Committee on Taxation and Economic Growth

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This article is part of the Tobacco portal on Sourcewatch funded from 2006 - 2009 by the American Legacy Foundation.

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This article is part of the Center for Media & Democracy's spotlight on front groups and corporate spin.

The Committee on Taxation & Economic Growth was an informal committee started in late 1983 by Robert D. Tollison (Bob Tollison) and four other economists: Harold M. Hochman, Thomas E. Borcherding, Fred McChesney and Dolores T. Martin. This committee was supported by the Tobacco Institute (TI) through 'Ogilvy & Mather' PR (O&M) and Jim Savarese of 'James Savarese and Associates' (which had the same address and telephone number as O&M). The chairman of this group was Robert D Tollison from George Mason University -- but from the look of the monthly reports is was very much as an operation run by O&M.

C4C Network Phases

The Cash for Comments Economists' Network developed in five clearly identifiable phases.

  • Phase 1. (c 1979) Professors Robert D Tollison and Richard Wagner were recruited by George R Berman (Philip Morris and Devon Management Resources) to provide propaganda writing services to the International Committee on Smoking Issues (ICOSI) which met in Brussels under the direction of Mary Covington.
  • Phase 2. (c late 1983) Tollison and Wagner were transferred to the control of Ogilvy & Mather PR (James Savarese) in the USA under the control of the Tobacco Institute. They were joined by economics professors Harold M Hochman, Fred McChesney, Thomas Borcherding and Dolores Martin to form the Committee on Tax & Economic Growth. The CTEG offered advice on the desirability of low excise taxes on cigarettes to the media and politicians as esteemed members of an 'independent' society or experts.
  • Phase 3. (May 1984) Tollison and Savarese now established the cash-for-comments network for the Tobacco Institute using the Center for Study of Public Choice at George Mason University as a money laundry channel. They recruited 42 professors (they claimed) from the Public Choice Society (some didn't last long) before the end of 1985. Their task was mainly to write op-eds on specified subjects for their local newspapers, and they were paid a bonus for contacting their local Assemblymen and Congressmen. They were also to be available to the tobacco industry's State lobbyists as 'independent' witnesses at ordinance and Congressional hearings on workplace smoking, etc. (The promised 'secrecy' was not well preserved within the Tobacco Institute).
  • Phase 4. (c 1986) Savarese and Tollison now formed a formal partnership Savarese & Associates and expanded the network to include at least one professor of economics in each State (some States had two). Payment was increased; there was a regular turnover, but the numbers stabilised. Eventually the Tobacco Institute became annoyed with the mark-up that the partnership added to its bills, and sent in the auditors. They didn't like what they found.
  • Phase 5. (c. 1996) The Savarese/Tollison partnership continued with a few of Tollison's close associates, but the bulk of the network broke away and began to operate directly to the Tobacco Institute under the leadership of Robert Higgs and William Shughart through the Independent Institute think-tank.

Documents & Timeline

1984 June In June 1984 the U.S. Treasury Department held tax simplification hearings throughout the country. Maureen Delanty of O&M wrote in her monthly report on July 6, 1984 to Peter G. Sparber (TI Vice President)

"We participated in six out of the eight hearings, hiring local academicians in each city to prepare and deliver testimony against excise taxes. We arranged media coverage for the academicians and traveled to each city to coordinate their activities. [1]
RELATED ENTRIES
This entry is predominantly on the
Committee on Taxation & Economic Growth.
It needs to have the hotlinks updated to the San Francisco Uni archive.
See also the later Cash for Comments Economists Network
Also the Economists' network
These three need to be consolidated with the Committee split off as a separate entry.

1984 June 20: Patricia Milita of Ogilvy & Mather PR has written to Michael Kerrigan, a Regional Director at the Tobacco Institute.

Following is the information you requested on The Tobacco Institute's involvement in the U.S. Department of Treasury's tax simplification hearings in your region.

  • So far, one hearing has been held in the Northern Sector: in Minneapolis on Tuesday, June 19. Dolores Martin, an economics professor at the University of Nebraska, presented testimony at that hearing. We arranged interviews for her with KSTP-AM (radio) and KSTP-TV (both are St. Paul stations). A copy of her testimony and a biographical sketch are attached.
  • The next hearing [June 25] in your region will be in New York on Monday, June 25. Harold Hochman, an economics professor at Baruch College of the City University of New York, will testify. Hochman's testimony (subject to his revision) and biographical information are attached. We are seeking media coverage for him.
  • The final hearing is scheduled for Thursday, June 28 in Springfield, Illinois. We are now preparing testimony and seeking both an academician and a small business spokesperson to present testimony at that hearing. [2]
Harold Hochman and Dolores Martin were members of the Committee on Taxation and Economic Growth run by O&M at that time for the Tobacco Institute.

1984 July 16 Samuel D. Chilcote (President of TI) wrote in a letter dated July 16, 1984 "On short notice, we were able to encourage the testimony of different economists at six of the eight hearings. They presented their personal views on excises, which coincided with our own, and in some cases personal views on other aspects of taxation." [[3] This proves that O&M was doing all of this on behalf of TI. All five economists who formed the committee plus Roger Kormendi participated in these hearings.

1984 Sep 6 In the 'August Monthly Report' Patricia Milita of O&M wrote to Peter Sparber:

  • "Agency wrote copy and began coordinating design for a brochure based on testimony before the Treasury Department. We will have a comprehensive estimate by 9/10/84. Black and white sketches of economists are $500; color are $850. We are proceeding with sketches as each economist submits his or her photograph."[4]
Roger C Kormendi was an Associate Professor of Economics at the University of Chicago (later Michigan) and Director of Research at the Mid-America Institute for Public Policy Research. This ultra-libertarian think-tank later changed its name to Catalyst Institute and it is now part of the extreme corporate-backed libertarian Atlas Croup network of think tanks.

The booklet was called '...The U.S. "Deserves to Have a Tax System Which Looks Like Someone Designed it on Purpose."' was issued under the name, the Committee on Taxation and Economic Growth consisting of all the aforementioned economists minus Roger Kormendi. Nothing is mentioned about O&M or TI. In the preface of the brochure it said:

"The Committee on Taxation and Economic Growth opposes excise taxes and believes government should seek other ways to raise revenue. The following excerpts, taken from public testimony before the U.S. Treasury Department, present some of the strongest arguments against excises.' [5]

Patricia Milita wrote in that same O&M 'August Monthly Report' that they had "Hired Roger Kormendi to prepare testimony for submission to the Senate Finance Committee."[6] An excerpt of his written statement for the Senate Finance Committee was published in 1985 in a TI booklet called "Excise Taxes: the Fairness Issue" together with excerpts of statements from other people including several members of the 'Committee on Taxation and Economic Growth'. end_page=15

1984 Nov 2 Patricia Milita of O&M reported to Peter Sparber

  • Produced and delivered 2,000 copies of the U.S. Treasury Department brochure. All members of the Committee on Taxation and Economic Growth received copies.
    • Obtained a P.O. Box for the Committee on Taxation and Economic Growth.    [7]

1984 Nov 20 Ogilvy & Mather PR (O&M) is organising for the Tobacco Institute the first economists forum at the Public Choice Society meeting in New Orleans, Feb 21-23. (Note: at this time James Savarese worked for O&M's PR division)

The topic would be "Public Choices About Tax Reform." William F. Shughart II, an economist from Clemson University, would chair the panel. Those who would present papers would be:

  • Thomas Borcherding, from Claremont Graduate School. Subject: "Tax Reform and Simplification: A Public Choice Perspective."
  • Harold Hochman, from City University of New York. Subject: "The Value-Added Tax: Do We Need Another Excise Tax?"
  • Fred McChesney, Emory University Law School. Subject: "Tax Reform in a Rent-Seeking Perspective: The Role of Interests."
  • Gary Anderson, an economist from George Mason University, would be the discussant.

Bob Tollison would be responsible for getting us on the program. He and Jim Savarese would work with each of the people to ensure that each paper contained a clear anti-excise tax message. Shughart and Anderson would also mention excises in their presentations. We will be obtaining CV s from Anderson and Shughart, who Jim and Bob Tollison know well. The other economists have all worked with us before.

Savarese's estimate of the costs for running this Economists' Forum project with the three papers at $2,000 each and Gary Anderson with $1000, plus travel, hotel, administration, etc. was $16,000. [8]

This appears to be the first operation of what was to become the Cash for Comments Economists Network

1984 Dec 13 At the Annual Meeting of the Tobacco Institute, William Kloepfer (Senior Vice President of Public Affairs Relations) said

"This year we popped consulting economists into Secretary Reagan's regional hearings on tax simplification, each of them building into the records testimony that excises are lousy.

With our support five of them have formed a Committee on Taxation and Economic Growth and published their views in a pamphlet. They'll go anywhere to testify. They have also been helpful in lining up other experts to help.

This February, in Atlanta, two of them will be conducting a seminar on tax reform and simplification.'[9] (Robert Tollison and Fred McChesney participated in this seminar [10] [11] [12] start_page=7&end_page=7)

Phase 3.

Note: There was some overlap with the old Committee on Taxation & Economic Growth continuing to operate as a concentrated front organisation, while the more distributed Cash for Comments Economists Network was being developed to service the various states.

1985 In a internal TI document (±1985) this committee was described as:

"Ogilvy & Mather and Jim Savarese worked with Professor Bob Tollison (George Mason University) in organizing an informal committee of economists from 42 states who have collectively and individually participated in activities on behalf of the tobacco industry in the areas of excise taxation and public smoking. [13]

This was the foundation of the Cash for Comments Economist Network which lasted for a couple of decades and involved well over 120 professors of economics at State universities in total. It was headed by Robert Tollison (with the help of his wife Anna Tollison) and assisted by a core group of economists: Richard Wagner Dwight Lee, Henry Butler, William F Shughart and Garry Anderson. Elizabeth A Masaitis and Carol M Robert staff from the Center for the Study of Popular Choice also worked for the network (paid via Savarese & Associates).

1985 Jan 31 On January 31, 1985 M. Hurst Marshall (Tobacco Institute Vice President) sent a list of economists who could "assist TI on the federal cigarette excise tax issue" as an attachment of a letter asking to spread this information to their lobbyists. [14] [15]

This list covered 42 states (although Hawaii and Maine had not yet been given an economist and two economists were named for New York). All the economists on that list were member of the incipient Cash for Comments Economists Network. Some of these were Ryan C. Amacher, Terry L. Anderson, Robert Ekelund, Richard K. Vedder and Richard Wagner plus the four economists who started the 'Committee on Taxation and Economic Growth' with Tollison

1985 Feb 12 Similar information was in the 'January Monthly Report' of O&M sent on February 12, 1985

Identified economists in 14 states (for a total of 42) and provided TI with CV's on each. We need to identify one more economist, in Hawaii. [16]

1985 Mar 6Maureen Delanty of 'Ogilvy & Mather' reported on March 6, 1985 to Peter Sparber in the 'February Monthly Report'

Prepared 31 rough drafts of op-ed articles on tax reform based on phone discussions with economists in each Senate Finance and House Ways and Means Congressional district. (We worked with Bob Tollison and three other economists on this portion of the project).

Eight final articles have been submitted to papers for publication; others will be completed as soon as possible. Economists will send copies of their articles to their Congressmen, whether they are printed or not. We will forward published articles as they appear.

Collected sources for earmarking brochure. Committee on Taxation and Economic Growth has agreed to endorse this piece. We will have first" draft by week of 3/11 [17]

Earmarking = dedicating an excise tax to fund a specific project ... in this case, Medicare. This worried the tobacco industry because it was popular.

Ryan Amacher a member of this network [18] had one of his first tobacco industry friendly op-eds (the article 'Excise taxes must be understood') published on March 6, 1985 in Greenville News (Greenville, SC) [19] [20]

1985 May 14 In the 'April Monthly Billing' of O&M Maureen Delanty reported on May 14, 1985 to Susan Stuntz (Director of Issues Management at the Tobacco Institute).

"• Drafted and revised article on tax reform and excises for submission to American Legion Magazine. Ryan C. Amacher, Ph.D., from Clemson University signed the piece." See p399-400

[Note that Archer only "signed" the piece -- not "wrote" it. That article was published in the September 1985 edition of the American Legion Magazine. [21]

1985 June 10 The O&M's Maureen Delanty reported on June 10, 1985 to Susan Stuntz (TI Issues Manager) in the 'May Monthly Report'

Delivered brochure on health care financing. We also printed stationery for Committee on Taxation and Economic Growth for cover letter signed by Bob Tollison. Distribution list is being compiled and brochure will be mailed as soon as possible.

  • Continued to prepare op-ed articles on tax reform and work with area economists to place in newspapers in home districts of members of House Ways & Means and Senate Finance Committees. We are collecting originals of all published articles for distribution at TI and elsewhere.
  • Arranged for Citizens for Tax Justice and Harold Hochman, professor at City University of New York, to testify before Representative Rangel on the taxation of low-income wage earners. This involved coordination of testimony with the subcommittee and making final revisions on Hochman's statement." [22]

The mentioned brochure was most likely called "Health Care Financing: we Can't Afford To Make A Mistake" [23] which was officially issued by the 'Committee on Taxation and Economic Growth' and mentioned the address: P.O. Box 65192 Washington, D.C. 20035.

1985 June 19 Thomas E. Borcherding gave his testimony against increasing excise tax on tobacco before the House Ways and Means committee end_page=12 [24] and he provided a similar testimony in California. [25]

1985 July 15 Maureen Delanty reported on July 15, 1985 to Susan Stuntz in the 'June Monthly Report'

"• Distributed brochure on health care financing, under cover letter from Committee on Taxation and Economic Growth, to Congressional staff of all Members on the House Ways & Means and Senate Finance Committees." [26]

1985 Nov In the November 1985 'Public Relations Resource Catalogue' of TI the "Health Care Financing: we Can't Afford To Make A Mistake" pamphlet was described as

"- eight-page booklet of excerpts taken from various public statements and representing a wide variety of individuals and organizations
- Presents arguments for "Continuing a sensible discussion of Medicare solvency, against ill-advised quick fixes such as earmarking excises to support the program, and for instituting across-the-board cost containment reforms to protect the system over the long term."
- Immediate availability
- Most effective distributed to business, labor and health groups, can be used to fight earmarking for state health programs" [27]


1986 Aug TI did a 'Field Staff Evaluation of Resources' which was internally released in August 1986. end_page=40 TI was afraid their funding would backfire

Robert Tollison (George Mason University) 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." (page 16)
The Tobacco Institute shows up as the funding organization. The motives of the industry are called into question for undertaking such a program. (page 18)
.. , as soon as an MD's funding from the tobacco industry is revealed, that witness loses the "pedestal" advantage. (page 25)


1987 Jan 12 Two years after the 1985 list of economists, M. Hurst Marshall sent a letter plus an updated list of economists to the regional vice presidents. [28] [29] In the letter Marshall wrote that Jim Savarese had contacted everyone on the list to work with the 'State Activities' program of TI. Marshall also urged the vice presidents to call these economists before May 1, 1987 since they were already informed someone from TI would contact them. Some small changes (Matt Lindsay replaced Ryan Amacher in South Carolina, Maine had by then an economist named) but most of the names of the 1985 list were still there.

1987 Feb 5 A draft speech of William (Bill) Kloepfer sent to Samuel D. Chilcote on February 5, 1987 says:

"Our consultant, Ogilvy & Mather, has been our conduit in recruiting academic economists. Our first target, met two years ago, was to retain such a consultant in each state represented on the Congressional tax committees. Last year we shared with you the bundle of op-ed articles published by these people during the tax reform debate, all of them critical of excises.
They're ready to respond similarly this year as events warrant, including at the state level. We assigned a new series of op-ed submissions (on) the first of this month, state by state, based on a priority list Roger [L. Mozingo] furnished." [30] [31]

1988 Feb Paula Johnson Duhaime (manager legislative issues at TI) sent to regional vice presidents and regional directors on February 1988 a new list of economists who "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." [32] [33]


1988 Mar 31 In 1988 TI wanted to promote the book Smoking and the State written by Robert Tollison and Richard E. Wagner. James Savarese and Associates made a list of the economist in each state who would write a favorable book review for a local paper. This list was sent by Jim Savarese to Jeff Ross (TI, responsible for the 'Excise tax issue') on March 31, 1988. [34]

1988 June In TI's "Public Affairs Management Plan Progress Report June 1988" was written

"Promotion of the Tollison and Wagner book, Smoking and the State, continues. An executive summary of the book is near completion. Several members of the economists' network have completed critiques, which are in the process of being cleared for publication." [35] (emphasis added)

1988 Aug 14 Ryan Amacher was one economists who wrote a review in an article called 'Economists Explore the Dangerous Aspects of Government Protection' which was published on August 14, 1988 in The State (Columbia SC) rotation=90 and which was reprinted in the Tobacco Observer in November 1988. [36]

1989 Jan 11 an updated list of economists was issued covering 43 states and 64 economists including Gary Anderson, Jeffrey Clark, Dwight R. Lee, and Walter E. Williams. [37]

Alexis de Tocqueville Institute

In 1994 the Alexis de Tocqueville Institute (AdTI) made a pro-tobacco junk science report and Cesar Conda (then Executive Director of AdTI) asked Philip Morris if they could contact Tollison and some other people (if possible scientists, epidemiologists etc.) for the the 'Academic and Science Advisory Board'. [38]

1994 Aug 11 The final AdTI report ("Science, economics, and environmental policy: a critical examination" [39]) had a 19 member 'Academic Advisory Board' including Tollison and 9 other economists. So his network was still working. (see also Center on Regulation and Economic Growth & AdTI-Funding)

The names on the so-called Academic Advisory Board list are either members of the Cash for Comments Economists Network, other tobacco industry academic supporters, or associates of S Fred Singer and his SEPP (climate denial) organisation.

As can be seen in the article about Ryan C. Amacher, the activities of these economists were reported by 'Ogilvy & Mather' and later 'James Savarese and Associates' to TI. These organizations were also funded by TI, so probably most of these economists were not paid directly by TI but through these two organizations with the same address in Washington. Tollison himself was directly paid by TI.

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