce Benson
• Burton Weisbrod
• Bruce Yandle
• Roger L Faith
• Roger Congleton
• James Buchanan
• Gary Anderson
• Peter J Boettke
• Jeffrey R Clark
• Robert J Staaf

1989 Mar 30: Dwight Lee's report and papers from an "Issues and Taxation" session which was organised for the Southwestern Social Science Association meeting in Little Rock Arkansas. Lee reported that:

Three papers were presented, one each by Dwight R. Lee of Washington University, St. Louis; Richard McKenzie, Clemson University; and David Gay, University of Arkansas, Fayetteville.

    Discussants were Edward Price, Oklahoma State University; Richard Wagner, George Mason University.

    The session was attended by approximated 20 people, and enough time was left over for several questions and comments

1989 Apr 26: Wagner is on a media tour in Montana promoting the tobacco book. This is a transcript of one of his interviews, promoting not only the book, but the propaganda of the tobacco industry.

As you know, we're witnessing a strong war on tobacco in this country, declared by governments throughout the land. And an important part of the ammunition in that war is the economic doctrine of social cost. This is the idea that smokers impose costs upon nonsmokers, through missing work and through being — having higher medical expenses.

And as a nonsmoking economist, this interests me very much. And what I've concluded, upon examining that question, is that this is a wrong use of a reasonable economic doctrine, that smokers don't impose any costs upon nonsmokers

... an affiliation of the George Mason University... it's a group of economists who specialize in examining public policy issues and the application of economic principles to local (?) questions.

1989 May 15: Richard Wagner is off on another media tour promoting the book, This time he is going to Birmingham, Alabama and Tallahassee, Florida. Kathrine Moor of Ogilvy & Mather is organising the schedule.

Your media tour to Birmingham, AL and Tallahassee, FL has come together very nicely. Six out of your nine interviews are television shows. In Birmingham, you will appear on all three network affiliates and in Tallahassee you will appear on two network affiliates as well as the Florida State University cable station.

    The last interview on the Birmingham schedule is a drive-time radio show with audience call-ins. Your other radio interviews will be edited for news story formats.

    Only one of the television appearances will be in a debate format. Your opposition will be a representative from the local lung association.

1989 May 25: Savarese reports to the Tobacco Institute on expenses involved in their Phase II of the Social Cost Research Project. Wagner is owed $703 for airfares, hotel, meals, and taxis.

    A further $18,500 has been billed as payment for the economists who appeared at the Southwestern Social Science Association meeting.

1989 May 31: Debbie Schoonmaker recommends funding of Tollison & Wagner's "Earmarking Book Proposal"

1989 June: - July Wagner is in Germany again.

1989 June 9: Richard Marcus of Ogilvy & Mather reporting to the Tobacco Institute on his company's May Activities.

• Taxes: They were working with:
  • American Agricultural Movement (AAM) ;
  • Citizens for Tax Justice (CTJ);
  • Coalition on Human Needs (CHN);
  • League of Rural Voters (LVR);
  • Opportunities Industrialization Centers of America (OIC)
    [They were providing publishing services of some kind].
  
  
• Public Smoking: They were working on Federal union IAQ Issues with
  • American Federal Government Employees (AFGE) [Savarese's old union];
  • National Energy Management Institute (NEMI) [They paid a half-dozen executives running this union-controlled air-testing organization to counter workplace smoking bans]
  
  
• Media Tours:   • Social Costs Media Tours (Richard Wagner and Bob Tollison);   • Truth Squad Media Tours ( Dave Weeks and Jack Peterson)
  
• Labor Coalitions: LMC, unions, Pittsburgh project
  
• Ad Bans: Jolly Ann Davidson's media tours.
  [She was ex-President of the National Association of State Boards of Education (NASBE) who ran 'Let Youth Decide' and other teenage smoking projects for the industry.]

1989 July 5: James Savarese advises the Tobacco Institute (TI):

Attached is a revised version of Bob Tollison and Dick Wagner's Phase II research project. They have incorporated Tl's changes and revisions.

1989 July 5: Wagner is off on another media tour promoting "Smoking & the State". He is advised

Media Tour to Grand Rapids and Lansing, Michigan
The schedule for your social cost media tour to Michigan includes seven radio interviews, a "live at 5:30 p.m." television show, and an interview with the daily newspaper in Lansing.

    A one-cent cigarette excise tax is pending in the state legislature. Like Florida, the revenue from the proposed increase has been earmarked for specific projects. In this case, the cause is a homeless shelter.

    Other noteworthy activity in the state includes a workplace smoking ban being implemented by the Ford Motor Company. The company policy has received national media attention since it was introduced. Attached are clips for your review.

1989 July 14: Debbie Schoonmaker and Carol Hrycaj create a Tobacco Institute memo "Response to NCI "Fact Sheets."

As requested, this memo discusses the extent to which we are responding to NCI's allegations and recommends methods to assure that our messages reach the groups targeted by NCI.

    To date, the majority of TI's activity on social costs has been in the economic/academic arena. NCI's target groups, however, are important audiences for TI to reach. For example, many state health departments are preparing their own faulty versions of social cost studies. NCI's generic information on the alleged cost of smoking may reinforce this activity.

    Our consulting economists are establishing and building an economic record. In a broader sense, the Smoking and the State media tours educate the public on the issue.

    Currently, we are approaching a transition phase with the presentation of the social cost material to a much larger audience, including those groups targeted by NCI.

    In addition, our involvement with the Social Cost Council will ensure that our messages are carried to corporate America as well.

• Smoking and the State media tours began last fall. Markets have been se ected for tours through the end of 1989;
• The economist network critiqued and successfully placed several reviews of the Tollison and Wagner book;
• An op-ed on Smoking and the State (by Sandler) has been distributed by a matte service;
• Consulting economists have conducted social cost research, and presented related papers at economic conferences (publication in academic journals is pending).
• Upcoming Projects:We have several projects nearing the production phase; they soon will be available for distribution.
• Recommendations: Social Cost Council activity underway includes research, discussion of a Council journal in which relevant research and articles and a possible Council-sponsored conference on the issue.
• Produce and distribute a "popular" version of Ekelund's 1988 absenteeism study
• Promote Wagner's research concerning the use (and misuse) of phony statistics, as described in his paper, "Smoking and Productivity: Some International Comparisons;"

1989 Aug: /E The Annual Report of the Center for the Study of Public Choice says

During 1989, Richard Wagner was named Acting and then Permanent Chairman of the Department of Economics, replacing Karen Vaughn, who stepped down to return to her scholarly pursuits after six years as Chairperson.

    Ronald Heiner joined the Economics Department and the Center staff during the past year. Heiner came from Brigham Young University. We are also pleased to note that James C. Miller III will serve at the Center for another year as a John M. Olin Distinguished Fellow.

1989 Aug: Carol Hrycaj & Debbie Schoonmaker's monthly report to the Tobacco Institute on their "Excise Taxes" and "Social Cost" projects.

Robert Ekelund's social cost research paper, "Some Economic Consequences of the Koop Doctrine: National and State Revenue Shortfalls from Smoking Regulation," was sent out for legal clearance. This is the last of the four papers commissioned this year.

    In advance of the scheduled August media tours, we provided background information to consultants on California and Alaska tobacco legislation. Tollison traveled to Sacramento and San Francisco; Wagner's Anchorage tour was cancelled at SAD's [State Activities Div.] request.

    We worked closely with Media Relations on an op-ed to be submitted by Bob Tollison to the Los Angeles Times in conjunction with next month's media tour.

1989 Aug 8: Leslie Dawson of Savarese & Associate gives a status report on the Social Cost Project

• Smoking & Absenteeism (Ekelund, Ault, Jackson, Saba, Saurman) — submitted to the Southern Economic Journal, then revised and resubmitted — no editorial decision yet.
• The Social Cost of Everyday Life (Gary Anderson) — submitted to Contemporary Policy Issues — no editorial decision yet.
• Smoking and the Problem of Social Cost (Tollison & Wagner — accepted by Journal of Public Choice (they controlled the journal)
• Smoking and the Wealth of Nations (Wagner) — submitted to Journal of Contemporary Business.
• Self-Interest, Public Interest, and Public Health (Tollison & Wagner) — submitted to to Journal of Public Interest and Public Choice
• Smokers' Subsidy of Nonsmokers' Retirement Benefits (Higgins and Gordon Sufford from Capital Economics) — submitted to Social Science and Medicine
• Social Cost and the Cigarette Excise Tax: A Misguided Rationale for an Inefficient and Unfair Policy (Dwight R. Lee) — Unpublished
• Some Economic Consequences of the Koop Doctrine: National and State Revenue Shortfall from Smoking Regulation (Ekelund) - still at TI for review.

1989 Sep: Carol Hrycaj and Debbie Schoonmaker's monthly report to the Tobacco Institute on their "Social Cost" projects.

Overview:
The eighth, and final, paper in the existing body of social cost research was cleared by attorneys. The author will seek publication opportunities.

    Social cost media tours hit a snag in September, but will be back on track in October, when Tollison and Wagner "hit the road" with two tours each.

Highlights:
Professor Robert Ekelund's paper, "Some Economic Consequences of the Koop Doctrine: National and State Revenue Shortfall from Smoking Regulation," has received legal clearance. The paper is the last in a series of eight social cost research projects commissioned since 1988.

Bob Tollison and Dick Wagner were scheduled in September to promote Smoking and the State in two of the nation's largest media markets, Los Angeles and San Diego, CA. However, the tours have been rescheduled for early October.

1989 Oct: Listed as "Consulting Economist" Chair and Harris Professor, Dept of Economics, George Mason University Richard Wagner is conducting media tours for the Tobacco Institute Celebrity Speaker's Advertising Commercial Free Speech.

Smoking and the State media tour : San Diego, CA ; Memphis, TN (3 radio interviews) and Little.Rock, AR (interviews : 2 radio, 2 print)

See page 14

1989 Oct: to 1990 Mar Brennan Dawson's report on her division's activities to the Tobacco Institute's Communications Committee
    She has a detailed list of Wagner's work for the Tobacco Institute See p 32.

1989 Nov: Another report by the Tobacco Institute's Communications Division on "Media Tours by Consultants":

Professors Robert Tollison and Richard Wagner conducted media tours on the "social costs of smoking" in Las Vegas, Reno, Knoxville, Nashville and Atlanta.

    During the media interviews, Tollison and Wagner are adept at turning most interviews, and interviewers, to their arguments for reduced government intervention in matters of personal choice. Reports and transcripts are enclosed.

1989 Nov: Richard Wagner was reported as helping the Tobacco Institute by:

Smoking and the State media tour: Knoxville/Nashville, TN (interviews: 6 radio, 2 television)

    Published "Social Cost, Rent Seeking and Smoking: A Public Choice Perspective," in Journal of Public Finance and Public Choice

See page 14

1989 Nov 30: James Savarese is now subcontracting to Ogilvy & Mather but still running the stable of cash-for-comments economists for the Tobacco Institute (in addition to other disinformation activities). He is also organizing economics seminars through O&M using the same tobacco-funded economists:

"The Political Economy of Tax Earmarking" [ie the use of cigarette excises to prop up Medicare/Medicade] Chairman: Robert Ekelund.
Papers by: Richard Wagner, Dwight Lee and Robert Tollison, with J Keith Watson and Mark Thornton as discussants.

1989 Dec: Wagner's up-do-date C/V has been sent to Brown & Williamson Tobacco. It boasts about his involvement with pro-corporate, tobacco-funded organizations like the:

• Cato Institute,
• Public Choice Society,
• Independent Institute,
• Institute for Research on the Economics of Taxation,
• James Madison Institute,
• American Enterprise Institute
• Pacific Research Institute
• Center for Research in Government Policy and Business
• Liberty Park Foundation.

1989 Dec: Carol Hrycaj report to the Tobacco Institute on her project "Excise Taxes."

Responding to reports that an administration "task force" might recommend raising cigarette excise taxes, we implemented a new op-ed program designed to reinforce opposition to federal excise tax increases.

    Consulting economists Robert Tollison and Gary Anderson provided a state-by-state analysis based on the hypothesis set forth in their article, "Political Entry Barriers and Tax Incidence: The Political Economy of Sales and Excise Taxes." We will review the findings of the analysis and assess its utility in tax matters.

The successful social cost media tours continued in December with the economists traveling to northeastern and northwestern states. Tollison and Wagner proposed revising and expanding their book, Smoking and the State.

    We developed a plan to disseminate the findings of the tobacco industry economic impact study. Copies of the study and executive summary will be available early next year.

Highlights:
    Robert Tollison and Richard Wagner, co-authors of Smoking and the State, traveled to Seattle/Tacoma, WA, Burlington, VT, and Portland, ME to discuss the social cost concept with the media.

    We provided Tollison and Wagner with background information on anti-tobacco legislative activity in the states.

    They also submitted a preliminary proposal for a revised and expanded edition of Smoking and the State. The authors suggest enlarging the treatise to cover more fully their economic approach to public policy and tobacco issues in light of recent legislative developments.

1989 Dec: He is still at George Mason University and the Center for Study of Public Choice, and has sent his CV to Philip Morris also.
    He gives his title as Chairman, Department of Economics, George Mason University

1989 Dec: He was reported as helping the Tobacco Institute by:

Smoking and the State media tour : Seattle/Tacoma, WA (interviews : 1 print, 2 radio, 2 television)

See page 14

1989 Dec: Sent his Revised C/V along to the Tobacco Institute

1989 Dec 11: Carol Hrycaj and Martin Gleason who are jointly running the Tobacco Institute side of the economists network at this time, memo Susan Stuntz about a Re: Treasury Department Task Force.

Rumors have circulated that a "Treasury-led task force" is considering recommending an increase in federal tobacco taxes.

    In response, we plan to work with consulting economists and allies to maintain an anti-excise tax environment, stressing that cigarette excise taxes are not "user fees," and increasing these taxes would violate President Bush's "no tax" pledge.

    Following is a description of four specific anti-tax projects:

• Op-ed Program: We have directed consultants to begin work on an anti-tax editorial program in key Congressional districts. [snip] Once the articles are published, they will be forwarded to the appropriate administration officials.
• Communication with Treasury Department Officials. We have identified a potential opportunity to communicate with Treasury Department officials concerning the recent statements on tobacco excises.
  
      If we pursue this option, key Republican economists would send letters to Treasury officials debunking the connection between excise taxes and user fees. This effort would be similar to the exchange of letters between Robert Tollison and Office of Management and Budget Director James Miller in 1987.
• Earmarking Session. Consulting economists will participate in a session on earmarking during the Southwestern Social Science Association Conference in March 1990.

Robert Ekelund will chair the session, "The Political Economy of Tax Earmarking. Robert Tollison, Richard Wagner and Dwight Lee will present papers (draft chapters of the upcoming book on user fees/tax earmarking). A preliminary agenda is attached.

1990: A later (1992) overview and proposal for another media tour stresses the success of Tollison and Wagner in promoting the tobacco-funded book "Smoking and the State".

During the 38 media tours for "Smoking and the State", Wagner and Tollison conducted 235 interviews in 54 markets in 27 states during an 18 month period from 1988 - 1990.

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

Brennan Dawson, head of PR at the Tobacco Institute, report on their activities to the TI's Communications Committee She gives details of their work in planting ghosted academic-op-ed pieces for the tobacco industry. Some of the economists managed to plant these TI-written articles on a number of newspapers.

    On Dawson's Tobacco Institute list these names are marked "Consulting Economists, not on Philip Morris' List" which suggests that another subsantial list of tobacco-serving economists also existed elsewhere

• Robert Tollison, Duncan Black Professor of Economics, George Mason University [He is probable the author of the main op-ed featured below]
      1/90 Letters to administration officials debunking excise tax/"user fee" connection
• Richard Wagner, Chair and Harris Professor, Department of Economics, George Mason University [associate of Tollison] See document for much more.
  1/90 Letters to administration officials debunking excise tax/"user fee" connection
• Dwight Lee, Ramsey Professor of Economics, University of Georgia

1/90 Op-ed on excise taxes and user fees published in Macon Telegraph News

On the Tobacco Institute list these names are marked "Consulting Economists, not on Philip Morris' List"

• David Gay, Professor of Economics, University of Arkansas
  Excise Tax/"user fee" op-ed published in Arkansas Democrat April 1990
• Barry Poulson, Professor of Economics, University of Colorado
  Excise Tax/"user fee" op-ed published in Aiamosa Valley Courier May 1990
• Dominick Armentano, Professor of Economics, University of Hartford
  Excise Tax/"user fee" op-ed published in New Haven Register Jan 1990
• Michael Babcock, Professor of Economics, Kansas State University
  Excise Tax/"user fee" op-ed published in The Topeka Capital-Journal March 1990
• Thomas Wyrick, Professor of Economics, Southwest Missouri State University
  Excise Tax/"user fee" op-ed published in News-Leader May 1990
• Clifford Dobita, Professor of Economics, North Dakota State IIniversity
  Excise Tax/"user fee" op-ed published in Grand Forks Herald Mar 1990
• Richard Vedder, Professor of Economics, Ohio University
  Excise Tax/"user fee" op-ed published in Plain Dealer Jan 1990
• Joseph Jadlow, Professor of Economics, Oklahoma State University
  Excise Tax/"user fee" op-ed published in The Tulsa Tribune Apr 1990
• Ryan Amacher, Dean of the College of Commerce and Industry, Clemson University
  Excise Tax/"user fee" op-ed published in The Anderson Independent-Mail Feb 1990
• J R Clark, Hendrix Professor of Economics, University of Tennessee
  Excise Tax/"user fee" op-ed published in The Paris Post-Intelligencer, The Weekly County Press, Kinusoort Times-News, The Commercial Appeal, the Jackson Sun. May 1990
• John David, Professor, West Virginia Tech
  Excise Tax/"user fee" op-ed published in The Charleston Gagette Feb 1990
• William Hunter, Associate Professor of Economics, Marquette University
  Excise Tax/"user fee" op-ed published in The Milwaukee Journal Feb 1990
• Todd Sandler, Professor of Economics, Iowa State University
  Anti-excise tax/"no taxes" op-ed published in Fort Dodge Messenger Jun 1990
• William Mitchell, Professor of Political Science, University of Oregon
  Anti-excise tax/"no taxes" op-ed published in The Register Guard Jun 1990

1990 Jan: - Feb The Tobacco Institute's "Communications Activities" report says:

MEDIA TOURS BY CONSULTANTS
In place of "Truth Squad" media tours. Jack Peterson, Dave Weeks and Larry Holcomb have been conducting interviews on the publication of the report from the ETS Symposium held at McGill University.

Professors Tollison and Wagner conducted media tours in Springfield, MA and Louisville. In Springfield, Tollison had a live television appearance on a network affiliate and taped a radio debate opposite Ed Sveda of GASP.

    Wagner's media tour in Louisville was immediately following the HHS report claiming "social costs" of $52 billion per year from smoking, and Wagner was able to effectively argue that smokers more than pay their own way. Reports and transcripts are enclosed.

    Tollison also responded to an editorial in the Washington Post proposing an increase in "user fees."

1990 Jan: Wagner was reported as helping the Tobacco Institute by writing:

Letters to administration officials debunking excise tax/"user fee" connection

See page 14

1990 Jan 23: Robert Tollison has sent Martin Gleason at tje Tobacco institute a bill for the

"Preface and first five chapters of the book
plus the 'third of the four billings for this project" = $36,250

1990 Feb: Wagner was reported as helping the Tobacco Institute by:

Smoking and the State media tour: Louisville, KY (interviews: 4 radio, 1 television)

    Testimony for Hawaii Department of Health excise tax and "social cost" bill hearing

See page 14

1990 Feb 1: Savarese's report to Susan Stuntz at the Tobacco Institute lists a number of projects involving the cash-for-comment economists:

• "Smoking and the Problem of Social Cost: A Survey" by Tollison and Wagner, published in Journal of Public Finance and Public Choice - reprints have been distributed.
• "Smoking and Absenteeism: An Empirical Study" by Ault, Ekelund, Jackson, Saba, and Saurman - submitted to Applied Economics.
• "Smokers Subsidy of Nonsmokers' Retirement Benefits" by Higgins and Shuford - submitted to Social Science and Medicine.
• "The Social Costs of Everyday Life" by [Gary] Anderson submitted to Contemporary Policy Studies.
• "Social Cost and the Cigarette Excise Tax: A Misguided Rationale for an Inefficient and Unfair Policy" by [Dwight] Lee - submitted to Contemporary Policy Studies.
• "Self Interest, Public Interest, and Public Health" by Tollison and Wagner - accepted for publication in Public Choice.
• "Some Economic Consequences of the Koop Doctrine: National and State Revenue Shortfall from Smoking Regulation" by Ekelund - returned to Ekelund for submission.
• "Smoking and the Wealth of Nations" by Wagner - submitted to Journal of Contemporary Business.

    Began Phase III of the social cost research. Proposals have been submitted to TI.

1990 Mar: Wagner was reported as helping the Tobacco Institute by making a:

Presentation on tax earmarking and regressivity at the Southwest Social Science Association conference in Fort Worth, TX

See page 14

1990 April: The monthly Tobacco Institute report for March from Carol Hrycaj who is in charge of the issues involving "Excise Taxes", says

Following the meeting in February on bootlegging cigarettes in the states, we received a proposal from consulting economists to conduct an in-depth analysis on the issue. We have commented on the plan generally, and await State Activities' assessment of the document.

    Consulting economists made presentations on tax earmarking during the Southwestern Social Science Conference in Fort Worth, Texas. Robert Ekelund chaired the session "The Political Economy of Tax Earmarking." Participants included: Richard Wagner, Dwight Lee and Robert Tollison. The presentations were based on material that will be contained in the upcoming treatise on earmarking.

1990 April: The Tobacco Institutes "Public Affairs Management Plan Progress Report." This 40 page document has overviews by different section heads.

• According to consulting economist Richard Wagner, there is much interest in publishing the earmarking treatise, "Charging Beneficiaries for Public Services: User Charges and Earmarked Taxes in Principle and Practice." Currently, Wagner is discussing the options with two publishing houses.

See page 25

1990 May 7: The Tobacco Institute's "1991 Tax and Social Cost Plans" have sections on

• "Social Costs" Hearings Readiness (preparation for fielding witnesses at Congressional hearings.) They list here the arguments

  What TI and Its Allies Must Cover

  1. "Social cost" arguments used to justify excise tax increases, smoking restrictions and ad bans are not valid.
  2. Independent economists state that "social cost" calculations used by anti-smokers do not withstand credible economic scrutiny.
  3. There is no convincing economic evidence that smokers impose costs on society. Any supposed costs are "private costs" and are borne by the smoker.
  4. Other industries are vulnerable to social cost attacks. A "slippery slope" may exist as anti-smokers, using "social costs" arguments, seek legislation restricting smoking or increasing taxes. These efforts may signal lawmakers to regulate other products as well.

• "Tax" Hearing Readiness (as above, but for excise tax increases, State and Federal)

  What TI and Its Allies Must Cover

  1. Excise taxes are regressive and take away tax reform for low- and middle-income Americans. As a percentage of income, low income families pay as much as 27 times more in federal excises than high-income families.
  2. Cigarette excise taxes are discriminatory. They fall disproportionately on Blacks, Hispanics and other minorities.
  3. Excise taxes are unfair. Tobacco consumers are forced to pay more than others for government services benefitting everyone. Why should smokers pay more for national defense than nonsmokers?

• List of cash-for-comment network economists in each State.

VIRGINIA
Professor Henry Butler
George Mason University School of Law
3401 North Fairfax Drive Fairfax, Virginia 22201 703-841-2665

Professor Richard E. Wagner
Center for Study of Public Choice, George's Hall
George Mason University Fairfax, Virginia 22030 703-323-3773

Professor Walter Williams
Department of Economics, George Mason University
Fairfax, VA 22030 703-323-2631

1990 June: /E Excise Tax Letter-Writing Fact Sheet. This is a list of points that the Tobacco Institute wanted the economists to include in their op-ed articles.

• Excise taxes are regressive
• Excise taxes are fundamentally inequitable
• Excise taxes are an unfair burden on minorities
• Government data demonstrates the unfairness of excise taxes.
• Excise taxes are arbitrary
• Excise taxes are hidden taxes
• Excise taxes are an unfair burden on businesses
• Excise taxes are bad economic policy
• Excise taxes are historically controversial.

• pages of data so that the economists got their facts right,
• a series of quotes that could be incorporated into the article.
• pages of State-by-State data including the number of jobs that the Tobacco Institute estimated would be lost by higher cigarette excises
• lost revenues for each State, due, it was claimed, to cross-state bootlegging and smuggling.
• a list of Congressmen to be contacted in every region.
• Tollison's C/V

1990 June: Carol Hryjak reports to the Tobacco Institute on her progress with the "Social Cost" program.

Consulting economists presented papers on the social cost issue during the Western Economic Association's annual meeting in San Diego, California. Dwight Lee chaired the session entitled, "Smoking and Public Policy." Papers were offered by Lee ("Smoking and Public Policy"), Gary Anderson ("Politics, Redistribution and Smoking") and Benjamin Zycher ("Insurance and Smoking: Market vs. Government"). A full report on the conference is expected next month.

    We have agreed to support consulting economists' presentations during sessions of two other major academic conferences later this year: the Atlantic Economic Society and the Southern Economic Association. Both will focus on aspects of "user fees" and budgetary politics.

    Consulting economists Bob Tollison and Richard Wagner began work on the manuscript for the revised edition of Smoking and the State.

    We received a proposal from consulting economist Dwight Lee to write an article on the social cost issue for placement in an economic periodical, The Margin. The publication is required reading for students of economics at universities around the country.

    We continued to work on the social cost plan for 1991, with a final draft submitted for Public Affairs review.

1990 Aug: This long document has media tour records [being conducted by Fleishman-Hillard] for the cash-for-comments

• economists network
• ventilation network members (mainly HBI)
• biological scientists network,
• academic lawyers nework
• labor network and
• advertising academics network

Richard Wagner
Chair and Harris Professor, Department of Economics, George Mason University

• 10/89 Smoking and the State media tour: San Diego, CA; Memphis, TN (3 radio interviews) and Little Rock, AR (interviews: 2 radio, 2 print)
  
  
• 11/89 Smoking and the State media tour: Knoxville/Nashville, TN (interviews: 6 radio, 2 television)
  
  Published "Social Cost, Rent Seeking and Smoking: A Public Choice Perspective," in Journal of Public Finance and Public Choice
  
  
• 12/89 Smoking and the State media tour: Seattle/Tacoma, WA (interviews: 1 print, 2 radio, 2 television)
  
  
• 1/90 Letters to administration officials debunking excise tax/"user fee" connection
  
  
• 2/90 Smoking and the State media tour: Louisville, KY (interviews: 4 radio, 1 television)
  
  Testimony for Hawaii Department of Health excise tax and "social cost" bill hearing
  
  
• 3/90 Presentation on tax earmarking and regressivity at the Southwest Social Science Association conference in Fort Worth, TX

1990 Aug 3: Sam Chilcote at the Tobacco Institute has advised the Members of the Executive Committee of plans to develop a celebrity speakers program using academics and other expert consultants. There are offer the speakers both money and personal promotion:

[W]hile it is clear that there are a number of individuals who can and are speaking out on our issues independent of The Institute, there also is much more that could be done. There are, for example, opportunities to develop higher profiles for those individuals with whom we enjoy an existing relationship, and to increase within the media an awareness of their availability.

    There also are a number of individuals who have been identified who do not currently have a relationship with the industry, but whose views appear to be compatible with our own. Should the Executive Committee decide that it wants to proceed with an expansion of our speakers' program, these individuals would be contacted to determine their interest in our issues.

    The addition of new speakers to our program will be expensive. Most of these individuals command substantial consulting fees; media and other activity will require a new commitment of funds, although an exact amount cannot be determined until candidates have been approached.

• Authors, newscasters and newspaper columnists
• Well-known politicians, political aides, White House staffers, State authorities, agency administrators, etc
• Heads of various coalition groups (American Advertising Federation. etc)
• Cash-for-comments legal and business academics from Savarese's network list.
• Cash-for-comments 'risk assessment' academics and promoter.
• Cash-for-comment experts in indoor air pollution and ventilation systems.
• Cash-for-comment academic economists + some likely allies:

  • BRUCE L. BENSON, professor of economics, Florida State University and board member, James Madison Institute, a Tallahassee think tank.
  • DWIGHT R. LEE, professor of economics, holder of the Ramsey Chair of Private Enterprise, University of Georgia
  • JAMES C. MILLER, Citizens for a Sound Economy Foundation, Washington; former director of OMB
  • WALTER E. WILLIAMS, professor of economics, George Mason
        University, Fairfax, Va.
  • BOB TOLLISON, George Mason University, Center for the Study of Public Choice

• Some more minor network academics, together with their recent achievements.

Richard Wagner
Chair and Harris Professor
Department of Economics, George Mason University

• Smoking and the State media tour: San Diego, CA; Memphis, TN Knoxville/Nashville, TN; Seattle/Tacoma, WA; Louisville, KY
• Published "Social Cost, Rent Seeking and Smoking: A Public Choice Perspective," in Journal of Public Finance and Public Choice
• Letters to administration officials debunking excise tax/"user fee" connection
• Testimony for Hawaii Department of Health excise tax and "social cost" bill hearing
• Presentation on tax earmarking and regressivity at the Southwest Social Science Association conference in Fort Worth, TX

1990 Aug 13: Carol Hrycaj at the Tobacco Institute has set her boss Martin Gleason a SAD [State Activities Division] media request for Washington State. They need help both in countering anti-smoking publicity and the plans for one insurance company to offer lower premiums to non-smokers.

1. The last Washington State "Smoking and the State" media tour was conducted in December 1989 and covered Seattle/Tacoma (Dick Wagner). While there is a possibility that it could be pitched in the market again, timing (to a certain extent) may be determined by the authors1 academic commitments.

    Tollison and Wagner presently are working on the book revision. The release and promotion of the update (Spring 1991) may be an alternative to activity in September.

    2. Recent use of consulting economists for tax op-eds may make a "home-grown" effort difficult. (Richard Zerbe of the University of Washington, a participant in the recent antiexcise op-ed campaign, has submitted an article to the Seattle Post Intelligencer). However, we could explore further to see if additional op-eds are possible.

    It may not be realistic to assume that consulting economists Tollison, Wagner and Lee could successfully place op-eds in Washington newspapers. In the alternative, we could request that they (or other economists Savarese might suggest) write letters to the editors of papers covering the Department of Health and anti-tobacco insurance plan stories.

1990 Aug 27: The Tobacco Institute spokeswoman, Brennan Dawson's report of her division's activities for June and July. It was made to the Tobacco Institute's Communications Committee, and it explains:

• Economists are weighing in on the federal budget debate with a new series of anti-excise tax op-eds in key congressional districts include: Economists appearing in print (copies enclosed)
  • JR Clarke, Jackson (TN) Sun and Memphis Commercial Appeal
  • Ryan Amacher, Anderson (GA) Independent-Mail;
  • Todd Sandler, Fort Dodge (IA) Messenger;
  • Domenick Armentano, Hartford (CT) Courant;
  • William Mitchell, Register Guard (OR);
  • Barry Poulson, Alamaso (CO) Valley Courier.

1990 Aug 29: Robert Tollison, as Director of the Center for Study of Public Choice has put a submission into the Environmental Protection Agency as part of its scientific exchange over Indoor Air Quality (ANR-445). The tobacco industry wants to downplay the role of ETS (Environmental Tobacco Smoke = second-hand smoke) in IAQ (Indoor Air Quality) calculations.

    His submission is deceptive from the opening paragraphs. He says:

I come to the issue of environmental tobacco smoke (ETS) from a background as a professional economist. It is therefore the economic aspects of the Environmental Protection Agency's (EPA) proposed guide to workplace smoking policies which I will critically assess.

[This is an outright lie. In fact he comes to the ETS problem from the position of a well-paid lobbyist working for the Tobacco Institute and its global equivalent, the ICOSI and later INFOTAB organisations.]

... there are presently no uncompensated costs in the workplace arising from ETS; hence, there can be no cost savings from banning ETS in the workplace.

there is no persuasive evidence that smokers impose special costs on their employers or that smoking employees are more costly overall than nonsmokers. Second, to the extent smoking is an issue, employers and employees already have sufficient incentive to negotiate an efficient employment relationship.

Richard W Ault; Robert B Ekelund Jr, John D Jackson; Richard Saba; David Saurman, Richard E Wagner;

1990 Sep 26: Kurt Malmgren's Tobacco Institute telex re: Sacramento County, California Ordinance

On September 25, the Sacramento County Board of Supervisors on first reading voted 3-2 to adopt a strict ordinance banning smoking in the workplace and phasing out smoking in restaurants by 1993.

Terry Eagan — along with expert consultants Gray Robertson (IAQ), David Weeks, MD, (ETS), John Fox (labor/management attorney) and Melinda Sidak (C&B) were the subject of print and broadcast interviews.

    Please contact me if you have questions, as we prepare for the referendum phase of this project.

• March 16 — Topeka, KS — Legislative Hearing — Dwight Lee
• March 30 — Park Ridge, IL — Local Hearing — Dwight Lee
• March 21 — "Social Cost" media tour, New York City — Bob Tollison
• April 12 — Honolulu, HI — Legislative hearing — Dick Wagner
• April 30 — New Hanover, NC — Local Hearing — Dwight Lee
• April (Editorial tour) — "Social cost" Texas Newspapers — Mike Davis
• May 9 — Baton Rouge, LA — Legislative hearing — Morris Coats.

1990 Oct: /E Tobacco Institute document. It lists the services that academics and secret consultants have provided to the tobacco industry during 1989 and 1990 — both as witnesses and as authors of articles and letters.

• Pages 2 - 9     Advertising: lawyers and advertising administrators
• Pages 10 - 30 Science and Public Policy on ETS/IAQ
• Pages 31 - 39  Taxation
  This gives the dates of each of the services, and any 'Current Projects' they may be working on:

Richard Wagner
    Chair and Harris Professor, Department of Economics, George Mason University

• 10/89 Smoking and the State media tour: San Diego, CA; Memphis, TN (3 radio interviews) and Little Rock, AR (interviews: 2 radio, 2 print)
• 11/89 Smoking and the State media tour: Knoxville/Nashville, TN (interviews: 6 radio, 2 television)
    Published "Social Cost, Rent Seeking and Smoking: A Public Choice Perspective," in Journal of Public Finance and Public Choice
• 12/89 Smoking and the State media tour: Seattle/Tacoma, WA (interviews: 1 print, 2 radio, 2 television)
• 1/90 Letters to administration officials debunking excise tax/"user fee" connection
• 2/90 Smoking and the State media tour: Louisville, KY (interviews: 4 radio, 1 television) Testimony for Hawaii Department of Health excise tax and "social cost" bill hearing
• 3/90 Presentation on tax earmarking and regressivity at the Southwest Social Science Association conference in Fort Worth, TX

See page 34

[TI budget papers show that each op-ed still earned the economists $3,000. Presentations to conferences earned them $5,000. Savarese was paid $70,000 to $100,000 pa for this project, and Ogilvy & Mather $250,000.]

See page 5

1990 Oct 19: Richard Wagner, as section-chairman of the Atlantic Economic Society [subtitled "Patriots of the Future", Williamsburg] reports to James Savarese on a session he has run on "User Fees and Budgetary Politics."
[The document is clearly designed as proof of payable services to the TI]

    He outlines his introductory remarks, then writes:

The participants did the rest. Dwight Lee, Fred McChesney, and Robert Tollison each presented their papers dealing with aspects of the session's theme, and Kevin Grier and Bruce Yandle offered some interesting observations in discussing the papers.

    Indeed, one of Bruce Yandle's comments was to the effect that the three papers together provided a quite coherent, alternative body of analysis to the conventional literature on user fees.

[All speakers and pre-selected discussants were members of the cash-for-comments network]

1991: These witness lists are attached to 1993 June 1 Tobacco Institute list of "Witness/Expert Appearances — Scientific/Legal/Spokespersons."

• This list includes: Tom Lauria, Mike Buckley, Simon Turner, Gio Gori, Bill Wordham, Gray Robertson, Peter Binnie (Now HBI), Larry Holcomb, John Fox, Rich Silverman, Walter Merryman, David Remes, Frank Powell, Melinda Sidak, Rudy Cole, Larry Halfen. Binnie appears to be concentrating on airports (not aircraft)!]
• An attached 1991 Witness List includes, Brennan Dawson, Jeff Seckler, Jim Goold, Joe Pedelty, Jolly Ann Davidson, Dick Wagner, Bernadette Davidson, Walt Decker
• And a 1990 Witness List (page 35) includes Bill Orzechowski, Mike Davis, Morris Coats,
• There is also a document attached the 1989 witness list with (in addition to above) Dwight Lee, David Weeks, Alan Kassman, Bob Tollison, Richard Wagner, Jack Peterson, "Besttype Consulting", Dennis Vaughn,
• And a 1988 List (with most of the above) but also with A Katzenstein, David Brenton (focus on airlines)

1991: A list of useful consultants and witnesses held in the B&W files, carried many entries which show lists of past activities for the Tobacco Institute, which were effectively credentials showing that they could be trusted.

Richard Wagner
Chair and Harris Professor Department of Economics, George Mason University

  •   10/89 Smoking and the State media tour: San Diego,.CA; Memphis, TN (3 radio interviews) and Little Rock, AR (interviews: 2 radio, 2 print)
  •   11/89 Smoking and the State media tour: Knoxville/Nashville, TN (interviews: 6 radio, 2 television)
      Published "Social Cost, Rent Seeking and Smoking: A Public Choice Perspective," in Journal of Public Finance and Public Choice
  •   12/89 Smoking and the State media tour: Seattle/Tacoma, WA (interviews: 1 print, 2 radio, 2 television)
  •   1/90 Letters to administration officials debunking excise tax/"user fee" connection
  •   2/90 Smoking and the State media tour: Louisville, KY (interviews: 4 radio, 1 television)
      Testimony for Hawaii Department of Health excise tax and "social cost" bill hearing
  •   3/90 Presentation on tax earmarking and regressivity at the Southwest Social Science Association conference in Fort Worth, TX

1991 Jan: /E Tobacco Institute draft plan for 1991 with emphasis on "Taxes." These are the economist-related paragraphs:

Objective
To discourage reliance on consumer excise taxes on cigarettes to meet social and economic objectives by demonstrating that excise taxes are regressive and inconsistent with fair taxation.

Goals and Tactics:

• Commission two op-ed articles in 1991 from consulting economists. As articles are published, provide to other Institute decisions for promotion and submission to appropriate policy makers.
• Conduct at least 10 presentations by consulting economists on the excise tax issue before national, regional and state tax policy conferences.
• Continue to utilize consulting economists for testimony and briefings. Expand appearances to include presentations to business clubs and the business press. Conduct media refresher courses for public speaking appearance and delivery of testimony.
• Utilize the consulting economists for an op-ed program that addresses the national earmarking issue and state specific earmarking issues. As articles are published, provide to other Institute divisions and promote to appropriate public policymakers. Use field staff network to support distribution efforts.

1991 Jan 8: Savarese has sent the current list of network economists to Carol Hyrcaj at the Tobacco Institute. It contains three new names, but otherwise is essentially the same as the old lists.

    ALABAMA, Robert B. Ekelund, Jr., Auburn University
    ARIZONA, William J. Boyes, Arizona State University
    ARKANSAS, David E. R. Gay, University of Arkansas
    CALIFORNIA, Gary Anderson, California State at Northridge
                Roger Arnold, California State Univ. - San Marcos
    COLORADO, Barry Poulson, University of Colorado
    CONNECTICUT, Dominick Armentano, University of Hartford
    DELAWARE, Burton Abrams, University of Delaware
    FLORIDA, Bruce Benson, Florida State University
    GEORGIA, Dwight R. Lee, University of Georgia
    IDAHO, Allan Dalton, Boise State University
    ILLINOIS, James Heins, University of Illinois
    INDIANA, Cecil Bohanon, Ball state University
    IOWA, Todd Sandler, Iowa State University
    KANSAS, Michael Babcock, Kansas State University
    KENTUCKY, Brian Goff, Western Kentucky University
    LOUISIANA, Michael Kurth, McNeese State University
    MAINE, Robert McMahon, University of Southern Maine
    MASSACHUSETTS, David Tuerck, Suffolk University
    MISSISSIPPI, Bill Shughart, University of Mississippi
    MISSOURI, Joe A Bell, Southwest Missouri State University
                Thomas I. Wyrick, Southwest Missouri State University
    MONTANA, Terry L. Anderson, Montana State University
    NEBRASKA, Dee Martin, University of Nebraska
    NEVADA, John Dobra, University of Nevada Reno
    NEW HAMPSHIRE, Dennis Logue, Dartmouth College
    NEW MEXICO, Allen Parkman, University of New Mexico
    NORTH DAKOTA, Cliff Dobitz, North Dakota State University
    OHIO, Richard Vedder, Ohio University
    OKLAHOMA, Joseph Jadlow, Oklahoma State University
    OREGON, William Mitchell, University of Oregon
    PENNSYLVANIA, Ann Harper-Fender, Gettysburg College
    RHODE ISLAHD, Arthur Mead, Universityof Rhode Island
    SOUTH CAROLINA, Ryan Aiaacher, Clemson University
    SOUTH BikEOTA, Dennis lain, Augustana College
    TENNESSEE, JR Clark, The University of Tennessee at Martin
    TEXAS, S Charles Maurice, Texas ASM University
                Michael Davis, Southern Methodist University
    VIRGINIA, Richard B Wagner, George Mason University
    WASHINGTON, Richard D. Zerbe, Jr., University of Washington

1991 Feb: The Tobacco Institute has put out a draft press-release for a visit to Alaska (boilerplate for other states) to promote a visit by either Richard Wagner or Robert Tollison as "editors of new book on user charges and earmarked taxes." They want media interviews.

An interview with Dr Wagner [Tollison] on how and why the Alaska legislature's proposed earmarking of tax dollars from user charges is unfair to consumers and violates basic economic principles.

    Dr Wagner [Tollison] will be in Anchorage on March 6th and 7th. Dr Wagner's [Tollison's] trip is sponsored by the Tobacco Institute.

1991 Feb 5: James Savarese writing to Carol Hrycaj at the Tobacco Institute.

I've enclosed a final draft copy of Bob [Tollison] and Dick [Wagner]'s book, Economics of Smoking: Getting It Right. Let me know if you have any questions.

1991 Mar: /E Robert Tollison and Richard Wagner have written a book "The Economics of Smoking" to counter the "Social Cost" arguments:

Chapters:

1. Tobacco Warfare In America: An Overview
         [A Battlefield Tour]
2. Welfare Economics, Public Policy, and Smoking
3. The Taxation And Regulation of Smoking:
         [Principle vs. Expediency]
4. Smoking and the Economic Cost of Lost Production
         [Absenteeism isn't a problem!]
5. Markets, Insurance, and the Medical Costs of Smokers
6. Medicare, Medicaid, and the Social Cost of Smoking
         [Principle, Expediency, and Wealth Transfers]
7. Smoking, Business Costs, and Social Cost
8. ETS And Governmental Protection Of Consumers And Workers
         [An Alternative Explanation]
9. Advertising, "Addiction," And The Denial Of True Choice
         [Consumer Sovereignty or Health Fascism?]
10. Self Interest, Public Interest, and Legislation
11. Interest Groups And The Public's Health
          [Self Interest in Public Interest Organizations]
12. Principle And Expediency In Public Policy

[This book is entirely written by Tollison and Wagner; many of their previous books for the tobacco industry were editing and compilation jobs.]

1991 Mar 19: Martha Rinker (TI Issues Manager) writes to Susan Stuntz (her superior) about the "Productivity Proposal" from the two cash-for-comments economists:

Attached for your review and comment is the productivity study proposal prepared by our consulting economists Wagner and Grier. This proposal is for a much needed update of the productivity component of our workplace program.

    The idea is very simple. It is a two-part examination of public information on companies who have banned smoking to determine if such bans have increased worker productivity. The "event study" will compare the stock prices of companies that have imposed smoking bans with companies that have not. The study will chart the movement of stock prices before and after a company has imposed a smoking ban.

    The time frame and budget for this project approximately 3 months from the time of approval to complete. The cost is projected as $42,500.

Wagner & Grier's proposal

1991: May14 James Savarese has sent a research proposal by [Ricahrd] Wagner and [Kevin] Greir " Research Proposal for Earmarked Taxes" along to Marty Gleason at the Tobacco Institute.

Per your request, I have attached a proposal to produce a study on earmarked taxes which would provide the basis for arguments we could make against the earmarking of excise taxes.

    The time frame required to produce this study is 8-10 weeks.

[Is this] related to Chamber of Commerce Study?
No.

Marty, this came up in review of the Earmarked tax plan on 13 May... included under Strategy I, Tactic 3, as aption.
Without more deailt and other qustions, costs... comments.. ?

1991 June: Richard Wagner and Robert Tollison have written a light-weight economics article "Robbing Peter to Pay Paul: The Reality of User Fees and Dedicated Taxes".

    The draft has been sent to the Tobacco Institute for editing and legal checks. A footnote tells us that:

Dr Richard E. Wagner is the editor of the forthcoming book, Charging Beneficiaries for Public Services: User Charges and Earmarked Taxes in Principle and Practice, to be released June 1991. Dr Robert D. Tollison is a contributor to the book. Both are professors of economics at George Mason University.

1991 June: /E The Tobacco Institute's Public Affairs division has been asked to find $1 million in budget cuts. They have produced a detailed list of what would be cut in 1992 if they were forced to make these economies. This is an extensive list with Total amounts budgetted for each project.

Social Costs:
Cancel all media/op-ed activity surrounding promotion of new earmarking and updated "social cost" books       $ 63,000

Cancel plans for production and limited promotion of economist critique of HHS "social costs" model being used to promote tax increases in the states.       $ 22,000
[This refers to their attacks on the SAMMEC calculations.]

1991: June. Calvin ('Cal') H George and Carol Hrycaj were now looking after the "Social Cost" issues management at the Tobacco Institute. Their report for June shows:

A task force comprised of consultants and TI staff was convened to discuss the promotion of The Institute's social cost resources and to address using the resources more aggressively in the workplace and public smoking areas..

    The first draft was received of consulting economist Robert Ekelund's critique of the underlying methodology the US Department of Health and Human Services (HHS) used to estimate the "social cost" of smoking. Review and clearance of the white paper will be completed this summer. We anticipate promoting the HHS critique this fall in major media markets and to key policy makers.

    At the state level, social cost media tours were activated to respond to Pennsylvania Governor Casey's use of "cost" arguments to justify the proposed 30-cent hike in the state's cigarette excise tax. In advance of the tours, we developed the pitch materials and worked closely with Media Relations to finalize details for the visits.

    Consulting economist Robert Tollison and a spokesperson from The Institute traveled to Harrisburg and Philadelphia to discuss the social cost concept and tobacco-related issues with the media. Richard Wagner discussed the taxes and social cost theory with reporters in Pittsburgh and Scranton.

1991 June 25: Jim Savarese has billed the Tobacco Insitute for an article written to order by Wagner and Tollison attacking Governor Casey's cigarette tax proposal as "Unfair and Inequitable". They each charge $1,500 per day for two-days of writing time... a Total of $6,000.

1991 June 25: Carol Hrycaj memos Martin Gleason:

Attached, for your reference, is Dick Wagner's chronology of action on the tax earmarking book. Note that a representative from Routledge met with Wagner in June 1990 and indicated that a nine month publication schedule was possible, making the book available in early 1991.

    It appears that the authors acted to see that the publication would be in print in a timely fashion. I talked to Bob Tollison about the June 12, 1991 entry that says, "call to Alison Kirk, received 5 September 1991 as publication date — after much delay over increasing TI order." Bob clarified that the TI order did not impact the publisher's anticipated delivery date.

1991 June 27: An email sent to Melanie Merkle (Issues Analyst at the Tobacco Institute) by Carol Hrycaj suggests a rewording of some report:

How's this?

This week, consulting economist Richard Wagner traveled to Scranton/Wilkes Barre and Pittsburgh, Pennsylvania, to discuss "social cost" arguments and state tax and budget policy with the media.

    Edit away....

Well, first of all, I certainly am a non-smoker myself.

    But secondly, I have written probably 20 books on different kinds of public policy measures of which are all concerned with proper kinds of tax policy and spending policy, of which tobacco is simply one interest among many.

1991 June 28: Wagner and Tollison have now become regulars on the Tobacco Institute's schedule of conducted media tours. This is a list of the various 'witness' activities during 1991. Most are 'ventilation experts' promoting the idea that passive smoking isn't a problem in offices and workplaces. Jolly Ann Davidson is selling the TI's "Helping Youth Decide" message about teenager smoking.

    The economists are opposing 'earmarking' of cigarette taxes for the support of health initiatives:

• Wagner in Concord, New Hamprshire, on 12 and 13th March
• Wagner in Madion Wisconson, on 2nd and 3rd April
• Tollison in Columbus Ohio on 9th and 10 of April.

1991 July: Tollison and Wagner have sent a draft of a study to the Tobacco Institute: "The Value of Tobacco Sales to the Air Force Commissary System."

While tobacco products represent about ten percent of Air Force commissary sales, their prohibition would reduce commissary net income by between 25 and 37 percent.

    While the five percent surcharge applies to all products, tobacco products are particularly lucurative sources of income through coupon redemption fees and discounts for early payment of invoices. Tobacco manufacturers pay shelf allocation fees to the commissaries for shelf space. Altogether, the direct sale of tobacco products generated $18.3 million in fiscal 1990, which was 12 percent of commissary net income.

    Second, tobacco products generate a considerably larger sales volume per foot of shelf space or per square foot of commissary space than other products. They also entail considerably lower personnel and inventory costs. Less than two percent of the commissary labor force is engaged in the handling of tobacco products.

    Altogether, the prohibition of tobacco products in Air Force commissaries would reduce commissary net income by between $38.7 million and $56.2 million, which is between 25 percent and 37 percent of fiscal 1990 magnitudes. This would equate to building four fewer replacement commissaries annually. The elimination of tobacco products would damage strongly the economic basis of the Air Force's commissary system, undermining a good part of the commissary benefit to smokers and nonsmokers alike.

This proposed study seeks to analyze the impact of cigarette excise taxation on the military population at large, including active duty personnel, reserve personnel, retired military and veterans. There is good reason to think that cigarette taxation, as well as restrictions on indoor smoking, burden the military population more heavily than the civilian, in this report we will explain why this is so and will assess the extent of those penalties.

1991 July 15: James Savarese is billing the Tobacco Institute for the services of his network economist at the Western Economic Association meeting in Seattle, Washington.

Dwight Lee; Henry Butler, Richard Wagner are charging a combined $18,500 for their professional services + $1,640; $912; $1,100 in expenses.

1991 July 17: Jim Savarese writes to Cal George at the Tobacco Institute: he is now pimping Professor Richard Wagner like a prostitute. They are creating 'spec' reports for the industry.

Attached is the revised earmarked excise tax study which will be written by Dick Wagner. We included two new sections:

• A discussion of existing forecasts for excise taxes by CBO and OMB.
• Specific findings concerning excise taxes ability to fund a variety of health care programs in 15 states.

Let us know if you wish to proceed.

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

• Productivity: A popularized version, including discussions of health costs, insurance, and general costs of everyday life [proposal from Wagner & Grier].
  • 20-25 pages for management/business journal — cost $18,500
• Earkmarked Excise Taxes for Health Care: A Fiscal Mismatch (Grier & Wagner)
  • Sent to Marty Gleason and Carol Hrycaj at the TI on the 9 April 1991 — total fee $32,500.
  • Resent 15 May 1991 - tentative approval.
  • Resent once more on 17 July 1991 — total fee $42,000
• Smoking & Workplace Efficienty: An Assessment of the Record
  (Productivity Study - Wagner/Grier)
  • Sent to the Tobacco Institute 7 March 1991. Approved 10 April 1991 — total fee $42,500.
  • Revised version sent to Carol Hrycaj on 19 March 1991
  [Note says "Tell them will pay next year" (must have overrun the budget)]
• Excise Taxes and Excise Tax Increases: Effects on Rural Americas (Ekelund).
  • Sent to Cal George at the Tobacco Institute July 1 1991, — total fee $28,000.
• Scientific Fraud and the Organization of Science (Wagner/Tollison)
  
  • Sent to the Tobacco Institute on 12 April 1991 — total fee $29,500
• Sports Advertising: (Ekelund)
  
  • Sent to Shelia at the Tobacco Institute (approved) 19 Mar 1991 — total fee $26,500
• Bootlegging Study II: (Ekelund)
  
  • Cal George and Carol Hrycaj were looking after it.
  • Sent to Tobacco Institute 7 March 1991 — total fee $27,000
  • Specific State studies were $4,500 each.

[Note: US Average Annual Salary in 1990-91 was $9,669]

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

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

    Four proposed projects emerged from the meeting held a few weeks ago: a popular paper discussing the [Robert] Ekelund, et al results, a speaking tour, an op-ed program, and a possible health costs study.

1. The preparation and publication of a popular article by [Richard] Wagner and [Robert] Tollison that would include a discussion of the Ekelund et al results, health care and insurance costs issues, and the social costs of everyday life.
   
       The proposal is more than we want or need. A 20-25 page paper like this would have to published in a university business journal. What we had in mind, and I've discussed this with Savarese, is a shorter article to be placed in the personnel or human resource trades. The article would be good for reprints and possibly a TI brochure.
2. The preparation and testing of a speaking project for [Dwight] Lee and Tollison. The tasks would include the preparation of a standard speech and the solicitation of speaking engagements with Chamber of Commerce type audiences.
3. An op-ed campaign based on the paper prepared by Wagner and Tollison listed in the first task above. The op-eds would be written by economists in the targeted areas identified by TI.
4. A possible health costs study looking at the actual costs of smokers and non-smoker

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

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

1991 Nov 19: Carol Hrycaj sends a memo to Walter Woodson (TI Public Relations head):

Attached, as you requested, is a list of excise tax (and social cost) witnesses. The list of youth issue witnesses will be forwarded as soon as possible.

    The following conservative economists are academics whose testimony is from a public choice perspective. Regional or local economists may be identified as appropriate.

1991 Dec 5: Savarese has sent the Tobacco Institute a bill for $42,000 and the first draft of the Wagner/Greer study which is now called "Smoking and Workplace Efficiency: An Assessment of the Record."

1992: Tollison and Wagner have finished their book, "The Economics of Smoking" For much of this year they were tied up with promoting the book in various ways. [See some of the concluding pages to the book ]

Efforts to attribute a cost of lost production to smoking, as well as a cost of medical care, commonly and wrongly attribute to smoking the entire amount of what is really a joint cost. This problem arises because smokers and nonsmokers are not identical in all respects other than smoking. Among other things, smokers have an above-average representation in blue collar occupations, they also consume on average an aboveaverage amount of alcohol, although there are many teetotaling smokers and nonsmoking alcoholics,3 and they generally exercise less than nonsmokers, although smoking bicyclists, swimmers, and joggers can be found.

1992 Mar 5: Karen Fernicola Suhr, the Issues Manager at the Tobacco Institute writes to Jim Savarese.

As discussed at our meeting on Monday, we have some concerns about the Kevin Grier/Richard Wagner paper, "Smoking and Workplace Efficiency: An Assessment of the Record." Our general concerns are outlined below. I've also written some notes on the attached draft.

• We find the premise on which the paper is based — that changes in a company's stock prices would reflect changes in worker productivity due to implementation of a smoking ban — to be overly simplistic.
• Section 2, seems to argue rather forcefully for a workplace smoking ban. Though an attempt is made in Section 3 to refute the claims, the refutations come too late, after the reader has already accepted the claims.
  • Section 3's arguments seem too hypothetical and weak compared to the claims advanced in Section 2.
  • We also get the impression that the authors condone employers' punishing smokers for being smokers.
  • Section 4, even more than Section 3, seems to encourage employers to discriminate against smokers.
• We have problems with the makeup of the study outlined in Section 5. Is a sample size of 14 firms large enough to conclude anything?

Given these concerns, we find it difficult to accept the authors' conclusion that smokers do not increase business costs. Whether or not they're right, we don't believe this paper, or the study that was conducted, makes a compelling case for it.

We'd like to discuss with you and the authors how the paper can be reworked, with the understanding that since we paid for this study in full upon receipt of the first draft, we do not expect to expend any more funds in bringing it to final form.

    We also need to discuss where and how the paper could be promoted or published when it's in final form.

1992 Mar 18: Karen Fernicola Suhr to Martin Gleason at the Tobacco Institute.

Attached is the response from Richard Wagner (via Jim Savarese) to my letter expressing concerns about the Wagner/Grier paper "Smoking and Workplace Efficiency: An Assessment of the Record."

    Wagner makes several suggestions for clarifying and restructuring the paper to address our concerns. I think that many of the explanatory points he makes in his letter would do a great deal to shore up the assertions made in the paper. While I am not yet convinced that the conclusion drawn by the paper is valid, if the authors do a better job of stating their case, perhaps the conclusion will be more acceptable.

    Wagner thinks that the paper, once in final form, could be published in a major journal, such as the Journal of Law and Economics or the Journal of Finance. That would probably be the best test of the paper's credibility, assuming that some sort of critical review goes on before publication. However, I think we're a ways off from submitting it for publication at this point.

    I suggest that we give Wagner/Grier a chance to revise the draft (I can work out a due date with Savarese). Then, after we've seen the revision, it may be appropriate to sit down with Savarese and Wagner to discuss the paper further.

1992 Mar 20: Bob Tollison and Richard E Wagner (who is now Harris University Professor) are arguing with Dr Joseph P Newhouse of Health Policy and Management, Harvard University, over the social cost of smoking.

[The Tobacco Institute, of course, gets a copy of their correspondence]

1992 April 7: Cal George sends his English counterpart Ron Tully a copy of a Wagner paper.

Regarding your request on Hypothecated/Earmarked Taxes dated today, I have enclosed our most recent work on the subject titled Charging for Government, by Richard E. Wagner. I hope you find this of interest.

In 1991, we financed the publication of an academic readings book on the earmarking issue entitled Charging For Government: Earmarked taxes in Principle and Practice edited by Richard Wagner.

1992 July 17: Karen Fernicola Suhr has circulated to her superiors her thoughts about the redrafted Wagner/Grier "Smoking and Workplace Efficiency" paper.

The redraft reads much better than the earlier draft did. The authors took our advice on restructuring the paper, which makes it much easier to understand.

    In terms of whether the authors' conclusions are helpful to us, I believe that a journal article that concludes that smoking workers do not increase business costs couldn't hurt us, as long as the methods used to reach that conclusion are sound.

    An earlier correspondence from Dick Wagner to Jim Savarese asserted that the method used is an accepted one among economists, and that the sample size of 14 was not too small for the type of study done.

    I asked John Rupp's [The main C&B lawyer] advice about the conclusions reached by the authors. Rupp thought it unrealistic to suggest that any "costs" incurred by smokers would have an effect on the market value of a business [but he] did not think that the conclusions in this paper would "embarrass" the industry.

    I plan to pass the article along to Shook, Hardy & Bacon [the other major lawfirm] for review before we give Savarese the go-ahead.

1992 July 24: Karen Fernicola Suhr returns the Wagner/Grier article to Jim Savarese.

We have reviewed the draft and would like the edits on the attached copy to be made. If you or the authors have questions about any of our suggestions, please feel free to call me.

    I also wanted to point out a concern that came up when reviewing the draft. The logical flow of the paper appears to break down in transition from Part 2 to Parts 3 and 4.[snip]

    Before the paper is submitted to the Journal of Law and Economics. I would like to see a clean copy that incorporates the revisions that are marked on the attached, as well as any additional changes that are made.

1992 Aug 6: Anne Tollison working with Jim Savarese has sent the draft copy of a Tollison/Wagner op-ed "Scientific Integrity Consumed by Anti-Smoking Zealotry" along to the Tobacco Institute. It has been edited and sent to the Orange County Register because it was specifically intended to help the industry counter threatened smoking bans in California.
[There's not the slightest indication that the authors were aware of the hypocricy of the title of their attack on anti-smokers, and their own stance on 'scientific integrity'.]

    Savarese's editors have made many changes and corrections. A note has been attached probably suggesting that the article could also be planted in the "LA Times, Sacremento Bee, San Diego Union, or San Francisco Chronicle."

    In the article they complain bitterly about a social cost study which supports the smoking ban, saying

The plain truth of the matter is simply that smokers more than pay their own way in California, and there is no scientific economically sound case for increasing the tax on cigarettes. Indeed it is the smokers of California who paid $100,000 to the authors of this fallacious study.

1992 Aug 12: Grier and Wanger have now submitted a clean draft of their article "Smoking and Workplace Efficiency" incorporating suggestions from the tobacco industry's two main law firms. Karen Fernicola Suhr writes to her superiors:

Given the condition of the original draft, I think the article has come a long way. Aside from a couple of minor typos, I am prepared to give the authors the go-ahead (through Savarese) to submit the article for publication in the Journal of Law and Economics.

    Since we paid for the article in full at the end of 1991, I do not expect any 1992 invoices for this project. I do plan to follow up on the authors' success in getting the article published.

1992 Sept: A "Public Smoking" report by Karen Fernicola Suhr at the Tobacco Institute lists under "Project and Activity Status"

Grier/Wagner draft of "Workplace Efficiency: A Market-Based Assessment": Authors are attempting to get the article published in the Journal of Law and Economics.

• Worked with consultants and the economists' network on placing an op-ed developed in August in response to a recently released study by the Institute for Health and Aging at the University of California at San Francisco, which alleged that cigarette smoking imposes a $7.2 billion annual "cost" on Californians.
        Op-ed was sent to two additional major California daily newspapers, neither of which have published the piece.
• SAMMEC II critique and "journalistic" overview drafts were forwarded to legal counsel for review. Also met with consultants and Division's Director on Issue Management to discuss needed revisions in promotion plan, which should be made in October. Legal clearance (as well as requested revisions) should also occur in October.
• Reviewed and obtained revisions for a final draft of "Earmarked Taxes and Health Care: A Fiscal Mismatch" by Kevin Grier and Richard Wagner. Forwarded to Division's Senior Vice President for review and comment prior to sending to legal counsel for clearance. Expect to convene meeting with consultants and co-author in October to plan dissemination activities.

SAMMEC

SAMMEC (Smoking-Attributable Mortality, Morbidity and Economic Costs) was a software program developed initially by James M. Schultz and the Minnesota Department of Health in 1985 and 1986. It became famous in academic circles after being used in one well publicized nationwide study — the National Status Report on Smoking and Health published in 1990 (the "Sullivan Report").     The SAMMEC II version was then developed for evaluating state, city, and national populations in order to determine the so-called "social costs" of smoking.

1992 Oct 16: Jim Savarese is sending the Tobacco Institute a promotional program for the Tollison/Wagner book "The Economics of Smoking" which is being promoted also by their paper attacking the regulatory agency use of a cost-benefit modelling technique known as SAMMEC II.
[SAMMEC = Smoking-Attributable Mortality, Morbidity and Economic Costs.]

    He encloses a report on the media tours run by O&M for the previous Tollison/Wagner book "Smoking and the State"

During the 38 media tours for Smoking and the State, Wagner and Tollison conducted 235 interviews in 54 markets in 27 states during an 18-month period from 1988 - 1990.

The materials we developed for the initial "social cost" media tours were highly effective in aiding our efforts to schedule interviews. For the new "social cost" tours, we will develop

• pitch materials for a press kit similar to those developed for the initial program. The kit would likely include:
  • pitch letter
  • biographies of Wagner and Tollison
  • a popularized summary of The Economics of Smoking and the "SAMMEC II" paper
  • any applicable charts/graphs which also can be reproduced for local newspapers and television
  • one-page sheet describing the estimated "social costs" of various activities
• A matte service piece signed by Wagner and Tollison will focus on the three main themes of the program, perhaps using the "slippery slope' argument or the ongoing smokers vs. nonsmokers battle as the main hook. Emphasis will be placed on "Sammec II" in order to lend more substance to the article.
• a second matte service piece should be a review of the book by a member of Jim Savarese's economists' network. Such a review would provide the new book with the credibility of an independent expert and would help increase the book's visibility in a costeffective manner, much in the same way Todd Sandler's review supported Smoking and the State.
• Opinion editorials by the economists will be prepared for placement in state capital publications in states where "social cost" is a major issue. Ideally, placements would occur in conjunction with media tour visits.
• In addition, op-eds written by members of the Savarese economists' network will discuss issues raised in the book and "Sammtec II." The economists are very successful at placing pieces in their local papers. As with the matte service reviews, these pieces would lend credibility to the book and the analysis.
• There is a need for a responsive mechanism to handle media references to the SAMMEC study on "social costs."
• Additionally, we will prepare a standard letter to the editor on the flaws of the SAMMEC study — providing room for localization in the first and last paragraphs. The letter will be distributed to, and eventually authored by, a Savarese and Associates economist in the particular state.
• In order to give full exposure to both the "SAMMEC II" paper and The Economics of Smoking. George Mason University's Center for the Study of Public Choice has indicated that they will publish the "SAMMEC II" paper as one of their Working Paper series. This will give added credibility to the paper as a truly scholarly piece of research.

Wagner and Tollison stand as important resources for the Institute. Their expertise and credibility on the "social cost" issue enables them to assist the Institute in efforts to defeat measures to increase government regulation of tobacco.

    Promotion of their new book, The Economics of Smoking and the "SAMMEC II" paper will constitute an essential component of these efforts, allowing Wagner and Tollison to reinforce and expand the messages disseminated during the initial "social cost" program.

    The promotional program we have outlined will maximize use of Wagner and Tollison. The program elements will effectively take the spokespeople's messages to a wide and diverse audience.

• Ogilvy & Mather estimate they will need an additional $22,000
• James Savarese & Associates wants a further $26,000 for the economists to create Op-eds, Letters to the editor, Mattes and for media tour time.
  Further activities of the network economists are billed at between $200 and $250 per hour.

1992 Nov 20: [Reported in 1993 Jan 19 newsletter article "United Front: Conceived to strengthen the US's "tobacco family".

    The industry in North Carolina had a project "TOBACCO 2000" which aimed to produce a citizen-based united front of growers, process workers, retailers, company personnel and smokers before the turn of the century. They held a rally, expecting 3000 to turn up, but only 250 showed. However the speakers battled on bravely:

Dr Richard E. Wagner, author/educator and professor of economics at George Mason University, spoke out on "ETS hysteria," and blasted science that claims environmental tobacco smoke is medically unsafe. These studies, he says, are biased and scientifically unsound.

1992 Dec 12: A Philip Morris boilerplate document with answers to anti-tobacco claims has extensive quotes from Tollison and Wagner as well as NEMI and its other scientific lobbyists. The questions alone make a good case that "social costs" exist.

Claim 1: As employees, smokers are less productive than nonsmokers.
Claim 2: From the employer's standpoint, employees who smoke are more costly than nonsmoking employees.
Claim 3: Smokers impose higher "maintenance" costs on their employers than non-smokers.
Claim 4: Smokers are more prone to injuries and accidents on the job than are nonsmokers.
Claim 5: Smokers waste more time on the job than non-smokers.
Claim 6: Smokers cause health insurance rates to be higher for nonsmokers.
Claim 7: Smokers miss work more often than nonsmokers.
Claim 8: Banishing smoking and smokers from the workplace would boost morale and improve productivity.

1993: The main threat to the global tobacco industry came from the World Health Organisation (WHO) who's International Agency for Research on Cancer (IARC) was about to produce a report following a number of studies which labelled ETS as a carcinogen.

    The tobacco industry had managed to get support for the USA withdrawing some of their financial contributions from the WHO in the past. Robert Tollison and Richard Wagner now published for them "Who Benefits from WHO: The decline of the World Health Organization" which attacks the WHO for spending some of its budget on anti-smoking measures, rather than having a total focus on malaria, AIDS, etc.

    The report was published by Digby Anderson's Social Affairs Unit in the UK.

1993: Working with the TI making media tours and Legislative Appearances.

1993 Jan: The Detroit News "Guest Viewpoint" by Richard Wagner the co-author of the book "The Economics of Smoking." [Wagner has managed to invent a new pro-smoking line — air is 'owned' by which-ever company rents the office or workplace. Is there no limit to this man's genius?]

On the surface, the regulation of smoking to control ETS would seem to be but a particular case of government regulation to protect public health. Governmental regulation of indoor air quality through clean air acts would seem to be comparable to regulation of outdoor air or water quality through clean air or water acts.

    Closer examination shows this surface impression to be false.

    ETS is not similar to air or water pollution. Indoor air, unlike outdoor air, is owned bv someone, and this makes all the difference. Economic associations and relationships are voluntary. It is not correct to say that some people are forced to inhale other people's smoke

1993 Feb 19: Robert Tollison is dealing with Sharon Boyse at BAT over the design of a paper to attack the World Health Organisation which is using part of ts budget to run anti-smoking campaigns. Tollison has offered to publish the paper through the Center for Study of Public Choice. [Wagner also joins in]

Thanks for considering publishing the WHO paper, I think we would rather have something a little more formal than your working paper.

    The best option I have been able to come up with involves Digby Anderson, who you may have met in Venezuela at our media briefing. He is director of the Social Affairs Unit in the UK, and their major activity is to publish books and booklets on issues such as this. In fact, he has working with him a man called James Le Fanu [a prominent UK newspaper columnist and tobacco 'consultant'], who is at the moment involved in a book on UNICEF which includes a little on the WHO. They would be very interested in having you combine your work with theirs, and contributing a section to the book or something similar.

    I hope this would be acceptable to you, and you will probably receive a letter from them about this in the next week or two. If this does not seem desirable to you for any reason then please let me know.

I gather that they will pay you their usual small author's fee, but as mentioned previously, although we will be financially supporting actual publication costs of the resulting book through a donation to the SAU, we will also cover any additional costs you may have — I would, however, be grateful if you could estimate any such costs to me first of all

1993 Mar 10: Cal George to Susan Stuntz at the Tobacco Institute reports on the activities of his economists network.

Richard Ault and Robert Ekelund's critique of SAMMEC II software for estimating the alleged "social costs" of smoking, "The Political Element in Science and Technology: SAMMEC II and the Anti-Smoking Lobby," is being published as a working paper this month by George Mason University's Center for the Study of Public Choice.

    As you know, a plan has been developed for promotion of this study, along with Bob Tollison and Richard Wagner's newly available book on "social costs" , The Economics of Smoking, using Tollison and Wagner as spokespersons from the Center for the Study of Public Choice and experts on the application of "social costs" theory.

    SAMMEC II continues to be the primary tool being used by antismoking forces to argue for increased tobacco taxes and regulation, particularly on the health care reform front.

    I convened a meeting with State Activities, Media Relations and OA&R [Ogilvy Adams & Reinhard — the new version of O&M] last month to discuss experience in promoting the earlier book, Smoking and the State, and the collective judgement on where we could get the best return on a limited investment of two, two-city media tours to promote the study and the new book.

    The consensus at that time was for the states of Oregon and Minnesota, including most likely the state capitol and one other media market. OA&R was also to check on the availability of Tollison and Wagner.OA&R has determined that Tollison and/or Wagner should be available both the last week of March and the first week of April.

In addition to the above activities designed to promote the findings of the SAMMEC II study, the other key element of our strategy to counter "social costs" assertions is the development of a stock (or "canned" ) op-ed and/or letter-to-the-editor capacity to quickly respond to the use of SAMMEC II-derived numbers/studies that appear in the media from time to time.

    Such an op-ed was developed by Bob Tollison last September in response to a University of California study that used SAMMEC methodology. While Tollison was not successful in placing this particular op-ed, the piece itself was sound and I have asked State Activities to circulate it to field staff so that they will be aware that there is the capacity to respond and will alert us to opportunities to do so.

1993 Apr 29: Cal George writes to his supervisor Susan Stuntz about a "Tobacco Tax Burden on Military Personnel study."

Please find attached a proposal prepared for Savarese and Associates at our request by Robert Tollison and Richard Wagner to conduct a study of the impact of the cigarette excise tax burden on the military population at large, including active duty personnel, reserve personnel, retired military and veterans.

    This study would be an extension of Tollison and Wagner's earlier research on the economic impact of cigarette sales on the operations of military commissaries.

    Based on what is already known about the demographic characteristics of military personnel, including household income and incidence of smoking, it is expected that clearly demonstrate the regressive nature of tobacco excises on these populations.

    The health care reform debate will heat up once the Clinton Administration releases its plan in late May and veterans' groups can be expected to play a crucial role in pursuing the maximum benefits at the least cost for their members. Should tobacco excises be included in the financing, as is widely believed will be the case, this study should be useful to veterans' groups opposing such an approach to financing health care reform. The study is expected to be available in approximately four weeks.

    Should you approve this recommendation, I have attached for your approval a check request form for partial payment. The balance would be due upon completion of the study.

1993 April 29: Sharon Boyse (head of disinformation at BAT) and Matt Winokur (her equivalent at Philip Morris) were jointly running media junkets around the world, taking compliant hack journalists to exotic locations to listen to the speil of paid shills. They used a relatively stable group of UK and US speakers which usually included Ray or Phil Witorsch (speaking on medical aspects), Gray Robertson or one of his staff from Healthy Buildings International (speaking on the so-called 'sick building syndrome'), some local lobbyists (depending on the country), and the semi-famous magazine editor/lobbyist Paul Dietrich.

    Dietrich was an old Republican fund-raiser who had married Laura Jordan Dietrich (Reagan's ambassador to the UN), and moved up in the world. The famous Saturday Review magazine was secretly owned in the June 1984-88 period by the tobacco companies and Dietrich had been put in charge (editor-in-chief) with Nixon's faithful aide Frank Gannon as his editor. The magazine failed and was sold off into the Penthouse magazine stable.

    Dietrich was then given control of a Philip Morris front organisation called the Institute for International Health & Development (IIHD) (supposedly based in Geneva) which ran its own magazine and specialised in attacking the World Health Organisation over the cost of its anti-smoking projects. He also managed to worm his way onto the advisory board of the Pan American Health Organisation (PAHO)

    The IIHD had also been given the job of publishing, translating and distributing the faux-proceedings of the closed McGill University ETS Symposium, set up, funded and controlled entirely by Philip Morris. However he began to over-charge for his services and was fired by Sharon Boyse. She writes:

... we found it necessary to obtain a replacement for Paul Dietrich's usual WHO presentation and Bob Tollison agreed to step in at the last minute.

    Tollison has agreed to carry out more work on the WHO and to publish, at our instigation, a collaborative effort with Digby Anderson of the Social Affairs Unit (SAU), on the WHO and other similar organisations. We are funding this publication through the SAU.

However, understandably. Tollison is concerned about using Dietrich's data for a publication, especially given that in Dietrich's present state of mind he could well take offense and cause a major international incident! Tollison has therefore requested that we provide him with sufficient modest funds to do his own rapid but essential work into the WHO budget so that he cannot be accused of stealing Dietrich's data.
[But he can be accused of using selective data — and of reversing the normal order of inquiry. His attack on the WHO came first, and the facts he relied on to prop up his arguments came later.]

    Given the interest of this to both our companies, and the use that we will have for Tollison in the future in media seminars in Latin America and elsewhere, would you be prepared to split the funding of this project with us. We will carry on the funding of the SAU project independently. The cost for PM would be US $10,250.

1993 May 20: Wagner and Tollison have put together a 40 page draft of the WHO paper and faxed it to Sharon Boyse:

Herewith is a draft of the WHO paper. I hope you like it, and we would be happy to respond to coments.

I have not sent it to anyone else, including John Rupp or Digby Anderson.

    Please advise if you would like me to do so.

... a more clear contrast of those two percentages, which are bound to be dramatically different, would not go amiss.

    Will provide you with final details on the subcontinent media seminars as soon as possible; many thanks for your fax on the subject and this is to confirm that financial arrangements are acceptable to us.

1993 May 24: Susan Stuntz had to warn her staff that the OTA Report [New OTA Report Suggests That Smokers Already Are "Paying Their Own Way" — And Then Some"] prepared for the Tobacco Institute by Richard Wagner and Robert Tollison had series errors and needed to be replaced by this later version.

The one distributed late last week had numbers problems — all of the ones included in the paper didn't add up. This version attempts to correct that probles and also incorporates several additional suggestions from Federal Relations.

    Hopefully this is the last go-round.

1993 June 9: The Tollison-Wagner attack on the OTA study has finally been completed to the satisfaction of the Tobacco Institute. "The Office of Technolgy Assessment on the Costs of Smoking: Wrong Again."

    Cal George at the Tobacco Institute writes to his boss Susan Stuntz:

On the whole I think this is an excellent paper.

    I have made a few changes and am ready to send it to the lawyers with any changes you might have.

1993 June 25: Robert Tollison has sent a "Possible submission to the New York Times" along to the Tobacco Institute marked "Draft - Not for Quotation without Permission." It criticises pervious writers, and claims that increases in excise taxes on cigarettes produce no revenue.

    He quotes the study by Kevin Grier and Richard Wagner who "calculated that 35-40 cents a pack was a revenue-maximising rate for state excise taxes on cigarettes." and that high excise "will lead to a reduction in Federal excise tax collections." [Previously they had maintained the opposite — that higher excise takes were a rip-off directed at the poor.]

1993 July: Another bibliography from Richard Wagner — this time it is sent to Brown & Williamson Tobacco.

1993 July: The infamous Capital Research Center has published a paper in their series "Alternatives in Philanthropy" on...

Corporate Social Responsibility: "Progressive " Politics vs. Traditional Charity, by Dr Richard E. Wagner. Doug Bandow, Dr Thomas J. DiLorenzo, and Dr M. Bruce Johnson.
    The four essays argue that corporations best serve society by focusing on profit maximization, not by giving to charity

• Richard Wagner from George Mason University was one of the tobacco industry's most faithful (and wealthy by now) cash-for-comments economists.
• Doug Bandow was a newspaper journalist who worked extensively for the tobacco industry, and was later exposed as having been bribed to write columns.
• Thomas DiLorenzo was a long-term tobacco lobbyist and cash-for-comments economist from Loyala College, Baltimore (also a 'senior fellow' at Capital Research Center, if you buy their pseudo-academic titles).
• M Bruce Johnson one of the old school of corporate-promoting Randian-conservative economists. He was an early mentor of Robert Tollison (but not a tobacco tout.)

1993 Jul 1: Cal George of the Tobacco Institute is returning a TI-corrected, heavily-edited and legally cleared copy of a Tollison/Wagner article "The Office of Technology Assessment on the Costs of Smoking: Wrong Again" to Bob Tollison. [Joint authorship with Richard Wagner]

    The OTA had updated its 1985 estimates of the public/social cost burden of smoking to $68 billion (1990 estimate) using the standard SAMMEC (Smoking Attributable Mortality, Morbidity Economic Costs) model. By contrast, smokers were contributing only $13 billion in special excise and sales taxes (State and Federal combined).

    Wagner and Tollison had been contracted to challenge these figures because the estimate contradict the industry claims that. via excise taxes, smokers more than pay any additional health-care and other tobacco-related costs. Tollison and Wagner (with Tobacco Institute help) conclude that...

"Properly analyzed, the "social costs" of smoking are zero."

... involve a great deal of assertion, conjecture, and even mythology.

    In any full system of accounting, it could only be concluded that smokers are supporting nonsmokers. All of the costs of smoking are borne by smokers themselves and beyond this smokers would seem to contribute to the general treasury through cigarette excise taxes.

1993 Jul 22: The final corrected version of the Tollison/Wagner OTA "Wrong Again" paper has been returned with corrections and cleared for publication.

    For some reason the Tobacco Institute now admit their involvement. The document says:

This manuscript was produced under a grant from The Tobacco Institute. The views expressed are those of the authors and not necessarily those of The Institute or its member companies.

1993 Aug 5: Cal George to Susan Stuntz:

The American Legion and National V.F.W. conventions scheduled for later this month offer excellent opportunities for anti-excise tax activities in conjunction with the Veterans Rights Coalition's participation in these events.

    As you know, preliminary findings from the veterans excise tax study being conducted by George Mason University economists, Bob Tollison and Dick Wagner, will be available at the end of this week.

    An executive summary, utilizing these findings, will be prepared for distribution at the conventions.

1993 Sep 28: Sharon Boyse writes to BAT executives saying that they have sponsored Robert Tollison [and Richard Wagner] to publish the Anti-WHO book through the auspices of the Social Affairs Unit in London.

"Essentially, the argument is that the WHO has its priorities wrong in placing so much emphasis and spending so much money on western-type health prevention issues (smoking, seat belts, alcohol, etc) instead of concentrating its resources on major killers in the developing world.

    The launch of the book has received considerable publicity in the UK, particularly in the Sunday Telegraph, Relevant articles are attached.

    The book is currently in the final stages of publication and we have put in a substantial order from the printer.

1993 Oct: The international INFOTAB newsletter "InfoTopics" has a front-page story

World Health Organization under scrutiny

WHO BENEFITS from WHO? The Decline of the World Health Organization criticizes the top-heavy bureaucracy at the World Health Organization, the WHO's spending patterns, and its move away from its original mission of helping provide developing countries with the public health assistance crucial to their long-term development.

    The authors, Robert Tollison and Richard Wagner, suggest that WHO should concentrate on helping third-world nations where the great public-health need exists, instead of spending valuable resources on administration costs and on funding "western" campaigns such as those on drug and alcohol abuse, road safety and smoking.

1993 Nov: Dwight Lee gave testimony before the US House Ways & Means Committee on behalf of the Tobacco Instititue. He relied heavily on the Tollison/Wagner books and other cash-for-comments publications.

1993 Dec: /E The Tobacco Institute's paper "1994 Projected Expert Witness Needs".

This year is expected to present unusually heavy federal, state and media activity, and the total cost of presenting appropriate witnesses Is likely to be considerably higher than in 1993. It is anticipated that the current TI budget for 1994, with only $220,000 allocated to witnesses and submissions, will not be sufficient to meet the major needs for expert assistance.

The consultants described here are those for whom the Institute incurs significant expense for appearances, usually a per diem charge ranging from a low of $1,500 up to $30,000, plus travel expenses as appropriate. The "Anticipated 1994 Costs" are the total costs projected, including travel expenses.

    In addition, the Tobacco Industry Labor Management Committee will coordlnate assistance on tobacco tax and smoking Issues; the Committee bears any related expenses, and such requirements are not included here

Total Funding Required
The lowest amount that The Institute can hope to expend on federal, state and media witnesses In 1994 is $357,504. The high estimate for providing witnesses and support programs is $1,501,500. It is very likely that actual usage will be In the range of $750,000 to $1,000,003.

TAXES:
Federal Legislative Requirements
Congress is expected to hold one-to-two hearings on the tobacco tax increases for health care reform; One witness would be required for each hearing.
Economic Witnesses: Robert Tollison, Richard Wagner, Dwight Lee
Anticipated 1994 Cost: Per hearing $12,000 — Total $12,000 - $24,000

State Legislative Requirements:
Interest in general tax Increases will be tempered by elections in many states in 1994.However, tobacco excise taxes are expected to be high on legislators' lists of "user fees" for increases
Economic Witnesses: Same as above
Total number of appearances projected: 8 hearings and briefings
Anticipated 1994 Cost: Per hearing $10,000 to $15,000 — Total $80,000 to $120,000

Media Support and Other Events (Taxes): The Media Division is often asked to provide an expert on economic and social cost issues for in-depth responses to media inquiries. Furthermore, it is anticipated that TI will present at least one press conference or similar event on the tax issue this year.
Witnesses: Same as above
Anticipated 1994 Cost: Per use $2,500 to $10,000 — Total $10,000

1994 Jan: The BAT Bulletin (the company's internal newspaper) ran a major article "Who Benefits from WHO?" which praised the Tollison/Wagner report published by the UK Social Affairs Unit. It is fulsome in its praise for Tollison and Wagner, but forgets to mention that the company paid them for their anti-WHO activities.

    The main article carries sidebars with titles like "Time to redefine WHO", and "Block on protective research" — on the neglected study of Parkinsons and Altzheimers — which quote from an article in New Scientist (probably planted by tobacco) which says that

epidemiological studies have suggested that cigarettes can protect against these currently incurable disease, [and] that researcher, funding bodies and pharmaceutical companies have failed to follow up these leads because of the stigma attached to smoking.

1994 Jan 14: Sharon Boyce, the 'Issues Manager' [chief disinformation executive] at British American Tobacco (BAT) advises her Australian PR team leader on potential contracted economists for seminars to be held 'Down Under' with journalists and editors.

I have asked our consultants for suggestions for additional experts who could be of assistance in preparing submissions but I have to say that so far, only Tollison has been suggested.

    If you would like us to provide any contact with Tollison or Wagner, then please let me know as they are consultants to us and I have previously invited both to participate in our media seminar programme. If either were to be invited to Australia for the purposes of discussing these issues, then I would strongly recommend Tollison and not Wagner.

Wagner clearly knows his stuff and is able to write it down clearly enough, but he appears to be incapable of expressing himself lucidly in conversation and is the most awful presenter I have ever come across! Similarly, if you would like comments from either of them on ACIL's review, then please let me know.

1994 Feb: The Arise Arena newsletter produced by a fake scientific organisation dedicated to promoting the idea that tobacco is not addictive ( Associates for Research into the Science of Enjoyment) has a long article on the Tollison/Wagner WHO report.

1994 Projected Expert Witness Needs. 1994 Mar: Two copies of a Tobacco Institute document list scientific witness-payment and estimates for their core group of 'consultants' (one document has additional handnotes). The Tobacco Institute is responsible for ensuring presentation of credible expert testimony on tobacco proposals in federal, state and media and other arenas. This testimony often comes from independent contractors or consultants who must be fairly compensated for their time and expenses.     This year is expected to present unusually heavy federal, state and media activity, and the total cost of presenting appropriate witnesses is likely to be considerably higher than in 1993. It is anticipated that the current TI budget for 1994, with only $220,000 allocated to witnesses and submissions, will not be sufficient to meet the major needs for expert assistance. The consultants described here are those for whom the Institute incurs significant expense for appearances, usually a per diem charge ranging from $1,500 to $3,000, plus travel expenses as appropriate. The "Anticipated 1994 Costs" are the total costs projected, including travel expenses.     Tobacco Institute staff often provide testimony at hearings and such appearances incur costs for legal preparation and travel to state capitols. This type of witness need is not included in the following tally.     Covington & Burling provides a range of assistance in preparation of witnesses, review of testimony and written submissions. Costs for C&B assistance is noted here only when an attorney is the actual witness. The lowest amount that The Institute can hope to expend on federal, state and media witnesses in 1994 is $357,500. The high estimate for providing witnesses and support programs is $1,501,500. It is very likely that actual usage will be in the range of $750,000 to $1,000,000. Economist - Tax Issues. The State and Federal Legislative requirements for economic witnesses were estimated at $12,000 per hearing, with Robert Tollison (who charged $5,000), Richard Wagner and Dwight Lee (who presumably charged $3,500 each). Federal/State Legislative Requirements: Total hearing costs for economists in 1994 between $92,000 and $144,000. [Which makes their earnings for witness appearances alone between $40,000 to $70,000 per year each] Media support and Other Events: The same three economists charged between $2,500 and $10,000 per time to front at press conferences, and discuss 'economic and social cost issues for in-depth responses to media inquiries."       The TI had an annual budget allocation of $10 to $50,000 for these services. Smoking and ETS Issues ETS Science witnesses — Gio Gori, Maurice LeVois, Larry Holcomb [Note says:] "Used legislative — 3 hearings. 4 witnesses cost $22,0000 total." Ventilation witnesses — Gray Robertson, Simon Turner (both Healthy Buildings International (HBI)) [Note says:] "$120,000 to HBI pays all but expenses." Employer Liability Law — Victor Schwartz, John Fox. [Note says:] "Projected, 1 more hearing — 2 witnesses — cost $5-10,000."     Attached page says: "DC Area Indoor Air Quality Symposium, March 1994: also appearing (but paid by companies): Fox, Schwartz, LeVois. Federal Regulatory Requirements: Scientific witnesses to appear at OSHA public hearings: Alan Gross Maxwell Layard Maurice LeVois Paul Switzer Peter Lee Gary Flamm Gio Gori JohnTodhunter Mark Reasor Mike Guerin Joseph Wu Ronald Hood Ray Witorsch Phil Witorsch Gray Robertson Elia Sterling $3-500 per submission;       $5-10,000 per hearing Total $48,000 (no hearings) [Presumably this was a retainer fee] Total $230,000 (with hearings) [Note says:] "Covington & Burling projections — Witnesses $420,000 + Legal $550,000 = Total $970,000" State Legislative Requirements: were estimated at $30,000 to $90,00 for HBI, Holcomb, Fox and C&B. State Regulatory Requirements for the same group, plus Maurice LeVois involved 15 to 25 appearances at a cost between $2,500 and $7,500 er appearance... Anticipated Total $27,500 to $187,500 Media Support at State Hearings between $2,500 and $5,000 per time, up to $25,000 overall Scientific Analysis and Review Program: Through Covington & Burling, The Institute has provided its consultants with up to date information on ETS and IAQ science. This information has prompted additional research, comment and publications by these scientists, and provides them with the tools to prepare credible, timely testimony when required. The funding for the 1994 operations of the ETS literature database was encumbered by The Institute in 1993, so costs for 1994 will relate to the review and response to such literature and any new research to be prepared for use in the above federal and state arenas. Anticipated 1994 Cost: Per project $7,500 to $15,000 Total $75,000 to $150,000 Youth Issues, ADAMHA, and FDA Regulations: These required the support of Floyd Abrams, Burt Neuborne, Martha Rogers, Roger Blackwell, Scott Ward and Jolly Anne Davidson at an anticipated total cost of $45,000 to $300,000 [Note says] "Per hearing - $25-75,000 - High figure includes Abrams" Jolly Anne Davidson and C&B support was wanted tor 13 State Legislative hearings at between $2,500 and $5,000 each (total up to $65,000) Media Support for Surgeon General's report could add $50,000 Fire-Safe Cigarette requirements Required the services of C&B, and consultants Phil Schaenman, Fred Clark and Steve Spivak. Federal hearings at a per-hearing cost of $10-25,000 — Total up to $50,000 State hearings at per-hearing cost of $15-20,000 — Total up to $60,000 Incomplete Document with notes:

1994 Mar: The Tobacco Institute of Australia (TIA) has paid economics firm ACIL Economics (Aust) to produce a cost-benefits of smoking study in their country. This was theoretically an attempt to provide an 'independent analysis' of the economics of the cigarette business and its health implications in opposition to the (Collins/Lapsley) C&L Study made for the Department of Health which estimated that smoking cost the community $6.8 billion each year.

    ACIL determined that tobacco contributed $3.5 billion to GDP, and with excise taxes etc, the net benefits each year to the Australian economywas $12.5 billion — much more than the meat industry, and equal to that of the iron and steel industries.

    On the question of 'causes of death' (including 'death benefits') they say:

The difficulties in confidently attributing the cause of death in this analysis are widely recognised and understood, particularly in the context of tobacco.

    It is surprising, for example, that the caution sounded earlier by prominent researchers in the tobacco area, such as Tollison and Wagner in the United States, in their analysis of the economics of smoking, was not heeded. That work addressed specific challenges for research in attempting to attribute deaths to a single factor. They pointed to errors in medical reporting of the causes of death, joint causes (for example, exercise, alcohol, occupation), and the fact that nonsmokers can be afflicted by the same illness as smokers.

1994 Mar: The Tollison and Wagner calculations in "The Economics of Smoking" book were also assumed to be correct in the study conducted by Jane Gravelle and Dennis Zimmerman for the Congressional Research Service — which, itself, become widely quoted by the tobacco industry as an 'independent analysis'.

1994 March 16: A group of academic economists including almost all the members of the Tobacco Institute's cash-for-comments network sent an "An Open Letter to President Clinton on Healthcare Reform." This had been organised by David J Theroux, the founder and operator of the Independent Institute apparently with the assistance of an academic network member, Simon Rottenberg. [The institute was well-funded by the tobacco industry]. They say:

In The Open Letter to President Clinton, 565 economists and 76 other scholars from all 50 states and the District of Columbia state their firm opposition to any form of direct and indirect price controls in any healthcare program.

    Rationing Health Care: The New Threat of Price Controls, by Simon Rottenberg and David J. Theroux

In countries that have imposed these types of regulations, patients face delays of months and years for surgery, government bureaucrats decide treatment options instead of doctors or patients, and innovations in medical techniques and pharmaceuticals are dramatically reduced.

1994 Apr 28: Robert Tollison appeared before the US Senate's Committee on Finance giving evidence for the Tobacco Institute against cigarette taxes. He insists that, despite his TI connections: "the views I am expressing are my own."

• "...as a means of reducing smoking. Use of the tax code to induce conformity with socially approved norms of personal behavior is totalitarian in its implications."
• it would be unfair to make smokers pay through increased excise taxes for any health care 'costs' that they may impose by virtue of their chosen lifestyle. They are already more than paying their way.
• reducing consumption would result in increased unemployment nationwide, and reduce state revenues, which would trigger additional federal spending which would offset any "new" revenues.

• The Congressional Research Service (CRS) study (which had quoted extensively from him, in a circulatory self-referencing manner)
• Professor Dwight Lee, (network economist) on absenteeism
• Office of Technology Assessments (selectively)
• His own book with Richard Wagner (smokers are mainly blue-collar workers, therefore subject to other toxic influences)
• Professor Richard Ault (another network economist) on absenteeism.
• Price Waterhouse (paid contractor to the Tobacco Institute)

1994 May 2: John Rupp and Clauson Ely, two of tobacco's main conspiratorial lawyers at Covington & Burling have put together a list of "Proposed Consultants" that could be relied on to give testimony for the industry at a OSHA hearing. They divide the area of expertise into different categories:

• ETS [passive smoking's lack of] Health Effects:
  • Lung-Cancer: Paul Switzer [H], Genevieve Matanowski [NC], Maurice LeVois [H], Peter Lee [?], Max Layard [H], Joe Fleiss [H], Gio Gori [H].
  • Cardiovascular disease: Joseph Wu [H], Peter Lee [H], Meyer Friedman, Alan Armigage, Max Weetman.
  • Pulmonary effects: Phil Witorsch [H]
  • Reproductive effects: Ray Witorsch [H]
  • Irritation: Alan Hedge [H]
• ETS Exposure Analysis:
        Mike Guerin/Roger Jenkins (ORNL) [H], Larry Holcomb [H]; Keith Phillips [NC].
• ETS Risk Assessment:
        Gary Flamm/John Todhunter [H], Sorrell Schwartz [?]
• Ventilation Issues:
        Milt Meckler [H], Gray Robertson [H?]
• Economics and Other Impacts:
  • Dwight Lee (productivity and other issues) [H]
  • Lou Solomon (productivity and other issues) [sic actually Lew Solmon]
  • Bob Tollison/Dick Wagner (productivity and other issues) [H]
  • Phil Schaenman (assertions concerning accidental fires)

1994 June: Richard Wagner has written a treatise: "Tobacco Prohibition: An Economic Assessment." He compares excise taxes on cigarettes to the alcohol Prohibition movement of the 1920.

These people are clearly exponents of Chief Justice Marshall's famous dictum: the power to tax involves the power to destroy. For proponents of a smokefree America, outright prohibition of smoking is the ultimate goal. Higher taxes would stop short of the tobacco prohibition that a smokefree America would require, but the higher those taxes get the closer they would move us in that direction.

    Advocates of a smokefree America assume that tobacco prohibition is both achievable and desirable. Actually, it is neither. Tobacco prohibition would no more stop people from smoking than alcohol prohibition stopped people from drinking intoxicating beverages.

The prohibitionist warriors argue that the civil war they are promoting is justified because the costs of war are far less than the gains, and to be sure, the opportunity to eliminate a $70 billion evil would be worth some expense.

    However, a careful examination shows the common claims that smokers impose costs on nonsmokers to be fallacious. What we have in the case of the American Tobacco War is an army of generals, arms dealers, and their hawkish political supporters who are anxious to use their munitions regardless of the destruction they wreak upon people's jobs and livelihoods and upon American traditions of honesty, civility, and mutual respect.

Studies of smoking and health focus only on diseases where there is a positive attributable risk. However, there are numerous cases where there is a negative attributable risk associated with smoking.

    It is well recognized that smokers have a lower incidence of Parkinson's disease than do nonsmokers. Sterling (1975) reports a wide variety of diseases that are negatively associated with smoking, some of which are cancer of the tongue, senility, nephritis, diabetes, degenerative heart disease, vascular lesions of the central nervous system, and rectal cancer. A thorough use of the method of attributable risk would have to conclude that smoking is associated with an increased likelihood of contacting some diseases while being. associated with a reduced likelihood of contacting others.

1994 June: Richard Wagner has circulated his tome "Tobacco Prohibition: An Economic Assessment". It is an attack on the Clinton Administration and their health care reform program.

Each pack of cigarettes sold in America carries a tax burden that averages a little over fifty cents, 24 cents of which is taken by the federal government and the remainder by state and local governments. With an average retail price in the vicinity of $1.50 per pack, cigarette taxes raise the price of cigarettes by around 50 percent.

    This is an exceedingly high tax by anyone's reckoning. Yet it is not high enough for some people's appetites. The Clinton administration and various members of Congress have proposed to increase the federal cigarette tax by somewhere between 75 cents and two dollars per pack.

The prohibition of alcohol created disrespect for the law, launched modern organized crime in America, corrupted law enforcement, the court system, and politics, overburdened the police, the courts, and the penal system, and harmed people financially, emotionally, and morally.

    As a continuation of that path, the current War on Drugs is in reality a War on America: drug use is pervasive and increasing in almost every category, the toll on the justice and penal systems, as well as on the family unit, is unfathomable, and such constitutional guarantees as those of the Bill of Rights are only distant memories.

    A continued escalation of the War on Tobacco will intensify many times over the damages already wrought in this on-going War on America. Courts would be further clogged and prisons further overwhelmed.

1994 Aug 11: The Alexis de Tocqueville Institute has produced the final report by Kent Jeffreys, with S Fred Singer of SEPP [via Philip Morris's own PR-firm APCO], for the tobacco industry and other industries in a small climate-concerned coalition.

    This was a well-funded, and well-camoflagued attack on the activist concerns about Environmental Tobacco Smoke (ETS). However it hid behind the potential problems raised by the Environmental Protection Agency (EPA) over radon, pesticides and the Superfund toxic chemicals in the environment. It says:

" Science, Economics, and Environmental Policy: A Critical Examination" is an evaluation of the data, statistical analyses, and underlying scientific theories that underlie the Envirorunental Protection Agency's (EPA) policy decisions on environmental tobacco smoke, radon, pesticides and hazardous clean-up under the Superfund law.

    With the total costs of environmental regulations estimated to be $150 billion annually — or $1,500 per U.S. household — it is extremely important that environmental decisions be based on sound scientific analyses of potential risks to public health and the environment, and that the costs of environmental regulation be weighed against the benefits. [Note the lack of conculsions that it was even more important for American industry to clean up its act and stop polluting!]

    But as Dr John Graham of the Harvard Center on Risk Analysis notes, "While it may seem obvious that EPA should use good science, students of the Agency have documented that the Agency's leadership, when preoccupied with public fears and legal pressures, has sometimes allowed good science to be neglected."

• Gerhard Stohrer, Singer's partner in SEPP (the Moonie contact)
• cash-for-comments network economists: Robert Tollison, Richard Wagner, Dwight Lee, Gary Anderson, Mark Thornton, Robert Ekelund, Jeffrey Clark, and Richard Vedder
• Other economic professors, Michael Darby (UCLA), Thomas Hopkins (Rochester Inst of Tech), Michael Marlow (Cal State Poly Uni-San Luis)
• Nancy Bord and Thomas Gale Moore from the Hoover Institution
• Environmentalists Gordon Brady (Sweet Briar College) William Hazeltine
• tobacco industry consultants and well-known lobbyists Michael Gough. (Cato)

1994 Aug 11: The Alexis de Toqueville Report was first sent to the Tobacco Institute for approval. The Institute then advised its Management Committee about the success of its operation.

1994 Aug 31: /E The August 1994 activities report by Powell-Tate to RJ Reynolds for "Project breakthrough."
[Jody Powell was Carter's press aide and Sheila Tate was Nancy Reagan's assistant.

    Powell-Tate had now merged with O&M/O&RA and Savarese & Associates into Cassidy & Associates — but kept their names]

    This 'project' consisted of countering the anti-tobacco science with claims that it was all "junk" (They were running Steve Milloy and TASSC at this time — Philip Morris had bailed out.) and similar attempts to counter economic evidence of the cost of smoking,

Jody Powell is charging Reynolds for:

• Prepare media plan for release of Richard Wagner study.
• Review Richard Wagner study and media plan.
• Marked-up study and began to identify major themes/facts of the study to incorporate into a release, matte service article and radio actuality; call with Rob Meyne to discuss.
• Conducted research on the Richard Wagner study on tobacco prohibition for an op-ed by Robert Sobel [a history professor] of Hofstra University
• Wrote one-page backgrounder and summary of Richard Wagner study and distributed to account team for review.
• Placed call to RSM in Maryland to discuss the Wagner study. [RMS is possibly RJR's VP Sales, Richard M Sanders. It could just be Richard Mellon Scaife]
• Wrote an op-ed and did several rounds of edits for Robert Sobel and provided for review.
• Conversations with Tom Griscom [head of RJR Issues management] to discuss the op-ed and progress.
• Provided final copies of op-ed to both Tom Griscom and Professor Sobel; provided Sobel with instructions for placing an op-ed in the New York Times
• Reviewed Richard Wagner study to look for graphic ideas for inclusion in the release of the study.

1994 Oct 11: RJ Reynolds has issued a press release: Study shows that costs of tobacco prohibition equal to that of natural disasters Richard Wagner of George Mason University had...

... concluded that the prohibition of tobacco would cause an economic disaster on the scale of 16 Hurricane Andrews.

    Hurricane Andrew, which struck Florida and Louisiana in August 1992, caused an estimated $20 billion in damage and has been characterized as the worst natural disaster ever to strike the United States. The [Wagner] study assesses the economic losses that would result from prohibition on cigarettes.

    In the new report, "Tobacco Prohibition: An Economic Assessment", Dr Wagner puts the cost of tobacco prohibition in excess of $300 billion. "Tobacco prohibition would thus be equivalent to the simultaneous imposition of 16 or 17 Hurricane Andrews on the American economy," Wagner said.

    RJ Reynolds Tobacco Company commissioned the Wagner study to give independent empirical evidence to the company's claim that tobacco prohibition would be devastating both socially and economically. Robert Meyne, senior director, public affairs, at RJR said, "Dr Wagner's study clearly shows that tobacco prohibition would have a profound negative impact on this country.

    The economic toll on Americans would be devastating. But Americans could ultimately pay even a higher price in lost freedom. The precedent Washington sets with tobacco may well encourage the government to interfere with other private, lifestyle choices as well. That loss of freedom to choose should concern every American, no matter how you happen to feel about tobacco.

Dr Wagner believes that his study illustrates more than just the economic impact of tobacco prohibition. He says,

"It is when government strays away from its central duties to preserve and to protect, and to become instead a partisan proponent of particular causes or interests then civility becomes a casualty. The prohibition of tobacco products shows the degeneration of civility and liberty. We as Americans can work this problem out among ourselves. We do not need the heavy hand of government destroying jobs, livelihoods, and liberty."

"It is when government strays away from its central duties to preserve and to protect, and to become instead a partisan proponent of particular causes or interests then civility becomes a casualty.       The prohibition of tobacco products shows the degeneration of civility and liberty. We as Americans can work this problem out among ourselves. We do not need the heavy hand of government destroying jobs, livelihoods, and liberty." Richard Wagner exhibiting his talent for hypocrisy - Oct 1994

1994 Nov 1: Victoria Hughes, Vice President for Development at the Citizens for a Sound Economy Foundation, has written to Neal M Cohen, the Executive Vice President of APCO [& Associates] asking for a large donation to aid the CSE in tort-reform lobbying.[Cohen also ran American Tax Reform Association (ATRA) for Philip Morris — so this was an indirect appeal to Philip Morris who was well-known to the CSE.]

    She had been supported at their meeting by CSE executives Paul Beckner, James Gattuso, and Wayne Brough [The last is a minor cash-for-comments economist from the Uni of Central Florida].

Following up on our discussion, I am writing to outline Phase One of our research and educational efforts and to formally request that APCO underwrite our work with a grant for $63,000.
['APCO' was a surrogate for 'Philip Morris' because the cigarette company effectively owned the PR company via its boardroom lawfirm, Arnold & Porter (the origin of the AP Co. name)]

    As a first phase of CSE Foundation's efforts to educate citizens about abuses in the legal system, we would publish an economic analysis, as part of our Issues and Answers series. The study would frame the current rash of Medicaid litigation as part of an overall trend to redirect the judicial system from contract enforcement and property rights protection toward income redistribution or taxation. The study would also identify the relevant interest groups, assess the impact on taxpayers and consumers, and examine the potential adverse effects on economic activity.

    With a working title of "Assaults on the Rule of Law," we would publish the study in late November or early December. Dr Wayne Brough, economist and Director of Research at CSE Foundation, would write the study, which we would distribute to nationally and in targeted states to policymakers, journalists, business and community leaders, and others.

    To enhance the impact of this study, CSE Foundation would commission an academician with a law and economics background to author an Issue Analysis. We would commission the study potentially using an expert such as Henry Butler (University of Kansas), Thomas L DiLorenzo (Loyola College of Maryland), James Gwartney (Florida State University), or Richard Wagner (Center for the Study of Public Choice at George Mason University), as the author. [All long-standing cash-for-comments economists... how did she know?] We would distribute this analysis nationally and in targeted states to policymakers, journalists, business and community leaders, and others.

The donor shall receive no benefits (goods or services) from this contribution in order for it to be fully tax deductible.

1995: Wagner is now on the Advisory Board of the Independent Institute. When the cash-for-comments network begun to run down, many of the tobacco industry's economic projects moved over to this institute.

Robert Higgs, one of the cash-for-comments economists worked as the Research Director for the Independent Institute — and the tobacco companies gave them a health annual donation and also commissioned specific project work (mainly political propaganda).

SAMMEC

The software named SAMMEC (Smoking-Attributable Mortality, Morbidity, and Economic Costs) developed initially by James M. Schultz in 1985 and 1986 in conjunction with the Minnesota Department of Health, had been used primarily in one well publicized nationwide study — the National Status Report on Smoking and Health, 1990 (the "Sullivan Report" ) — and in various states in the United States.     SAMMEC II was developed in 1990 for purposes of evaluating populations (state, city, and national) in order to determine the so-called "social costs" of smoking.

1995: William Shughart III, another cash-for-comments economist has edited for the Independent Institute "Taxing Liberty and other "sins" : Predatory Politics and Taxation". It has chapters written almost entirely by cash-for-comments economists, including Richard Wagner.
[Beware... 626 pages]

1995 Apr 20: RJ Reynolds has produced a report labeled "SAMMEC - Recent Efforts" The tobacco industry had continued its funding of attacks on this economic model using the services of

• Theodor Sterling [their most productive scientific lobbyist from Canada];
• John Ashford [Uni of Exeter UK];
• Richard Wagner; Richard Ault and Robert Ekelund [All cash-for-comments network members];
• SAI [ Stanley Greenfield and Systems Analysis International] ;
• Jones Day Reavis & Pogue [lawyers];
• William Butler [Could be either WH or WJ Butler];
• Gary Huber [medical lobbyist] and Brigid Byrne [worked with Huber in Texas].

1995 July: /E Wagner has produced The Taxation of Alcohol and the Control of Social Cost

The Tax Foundation calculates that Tax Freedom Day now comes to America only in early May

    Until then the average American must work to support government. Only after then can his work go to support self and family. Stated differently, the average person devotes nearly three hours out of each eight-hour working day just to pay taxes.

1995 Oct 17: Diana Avedon who runs the media tours for the Tobacco Institute reports on the availablity of witnesses.

• Larry Holcomb has been highly praised by both the field staff and lobbyists. He brings knowledge and credibility concerning the ETS science and has been well received both in legislative settings and one-on-one's.
• Larry Halfen: Backing Larry [Holcomb] up when he has been unavailable, is Larry Halfen. While Larry Halfen had not been used extensively in previous years, Larry did exceedingly well out in Oregon on the state level, both in testifying before the legislature and one-on-one's with individual members. Larry also testified and provided written testimony in Columbus, OH. There are additional expert witnesses if either Larry is unavailable.
• Gary Robertson, Simon Turner, Peter Binnie, Jeff Seckler, (all HBI). Following up the science arguments with credible solutions, HBI continues to provide expert testimony in the area of ventilation and indoor air quality. In addition to legislative testimony and one-on-ones with legislators and council members, HBI did extensive work with the Denver Airport project, working with city officials in developing an equitable solution to accommodate smokers and nonsmokers.
• Dr [Gio] Gori has testified and met with bill sponsors with great success.
• John Fox has been instrumental in answering liability concerns. He has also written an op-ed and a letter to the California Restaurant Association.

Social Costs Tours.
Economists Bob Tollison and Richard Wagner will be on a media tour to promote their "social costs" book and to discuss the issue in general.

• April Trenton
• May St. Louis
• June Tucson

1996 Jan: /E An advisory on handling "Tax Arguments." is being circulating by the Tobacco Institute. It contains many admissions about their underhand dealings and their exploitation of ethnicity, class and discrimination to flog their propaganda:

• Economic Impact Study - The American Economics Group (AEG) has recently published a large study on the economic impact of the tobacco industry entitled "The US Tobacco Industry in 1994: its economic impact in the states." Economic losses due to any federal cigarette tax increase can be quickly estimated and enumerated for all states and the nation. AEG on fast notice can generate economic loss statements for all states. We currently have on hand the loss projections for a $1.00 tax increase.
• Regressivity: Key Studies - A variety of studies have been used to illustrate that cigarette taxes take a bigger chunk out of low income budgets compared to higher income budgets. A variety of studies by Peat Marwick for CART [Coalition Against Regressive Taxation] were done to portray the regressive impact of excise taxes.
        CTJ [Citizens for Tax Justice] also developed studies on regressvity. One study entitled "Nickels and Dimes" listed the regressive impact of major excise taxes by state and was used to a fair degree. The study is now dated and use has dwindled over the years.
        The most recent large effort was by Peat Marwick in 1993 that attempted to show the impact of higher excise taxes by listing the median household incomes by congressional districts. Median income is very low in a variety of key districts - often well below $30,000. The idea was to couple this finding with the fact that cigarette taxes would hurt the poor the most.
• Minority Groups - We have often used arguments that since blacks, Hispanics and women make lower incomes that excise taxes are especially harmful to such families. A variety of labor union and public interest groups make this argument on our behalf. The general approach is to compute excise taxes as a percentage of income paid by such groups compared to the "rich". The minority groups often pay 7 to 12 times higher than the rich.
• Rural America - We have used a study by Eckelund and Long [sic Robert Ekelund & James Long of Auburn Uni] to show that excise taxes hurt rural America more since average income of rural people is less than urban workers. Farm groups have carried this message for us.
• Blue Collar Discrimination - We have used the argument that raising cigarette taxes to fund deficits is often a way for the rich to dodge the deficit reduction bullet by passing the tax on the blue collar worker who spends more on these items as a percent of income.
• Earmarking - [Much more here] In 1991, we financed the publication of an academic readings book on the earmarking issue entitled "Charging, For Government: Earmarked taxes in Principle and Practice" edited by Richard Wagner.
• Tax Resources - Outside Groups
  
  • The Economist Program - We have a core group of approximately 7 to 12 economists who will write op-eds and testify for us at all levels of government.
  • Tax Foundation - This group is working on the cross border and smuggling issue. they will soon release a major study on cigarette tax evasion and smuggling. We hope to utilize them with op-eds, news releases and cross border studies.
  • AEG - This group will continue to work on our economic impact studies and will develop cross border studies at the state level.
  • [Alexis] De Tocqueville Institute - This group is on retainer to do work on tax issues. They were helpful in defeating federal tax increases releasing studies on Canada's cigarette smuggling problems. They were also quite helpful on the ETS issue releasing a major study in 1994.

1996 Aug 14: Excise Tax Forum: Philip Morris and RJ Reynolds were trying to put together a coalition of tobacco and alcohol companies and organizations to run a three-day "Comprehensive Inter-industry Forum on Excise Taxes", to be held early January 1997 in Palm Beach, the Bahamas, or Nassau.

    It would bring together "15 Leading Academics, 10 Industry Representatives, 5 Decision Makers, and 5 Representatives from the Public Policy Community [eg. think-tank operatives]."

    It would be funded by the tobacco companies through the Coalition Against Regressive Taxation (CART) [a tobacco front], but officially run by the Tax Foundation [A subsidiary of Citizens for a Sound Economy which is now known as FreedomWorks.]

Deliverables
The Excise Tax Forum will produce two immediate deliverables:

• A special journal supplement, and related articles summarizing the proceedings of the meeting. It is anticipated that this will be published in a scholarly economic journal:
• Press materials and video summarizing the meeting, and its findings.

    In addition, participants in each of the four workshops will determine at least one area for additional research. The result of each of these research projects will be an academic journal article and related press material.

Estimated Cost.
Provisions wIll be made to provide small honoraria to forum participants [those who attend, not just those who speak] and all expenses will be paid by the sponsors. These expenses include airfare, ground transportation, 2 hotel nights, and all food and sponsored entertainment.

    As currently envisioned, the cost for the Excise Tax Forum will be approximately $195,000.[Plus the cost of future research committed.]

    It is recommended that a small New York based boutique shop, Current Medical Directions (CMD), be hired to undertake this event.

1998 Dec 2: The Americans for Nonsmoker's Rights (ANR) have a newsletter called "Update" which carries news about smoking bans across America. RJ Reynolds is circulating the newsletter to keep their lobbyists informed. On page 6 of 15, they carry a column thanking donors:

We gratefully acknowledge the following contributors of $100 or more since our last issue of UPDATE.

[Which includes in its listing] Dr Richard Wagner & Estelle Wagner

[Alongside a story which begins] Two bodies have reinforced the scientific finding that secondhand smoke is a deadly substance....

Independent Institute

The Independent Institute, which is itself a component of the Atlas Group of ultra-free-market think tanks with links to the Atlas Economic Research Foundation and the Alexis de Tocqueville Institute [all heavily dependent on commissioned corporate funding from tobacco, oil, chemicals, etc.] appears to have taken over the role of administrator of the Tobacco Institute's cash-for-comments network at the end of the 1990s.     Their research director and journal editor, Robert Higgs, was already a member of the cash-for-comments network. Tobacco funding continued to flow to the Independent Institute which 'warehoused' these academic supporters, to insulate them from legal discovery. The Institute acquired the bulk of the cabal of cash-for-comments economists who were still operating, and some who had been retired: Senior Fellows Bruce L Benson, Florida State Robert Higgs, Independent Institute William Shugart, Utah State Richard Vedder, Ohio University Research Fellows Burton Abrams, Uni of Delaware Gary Anderson, California State at Northridge Dominick Armentano, Uni of Hartford Peter Boettke, George Mason Uni Thomas DiLorenzo, Loyola College, Maryland Robert Ekelund, Auburn Uni Lowell E Gallaway, Ohio Uni Randall Holcombe, Florida State Dwight Lee, Southern Methodist Uni Cotton 'Matt' Lindsay, Clemson Uni Fred McChesney, Northwestern Uni Mark Pauly, Uni of Pennsylvania Richard Stroup, Montana State Mark Thornton, Ludwig von Mises Institute Richard Wagner, George Mason Uni Bruce Yandle, Clemson Uni Also dozens of other academics and writers who provided independent contract services to the tobacco industry — like Richard Epstein, John Goodman, Peter Huber, Paul Craig Roberts, Paul Rubin, Peter Samuel, S Fred Singer. Russell Sobel, etc.

2013: Wagner his his own autobiographical pages at the George Mason University web site. But you won't find a word about his work for the tobacco industry here.

    It's worth a look, just for the laugh.

CONTRIBUTORS:in22 samf dlo2