The corrupted tobacco economist network Part 65 - Conclusions

 Overview of previous posts here

It is clear all the economists were fully aware they worked with the Tobacco Institute. Yet still I think it is possible when joining the network, some of the economists presumed they were sought to nothing but expressing their worldview. They were part of one big corporate conspiracy though, even if in the beginning not all of them might not have realized this themselves.

The tobacco industry used and exploited the libertarian bias of the economists. And the industry knew they would write the conclusions wanted by the industry. Before even contacting one, the industry was sure it would find a guy concluding taxes are evil, and that guy would be publishing it in a journal. It's not hard to find out why the industry was so sure: libertarians always conclude there shouldn't be taxes or tax-increases. The industry simply exploited their predictability.

George Berman's testimony in court shows the tobacco industry exploited Robert D. Tollison's libertarian bias to recruit him. The Tobacco Institute never told Tollison he needed to defend the tobacco industry. Instead, they fed him arguments so Tollison would come to that conclusion. in the words of Berman "we had focused a leading economist's mind on this particular problem and he was now able to be a spokesman for the solution he had come up with". Question: independently ? Berman's answer: "independently".

Of course Berman's answer "independently" isn't entirely correct: the industry fed his bias, and by doing so has been able to alter his mindset, picking up the tobacco issue. While Tollison indeed may have concluded for himself taxing is evil, his conclusion wasn't entirely independent.

The extremist worldview of the economists is obvious, and as shown even the industry sometimes had doubts on this worldview, afraid it could harm the industry being associated with people attacking tax-increases with op-eds like the one by Cotton Maher Lindsay titled excisetaxes: fascist finance, effectively comparing tobacco excise taxes to the practices of Italian fascism under dictator Benito Mussolini. A bit far-fetched, no? 

Or what to think about thois one; Tollison and Wagner writing the op-ed scientific integrity consumed by anti-smoking zealotry.  The same year the corrupted Tollison wrote a letter to the editor stating

Do remember this was written by a man heading a corrupted network, earning him well over 1 million dollars. Shameless. 

Yet at the same time, the extreme views are exactly the reason the economists were recruited. As shown, Philip Morris was interested in Dwight R. Lee *because* he was an extremist, writing giving the EPA authority over indoor air "would be likegiving a machine gun to a child".

The industry never asked Lee to take such positions. Whatever a scientific viewpoint is, there will be always be a deluded naysayer. The industry's tactic, seen in all the headhunting documents, is always showing the same pattern; the industry deliberately searches for nutcases, then giving them lots of money and making sure they receive media attention. To the laymen, the illusion then arises these extremists ' viewpoints might mean there actually is a scientific discussion. This is the doubt the industry wanted to create, because many people think when two different opinions exist, both must have some merit; Quod non, one can be completely wrong.

Were the economists corrupt ? Were they lobbyists, or just a pragmatic free-marketeers: was libertarianism the motivation driving the economists ? Or were they really for sale ? The Legacy Tobacco Documents Library doesn't provide a clear answer to these questions. Ultimately, it depends on the definition of corruption: the first thing we think of hearing the word probably will be: people doing or telling things they wouldn't do if not being paid.

Following that definition, it is clear some economists were probably dishonest: they signed things they  knew were flawed (Poulson), or lied being independent citizens (Militello). But this necessarily mean they defended work they did not believe in at all.

There's also another form of corruption: people being paid to tell ... exactly the same thing they would be saying if they would not receive money. In the case of the economists, I think it's clear that if they would not have accepted money from the tobacco industry, they still would be objecting any form of taxation.

This form of corruption isn't so much about whàt they said, but what they did not say. The website ScienceCorruption.com has done a tremendous job looking at the activities of the social cost consultants, giving a chronological order of the documents regarding the individual members. In 2011  Dominick Armentano wrote an error loaded reply (at the bottom of the page) addressing one strawman after another.

I guess the most interesting part in Dominick Armentano's reply, is the mere fact Armentano thinks his actions are defendable.

His answer misses a couple of points. ScienceCorruption's reply summarizes the entire problem with the activities of the network:

And those five points imply that every member of the network who ever delivered any output for the industry was corrupt.

Some economists seem to never have produced anything for the industry. But they accepted to join a network knowing they would be working for the industry. And several economists in the network accepted they would testify if being asked so by the industry. The fact some were never asked to testify, doesn't alter the fact they accepted to deliver testimonials if they would be asked to. It might not have been illegal (I don't know the american legal system), but it is clear there are some moral problems with their activities.


Further Research

Even though this series of blogposts isn't exactly short, there's much more to add to the tale of social cost and the economists network.

I have not fully explored the fact so many economists belonged to just two universities (George Mason University and Clemson University). What exactly was the role of GMU and Clemson ? Were these university aware of their activities ? What's the connection between the think tanks and GMU, the connection with the libertarian foundations, etc.

Another open question is how the economists ended up in think tanks. Did they join voluntarily ? Were they asked ? Is it coincidence they all ended up in the same think tanks, while there are literally dozens of right wing / free market think tanks ? Were some think tanks obliged by the industry to take the economists aboard ?

The 1984 Excise plan indicates the industry did not just want economists, but also wanted to recruit lawyers. We know there were attempts to create the network, but was it ever fully established ?

What was the role of the people "not on PM's list" ? Why does this document carry this strange heading? Were there other fully developed networks ?

We know some economists dropped out the network, but don't always know why. It is clear some were sacked, but were there any network members whose conscience came to play ?

On top of that, I'm pretty sure i did not discover all documents in the LTDL: the documents in the LTDL have been scanned and automatically converted to text, but the conversion sometimes failed, with letters getting switched etc. p. ex. Tollison can be found in the database as Tollison, but also Tol!ison, Toiison, Tollis0n, etc... This makes it difficult to find the right search queries...

One thing is clear: lots of questions remain unanswered...

Corrupted tobacco economists network, Part 34: promo-tours all over the USA

Overview of previous posts here

Promo-tours all over the USA

The Ogilvy and Mather promotion plan from previous blogpost effectively was executed and Robert D. Tollison and Richard E. Wagner started making media trips to promote Smoking and the State: Social costs, rent seeking, and public policy, just as the strategy dictated.

In 1992, the industry planned a new media tour to promote the book The Economics of Smoking. The document looks back on the 1988/1989 media tour

Assuming the economists earned at least $3,000 per tour stop (see appendix, to be published at the end of the blogseries), the authors must have earned well over $100,000 (on top of the $20,000 for writing the book).

PR-firm Ogilvy and Mather helped Tollison, giving him advice on how to communicate with the press

And some more advice in another letter

As always, the industry was evaluating the economists

The media tour results pleased the industry as the authors spoke with lots of media. 

In 1995, Tollison and Wagner participated in another media tour, though it is not clear from the LTDL which book they presented. The Economics of Smoking dates from 1992, so there may be a missing publication.  It is not clear also why Tollison and Wagner received more media training from PR-firm Fleishman-Hillard in 1991

The LTDL has some examples of the interviews, showing Tollison’s one sided argumentation

Corrupted tobacco economists network, Part 33: Robert D. Tollison writes more tobacco books

Overview of previous posts here

Robert D. Tollison writes pro-tobaccco books, part III

Smoking and the state (1988)

The executive summary for this book was written by the Public Relations firm Ogilvy and Mather, but the Tobacco Institute did not like their work and rewrote the piece

The book had a clear purpose

Promoting smoking and the state

PR-firm Ogilvy and Mather designed the campaign to promote Tollison's and Wagner's book Smoking and the State: Social costs, rent seeking, and public policy

Tollison and Wagner agreed on the program presented by Ogilvy and Mather

The tobacco industry always tried to hide that it was lobbying with the aid of 'independent' academics. The scientists in the ‘Social Cost’ category usually were strictly separated from the ‘truth squads’ and the witnesses in these programs never appeared at the same place at the same time. This way, the industry wanted to create the illusion that different categories of scientists in non-related fields opposed the government's tobacco-regulations.


Reality was different: both the ‘tax’ and ‘truth squad’ academics took part in media tours set up by the industry. Ogilvy and Mather organized both tours, in one controlled operation and often mentioned both media-tours in one and the same memorandum, e.g. the memorandum written February 15, 1989

Similar notes were written on (small selection): February 1, 1989, on April 11, 1989, on August 17, 1989, etc.

There's one exception to this rule of separating thruth squad and the economists: when the American Medical Association held a meeting and the industry only became aware of this conference one month in advance. Probably because of a time constraint Tollison and David Weeks were touring at the same place and time.

Just as with legislative testimony, the Tobacco Institute did follow up how the scientists coped with their lobbying:

Corrupted tobacco economists network - part 26 : organized op-ed campaigns in newspapers

Overview of previous posts here

Op-ed campaigns

A memorandum written by Tobacco Institute's Fred Panzer explains why the industry launched severalop-ed campaigns.  This memo strongly implies the op-eds were not written whenever the economists felt like writing something.

The campaigns were given different names like Phase II (also involving some "scientific papers").  In 1993 there was the monster op-ed campaign, etc...

The LTDL shows the industry paid a small bonus (900US$ for an Op-ed, only 125 US$ extra for forwarding it) to the economists sent an Op-Ed to their local politician, not just to a newspaper.  The industry specified the recipients. In states where the industry 'owned' more than one economist, they were given different politicians to contact. Panzer wrote

The op-eds also proved to be a handy instrument for the field lobbyists

The free-market economists were supposed to write something against excise-taxes, but were not completely free to write anything. The industry dictated that they  had to mention

-         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.

The last bullet refers to the argument "They are simply modern versions of the onerous British taxes which America's founders fought against". That is pure emo-argumentation.

Of course, op-eds had to be cleared by the Tobacco Institute's lawyers

As mentioned before, (at least the 1985) op-eds were also corrected by the PR-firm Ogilvy and Mather before the economists were allowed to send them to newspapers.

Nevertheless, even though the network members weren't free to write what they wanted, the Tobacco Institute did not erase every passage it didn't like. Again, this had a purpose 

Still, sometimes letting things the industry didn't like through, did not mean the Tobacco Institute let everything slip through. Fred Panzer of the Tobacco Institute wrote

The last line in this memorandum is more important than it may sound: it is the message the tobacco industry used to find business-partners.  The tobacco industry would try to scare other companies telling them something like "if the tobacco industry is going down, you're going to be next"

Again, as with the testimony, the output of the economists was closely monitored by the Tobacco Institute

(...)

The economists must have known it was bit strange they would receive more money if they would write their senator, once again disproving the thought they might have been useful idiots. Not all economists sent a copy of their op-eds to their Senator. Why not all of them tried to earn the extra cash is open to speculation.

The 120+ corrupted tobacco economists network - Part 21 of many

Overview of previous posts here

Ryan C. Amacher

The Ogilvy and Mather report of a meeting held april 29, 1985 is interesting

Ryan Amacher indeed signed the piece corrected by PR-firm Ogilvy and Mather

In 1988 Northwest Airlines became the first American airline company to ban smoking on domestic flights. Ryan Amacher wrote

Even without checking Amacher's data it is obvious that the things he mentions are not related to a smoking ban. But where did his arguments come from? The Tobacco Institute's president Samuel Chilcote wrote a memorandum explaining how the tobacco industry responded to the announcement of the smoking ban

Ryan Amacher wrote exactly what the Tobacco industry wanted him to write.

Tobacco economist professors network, Part 11: independent political testimonies ?

Overview of previous posts here

Political hearings

The Tobacco Institute wanted economists to testify for legislators to create the illusion that "the academic world" opposed excise taxes on cigarettes. The August 1986 Field staff evaluation of resources explains why the industry used this form of lobbying

The field staff evaluation also explains why the industry desperately wanted to 'own' an economist in every state

The industry taught the economists how to communicate and frame their message.

As the next blogposts will show, one can question the legitimacy of the testimony, as not all economists were always defending material they wrote, or even believed. At least 27 members of the network participated in hearings

The first hearings

The TI Excise plan is from 1984, and already in the same year the first economists testified. It is not certain how the industry persuaded them, and setting up the 'official' network seems to date from 1985.

The PR-firm Ogilvy and Mather reported

This makes clear the academics worked under a well defined strategy, even though at that point they may not have been aware of this. The Tobacco Institute wrote

Actually this summarizes the entire activities of the network. Even though in the next chapters there are further examples raising questions about the honesty of some network members, it is likely most of the economists never said anything they did not believe.  They were paid to say what they would have said anyway, as they were libertarians opposing any form of taxation in any case.

The problems with the network were:

• the industry diverting the economists' attention to tobacco
• the economists forgetting to mention they were being paid
• the economists giving the industry material for their field lobbyists

This may not seem much of a problem, as the economists might have said the same if they were not paid.

It is not that simple though: by funding the economists, and promoting their output, the economists 1) created much more pro-tobacco output than they would've written if they were not paid 2) received much more attention than they deserved. And this was exactly what the industry needed: the massive output of the economists created a false balance. It was not all that important whether or not the economists' arguments were correct: the mere fact the economists opinions existed was enough to fit the message of doubt the industry wanted, because most people tend to believe when two different opinions exist, both must have some merit. That is incorrect: one of the opinions can be completely wrong. 

Preparing the economists

Ogilvy and Mather's annual report shows the PR-firm identified public smoking and creating doubt as the most important instruments in lobbying. Other LTDL documents show manufacturing doubt on health risks always was the industry's main focus.

The program around taxes emerged as the second most important issue. That's where the economists come into play

Tobacco Institute's lobbyist Dave Krogseng wrote to network economist Raymond Raab explaining to Raab what to say

  

This letter clearly illustrates the economists were not expressing their personal views but were acting as lobbyists. 

During the years to follow, the economists testified at many hearings, often local ones. This was the main reason the TI wanted to recruit an economist in every state, so politicians would not have the feeling some 'corporate scientists' were flown in from some far away metropolis.

Of course the testimonials were not the work of independent academics: the industry was aware in advance of the testimonials’ content. In 1985 Tollison forwarded Thomas Borcherding's draftstatement to the Tobacco Institute after the hearing, but the industry also knew what would've been said in hearings that were cancelled

Telling the tobacco industry what the content of your testimony will be cannot be considered as normal academic behavior. 

It is clear why the industry wanted copies of the statements: testimonials were not just useful on the day of a hearing itself, the industry also wanted to use the statements of the economists after the hearings

The tobacco economists network - or how the Tobacco Institute recruited over 100 American economics professors. Part 7 of many

Overview of previous posts here

The social cost consultants

The Tobacco Institute's Cigarette Excise Tax Plan teaches us why the industry recruited the economists: the industry needed people with academic credibility telling legislators that "social cost" based actions were based on flawed argumentation and that taxes are evil.

Setting up the network

The task to set up an economists network was given to a subcontractor: James M. Savarese of consultancy-firm James Savarese & Partners. He worked closely with professor Robert D. Tollison. The PR-firm Ogilvy & Mather was hired to promote the output of the network.

Robert D. Tollison worked as consultant for the industry since at least 1979, researching social cost. James Savarese was a consultant who started working for the tobacco industry in the early 1980's. I was not able to find out how the industry put the two partners together.

Savarese usually was the person corresponding directly with the Tobacco Institute and usually he was the one presenting the invoices, even though some money seems to have been funneled through Covington & Burling. Sometimes Tollison or others billed directly. Savarese was much more than an administrative employee: he participated in meetings of the TI, set the strategy and testified for legislators, etc. He did not just run the economists network, but also worked with labor unions, trying to convince them excise taxes on tobacco would cause unemployment.

Some economists, like Richard Wagner and Tollison himself, seemed to have been recruited directly by the Tobacco Institute.  By 1985/1986 James Savarese was at least nominally responsible for expanding up and operating the network, the industry still provided leads for headhunting

A 1986 memorandum from Tobacco Institute's Susan Stuntz describes how the recruitment of several economists was done through the informal personal networks of James Savarese, Robert Tollison and Dwight R. Lee. Interestingly Stuntz in 1986 speaks of "several years" ago, while the excise tax plan only dates from 1984. Therefore the memo hints the Tobacco Institute used economists even before the formal creation of the economists network. We also learn the network started rather slowly. 

As an example of such personal network: in 1984 James M Buchanan & Robert D. Tollison were the editors of the book Public Choice II. At least 9 of the 22 authors were or would later start working for the Tobacco Institute.

It is unclear how the economists were formally contacted by the Tobacco Institute after being recruited by Savarese/Tollison. A letter from K. Celeste Gaspari indicates recruiting some of the new members may have been through Robert Tollison's Center for the Study of Public Choice at George Mason University. 

Unfortunately, Savarese's full correspondence with the economists he worked with did not fully end up in the LTDL, so we will never know exactly how the network worked, nor will we know exactly how new network members were approached. We only know new members of the network would be contacted by someone from the Tobacco Institute once they were recruited.  In light of the letter by Celeste Gaspari contacts with the institute were likely made only by telephone

Do notice the letter illustrates the economists were fully aware they were working for the Tobacco Institute.

The network must have been set up after the industry finished the 1984 Tax Excise plan. At that time, several of the core members of the network were already working as industry consultants and they were already writing the book Smoke and the State.

It seems though the network was not complete until 1987, when the industry started to contact the economists, checking if the people Savarese had recruited were suited for the job the industry had in mind. Some economists seem to have dropped out at that point, or had moved state or simply lost interest in the network. 

Even though the economists in the network were subcontractors of Savarese and Tollison, they were fully aware they worked with the industry, and several documents in the LTDL (example) show the economists did not just have contact with James Savarese, but also with the Tobacco Institute itself.