The Tobacco Institute's

1 million dollar 'economists network'
Over 100 U.S. economics professors recruited by the Tobacco Institute

Jules' Klimaatblog, March 2015

SUMMARY
The recent case showing how climate skeptic Wei-Hook 'Willie' Soon was heavily funded by the fossilfuel industry has once again drawn attention to the 'tobacco strategy' of casting pseudoscientific doubt
on a scientific topic.
The tobacco industry used a series of scientists in so-called 'truth squads' to deny the harmfulness of
second-hand smoking.
Lesser known is how the industry handed out well over 1 million dollar to a secret network of over
100 American economics professors, known as the "economists network".
The aim of the network was preventing the government imposing higher excise taxes on tobacco to
cover social costs related to smoking. The economists were hired to spread economic doubt on the
effectiveness of social cost related actions by the government.
The network, lead by George Mason University professor Robert D. Tollison and tobacco consultant
James Savarese, engaged in different activities.
This paper will prove how the economists were :
 Targetting the media in well organized op-ed campaigns.

All op-eds had to be cleared by the tobacco industry's lawyers before publication
The economists earned up to $3,000 per op-ed they managed to get published in newspapers

 Testifying at political hearings
The economists earned up to $10.000 per hearing
Some economists defended arguments they knew were flawed

 Producing 'scientific' papers that were approved by the tobacco industry.
The economists earned up to $40.000 per scientific paper they published
Some economists "authored" reports actually written by the tobacco industry
Every single scientific paper was cleared - corrected by the tobacco industry's lawyers

 Producing pro-tobacco books
Robert D. Tollison and Richard E. Wagner wrote/edited at least 5 pro-tobacco books
The books were promoted in well organized media-tours funded by the industry all over the USA, the authors
receiving media training organized by the tobacco lobby on how to deal with tricky questions
Positive book review were sent to newspapers by other members of the network

The economists consistently forgot to mention they were paid by the Tobacco Institute.
While many of the individual points discussed below are known in isolation this paper tries to provide a
complete and much needed overview of the activities of the network. It expands on the incomplete
overview provided by Stanton Glantz, Anne Landman, and Daniel K. Cortese in their paper Tobacco
industry sociological programs to influence public beliefs about smoking1.

Glantz, S., Landman, A., Cortese, D., K. (2008) : Tobacco industry sociological programs to influence public beliefs about smoking. Soc Sci Med.
2008 Feb; 66(4): 970–981http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2267871/
1

KEY PLAYERS
The tobacco industry wanted to recruit at least one social cost economist per American state. During
the existence of the network, over 100 American economics professors were involved. The industry
called those shown below the "core group”. They all worked closely with the Tobacco Institute 2 3
ROBERT D. TOLLISON - Duncan Black professor at George Mason University
http://en.wikipedia.org/wiki/Robert_Tollison

Set up the network with consultant James M. Savarese

 earned at least $ 350.000(corrected for inflation, currently well over 1 million dollar)
In support of the tobacco industry
 attended strategic meetings at the Tobacco Institute
 wrote/edited at least five pro-tobacco books
 engaged in media tours all over the USA
 testified several times at political hearings
 wrote numerous op-eds and 'scientific' papers
 attended several meetings of economists associations
 helped write with S. Fred Singer a tobacco report for the Alexis De Tocqueville Institution
 also worked for British American Tobacco , and as a consultant for dozens other industries

RICHARD E. WAGNER - Professor of economics at George Mason University
http://en.wikipedia.org/wiki/Richard_E._Wagner

 earned at least $100.000
 attended strategic meetings at the Tobacco Institute
In support of the tobacco industry
 wrote/edited at least five pro-tobacco books
 engaged in media tours all over the USA
 testified several times at political hearings
 wrote numerous op-eds and 'scientific' papers
 attended several meetings of economists associations

DWIGHT R. LEE - professor at the University of Georgia
 earned at least $125.000
In support of the tobacco industry
 attended strategic meetings at the Tobacco Institute
 testified at least 20 times at political hearings
 wrote numerous op-eds and 'scientific' papers
 attended several meetings of economists associations

RICHARD S. HIGGINS - Deputy director of the Federal Trade Commission's Bureau of Consumer Protection
 earned at least $28.500
 attended strategic meetings at the Tobacco Institute
 wrote a 'scientific' paper in support of the tobacco industry
kept low profile, probably because he wasn't a professor, but working at the FTC

2
3

NN (1991) : Social cost issue - Consulting economist team http://legacy.library.ucsf.edu/tid/asj51a00/pdf
NN (1988) : Economic experts witness team orientation and media training program http://legacy.library.ucsf.edu/tid/gya30g00/pdf

KEY PLAYERS
ROBERT B. EKELUND - professor at Auburn University
http://en.wikipedia.org/wiki/Robert_Ekelund
 earned at least $70.000
In support of the tobacco industry
 wrote numerous op-eds and 'scientific' papers
 attended several meetings of economists associations

MICHAEL L. DAVIS - Southern Methodist University
 earned at least $15.000
 attended strategic meetings at the Tobacco Institute
In support of the tobacco industry
 wrote numerous op-eds and 'scientific' papers
 participated in media tours
 attended several meetings of economists associations

GARY M. ANDERSON California State University Northridge (emeritus) / Auburn University
 earned at least $20.000
 attended strategic meetings at the Tobacco Institute
In support of the tobacco industry
 wrote numerous op-eds and 'scientific' papers
 attended several meetings of economists associations

The full list of the network members, and the years they were active is given in Appendix A

CONTENT
SUMMARY ...................................................................................................................................................................................................2
Key players .................................................................................................................................................................................................3
1.

The economists network ...........................................................................................................................................................6
1.1.

Activities of the network..................................................................................................................................................6

1.1.1.

Testimonials ................................................................................................................................................................7

1.1.2.

Economists selling their names ....................................................................................................................... 10

1.1.3.

Op-ed campaigns .................................................................................................................................................... 10

1.1.4.

Pro-tobacco Books ................................................................................................................................................. 12

1.1.5.

"Scientific" papers .................................................................................................................................................. 14

1.1.6.

GSA mailing ............................................................................................................................................................... 17

1.1.7.

Manipulation on all fronts.................................................................................................................................. 17

1.2.

The end of the network ................................................................................................................................................. 18

1.3.

Core members anno 2015 ............................................................................................................................................ 20

2.

Conclusions ................................................................................................................................................................................... 20

3.

Appendixes .................................................................................................................................................................................... 22
3.1.

Appendix A: all economists ......................................................................................................................................... 22

3.2.

Appendix B: activities of the core members ........................................................................................................ 22

3.3.

Appendix C : economists who testified at hearings ......................................................................................... 22

3.4.

Appendix D : invoices ..................................................................................................................................................... 22

3.5.

Appendix E : membership of think tanks.............................................................................................................. 23

1.

THE ECONOMISTS NETWORK

A 1979 report by the US Surgeon General's concluded passive smoke, or Environmental Tobacco Smoke
(ETS) exposure should be considered a separate scientific issue from active smoking4
The ETS-issue caused a serious problem for the industry, because ETS means smoking did not just harm
the smoker, providing a justification for the government to take action against smoking in public places.
ETS leads to smoking related illnesses by non-smokers through inhaling smoke. But economic analysis
shows that there are additional economic losses because smokers themselves are ill more often, with
increased absenteeism at work, etc. It is possible to put a price tag on these costs, the so called social
(economic) costs.
The tobacco industry's answer was creating doubt by
 denying the health effects of second hand smoking
 denying the social costs related to smoking
The 109 pages long TI Cigarette Excise Tax Plan5 from 1984 thoroughly describes the tactics used by the
Tobacco Institute. Part of this plan was to create a network of economists whose academic credibility
would help undermine the possibility of regulations or increases in excise taxes to cover the social costs
of tobacco.
Robert D. Tollison was hired in 1979 by the Tobacco Institute to research the economic aspects of
tobacco related social costs6. With the help of consultant James Savarese, the two men set up a secret
network of over 100 American economists (appendix A).
1.1.

ACTIVITIES OF THE NE TWORK

The Tobacco Institute's Cigarette Excise Tax Plan describes why the industry recruited the economists:
the industry needed people with academic credibility to tell politicians that "social cost" based actions
are based on flawed arguments and that 'taxes are evil'.
To be more effective in lobbying, the industry also wanted to team up with allies. The 'no tax' message
was useful in finding allies amongst free-market think tanks. The social cost consultants network
consisted mostly of economics professors who followed the Austrian School. They provided a source of
local consultants willing to testify at hearings, write op-eds, etc. It was important to the tobacco
industry to have 'local' economists because strangers from another state might be regarded by
politicians as 'foreigners'.
The tobacco industry did not set up the social cost consultants network. That job was given to a
subcontractor, James Savarese of consultancy-firm James Savarese & Partners. He worked closely with
Robert D. Tollison. The public relations firm Ogilvy & Mather was hired to promote the output of the
network. Payments to the economists were mostly made through Savarese.
Tollison appears to have been the person with the professional contacts who helped Savarese recruit
new members of the network, sometimes through the Center for the Study of Public Choice at George
Mason University. The network must have started around 1984/1985. At that time, several of the core
members were already working as consultants for the industry. It seems though the network wasn't
(more or less) complete until 1986. In 1987 the industry started to contact the economists, checking if
the people Savarese had recruited were suited for the job. Some of those originally recruited dropped
US Department of Health, Education, and Welfare (1979): Smoking and Health: A Report of the Surgeon General. 1194 p.
http://profiles.nlm.nih.gov/ps/access/NNBCMD.pdf
5 Tobacco Institute (1984a) : TI Cigarette Excise Tax Plan April 30, 1984, 109 p. http://legacy.library.ucsf.edu/tid/xnu98b00/pdf
6 Glantz S., Landman, A., Cortese, D. (2008) : Tobacco industry sociological programs to influence public beliefs about smoking
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2267871/
4

out at that point.
It is clear that once recruited, the members of the network were fully aware that they would be working
with the tobacco industry and for its benefit. All of the network members shared a libertarian opinion,
and this was a factor in their recruitment.
The details of how the network was conceived and set up will be discussed in the full report. In this
document we will describe the activities of the network and the rewards that it offered to the
economists. As will be seen, this was not only economics for pay, but the rewards were structured so
that those who were judged more effective received higher renumeration.
1.1.1.

TESTIMONIALS

Economists in the network testifying at hearings were paid by the Tobacco Institute, e.g. receiving
$2.000 per hearing in 1985.7 In the 1990's, the fee was $10.000 to 15.000 per hearing the witnesses
testified at8.

Figure 1: payment for testimonials, invoice April 2, 1985

After each hearing, the Tobacco institute evaluated the performance of the economists. These
evaluations show the testimonials weren't the work of independent scientists.
The 1997 evaluations include interesting remarks by the Tobacco Institute showing that the Institute
viewed the economists presentations as a product, bought and paid for and the Institute insisted on
value for money9

Figure 2: field staff evaluation of resources 1985-1986

The economic impact studies mentioned above were prepared by the Tobacco Institute, and they were,
in the industry's own words, "abysmal". Nevertheless, the economists defended them in front of
politicians10
Savarese, J. (1985) : April 2, 1985 Invoice to Tobacco Institute, http://legacy.library.ucsf.edu/tid/rrc78b00/pdf
NN (1994) : 1994 projected expert witness needs http://legacy.library.ucsf.edu/tid/wcw03b00/pdf
9 NN (1986) August 1986 Field staff evaluation of resources, (1985 - 1986), http://legacy.library.ucsf.edu/tid/hea71d00/pdf
10 http://legacy.library.ucsf.edu/tid/qen34b00/pdf
7
8

Specifically, the alleged "economic impact studies are abysmal. Even Professor [Dennis] Logue, who tried
unsuccessfully to defend one before a New Hampshire legislative committee, suggests major flaws in all of the
vehicles.

Proof the testimonials were prepared by the industry is seen in the same document:

Figure 3: field staff evaluation of resources 1985-1986

Eventually Dwight R. Lee would testify at least 20 times at hearings (appendix B). In 1988 Regional
Tobacco Institute director Bob Pruett wrote an interesting letter about Dwight Lee's testimonial in
Peoria showing how astroturf groups were an integral part of the tobacco industry strategy (my
emphasis)11
We presented Dr. Lee as being invited by STOP (our local coalition) and asked to come by Jay Glazer (local
wealthy businessman). The Mayor asked if he was on RJR's payroll. Of course, not being on their payroll he
could say "no".

Dwight Lee received $3,000 for this testimonial, but the money was paid by the Tobacco Institute12.
R.J. Reynolds was one of the companies funding the Tobacco Institute. Technically Lee didn't lie.

Figure 4: invoice proving Dwight R. Lee's answer he wasn't paid by R.J. Reynolds wasn't a lie.
He was paid by the Tobacco Institute...

After the hearing, the Tobacco Institute sent Dwight R. Lee a Thank You note (Dyer's emphasis)13
Dear Dwight,
Thought you would like to know we were successful in Peoria. The council voted not to tax our product on a 6-3
vote. The Mayor and Councilpersons Sinclair and Polk found us to be unworthy.
Through your expert testimony and local input the majority of the council understood they were not going to gain
from such taxes.

Pruett, B. (1988) : December 20, 1988 letter to Walter Woodson http://legacy.library.ucsf.edu/tid/fqc33b00/pdf
Savarese, J. (1989) : January 3, 1989 invoice http://legacy.library.ucsf.edu/tid/ofx53b00/pdf
13 Pruett, B. (1988) : December 20, 1988 Letter to Dwight Lee http://legacy.library.ucsf.edu/tid/aqc33b00/pdf
11
12

Again "thanks" for your excellent work and I look forward to working with you in the future. Enclosed please find
a copy of the Sunday morning Journal Star reporting on your testimony.

Of course Dwight Lee's testimonial was not the work of an independent scientist, but prepared by the
Tobacco Institute (same letter as above)
we used Professor Lee at a revenue hearing in Peoria, Illinois on December 10, 1988. Dr. Lee served our needs
extremely well. He presented our economic model (numbers furnished by Bill Orzechowski) with a quiet and
believable tone.

The reason the industry wanted to recruit an economist in every is clear14
Of the eight RVPs addressing this issue, six considered it important for the economist to be a resident of the state
in which he or she is testifying. Ideally, the economist would be associated with the state university. The
advantages of such residency are :
1) There is a greater likelihood the economist may be known and respected by the state legislators ; and
2) It precludes opponents' attacks on The Institute for "big spending" and the "big city syndrome."

But even being 'from the state' wasn't enough, as shown in a document also proving the economists
were prepared by the Tobacco Institute15
Two general comments from field staff warrant some consideration. Michael Brozak recommended a political
orientation to prepare witnesses for potentially politicized hearings.
(...)
Richard Scanlan suggested that an economist from the state capital city is much more valuable.

And we also know why the network was a 'men only' club (my emphasis)16
field staff recommended against using [Ann] Harper-Fender in Pittsburgh because the council would not view a
woman as credible

Indeed the members of the network were given training by the tobacco industry or its representatives
before the hearings. Robert Tollison was given some practice questions17 18

Figure 5: practice questions for witnesses

The reason of the training probably was to avoid situations like Tollison faced in 1987 19
In his testimony on the District of Columbia workplace smoking legislation, Tollison's knowledge was "good but,
[his] presentation and persuasiveness [were] marred by his not admitting from the beginning that the study was
sponsored by TI"

Even the network members who weren't too active were prepared by the Tobacco Institute. In 1985
PR-firm Ogilvy & Mather trained Cotton Mather Lindsay20

Figure 6 : memorandum by pr-firm Ogilvy & Mather

Appendix C gives an overview of economists who appeared at hearings.
NN (1986) : August 1986 Field staff evaluation of resources, (1985 - 1986), http://legacy.library.ucsf.edu/tid/lcl14b00/pdf
Ross, J. (1987) : August 21, 1987 memorandum. http://legacy.library.ucsf.edu/tid/jlx64b00/pdf
16 NN (1986) : August 1986 Field staff evaluation of resources, (1985 - 1986), http://legacy.library.ucsf.edu/tid/lcl14b00/pdf
17 NN (sd) : Social costs http://legacy.library.ucsf.edu/tid/dsj86d00/pdf
18 NN (sd) : friendly witnesses http://legacy.library.ucsf.edu/tid/yaf52f00/pdf
19 NN (1986) August 1986 Field staff evaluation of resources, (1985 - 1986), http://legacy.library.ucsf.edu/tid/hea71d00/pdf
20 Delanty, M (1985) : April 30, 1985 memorandum http://legacy.library.ucsf.edu/tid/yah38b00/pdf
14
15

1.1.2.

ECONOMISTS SELLING THEIR NAMES

On several occasions, the economists signed reports actually written by the Tobacco Institute
Robert McMahon authored an economic impact study written by the tobacco industry21

Figure 7: internal memorandum Tobacco Institute

Ryan C. Amacher, former Dean of the College of Commerce and Industry at Clemson University from
1981 through 1992 “authored” a piece prepared by PR-firm Ogilvy & Mather22
Legion article
O&M provided revised version of the article for client approval. Ryan C. Amacher, Ph.D., from Clemson University
will sign the piece

A follow up document shows Ryan C. Amacher indeed signed the piece23
In 1988 Northwest Airlines was the first American airline company to ban smoking on domestic flights.
Ryan C. Amacher wrote an op-ed, which carried the following passage24
it is important to know what the status of Northwest Airlines was before the self-imposed ban on smoking.
Northwest was in pretty bad shape in early 1988. In March 1988, just prior to the ban, the FAA cited Northwest
for 139 violations ranging from delaying aircraft inspections and repairs to requiring pilots to fly beyond the
allowable hours.
In addition, through October, Northwest had the third largest number of passenger complaints and was ranked
dead last among the 14 major U.S. carriers in on-time performance

Clearly the points Amacher mentions are not related to a smoking ban. But where did his arguments
come from? Tobacco Institute's president Samuel Chilcote wrote a memorandum explaining how the
tobacco industry reacted to the announcement of the smoking ban25
Our press appearances to date, and future media efforts, are focusing on Northwest's poor record of passenger
complaints and safety violations. Although the airline ranked second in .1987 in total passenger complaints to the
Department of Transportation, smoking was eighth, representing less than 3 percent of complaints to Northwest.

What a strange similarity...
1.1.3.

OP-ED CAMPAIGNS

To create the illusion of a broad opposition against excise taxes, the economists engaged in several well
organized op-ed campaigns (appendix D), targeting the local newspapers. By 1993, the economists
earned $3000 per op-ed they wrote30

Dyer, D. M. (1997) : June 3, 1987 memorandum http://legacy.library.ucsf.edu/tid/qen34b00/pdf
Delanty, M. (1985): April 4, 1985 Ogilvy & Mather memo to the Tobacco Institute, http://legacy.library.ucsf.edu/tid/yah38b00/pdf
23 Delanty, M. (1985) : May 14, 1985 letter to Susan Stuntz. http://legacy.library.ucsf.edu/tid/rgv91f00/pdf
24 Amacher, R. C. (sd) : Eliminating choice failed marketplace test (newspaper op-ed), unknown newspaper,
http://legacy.library.ucsf.edu/tid/qkz79b00/pdf
25 Chilcote, S. D. (1988): March 25,1988 memorandum to TI executive committee, http://legacy.library.ucsf.edu/tid/xoo21e00/pdf
30 Tobacco Institute (1990) : Budget 1990 http://legacy.library.ucsf.edu/tid/vqg09a00/pdf
21
22

Figure 8 : 1990 proposed budget Tobacco Institute

The economists were told what they had to write, and they first had to send their op-ed to James
Savarese before they were allowed to send it to newspapers31
This article should support the basic right to advertise legal products and oppose attempts to restrict advertising
either by outright bans or by punitive use of the tax code.
Obviously, the point of this exercise is to support tobacco's right to advertise on basic constitutional grounds.
Arguments which touch on issues such as censorship, cutting off the free flow of information, and even the
experiences in other countries with such bans might be useful.
Upon completion of a draft op-ed, please send it to me immediately via Federal Express. I will go over the article
and return it to you for submission to a newspaper. At that time you will be given some guidelines for submitting
your editorial to a newspaper and an appropriate newspaper in your state.

In each op-ed campaign, the industry kept close inventories of the op-eds getting published3233. In
1987, the fee was $900 for writing an op-ed, and an extra $125 if the economists contacted their
local congressman.

Figure 9 : 1987 op-ed campaign

Figure 10: 1996 FDA op-ed campaign

The most money was made by the core members though, as they were the ones controlling, and where
necessary rewriting the op-eds of the local economists.

Savarese, J. (1987) : February 7, 1987 letter to the economists network http://legacy.library.ucsf.edu/tid/swf93b00/pdf
Tillison, R. D. (sd) : Schedule of payments http://legacy.library.ucsf.edu/tid/jhe19b00/pdf
33 NN (1996) : 1996 FDA op-ed campaign http://legacy.library.ucsf.edu/tid/qib36b00/pdf
31

32

In 1996, professor John David was removed from the network34 for not writing what he was told35.
James Savarese wrote (my emphasis)36
Based on our discussion, I sent John David (WV) a detailed memo addressing the problems with his article. The
revised article we received failed to correct many of the original problems. As a result, we have dismissed him
from the program. We feel that he may have a problem with tobacco issues, but did not want to come out and
tell us.

1.1.4.

PRO-TOBACCO BOOKS

Robert D. Tollison and Richard Wagner wrote/edited several books funded by the Tobacco Institute
and Philip Morris




1986 Robert D. Tollison (ed), Smoking and society: toward a more balanced assessment, Lexington Books, Lexington,
Massachussetts
1988 Robert D. Tollison (ed), Clearing the air: perspectives on environmental tobacco smoke, Lexington Books, Lexington,
Massachussetts
1988 Robert D. Tollison, Richard E. Wagner, Smoking and the state: social costs, rent seeking, and public policy, Lexington
Books, Lexington, Massachussetts
1989 Richard E. Wagner & Robert Tollison, Charging Beneficiaries for Public Services: User Charges and Earmarked Taxes in
Principle and Practice
1991 Robert D. Tollison, Richard E. Wagner; The Economics of Smoking, Kluwer Academic Publishers, Dordrecht

The industry dictated what the content of Smoking and the State would be, and head-hunted Tollison to
be the author39
Our final project, and by far the most ambitious one, is a proposed monograph (or possibly a book) tentatively
titled, "smoking and society". The monograph would serve as a vehicle to bring together material by experts on a
variety of relevant and related topics under the supervision of an editor.
The key to the project is having the right editor, several months ago we thought we had one lined up - the
associate editor of the Harvard Business Review. He was very eager to participate in our project but his superiors
at Harvard told him they did not want him involve.
Fortunately, at around the same time, dr. Robert Tollison completed his service as director of the bureau of
economics and acting director of the office of policy planning, US federal trade commission, he is currently
professor of economics at Clemson University and has enthusiastically accepted the position of editor.
He is widely published in the areas of economics and public policy, he has done similar projects in the past and
with his previous work for us on the "social costs" issue we think he will be a great asset to us.
(...)
The cost of completing the monograph is estimated to be $114,000. I am pleased to report that due to their
interest in this project the tobacco institute has agreed to contribute 50 percent of this amount.

The same document shows the Tobacco Institute would pay 50 % of the costs for the book, INFOTAB, a
cooperation between seven tobacco companies, the other 50 %. The Tobacco Institute paid 70.000 US$
for the book40 meaning INFOTAB, must have paid the other 70.000 US$.
The 1988 book Clearing the air was paid for by Philip Morris. Robert D. Tollison earned $20,000, with
the other authors earning between $7,000 and $10,000 each41
Robert D. Tollison and Richard E. Wagner in 1988 also wrote the book Smoking and the state, which was
heavily promoted by the tobacco industry.
The authors participated in media tours organized by PR-firm Ogilvy & Mather42, bringing the authors
to 54 cities all over the USA43. But not before receiving media-training44.
Savarese, J. (1996) : August 8 1996 memorandum http://legacy.library.ucsf.edu/tid/ycb36b00/pdf
Savarese, J. (1996) : August 8 1996 memorandum http://legacy.library.ucsf.edu/tid/ycb36b00/pdf
36 Savarese, J. (1996) : March 1, 1996 memorandum to Fred Panzer. http://legacy.library.ucsf.edu/tid/jdb36b00/pdf
39 Simpson, B. (1983): August 30, 1983 letter to Samuel D. Chilcote. http://legacy.library.ucsf.edu/tid/jhp18c00/pdf
40 NN (1983) : Project budget 1984. http://legacy.library.ucsf.edu/tid/gpl02d00/pdf
41 Whist, A. (1988) : Letter to Robert Tollison January 7,1988, http://legacy.library.ucsf.edu/tid/bpf42e00/pdf
34
35

Figure 11: PR-firm Ogilvy & Mather memorandum on promoting "smoke a nd the state"

The authors received between $3,000 and 4,800 per media-trip (appendix C). As there were 38 media
tours, the authors must have earned over $120,000.
To further promote the book, 17 members of the economists network were asked to write positive
book-reviews45, to be sent to newspapers. But first the reviews had to be cleared by the Tobacco
Institute's lawyers46

Figure 12: Tobacco Institute's correction to Cecil E. Bohanon's book review

A similar edit was made in the draft written by Ryan C. Amacher. Notice the similarity in handwriting.
These edits were made by the Tobacco Institute.

Heyison, K. (1989) : February 15, 1989 memorandum - http://legacy.library.ucsf.edu/tid/yja93b00/pdf
Ogilvy & Mather (1992) : A promotional program for The economics of smoking: getting it right.
http://legacy.library.ucsf.edu/tid/ztz20g00/pdf
44 Hochberger, K., Marcus, R. (1988) : March 21, 1988 Ogilvy & Mather memorandum on promoting "smoke and the state"
http://beta.industrydocuments.library.ucsf.edu/documentstore/l/q/v/p/lqvp0049/lqvp0049.pdf
45 Savarese, J. (1988) : May 26, 1988 letter to Debbie Schoonmaker http://legacy.library.ucsf.edu/tid/qug93b00/pdf
46 Savarese, J. (1988) : June 13, 1988 letter to Susan Stuntz, http://legacy.library.ucsf.edu/tid/dug93b00/pdf
42
43

Even though Richard E. Wagner was the first author, Robert Tollison invoiced the Tobacco Institute for
a book written in 198947. The third and fourth invoice charged $36,25048 49, so probably the industry
paid $145,000 for the book. Exactly the amount the authors proposed50
Buchanan essay $20,000
11 essays (chs. 1-9, 11-12) 75,000
Organizing, Editorial, and Management Fees (including finding and working with publisher). Dick Wagner 25,000
Bob Tollison 25,000
TOTAL AMOUNT $145,000

James M. Buchanan probably earned more because he held a Nobel Memorial Prize in Economic
Sciences, explaining his high market value: how many people would dare to say a Noble Prize winning
economist is wrong on economy ?
The industry paid Robert D. Tollison and Richard E. Wagner 87.500 US$ 51 for a "smoking and the cost
revision", published in 1991 as "Economics of Smoking: Getting It Right". One should notice the
prominent place on the front page of the book for the logo of the Center of Public Choice at George
Mason University52. This is indeed buying academic credibility ?
1.1.5.

"SCIENTIFIC" PAPERS

As useful as op-eds and books were to get media attention, the industry needed 'scientific' output,
because it needed academic support to attack arguments about the social cost of tobacco. The industry's
method was to hand out grants to the economists in their network.
In 1996, nine economists sought this grant money, though the evaluation of the proposals show James
Savarese wasn't too pleased with any of them. Savarese, not the Tobacco Institute, proposed to reject a
couple53. Savarese's memorandum makes clear the research had to benefit the industry (my emphasis)
Although these can be improved in some regards to ensure they are most useful to the industry, three
proposals seem to have a good deal of merit.

As an example the reason Henry Butler's 1988 proposal was rejected: the industry was not sure the
research Butler proposed wouldn't backfire
If his results show smokers get- lower wages, then this "internalization" of productivity losses will give adversaries
some evidence they want, namely, that smokers are less productive.
If, on the other hand, smokers' wages are higher, prosmokers could gain an edge in the argument on productivity
losses, but other factors may be at work that account for differences, (i.e. occupations, skills, education, and
personality differences). Not much can be achieved here unless Butler is much more clear in his objectives/
approach/method/results/conclusion.

More proof the Tobacco Institute did not tolerate output they didn't like is the reason why it did not
fund The Economics of Smoking Bans by William Boyes and Michael Marlow54

Figure 14: genuine interest in scientific research ?

Tollison, R. D. (1990) : January 23, 1990 letter to Martin Gleason. http://legacy.library.ucsf.edu/tid/mjl38b00/pdf
Tollison, R. D. (1990) : March 20, 1990 letter to Martin Gleason. http://legacy.library.ucsf.edu/tid/jyu28b00/pdf
49 Tollison, R. D. (1990) : January 23, 1990 letter to Martin Gleason. http://legacy.library.ucsf.edu/tid/mjl38b00/pdf
50 Schoonmaker, D. E. (1989) May 31, 1989 memorandum to Martin Gleason http://legacy.library.ucsf.edu/tid/yug93b00/pdf
51 Hrycaj, C. (1990) : December 10, 1990 letter. http://legacy.library.ucsf.edu/tid/ayj44b00/pdf
52 http://www.amazon.com/The-Economics-Smoking-Robert-Tollison/dp/0792392248
53 Savarese, J. (1986) : May 12, 1986 memorandum http://legacy.library.ucsf.edu/tid/joa48b00/pdf
54 Fernicola, K. (1992) : November 6, 1992 letter to James Savarese http://legacy.library.ucsf.edu/tid/dwo48b00/pdf
47
48

The papers the industry did order, first had to be reviewed before publication55
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.

More proof of interference of the Tobacco Institute can be found in 1990 56
Consulting economists have submitted two additional pieces of social cost research commissioned in 1989:
"Smokers' Subsidy of Nonsmokers' Retirement Benefits" by Richard Higgins; and "Self Interest, Public Interest and
Public Health," by Bob Tollison and Richard Wagner. Currently, we are reviewing and seeking clearance of these
works.

The economists accepted the changes. Savarese wrote (my emphasis)57
Attached is a revised version of Bob Tollison and Dick Wagner's Phase II research project. They have
incorporated Tl's changes and revisions.

Wagner and Tollison weren't the only authors whose papers were commissioned and checked by the
industry before publication58
We received the last in a series of four social cost research projects commissioned this year. The draft of Robert
Ekelund's paper, "Some Economic Consequences of the Koop Doctrine : National and State Revenue Shortfall from
Smoking Regulation," is under review. The three other papers have been cleared and returned to the authors for
minor changes before submission for publication.

The economists earned a little cash for their research. Well actually more than a little 59

Figure 15: invoice for the "Phase II" research

1.1.5.1.

BENEFIT-COST ANALYSIS OF EPA'S WORKPLACE SMOKING POLICIES (1991)

In 1991 the booklet a benefit-cost analysis of the environmental protection agency's draft guide to
workplace smoking policies was written60
It was well funded, even though Savarese didn't mention all the names of the authors61

Schoonmaker, D. (1988) : November 28, 1988 memorandum to James Savarese http://legacy.library.ucsf.edu/tid/lct28b00/pdf
NN (1989) : Social cost issue http://legacy.library.ucsf.edu/tid/yhl83b00/pdf
57 Savarese, J. (1989) July 5, 1989 letter to Debbie Schoonmaker http://legacy.library.ucsf.edu/tid/qbt28b00/pdf
58 NN (1989) : Public affairs management plan progress report - December 1989 http://legacy.library.ucsf.edu/tid/uzl86d00/pdf
59 Savarese, J. (1988) : December 8, 1988 Letter to Debbie Schoonmaker, http://legacy.library.ucsf.edu/tid/sss98b00/pdf
60 NN (1991) : a benefit-cost analysis of the environmental protection agency's draft guide to workplace smoking policies. Revised Draft July 1991
http://legacy.library.ucsf.edu/tid/url38b00/pdf
61 Savarese, J. (1991) : June 13, 1991 memorandum to Susan Stuntz http://legacy.library.ucsf.edu/tid/ltt83b00/pdf
55
56

Figure 16: invoice "EPA project"

Of course, the authors didn't work independently62
Susan[Stuntz] : Although we're waiting for the last series of lawyer comments, the original product is essentially
completed. We are expanding the cost/benefit section as per Kay's and Covington's request to assist in answering
the OSH questions.
Can you help in this matter ?

The industry hired Miller and Tollison because they couldn't find anyone else63
We are paying a premium price for the services of a former OMB director [James Miller] with close ties to current
OMB staff, who is prepared to take on this assignment on short notice. In fact, we spoke with another former OMB
official about the same assignment; he refused to touch it. If Adams can find us a consultant with similar
credentials who bills at a lower rate and can produce what we need within a two-week period, we will certainly
consider that individual. Until then, we'll go with Jim Miller.
(...)
Given the amount of paper we gave these guys to review (and since Miller was a total novice, and Tollison
something of a novice to our EPA problems when we first met with them), my sense is that the daily rate may be a
bargain for Miller and Tollison.

1.1.5.2.

SAMMEC II (1992 -)

In the early 1990's the software SAMMEC II (Smoking-Attributable Mortality, Morbidity, and Economic
Costs) was developed to calculate the social cost of tobacco. As to be expected, the Tobacco Institute
planned to call the software flawed64. Just like all the other "scientific" output from the social cost
consultants, the Tobacco Institute carefully read the drafts before allowing it to be released. Overall this
letter from the Tobacco Institute's Cal George provides insight into how the institute worked65
Attached is the third working draft of the Ekelund SAMMEC study which has gone through extensive review for
content and style (readability/clarity and format) by all members of the "social cost" task force. Edits, comments
and questions have come from Carol[Hrycaj - Tobacco Institute] (first draft), Brennan [Dawson, VP of the TI](last
draft), Marty [Gleason, TI-employee], Orzo [probably Bill Orzechowski, TI-employee], myself and to a lesser extent,
both Ogilvy [PR-firm Ogilvy & Mather] and Savarese [consultant James Savarese].

Savarese, J. (1991) : October 25, 1991 letter to Susan [Stuntz] http://legacy.library.ucsf.edu/tid/luc87b00/pdf
Stuntz, S. (1991) : January 21, 1991 memorandum to Martin Gleason http://legacy.library.ucsf.edu/tid/oon98b00/pdf
64 Ault, R., Ekelund R., B. (1992) : the political element in science and technology SAMEC IIi and the antismoking lobby
http://legacy.library.ucsf.edu/tid/ogk48b00/pdf
65 George, C. (1992) : memorandum to Susan Stuntz. http://legacy.library.ucsf.edu/tid/mne93b00/pdf
62
63

The paper was written by Robert B. Ekelund Jr. and Richard Ault, both from Auburn University, which
although well known for its sports teams, did not exactly have a powerhouse economics department.
James M. Savarese found a solution66
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
1.1.5.3.

OFFICE OF TECHNOLOGY ASSESSMENT ON THE COSTS OF SMOKING: WRONG AGAIN (1993)

In 1993 Robert Tollison and Richard Wagner wrote The Office of Technology Assessment on the Costs of
Smoking: Wrong Again. The report was published by the George Mason University's Center for Study of
Public Choice. Yet it was not an independent scientific publication. The Tobacco Institute's Calvin
George wrote67
I have made a few changes and am ready to send it to the lawyers with any changes you might have.

The LTDL shows that indeed corrections were made68. And these changes do appear in Tollison's final
draft69
1.1.6.

GSA MAILING

In 1986 the U.S General Services Administration launched a proposal to restrict smoking in some 7,000
federal workplaces. That summer, completely 'spontaneously', sixteen letters appeared attacking the
GSA's plan70
John F. Militello sent his letter July 7, 1986, stating
I am writing as a private citizen

That's not exactly the truth: 5 months earlier, February 25, 1986 James Savarese sent this letter to the
Tobacco Institute during the ongoing Chase op-ed campaign72
Attached is the op-ed by Jack Militello at the Wharton School for use in Philadelphia.
Any comments or suggestions? If o.k., should he proceed immediately to try to place it?

Clearly, the GSA letter was not an effort of private citizen.

Figure 17: John Milletello's GSA letter was not the work of a private citizen

1.1.7.

MANIPULATION ON ALL FRONTS

In 1990, core member Michael Davis was solicited by the Tobacco Institute73

Savarese, J., Shulman, E. (1992) : October 16, 1992 memorandum to Marty Gleason http://legacy.library.ucsf.edu/tid/izm38b00/pdf
George, C. H. (1993) : handwritten comments on the publication "Office of Technology Assessment on the Costs of Smoking: Wrong Again"
http://legacy.library.ucsf.edu/tid/qme93b00/pdf
68 George, C. H. (1993) : Tobacco Institute's changes on the publication "Office of Technology Assessment on the Costs of Smoking: Wrong Again"
http://legacy.library.ucsf.edu/tid/wme93b00/pdf
69 NN. (1993) : July 22, 1993 letter to Calvin George. http://legacy.library.ucsf.edu/tid/ome93b00/pdf
70 Chilcote, S. D. (1986) : July 21, 1986 memorandum 'Update on GSA Activities' http://legacy.library.ucsf.edu/tid/xpg25b00/pdf
72 Savarese, J. (1986) : February 25, 1986 letter to Craig Barnes. http://legacy.library.ucsf.edu/tid/lku97b00/pdf
73 Orzechowski, B. (1990) : January 25, 1990 letter to Marty Gleason http://legacy.library.ucsf.edu/tid/ehh99b00/pdf
66
67

Before the tour Davis participated in a Texas Tax Strategy Meeting held by the Tobacco Institute74 and
indeed he did accept an assignment to tour from the Tobacco Institute75
Mike Davis, an associate economics professor from Southern Methodist University who has been employed by the
Institute previously, accompanied Hall on the tour and served as the spokesman for the Institute, The following
cities were included in the tour: Stephenville, Dallas, Houston, Galveston, Beaumont, Orange, Port Arthur,
Brownsville, McAllen, Harlingen, Corpus Christi, El Paso, and Laredo. The tour began March 8 and was completed
the first week in April.

A summary of the tour shows they talked with many editors of local newspapers76

FIGURE 18:1987 op-ed campaign

1.2.

THE END OF THE NETWORK

In 1991 the Tobacco Institute faced a budget cut of 1.1 million US$, so the institute had to downsize
certain activities, such as77
Cut to $10,000 funds remaining for scientific witnesses on state and local smoking restriction proposals
(...)
Cancel all media/op-ed activity surrounding promotion of new earmarking and updated "social cost" books

Also in 1991, Tollison and Wagner published their last tobacco book. It is clear the budget did not
increase again78 and the same document shows that year the industry had already spent $16,290 and
only had a budget of $19,710 left. In the late 1980's the industry paid the tobacco economists $18,500
to appear at one convention to reach a public of 25 people, so it is clear in comparison the 1992 budget
is peanuts.
The "tax hearing witnesses" list was decreased from one economist in every state to just three
economists: Robert D. Tollison, Richard E. Wagner and Dwight R. Lee79
NN (1990) : February 5, 1990 Texas Tax Strategy Meeting http://legacy.library.ucsf.edu/tid/nzq94b00/pdf
Barsumian, L. (1990) : April 24, 1990 memorandum to Bill Orzechowski http://legacy.library.ucsf.edu/tid/rvm44b00/pdf
76 Hall, J. (1990) : April 30,1990 Final report on Editorial Board Tour (The Saga Continues)
http://legacy.library.ucsf.edu/tid/hgh99b00/pdf
77 NN (1991) : Sources of EPA/OSHA Project Funds http://legacy.library.ucsf.edu/tid/kvj03f00/pdf
78 Tobacco Institute (1992) : public affairs management plan progress report march 1992 http://legacy.library.ucsf.edu/tid/nrv98b00/pdf
79 Hrycaj, C. (1991) : November 19, 1991 memorandum to Walter Woodson http://legacy.library.ucsf.edu/tid/hxv35b00/pdf
74

75

The Tobacco Institute sent a memo in 1995 mentioning that the economic consultants still were able to
provide op-eds in no less than 30 states80 and the economists started organizing an op-ed campaign
against FDA-regulations, including some new names (Gallaway, Sexton)81. The industry suggested
writing
 While FDA claims their focus is on preventing you smoking, the action is the first step to impose harsher
regulations on tobacco;
 The FDA regs will have repercussions on not only the tobacco industry, but vending, confectionery and
candy industries, distributors, advertisers and sponsors for sporting events; and
 The regs will have a devastating impact on jobs.

Seventeen op-eds were sent to newspapers82
After some years of legal actions, in 1998, the US government reached the Tobacco Master Settlement
Agreement. More and more whistleblowers surfaced explaining how the industry worked. The industry
realized it would face trial long before 1998, and knew the authorities would be uncovering the
lobbying-tactics it had used and the names of the people such as those in the economists network who
worked for the industry.
It's nearly impossible to find anything relevant to the economists network in the LTDL from 1995
onwards and the documents often don't carry names any more. The first attempts to hide names started
around 1995, until the 1998 Settlement, after which the industry systematically stopped using names.
From that point on, it is impossible to trace the network. All of the early documents always carried the
names of the economic consultants. An overview of whose op-ed was published in previous years, but
in 1998 James Savarese simply wrote:
payment of $22,000 for "Consulting Services - Op-Ed Project - 1 st of 2 payments

The invoice doesn't mention a single name. Because of that, I have not been able to detect if the
network really ceased to exist or not. The correct title of this chapter therefore maybe should be: The
end of the traceable network.
In the '90's some members of the network started working for individual tobacco companies, like Philip
Morris (Walter E. Williams), R. J. Reynolds (Richard E. Wagner, from 1994 onwards). Tollison started
working for British American Tobacco in 1993. It may be a direct result of the budget cuts and the
economists being too expensive83
I think it would be a good idea to have some funding for [Dwight R.] Lee to do limited consulting for NASFM
members, or to write an article for NASFMRs newsletter. (I'm afraid he might charge too much for a paper on
sources of public funding)

In 1994, Philip Morris must have also started working with Tollison (WRO = Washington Relations
Office)84
the WRO met with key tobacco state Senators in preparation for the Senate Finance Committee's Apri128 hearing
on tobacco tax issues . As a result, several Senators submitted written testimony opposing cigarette excise tax
increases . Additionally, the WRO reviewed the testimony of Bob Tollison, an economic expert on tobacco-related
matters. The WRO also prepped him for questions from committee members

NN (1995) : potential FDA contacts http://legacy.library.ucsf.edu/tid/xqw75c00/pdf
NN (1995) : Media relations. Economists. http://legacy.library.ucsf.edu/tid/bdz57d00/pdf
82 NN (1996) : January 5, 1996 overview of op-eds in the FDA campaign. http://legacy.library.ucsf.edu/tid/sob36b00/pdf
83 Fernicola Suhr, K. (1993) : May 17, 1993 memorandum to Cal George http://legacy.library.ucsf.edu/tid/ieb58b00/pdf
84 Fuller, C. L. (1994) : May 17, 1994 memorandum to Michael A. Miler http://legacy.library.ucsf.edu/tid/qqk35e00/pdf
80
81

1.3.

CORE MEMBERS ANNO 2015

Even though most of the core members aren't exactly young, most are still working in 2015
 James M. Savarese died of pancreatic cancer in 2009 85
 Robert D. Tollison (°1941) still serves as the J. Wilson Newman Professor and BB&T Senior
Fellow at Clemson University86
 Richard E. Wagner (°1942) Is the Holbert L. Harris Professor of Economics at George Mason
University87
 Richard S. Higgins : Is the managing director of the Berkeley Research Group88
 Robert B. Ekelund Jr. (°1940) : Emeritus Professor at Auburn University since 2003 89
 Dwight R. Lee : Holds the William J. O’Nel Endowed Chair at Southern Methodist University
resident scholar90
 Michael L. Davis: Is Senior Lecturer at Southern Methodist University, where he can "address the
long-term economic implications of the BP oil spill. Will taxpayers eventually feel the pinch? He can also
address the potential hazards of ethanol vehicles"91

2.

CONCLUSIONS

All of the economists were fully aware they worked with the Tobacco Institute. Yet it is possible when
joining the network, some of the economists presumed they were simply asked to express their
worldview. They were however part of a large corporate conspiracy though, even if in the beginning
they might not have realized this themselves.
The industry used the libertarian bias of the economists. The industry knew they would write the
conclusion wanted by the industry92
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.

Before even contacting an economist, the industry was sure it would find a person who believed that
taxes are evil and who published this view in journals. It's not hard to find out why the industry was so
sure of this: libertarians always conclude there shouldn't be taxes or tax-increases. The industry simply
exploited their predictability.
Tobacco lobbyist George Berman's testimony in court shows the tobacco industry exploited Robert D.
Tollison's libertarian bias to recruit him94. The tobacco industry never told Tollison he needed to defend
the tobacco industry. Instead, they fed him arguments so Tollison himself would come to this
conclusion. In the words of Berman :
 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: independently

http://www.washingtonpost.com/wp-dyn/content/article/2009/02/19/AR2009021903176.html
http://economics.clemson.edu/robert-d-tollison
87 http://mason.gmu.edu/~rwagner/Vitae.pdf
88 http://www.thinkbrg.com/professionals-richard-higgins.html
89 http://www.bobekelund.com/wp-content/uploads/2013/01/VITA-2013-NET.pdf
90 http://www.independent.org/aboutus/person_detail.asp?id=299
91 http://www.cox.smu.edu/web/michael-davis
92 Ogilvy & Mather, Savarese and Associates (1988) : January 15, 1988 letter to Jeff Ross. http://legacy.library.ucsf.edu/tid/lan83b00/pdf
94 Tommer Court reporting (1998) : Iron Workers Local -V- Philip Morris, Et.Al-12/9/98~G. Berman, 69 p.
http://legacy.library.ucsf.edu/tid/pbz40i00/pdf
85
86

Of course Berman's answer "independently" isn't entirely correct: the industry fed Robert Tollison's
bias, and by doing so was able to focus his attention on their issues in the way they wanted. While
Tollison indeed may have concluded for himself taxing tobacco is evil, his conclusion wasn't entirely
independent nor were those of any of the other members of the network.
The reason why the tobacco industry funded 'research' is clear: buying fake academic credibility by
letting the economists write 'scientific papers'. Papers, purely coincidentally, concluding there was no
need to tax the tobacco industry. The papers would also provide material for the industry's lobbyists to
be used to talk with media, politicians, etc. The economists in the network clearly knew they worked
with/for the industry, and were paid by the tobacco industry. The recruited economists were known for
their libertarian viewpoints, already opposing any form of regulations/taxes. This could mean some of
them were "useful idiots".
The most important argument against the useful idiot hypothesis is, the fact the early documents of the
network state all the economists were listed as "tax hearing witnesses". That means that every single
economist on the list agreed he would deliver testimony for the tobacco industry when the industry
would ask. The documents even mention how many days in advance they should be contacted. The
industry described it as follows in a memo sent to its regional vice- presidents38
Attached is an updated list of The Institute's cadre of excise tax economists. These economists are available for
testimony, one-on-one meetings with legislators, writing letters and op-ed pieces in the states in which they teach,
as well as in any state you deem appropriate.

This implies every single economist in the network list was no longer acting as an academic, but should
be considered a lobbyist, as they all agreed to defend the industry. This is true even for the ones never
asked by the industry to testify. They agreed to testify if they were asked.
The authors of articles must have realized it was strange they received money to write an op-ed, and
that it was strange that the Tobacco Institute required it correct them before publication if the
economists were to be paid. And that it was strange they earned more money if they would send the oped to a local senator, not just any senator but the one the industry told them to. It is possible some
members left the network once their conscience came to play.
Even though the industry recruited libertarians and used their bias, the economists were fully aware
they were not simply expressing their worldview, but instead were lobbying for the Tobacco Institute.

3.

APPENDIXES

The appendixes are in the accompanying excel-file
3.1.

APPENDIX A: ALL ECONOMISTS

Some 120 economists have been identified.
3.2.

APPENDIX B: ACTIVITIES OF THE CORE MEMBERS

Appendix B lists all the activities of the core members of the network which could be found. The
individual papers/od-eds which were written have not been listed, and not all dates for testimony have
been found, nevertheless the overview provides an idea of just how much time the core members
invested in the economists network. Remember, besides the listed activities they were writing op-eds,
writing papers, writing books, etc. Oh, and in the time not spent lobbying, they even were working as
professors at their university.
Overviews have been found for the years 1988-1989-1990. This may be the reason those years seems
busier than the others. It is clear though the activities decreased after 1991, even though it is likely that
not all the documents ended in the LTDL, large parts of the 1990's seem to have been culled.
Activities without a link will be described in the full report.
3.3.

APPENDIX C : ECONOMISTS WHO TESTIFIED AT HEARINGS

Even though there are several documents hinting more economists have testified, only economists of
whom its proven beyond any doubt they testified are listed in appendix C.
3.4.

APPENDIX D : INVOICES

The list with activities of the core members (appendix B) already illustrates just how incomplete the list
of payments given in appendix D is. Nevertheless it has some value, because it shows the core members
indeed were the ones probably earning most.
Examples of invoices still missing:
 several op-ed rounds (p.ex. 1998), papers, reports, ...
 GSA letter campaign
 several testimonials
 'smoking and the state' was promoted in much more cities than listed95, invoices were found for
13 tours. With all the invoices uncovered being $3000 and higher, the amount missing must be
at least $100.000
 Savarese billed the TI $60.000 for writing positive book reviews, but it is not clear how much
the individual authors received
 Savarese's share: he worked as a consultant for different programs, not just the one around
social cost, making it difficult to make a disambiguation in his invoices, so I did not include a
single invoice from Savarese.
 Ogilvy & Mather's share: like Savarese, the PR-firm worked on different programs. They
prepared p. ex. the media tours, in 1997 billing $5,500 per tour96, with 43 tours they company
must have earned over $200.000 for the tours.
The overview excluded the expenses of the economists (airplanes, hotels, meals, ...)

Ogilvy & Mather (1992) : A promotional program for The economics of smoking: getting it right.
http://legacy.library.ucsf.edu/tid/ztz20g00/pdf
96 Sparber P. (1987) : May 16, 1987 memorandum on media tours http://legacy.library.ucsf.edu/tid/jnd00g00/pdf
95

Therefore it is clear the figures in appendix D should be considered absolute minima. A reasonable
estimate is the Tobacco Institute spent well over $3 million on the social cost program, instead of $1
million that has been unambiguously identified.
The amount of money listed for the Monster op-ed campaigns follows indirectly from the evidence
1) Savarese foresaw a budget of $3000 per op-ed for the Monster op-ed campaign
2) The op-eds identified
Correction for inflation was done using the USA inflation calculator:
http://www.usinflationcalculator.com/
While using this tool probably isn't perfect, it does give an idea how much money the economists
earned by nowadays standards.
3.5.

APPENDIX E : MEMBERSHIP OF TH INK TANKS

Appendix E lists the known think tank connections with the economists.
An interesting pattern emerges: while there are dozens of free market think tanks, the tobacco
economists clustered in only a handful of them.