USA

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

OPINION ONLY

Professor Richard Zerbe became recruited into a clandestine network of academic economists who secretly worked for the tobacco industry through the Tobacco Institute.

The network was set up in November 1982 by James Savarese (working through his own company and Ogilvy & Mather PR) with later expansion nationwide through Professor Robert Tollison of George Mason University. It operated under Savarese and Tollison until early 1999, when the remnants were handed over to the Independent Institute to run

Tollison and Savarese acted as contractors and cut-outs, using the Center for the Study of Public Choice at George Mason University ( GMU), to provide the adminstration staff. They recruited ultra-libertarian economics professors at the major state universities through the Public Choice Society and various regional economics societies.

The problem is not that these scientists were ultra-libertarians, and that many of them were proto-Tea-Party disciples of Ayn Rand, Frederick Hayek and/or Ludwig von Mises. Nor was it necessarily made worse by the fact that the industry they helped prosper made a product that caused the premature death of about four million people globally each year.

The problem is that these academics

• exploited their trusted position as teachers at trusted universities to promote dubious corporate view-points contrary to the public good.
• they hid their corporate links from the university administration and staff, and from the public which ultimately paid their salary.
• they exploited for their own financial benefit the public trust invested in universities in general, and these institutional reputations for trustworthy research.
• they allowed the tobacco industry to preview, edit and alter the reports they wrote, which made them into industry propaganda.
• they wrote op-ed articles which were planted on their local newspaper — deceiving both the editors and the readers,
• they maintained the claim of being 'independent academic/scientists' when dealing with politicians after being coached in what to say by tobacco lawyers.

Over a hundred professors of economics at major American universities were successfully recruited by Tollison and Savarese into these cash-for-comments network, and many of them remained in service to the tobacco industry for many years. Others only served for a short time, and then dropped out voluntarily ... or were found to be unreliable or unsatisfactory.

They were not paid retainers or salaries, but were erratically commissioned to perform specified functions (usually for $1000 to $3000 per project) when the tobacco industry came under attack. Some earned much more — often in the $20-40,000 range — for producing 'independent research' which was customised to produce the desired results.

Payments were never made directly from the tobacco industry to the economists. Commissions were all carefully laundered through Savarese's company or Tollison's GMU operations — and so the economist (wrongly) assumed this would provide deniability if ever challenged over selling out their academic credibility to the merchants of death. They didn't bank on the courts releasing 7 million tobacco industry documents to the public archives — with files which documented their surreptitious dealings.

Some key documents

• Professor of Economics at the University of Washington (State)

1979: The Resume of Richard Tollison shows that he has contributed to Research in Law and Economics journal which is edited by Richard Zerbe.

"Toward a Theory of Government Advertising" (with K. Clarkson), in Richard Zerbe (ed.), Research in Law and Economics (Greenwich, Connecticut: JAI Press, 1979),

1981: Joined Evans School of Public Affairs at University of Washington as an Associate Professor. See his 2001 CV. He is listed here in 2001 as

• Daniel J. Evans Distinguished Professor,
• Daniel J. Evans School of Public Affairs
• Adjunct Professor, School of Law
• Director, Center for Benefit-Cost Analysis

1990 May: This is a list of the newspapers designated to certain economists on the network. They are to attempt to plant an op-ed article opposing "Excise Taxes" on this local newspapers.

WASHINGTON
Richard D. Zerbe, Univ. of Washington

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 Aug 13: Carol Hrycaj, the network supervisor at the Tobacco Institute, has sent her boss Martin Gleason a SAD [State Activities Division] media request for help in Washington state. They need to counter both anti-smoking publicity by the Department of Health and the plans of one insurance company to offer lower premiums to non-smokers.

Robert Tollison and Richard Wagner have also written a book which the tobacco industry is promoting by paying them to conduct media tours of various US states under the control of PR company Flieshman-Hillard. Other network economists are also promoting Tollison, Wagner and the book.

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 authors' 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 anti-excise 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 [Dwight] 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.

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 U n i v e r s i ty
    SOUTH BikEOTA, Dennis lain, Augustana College
    TENNESSEE, J. R. 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

1993 Mar 23: Jim Savarese is proposing to Cal George at the Tobacco Institute a new Op-ed program.

Outlined below is our proposed op-ed program in opposition to the use of excise taxes to finance health care.

1. Op-ed article by Robert Tollison to be submitted to Wall Street Journal $ 4,000.00
   
   
2. Rebuttal article by Bob Ekelund, Auburn University, to be submitted to the Birmingham News $ 3,000.00
   
   
3. "Monster" tax op-ed project using twenty economists (list attached) to submit articles in opposition to using excise taxes on cigarettes to finance health care reform - to be submitted to twenty newspapers in twenty different states $60,000.00
   
   TOTAL $67,000.00

1993 May 2: Savarese's status report on the "Monster Tax Op-ed Project". This was a major project aimed at discrediting the Clinton Health Plan which was to be financed partly from raised cigarette excise taxes. These lists of network economists show how successful they had been in planting their op-eds on local newspapers.

WASHINGTON
Prof. Richard D. Zerbe, Jr.
The Graduate School of Public Affairs, DC-13
University of Washington Seattle, Washington 98195

Submitted to: (rejected) Seattle Post Intelligencer
Resubmitted: Seattle Times

Sending op-ed on 5-21-93
Received   5-28-93   [by Savarese from Zerbe]
Sent to Cal [George]   6-1-93   [Savarese to Tobacco Institute]
Sent ltr for rewrite   6-4-93   [They wanted him to make major changes]
Sent revised to Cal   6-8-93
Cleared

1993 May 24: The Tobacco Institute has received two more op-eds from consulting economists on the "Clinton Health Care economic plans." Zerbe is still promising to send his draft article

1993 June 3: Zerbe has sent in his op-ed and it has been initially sub-edited at Ogilvy & Mather PR. They then send it along to Jim Savarese with the note

Jim,
Please read the attached.

    It raises two fundamental policy questions:

1. do we want to be associated with a piece that seems to advocate the legaliaation of presently illegal drugs?
2. do we want to be associated with a piece that so forthrightly bashes the use of alcohol?

Do you see any simple ways to fix these problems or is this a rewrite situation?

1993 June 16: Ogilvy & Mather faxes the Zerbe article to Cal George at the Tobacco Institute.

I have made all the changes you recommended. Can this go to Zerbe, or does it need to go to lawyers?

1993 June 17: Richard Zerbe's second attempt at an op-ed attacking the Clinton Health Care plans was 'cleared' after editing by the Tobacco Institute. It was titled "A Health Care Tax on Cigarettes".

    He uses the old PR ploy (sanctioned by the tobacco industry) of positioning himself as an anti-smoker in order to obtain credibility for his economic opinions. But clearly he overdoes it, judging from the Tobacco Institute's changes. The draft article, which has still to be retyped, now carries a lot of black ink.
[ Bold inserts/strike out redactions]

• I find smoking a noxious, unpleasant and unhealthy habit. People should quit smoking and our children should not smoke. But should we finance health care by a tax on cigarettes ?
• It is only fair for society to strike back by imposing high taxes on those that cause harm to/impose costs on the rest of us, right?
• [The arguments of non-smokers] would be be stronger if it had not been demonstrated that existing taxes did not cover/already cover the cost smokers would seem to impose on the rest of us.
• [The estimated total tax will lessen] especially considering that less and less people are smoking each year; the 24% estimate [of smokers] will drop each year as smoking becomes more and more socially unacceptable.

• Considering our federal government's past involvement with the tobacco industry, one wonders if additional subsidies for tobacco producers and processors would suddenly become necessary.

1993 Aug 3: This is a series of lists dated from March to August 1993. Savarese's staff have sent these to the Tobacco Institute to progressively report successes and failures with the economists writing op-ed pieces and having them published.

    Collectively they give us a good idea as to how the network worked and how litte they managed to plant on the major newspapers (the smaller local papers were obviously easy.) It's also interesting to observe the mechanical processes and the tight control the tobacco industry and its lawyers exerted over these academic lackies.

• The articles were either rejected, revised or passed by Jim Savarese and his staff
• They were then sent for checking and alteration by Calvin George [Cal] at the Tobacco Institute.
• The lawyer David Reemes who worked for the industry's main Washington lawfirm Covington & Burling then cleared them for publication.
• The economist then received the revised copies back for onward transmission to the selected newspapers.
• They would then send a copy to their local Congressmen without mentioning the tobacco industry's contractual arrangement.

WASHINGTON
Prof Richard D Zerbe Jr, The Graduate School of Public Affairs, University of Washington, Seattle
• Mar 23 — [TI designated newspaper/s] Seattle Post Intelligencer
• Apr 9 — (No Information)
• May 12 — (No information)
• May 18 — Sending op-ed on 5/12/93
• June 2 — Received 5/28/93 — Sent to Cal [Tobacco Institute staffer] 6/1/93
• June 14— Received 5/28/93: Sent to Cal 6/1/93; Sent letter for rewrite 6/4/93; Sent revised to Cal 6/8/93. (Cleared)
• Aug 3 — Submitted to Seattle Post Intelligencer (rejected)... resubmitted to Seattle Times

1995: The Washington State franchise for a cash-for-comments economist was transfered in 1995 to Bob Higgs of the Independent Institute. He was given the job of getting material published in the Seattle Post Intelligencer.

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