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 John 'Keith' Watson was a cash-for-comment economist originally recruited to serve the tobacco industry by Professor Robert Ekelund at Auburn University. He served for a time as an assistant to Ekelund in running this subsidiary network, but entered the mainstream of tobacco money (the network run by Professor Robert Tollison and Jim Savaraese) for a while when he shifted to Louisiana.

The source documents for the network begin in 1985 with the Tobacco Institute document, "Federal Markets", which was sent to the Tobacco Institute's Regional and State Directors,.

It provided a long list of the likely allies the industry had among academic economists who could be paid to oppose the earmarking of cigarette excises for healthcare and for other purposes. The tobacco industry was particularly interested in economists finding ways to attack the Food and Drug Administration (FDA) which it always feared would attempt to regulate cigarettes as a drug.

The Tobacco Institute's contractors kept a registry of those academics available to write articles or letters on demand, provide witness services at legislative or local ordinance hearings, etc. or give lectures to various influential bodies — or have one-to-one meetings with legislators. They were never required to divulge the industry connections, and they were never required to make any outright statement in support of smoking ... in fact, the complete opposite. Those who could maintain proudly that they were non-smokers were seen to be more sensible, and to have more credibility with the gullible readers who thought that political influence involved brass-bands and flag waving zealots.

Writing economic and political op-ed pieces and letters to the editor were the easiest way for these academics to earn some quick cash without sticking their neck out enough to be noticed. In their articles they attacked the principle of cigarette taxes, not the taxes themselves. They attacked the idea of the FDA extending its mandate, rather than the question of whether nicotine was a drug.

Payments were laundered through a couple of channels linked to the George Mason University's Center for the Study of Public Choice and its director Robert Tollison, and also through a labor/economics lobbyist named James Savarese who worked for Ogilvy & Mather (PR) and sub-contracted through his own James Savarese & Associates.

The purpose of the network was to provide propaganda and lobbying services to the tobacco industry in all 50 US States, utilizing trusted and prominent academics at the local universities, and the scam ran very successfully for a couple of decades. It was considered influential enough for the Tobacco Institute to continue its funding when other projects suffered budget cuts. As a result, hundreds of op-ed articles appeared in many dozens of influential newspapers across America.

Robert Ekelund who was one of the core economists who supported this network, also developed a subsidiary group at Auburn University which appears to have specialised in speaking engagements (often as a group) at various regional economist's society meetings, presumably in an attempt to convert the members to the tobacco industry's causes. Keith Watson became part of this group.

For more background information on how Savarese, Tollison and the Tobacco Institute operated these networks, see:

• economists and other networks
  
• cash-for-comment academic economists
  
• Robert D (Bob) Tollison
  
• James M (Jim) Savarese
  
• Savarese's letter to op-ed writers.
  
• George Berman's original idea

Some key documents

• Economist. Auburn University, Alabama and later the University of SouthWestern, Louisiana.

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

First, the scorecard cn the project to get our economic consultants pitching op-ed letters on tax policy, including low-rating of excises: — 31 drafts completed; nine delivered to editors; six published or accepted for publication.

Back to our economists, some ten of them have started running economic seminars and pitching the resulting papers for publication in professional journals.

1984 Jul: The Tobacco Institute's Cigarette Excise Tax Plan.

The plan augments our basic lobbying efforts by relying on groups outside the industry — some not regularly associated with the industry — to argue against excise taxes for us.

    It is an ambitious program, based on the notion that many of the most effective protests against tobacco taxes will come from groups philosophically distant from The Institute. Many such groups agree with us on the excise issue, even though they disagree with us on other matters.

    At the federal level, supporting Congressional members from the tobacco states is essential to our lobbyists. The tobacco members consistently vote as a unified group — something that is rarely seen in Congress today. They are our lobbyists' most important resource.

    The program recommends that economic and other consultants assist us in developing, "packaging," and presenting our anti-excise arguments in legislative testimony or meetings with coalition members.

Resources:
Economic consultants with different areas of expertise will conduct research and act as spokespersons for The Institute and organizations supported by The Institute. Specific activities with economists are discussed throughout the tactics.

Tactics:

• Stimulate reputable public finance economists at key state universities to determine the validity of state revenue forecasts, perhaps on behalf of state business organizations and present arguments against excise taxes in various forums; e.g., meetings with potential coalition members or budget officials.
• Encourage economists to make the case against regressive taxation in meetings with potential coalition members and legislators.
• Retain public finance economists affiliated with non-profit organizations to research the subject and use their findings in forums such as:
  • Private meetings with state legislators or staff ;
  • formal testimony before government bodies ;
  • targeted media appearances;
  • speeches before business, civic, labor, and other groups ;
  • tax symposia in key states where the proceedings could be published for use in other states ; and
  • articles which raise the visibility of key arguments in the business, academic, and popular press.

Strategies:

• Presenting specific members of the House Ways and Means and Senate Finance Committees with arguments prepared by economists with whom they share some common interest; e.g college affiliation, service on the same commission.
• Gaining the support of Citizens for Tax Justice (CTJ), the most influential labor/liberal tax reform group in the country, in opposition to excise taxes.
• Relying on the AFL-CIO — via The Bakery, Confectionery, and Tobacco Workers Union — to ensure that the labor/liberal tax package that emerges in the next session of Congress does not include tobacco.

Appendix: A list of economists in key states who may be willing to act as industry and third-party spokespersons on the tax issue.
Following is a list of economists in key states who might assist us as experts receiving honoraria. We have begun contacting them to ensure their willingness and expertise. We are asking each about past experience; work with similar issues; previous work with the industry; published articles or research; and availability.

    Our intent is to have a group of individuals whom we can call upon as needed to testify, conduct special research and discuss their research projects and/or views on excise taxes with budget officials, potential coalition members, legislators and the media.

1984 Nov 9: The economists have suggested to Savarese that the Tobacco Institute should attempt to use economic forums to spread their propaganda in 1985. The TI should pay the network economists to attend and give papers at these forums. They have suggested:

• Public Choice Society, New Orleans, LA, February 21-23
• Eastern Economic Association, Pittsburgh, PA, March 21-23
• Southwestern Social Science Association, Houston, TX, March 20-23
• Western Economic Association, Anaheim, CA, June 25-29
• Southern Economic Association, Dallas, TX, November

It is important to bear in mind that these papers must be a cut above the testimony we produced for the Treasury hearings, but they do not have to be of professional journal quality.

    This is not to say that we wouldn't want to get several of these published independently in academic journals, but rather that this is not necessary in the majority of cases.

    Again, unlike the Treasury hearings, the authors would have to do a good deal of the research themselves. We would work with them to insure that the main points are made, but we do need them to commit some of their time to the production side. [Note how this is being spelled out. Clearly most of the research data in previous papers had been handed to the economists, with their papers or testimonials already written.]

In order to get on the program of these meetings , we will need to rely heavily on Bob Tollison, who has just been elected President of the Southern Economic Association for 1985.

    With the help of [Robert] Tollison, Tom Borcherding, and Hal Hochman; we can probably appear before each of these groups.

    If The Institute is interested in pursuing their idea, I am available to work with Tollison to draw up a brief one page outline for programs for each of these forums. I will check.with the economists we have used to ascertain their availability ahd interest — and any ideas they might have concerning specific papers.

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 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)

1986: Watson has produce a study guide to accompany "Economics" by Robert Ekelund and Robert Tollison. ISBN: [9780316231299]

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 Keith Watson
  Economics Department, Auburn University, Auburn, AL

Public Smoking/Witness: Local economists are available on two-weeks notice to provide economic testimony on the public smoking issue. Those economists who have testified or prepared op-ed pieces on the economic effects of public smoking are marked accordingly. The others may be briefed on the potential cost to government of implementing smoking restrictions.

Tax witness: [He will] "explain why excise taxes are regressive and unfair to consumers and unsuitable and unreliable as a means to increase the federal revenue."

    Those economists who have testified or prepared op-ed pieces on the economic effects of public smoking are marked accordingly. The others may be briefed on the potential cost to government of implementing smoking restrictions.

1986 Jan: The Tobacco Institute's Public Relations Resource booklet for their Regional Directors, lists documents, booklets, article, posters and people who can help them fight local public smoking ordinances and threats to raise the excise taxes on cigarettes.

    It provides a long list of economists who are willing to speak at hearings, or write letters to the editor, or op-eds for the newspapers to counter the public smoking or excise tax threat.

    It lists him as:

• Professor Keith Watson, Economics Department, Auburn University, Auburn, AL
  (Professor Robert Ekelund from the same University department is also listed)

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 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 July 9: Robert Ekelund's private economists coterie at Auburn University is now attacking the decision of the General Service Administration (GSA) to ban smoking in Federal government buildings. In speaking out, the economists claim that they are concerned with economic consequences for the nation :

• Our general concern is that the costs of such a regulation will ultimately fall on taxpayers.
  
  
• The most obvious costs of the regulation are those for physical alterations to the several thousand buildings that will be effected by the regulation. We would imagine that No Smoking Except in Designated Areas" would have to be placed at all entrances, and that "Smoking" and 'No Smokirrg" signs would have to be posted throughout GSA-controlled buildings.
  
  
• A major cost of this regulation would result from a loss in productivity of federal workers.
  
  
• Implementation of this regulation would require a great deal of time by
      administrative personnel. The regulation would of course lead to disputes
      which would also involve valuable time of both employees and administrative
      personnel.
  
  
• In addition the regulation will be disruptive and lead to discrimination against minorities and low income employees.

[For some reason, this 'cost-benefit analysis' left out all the benefits. There is no mention of the benefits in worker's health or the reduced cost of building operations and maintenance in having a smoke-free workplace environment!]

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.]

1989 Nov 30: James Savarese and Bob Tollison are still organizing economics seminars through the same scientific organisations 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 5: James Savarese is sending a bill to the Tobacco Institute for his own fees ($18,500) and the detailed out-of-pocket expenses for his group of economists speaking at the "Southern Economic Association Meeting" Nov 19—22 in Orlando Florida.

• James Savarese — $1239
• Robert Ekelund — $1271
• John D Jackson — $1029
• Richard Saba — $843
• Richard Ault — $1002
• Mark Thornton — $428
• Henry Butler — $983
• Keith Watson — (will send later)

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.

1989 Dec 12: James Savarese is being paid $84,922.49 by the Tobacco Institute for a number of invoices, including the one for the economists meeting.

    This correspondence specifically mentions Keith Watson's expenses of $489.80 (travel and meals) for "the Southern meeting"

1990 Mar 21: Watson is to be a discussant at the March 31 economists meeting, These comments on The Political Economy of Tax Earmarking are to be presented at the Southwestern Social Science Association Meetings, March 31, 1990.

    Tollison, Wagner and Lee are to give papers on cigarette excise taxes at this meeting, and the discussant's comments are mildly critical of all (as would be expected). Watson's paper appears to be a luke-warm defense of tobacco.

From the contributions of these papers plus my own observations, the arguments that support cigarette excise taxes and/or earmarking as positive government policies to correct market failure due to external costs, fall into three categories:

1990 Sep 12: An even more extensive list of Auburn's own cash-for-comments economists has been lined up for the Southern Economic Association Meeting in New Orleans, November 1990. The (draft) title of the session is "Economics of Smoking".

• Robert Ekelund (Auburn Uni) is still chairman of the session
• John Jackson, Richard Saba, and Richard Ault (all Auburn University) have papers
• Suggested discussants are John Keith Watson (ex Auburn) Mark Thornton (Auburn) and Joseph Jadlow (Oklahoma).

1990 Oct 31: Ekelund has sent Savarese his "Proposed Program for SouthWestern Social Sciences Association Meeting" for approval. He will chair the session to be called "The Political Economy of Dedicated Taxes"

    It will have papers by Dwight Lee, Robert Tollison and Richard Ault. Also Mark Thornton, John Keith Watson and John Jackson will be discussants.
[All cash-for-comments academics. Watson is now at the University of SouthWestern Louisiana]

1990 Nov: Another meeting of the Southern Economic Association (New Orleans) on the subject "Economics and Smoking" has most of the economics faculty at Auburn University on the agenda:

• CHAIRMAN: Robert B. Ekelund, Jr., Auburn University

PAPERS by

• "Forecasting U.S. Excise Tax Revenues Under Smoking Constraints" John D. Jackson, Auburn University
• "The Economic Effects of Cigarette Bootlegging Across State Lines" Richard S. Saba, Auburn University
• "The Economic Costs of Smoking: A Critique of the Conventional Wisdom" Richard W. Ault, Auburn University

DISCUSSANTS

• John Keith Watson, University of Southwest Louisiana
• Joseph Jadlow, Oklahoma State University
• Mark Thornton, Auburn University

1991 Mar: Watson has written a critique of a Dwight Lee speech on Tax Earmarking made at the Southwester Social Sciences Meeting in San Antonio, Texas. It appears to be only for internal Tobacco Institute use.

1992 Sep: "The Economics of Sin and Redemption: Purgatory as a Market-Pull Innovation," by Robert Ekelund and John Keith Watson. Journal of Economic Behavior and Organization (September, 1992)

CONTRIBUTORS:ajw2 samf dlo2