AEI (Doc. Index)

From SourceWatch
Jump to: navigation, search

This stub is a work-in-progress by the journalists's group. We are indexing the millions of documents stored at the San Francisco Uni's Legacy Tobacco Archive [1] With some entries you'll need to go to this site and type into the Search panel a (multi-digit) Bates number. You can search on names for other documents also.     Send any corrections or additions to

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

The American Enterprise Institute for Public Policy Research (AEI) is one of the nation's oldest and wealthiest think tanks. It has undergone many transitions over the years and it can't simply be classified as 'conservative' -- it is also radically libertarian at times, and distinctively pro-corporate. It has been a libertarian free-market promoter of deregulation and privatisation for most of the last sixty years, very often supported by substantial corporate funds. This gave it the distinct tinge of being a corporate and industry lobby-shop for industries who believe that they need protection from regulators like the EPA, HHS and FDA -- (tobacco (cancer potential), chemical manufacturers (Agent Orange), energy companies (climate science).

However, following the loss of the Presidency by Gerald Ford, the AEI took in many of the hawks from the Republican administration. More recently its focus has been on manoeuvering the USA into taking a pro-Israel, interventionist line in the Middle East. It was very active in promoting the idea that Saddam Hussein had basic nuclear capabilities -- leading to the Weapons of Mass Destruction fiasco which now appears to have been responsible for triggering the current spate of bombings and terrorism. The AEI seems to have now left most of the corporate lobbying work to other related think-tanks which are also part of the Atlas Network and focussed on the military and defense (probably with defense-industry backing). Like most similar think-tanks it has the swan-like quality of being open, elegant, clean and sedate on the surface, while the vast majority of its activities are conducted below the surface.

Documents & Timeline

1937: Lewis Harold Brown (1894 - 1951) was president of Johns-Manville, the world's largest asbestos producer and miner. He founded and became Chairman of a group of "civic-minded businessmen" who established the Tax Foundation in 1937 during the war.

1938: The AEI was first established as a New York City business association called the American Enterprise Association (AEA) which was dedicated to promoting free enterprise and opposing the threat of socialism. [Note: This accords with the official story of the AEI is that it was established as a normal business round-table discussion group, which was later taken over by the neo-cons.] [2]

1940-41: The AEA opened a Washington office to lobby against government intervention in the domestic economy immediately after the end of World War II. It was supported by some of the largest US firms who saw the British economy deteriorating, and felt threatened by the rising tide of unionism and the rise of socialism. War service had changed the expectations of the working class and this became expressed through collective action, retail price maintenance, rent limits, etc.

1943: They substituted "Institute" for "Association" in their name and established themselves as a policy think tank servicing Capitol Hill. The official history of the AEI says that it was founded by Lewis Harold Brown (1894 - 1951) who was at that time the president of Johns-Manville. He founded both the American Enterprise Institute and the Tax Foundation He founded and became Chairman of a group of "civic-mined businessmen" who established the Tax Foundation in 1937 during the war.

[General Explanatory Note:] During the 1930s and '40s Johns-Manville was the largest asbestos manufacturer in the US, and it became involved in a massive, 40-year cover up of the severe health risks caused by inhaled fibres. For decades they attempted to refute the science showing that asbestos was a health risk to the miners, the asbestos product makers, workers and tradesmen-users. And since loose-filled asbestos was used as an insulating material, it also produced asbestosis, lung-cancer and mesothelioma in other workers and home-owners.

The dangers of asbestosis were known to be widespread among asbestos miners and workers, following the March 1930 report by the UK's Medical Inspector of Factories, "Occurrence of Pulmonary Fibrosis & Other Pulmonary Affections in Asbestos Workers." The potential dangers became widely known outside the industry only in the years immediately after the World War II because Naval ships used asbestos lagging around pipes and boilers, which led to the sailors, engineers and shipbuilders having very high rates of lung cancer and asbestosis. X-rays became common after the war and asbestosis showed up as disitinct 'shadows' on the lung in people with breathing difficulties. Many of these people were also smokers, so the asbestos industry tended to blame the cigarette companies (and vice versa), because the rate of lung-cancer among smoking asbestos workers was at least 20 times that of smokers (or asbestos workers) alone.

Activist efforts to stop the use of asbestos began in 1931, and the first regulations came into effect in 1932, but war intervened and efforts were only renewed to ban the substance in the early post-war years. The main killer disease related to asbestos however, was mesothelioma, a unique form of cancer of the membrane surrounding the lung. This unique, slow-growing cancer type was ONLY associated with asbestos -- there was no argument about its causes -- but it had a longer lag time (15 to 20 years) before it had its deadly effects. Mesothelioma therefore only became epidemic therefore in the 1960s, and asbestos fibres w3re then recognised as deadly in even small amounts.

1950: Representative Gerald Ford, praised the institute in 1950, beginning what AEI describes as a "long and happy relationship with the president-to-be."

1954: William J Baroody, took over as president and began bringing conservative economists into the institute, including Milton Friedman and Paul McCracken. He also actively developed a media outreach program and promoted libertarian ideas to journalists and broadcasters.


1966 General criticism growing of the Johnson Administration's handling of the Vietnam War. Gerald Ford and Congressional Republicans expressed doubt that the United States was doing enough to win the war.


1970-73 /E Neoconservative icon Irving Kristol (father of Weekly Standard editor William Kristol,) became an honorary fellow at the institute and closely involved in AEI's fortunes. He is generally recognised to be the "godfather of neoconservatism" and was the leader of a group known as the "New York Intellectuals". He was also associated with the CIA-funded anti-communist, Cold War focussed, Congress for Cultural Freedom (CCF). which had branches in 35 different countries, had hundreds of staff, and ran (openly and surreptitiously) many magazines. [3] The CCF became the model for many of the new libertarian/political think-tanks.

William Kristol says that this resulted in AEI

" ...expanding its free enterprise focus to include social issues and Cold War defense policies, topics closely covered by neoconservative writers"

. Attracted by the emergence of this new ideological grouping, writes Kristol, Baroody

"... made a determined effort to recruit 'neoconservatives' to AEI, and did in fact recruit, early on, Jeane Kirkpatrick, Michael Novak, Ben Wattenberg, as well as many others…. [Baroody's] task was facilitated by the appearance on the scene of a rejuvenated Bradley Foundation and John M. Olin Foundation, now staffed by younger men and women who had been exposed to, and influenced by, 'neoconservative' thinking. Among them special note has to be made of Michael Joyce of Bradley, who turned out to be an accomplished neoconservative thinker in his own right."

1970-78Between 1970 and 1978 the AEI budget grew from less than a million dollars to seven million, its staff from 24 to 125. [See Source details below]

1971 [In the 2004 Think Tanks, Public Policy, and the Politics of Expertise by Andrew Rich.] He says of the AEI:

The AEI had just weathered a congressional probe of its president's involvement in Senator Barry Goldwater's 1964 presidential campaign, with political activitiy prohibited among nonprofit organisations.


[Note: As a result of AEI problems and delays, Paul Weyrich and friend Edwin Feulner formed the Heritage Foundation.]

1973: The year of the Arab oil embargo gasoline rationing and endless revelations about Nixon's Watergate scandal

1973 Oct 10: Spiro Agnew resigned as Vice President. He pleaded no contest to criminal charges of tax evasion and money laundering. He had accepted $29,500 in bribes while governor of Maryland. Nixon was forced by the Republicans to elevate Gerald Ford to Vice President.

1974 Aug 9: Nixon resigns only six months after Agnew's resignation, and Gerald Ford takes over as President. His AEI associates begin moving into high government positions

1974 Aug 20: Ford nominated the wealthy Nelson Rockefeller as Vice President (over second choice George HW Bush). Under extended confirmation hearings before Congress, it transpires that Rockefeller had made large gifts to senior aides, such as Henry Kissinger.

1974 Sep 8: Ford gave Nixon a full and unconditional pardon for any crimes he might have committed while President

1975 JulA Legal advice bill by RJ Reynolds shows

Support by RJ Reynolds Tobacco for the American Enterprise Institute's advertising research project; [5]

1976 Feb 17: [Walker Merryman at the Tobacco Institute suggests they have research done by the Center for Research on Advertising (David Tuerck) at the AEI.

If we are interested in having some research done into public service advertising by the major health organizations and agencies of government concerning smoking and health, the American Enterprise Institute may be interested. I understand, through a third party, that David Tuerck, Director of the Center for Research on Advertising at the Institute, has evidenced some interest in counter advertising


1976 The AEI publishes a monograph for the tobacco industry; Restricted Advertising and Competition, by JF Cady.

1977 Jan 20: Jimmy Carter becomes President and Ford moves over to the offices of the AEI, bringing with him a retinue of conservative figures, including Arthur Burns, Robert Bork, David Gergen, and James Miller III. The institute says that

"AEI had become a hotbed of innovative ideas—on deregulation, tax reform, trade policy, social welfare, and the revitalization of defense and foreign policy—that were about to debut on the political stage.

1977 The SOSAS project (A multi-company PR push to deny dangers from passive smoking and create Smoker's Rights groups.) was directed at anti-smoking activists and appears to involve a concerted attack on the petrol companies in order to divert attention away from the pollution aspects of tobacco. They suggest that the project would be best run by the Tobacco Institute under RJ Reynolds control. Their main points:

  • Need to greatly expand PR role at RJ Reynolds and also at Tobacco Institute
  • Edelman PR have created a proposal
  • The AEI is in discussion about a study to address "the proper role of government in influencing matters of individual choice". [7]

1977-78 William Simon's book "A Time for Truth" called on business leaders and corporate foundation executives to fund

intellelectual refuges for the non-egalitarian scholars and writers in our society who today work alone in the face of overwhelming indifference of hostility. They must be given grants, grants, and more grants in exchange for books, books and more books.(Brock 72)

Simons has joined the AEI Board alongside Irving Kristol, Robert Bork, Jeane Kirkpatrick and Charles Murray (They have doubled the operating budget by late 1970s) [Source Brock]

1977-78 [Claim] The neo-con guru, Irving Kristol changed the AEI from a genuine business organisation into a highly partisan attack dog for the Republican right.

The AEI is not a "think tank" it's a "belief tank!" They have an ideology and they twist facts into a pretzel to justify their belief system.


1977 The New York Times reported on the AEI:

... its vast outpouring of materials and activities, included 54 studies, 22 forums and conferences ... 7 journals and newsletters, a ready-made set of editorials sent regularly to 105 newspapers, (and) public affairs programmes carried by more than 300 television stations. [9]

1977 May 11: David Turek (AEI) is dealing with the tobacco industry through Ed Jacobs (external tobacco lawyer with Jacob Medinger) and Frank Colby (RJR's scientific lobbyist) [10]

1977 Sep 11: William Baroody, Jr, now the Exec VP of the American Enterprise Institute writes on a first-name terms to Fred Panzer at the Tobacco Institute, sending some brochures in appreciation of "your interest in the Asssociate's program" [11]

1978 Feb 21 Anne Duffin and Fred Panzer of the Tobacco Institute have met with those involved with issues management from RJ Reynolds: Jim Peterson, Dennis Durden, Ron Sustana (PR), Hudnall Christopher, and Max Crohn (a Jacob Medinger lawyer)

This is obviously the SOSAS (Smokers Rights) project, and they are also setting up a meeting with Horace Korengay of the Tobacco Institute (Bill Kloepfer was excluded) in Florida. The writer (Anne Duffin) has recorded and transcribed some of the three hour meeting:

The purpose was to discern what program, if any, should be implemented to educate, communicate and mobilize support on behalf of the smoker, smoking and the entire tobacco community... to proclaim the rights of smokers and nonsmokers alike (and) to reassert the tobacco industry's position... as it relates to the issue of social acceptability.

There is thought of a membership group , Smokers Alliance or some such, that could eventually pay its own way; a rights group (PUFF might be a good name, but that was not mentioned).

Dennis had talked with Ed Grefe (PM Political Affairs) in Winston the day before for two hours about how you might tie these so-called volunteers in with the mercenaries (project employee lobbyists).

  • Chuck Morgan [Note: Grocery Mfg of America] has talked about approaching:
    • Bob Bjork (whose wife has been ill) [Note: Prof of Psychology UCLA]
    • Sam Ervin [Note: Democrat. Senator -- involved in Watergate prosecutions]
    • Clarence Kelly (after all, the industry helped him to become FBI chief) [Note: After Hoover: Nixon's FBI nominee June 1973 - to Feb 1977]
    • the present unidentified ACLU president and
    • Ramsey Clark (who they would not trust, however, without tethers) [Note: Pres. Johnson's Attorney-General -- anti-war activist].
  • They're also talking about working with Baroodi's American Enterprise Institute and maybe an AEI forum. [12]

[Note: Obviously, at this time RJ Reynolds were not members of International tobacco lobby, ICOSI -- although they had attended the Berkshire meeting in June 1977.]

1978Between 1970 and 1978 the AEI budget grew from less than a million dollars to seven million, its staff from 24 to 125. [See Source details below]

1978 May 14: ACTION PLAN on Smoking Restrictions: They want to create "a passive public attitude towards passive smoking." Many possibilities are canvassed:

  • The American Medical Association has been caught out taking tobacco money for a dubious research program (AMA-ERF) and forced to return the grant, giving them some money to splash around. Advertising and courtesy campaigns are considered.
  • Grant to Damon Runyon-Walter Winchell Cancer Fund with "publicly visible fund-raising events for the Fund"
  • Run Forums for Congress (smoking in government buildings), the Courts (do.), corrupt scientists, (Ragnar Rylander-type - run by lawyers), labour unions and Think-tanks. The report is proposing that Tobacco Institute members engage in AEI fund-raising They list the value of this to the industry

The AEI has achieved something of a reputation as a right-of-center intellectual center vis-a-vis the liberal-oriented Brookings Institutution. However, it does no contract work, so an approach would have to be made on the merits of out case. AEI is now actively seeking support.

Strengths: Visibility, credibility and access to opinion leaders and their journals AEI provides a wide variety of publications and forums, some of which lend themselves to the non-smoker issue.

Weaknesses: No guarantee AEI would undertake the assignment. AEI television forum is adversarial in nature and would require the appearance of an antagonist. While irritating, this format would enhance credibility.

Recommendation: Urge member receptivity to AEI fund-raising campaign. [13]

1979 Aug The list of think-tanks and foundations judged worthy of receiving money from corporations, Give, But Give Wisely is put out by the right-wing/business orientated "Philanthropic Advisory Service".

This is actually a front for the American Enterprise Institute -- both organisations have the same address. [14] [15]

1980 the tobacco industry had a Social Costs/Social Values Project conducted under the auspices of ICOSI/INFOTAB, the global tobacco lobby, by its Social Acceptability Working Party (SAWP). The report Cost-Benefit Analysis of Regulation: Consumer Products was

... to be published by a policy research center, the American Enterprise Institute, the text will generalize the social cost issue to include other consumer products such as alcohol and saccharin. ICOSI would sponsor the work through a grant to the authors. $25,000 for authors. AEI will pay for publishing and distribution.

[Note: ICOSI was the global lobby group for the tobacco industry. It was based in Brussels, so donations could be channelled through off-shore companies outside reach of any US legal processes.

Presumably the pubication and distribution would also be using donations from the US tobacco companies]. [16]

Their aim was to counteract "social cost" arguments against smoking by broadening the issue of social costs to include other consumer products. This was known as the slippery-slope technique of recruiting allies.

Social cost arguments against smoking hold that smokers burden society with additional costs quite apart from on-the-job absenteeism, medical costs, cleaning costs and fires.

The AEI had already published a previous monograph for the tobacco industry in 1976; 'Restricted Advertising and Competition,' by JF Cady.

1980 Feb 19 A speech made by Bill Murray (Philip Morris International) who was also the head of the ICOSI 's Social Acceptability Working Party (SAWP) to the executive members of the international lobby group ICOSI, He says (paraphrased):

  • $350,000 has been set aside for an International Seminar on Public Smoking, but they have been unable to agree on the question of acknowledging ICOSI and/or its member companies' connection to the symposium.
  • Countermeasures:
    • A Workshop for National Associations was held in Brussels Jan 28-29, and it considered a pre-emptive campaign against the World Health Organization's (WHO) "Year of the Non-smoker" in 1980"
    • Mobilisiation of allies at national and international levels and form coalitions with other industries - advertising, etc.
    • Intelligence monitoring and surveys [using outside consultants]
    • $36,000 for a training package of videotapes, questionnaires and other materials
    • Analysis of anti-smoking organisations - "papers that can be published and quoted to undermine the propaganda of anti-smoking groups [] by showing that these groups have self-serving ends.'
  • Plans for a workplace study which would be designed to show that tasks are adversely affected by smoking deprivation. The findings, if favorable, could be published and therefore yield useful references for the industry ($50,000 cost)
  • Murray seeks approval from the ICOSI executive for another program.

    We seek your approval for us to arrange for publication of a monograph on cost-benefit analysis as applied to consumer products, including, but not limited to, tobacco products. it would be published by a policy research center in the United States, the American Enterprise Institute. ICOSI would sponsor the work through a grant to the authors.

The AEI would pay for publication and distribution. The monograph would present a point of view favorable to the industry and would provide the kinds of quotable answers to social cost issues that associations and companies need.

The authors would write the monograph during this summer and we estimate it would be published before the end of this year. the cost to ICOSI would be $25,000. [Note: he knows the outcome before he commissions the research.]

  • Another project would involve a conference in the USA on cost-benefit analysis of regulation of consumer products. The papers would be published as a book (approx $50,000)
  • A third project would be a critical review of the literature on absenteeism and a pilot study to deterine if in fact smokers are absent more often than non-smokers. If we can disprove this allegation in the pilot study, it would be worthwhile to do a more extensive study to eliminate absenteeism as a smoking issue (pilot will cost $20,000)


1980 Passage of the Comprehensive Environmental Response, Compenstation and Liability Act (CERCLA).

CERCLA was enacted by Congress in response to the threat of hazardous waste sites, typified by the Love Canal disaster in New York, and the Valley of the Drums in Kentucky. The initial trust fund to clean up sites where a polluter could not be identified or forced to act was $1.6 billion.

This is a major problem for the asbestos industry and the Agent Orange and dioxine producers (who would have to pay). It mainly effects the chemical industry and nuclear waste, but it also give the tobacco industry problems, and also the some manufacturers and users of toxic products like herbicides and pesticides. {] [18]

1982 Jul 17: The AEI is organising opposition to the Superfund clean up program of toxic and hazardous waste sites.

1983 Dec 31 The RJ Reynolds Tax Return shows in the previous year they had made a contribution to

American Enterprise Institute -- $100,000 [19]

1986 The Olin and Smith Richardson foundations withdrew their support from the American Enterprise Institute because of substantive disagreement with certain of its policies, causing William Baroody, Jr. to resign in the ensuing financial crisis.

Following criticism by conservatives that the AEI was too centrist, it moved its programme further to the right and became more aggressive in pursuing its public policy goals. See American_Enterprise_Institute

  • Subsidiaries: Philanthropic Advisory Service; Center for Research on Advertising.
  • Offshoots: Competitive Enterprise Institute
  • Coalitions: The AEI also joined forces with the Brookings Institution circa 1990

At about this time the AEI focus changed. It now mainly promoted the advancement of free enterprise capitalism and deregulation. It also, succeeded in placing its people in influential governmental positions, so many neo-conservatives entered into positions of power.

The AEI has been described as one of the leading architects of the Bush administration‘s foreign policy and its support for regime change in Iraq via the Iraq war. The AEI also became a staunch supporter of the privatization of water.

[Note: No reason given]

1987 The recent history of the American Enterprise Institute shows that it is now funded and supervised by major corporations. It has become very rich and is now the home of neo-conservative guru, Irving Kristol.

Between 1970 and 1978 the AEI budget grew from less than a million dollars to seven million, its staff from 24 to 125. [20]

1987 May Alan Katzenstein, the contract statistician to the Tobacco Institute provides his monthly report. He has:

  • contacted Regulation (AEI magazine) outlining an article on ETS.
  • sent a letter-to-the-editor of The Rotarian
  • written an article on the harmlessness of ETS for Investor Daily
  • wrote a letter-to-the-editor of Science (not sent)
  • prepared a questionnaire listing his qualifications for becoming an 'expert' member of Scientists' Institute for Public Information (SIPI). The Tobacco Institute requested 'one modification'. [21]

1988 The AEI is listed as one of the founders of the Wise-Use coalition. The wise use movement was created in opposition to the environmental movement, and in the United States it is a loose-knit coalition of conservative groups and think-tanks.

It promotes the expansion of private property rights; a reduction in government regulation of public-property; expanded use of public land by commercial and public interests, and opposition to government intervention. Wise use proponents describe human use of the environment as "stewardship of the land, the water and the air" for the benefit of human beings -- in contrast to the environmental movement which tries to maintain the land for non-developmental reasons. [22]

1989 Later Annual report says they spent about $9 million on current operations and raised about $10 million, attracting many new corporate, foundation and individual supporters. From this years on they were "to build an endowment" and soon be able to announce substantial gifts towards this goal. [23]

1989 Dec AEI Annual Report sent to the Tobacco Institute: Chris DeMuth says their finances are strong and getting stronger by the month. Theire contributions were tax deductable .."from corporations, private foundations and individuals".

They are influential now among reformers in Eastern Europe and the Soviet Union. They are doing three types of research:

  • Economic Policy Studies - Herbert Stein, Allan Meltzer, Marvin Kosters, John Makin.
  • Foreign and Defense Policy Studies - Jeane Kirkpatrick and Richard Perle
  • Social and Political Studies - Robert Borkm Irving ristolm Michael Novak, Norman Ornstein, William Schneider, Ben Waltenberg
  • Administrator - Christopher C DeMuth,
  • Trustees - Robert Anderson (Rockwell Intl) retired; Charles T Fisher (Nat. Bank Detroit) retired; Paul A Miller (Pacific Enterprises) retired.
NEW Larry D Horner, Bruce Kevner, George R Roberts, Henry Wendt
OLD Winton M Blount, Paul E Oreffice, Christopher B Galvin, James C Buchanan, Paul O'Neill, Robert Malott

He includes a booklet (Dated Aug 1990) showing all the familiar names. [24] Note the 1984 list of Catholic Lay Commission members sent to the Tobacco Institute -- enormous crossover in the names [25]

1989 Dec PR speech by Edwin J Feulner (President of the Heritage Foundation)

At this point, let me go back to the early 1970s when I was working on Capitol Hill and became aware from first-hand experience that conservative ideas rarely worked their way into the public policy debate. Oh yes, we conservatives had the Hoover Institution. And in Washington were the American Enterprise Institute and the Center for Strategic and International Studies. But we lacked an institution to translate thought into action--an organization that could take pure research and apply it to the day-to-day questions facing our policy makers. What was lacking, from a conservative perspective, was an organization that could wage a war of ideas on a daily basis, in a generally hostile environment, with the energy and sophistication to win. [26]

1990 Launched American Enterprise magazine under editor Karlyn Keene. This was a consolidation of three older periodicals.

1990 Aug 1 Chris DeMuth's letter to Sam Chilcote at the Tobacco Institute, sending him their annual report. He boasts about their media coverage:

A major part of AEI's outreach effort is the dissemination of its research to the policy community and the public at large. AEI scholars who write regularly for newspapers such as the New York Times, Washington Post, Wall Street Journal, Washington Times, and Los Angeles Times include Jeane Kirkpatrick, Ben Wattenberg, Irving Kristol. Herbert Stein, and Richard Perle.

Michael Novak writes a regular column for Forbes; Ben Wattenberg and Richard Perle contribute regular features to U.S. News and World Report. William Schneider writes a weekly column for National Journal and longer essays on American politics for the Atlantic. Robert Bork, Patrick Glynn, Joshua Muravchik, Michael Ledeen, Douglas Besharov, and Norman Ornstein write articles for National Review, Commentary; the New Republic, the American. Spectator, the Public Interest, the National Interest, and other magazines.

Many AE1 scholars, including Jeane Kirkpatriek. Norman Ornstein, William Schneider, and Ben Wattenberg. appear frequently on network television news broadcasts and public affairs discussion programs. AEI"s conferences are often televised by C-SPAN.

In 1989 AEI scholars published more than 400 articles in leading newspapers and magazines. Each fortnight a selection of the best of these articles is reprinted and distributed to a national audience of public officials, business executives, and journalists as part of the Institute's On the Issues reprint series [27]

They received $10 million a year in revenues (half from corporations; 7% from individuals; 36% from foundations) exceeded their $9 million expenses.

1991 The 5th Circuit Court prevented the EPA from banning asbestos because the ban would cost $450-800 million while only saving around 200 lives within the next decade and a half. They said that the EPA did not provide adequate evidence that alternative products were safer.

1991 Apr Tobacco Institute Public Affairs Plan mentions that at a

Ways and Means Committee hearings, Jack Meyer, President of New Directions for Policy and an economist formerly with the American Enterprise Institute, cited a recent government study showing that "smoking leads to $2.2 billion a year in additional medical costs and another $43 billion in lost productivity." We are in the process of tracking this study down and will prepare a response to it, as appropriate. [28]

1993 Nov Election: Clinton wins.

Philip Morris's Washington Regulatory Organisation (WR)) held a dinner meeting in Washington to

...form a network of people who can respond quickly to legislative efforts to raise tobacco excise taxes. Representatives from all the tobacco companies, the grower groups, and various trade associations attended the dinner. [One point discussed was a] ...Proposal to restrict the salem marketing and promotion of tobacco products in the miitary resale system [which] also can be expected to arise next years, as well as continued movements to establish a smoke-free Department of Defence workplace. [29]


1993 Jan A Philip Morris document Here's what the Association chiefs are being paid. -- Revenue and Salaries of Policy Institutes It lists the trade and professional associations, their revenues and the amount paid to their CEOs.

  • AEI Revenues $11.9m: Christopher C DeMuth, President $258,000 + $37,000 expenses [30]

1993 Jan 15 Craig Fuller's Monthly Report at Philip Morris. He is head of Corporate Affairs.

  • Working with the Hudson Institute to develop a program to look at efforts in the areas of risk assessment, management and reform, VAT, NAFTA and/or a reevaluation of the economic policies of the 1980s.
  • Worked with VISNEWS in arranging interviews to promote PM In Motion with several public policy experts with whom we have close ties :
  • Working with Institute for Regulatory Policy [Note: Thorne Auchter & [James Tozzi|Jim Tozzi]]] discussing preliminary strategy and plans for a conference on the impact of federal mandates/EPA regulations on states and cities, including sponsorship by one or more public policy organisations (.g. Brookings, Heartland, CATO, CEI, PRI)
  • The National Center of Policy Analysis has published a study to support their position with the OSHA. It estimated that the cost to the US economy if the EPA regulates indoor air quality, will include losses of jobs. It was circulated to conservative journalists.
  • They have been "networking with the environmental movement" over the EPA priorities.

1994 Feb Steve Parrish report for Philip Morris -- on his actions with Policy Institutes against the Clinton Health Plan (See Roy Marden monthly report also)

American Enterprise Institute for Public Policy Research (AEI).
Provided background information to AEI in the development of a series of monographs examining various aspects of the Clinton Plan, and how other alternatives would provide a preferable health care system for the American people. Although AEI is highly bureaucratic and rather slow in getting programs off the ground, they have a premier conference/forum/panel operation. We should consider working with them in the development of a well-publicized forum under their sponsorship that would "expose" various aspects of the Clinton plan and help explain the benefits of some of the existing alternatives. [32]

1994 Feb 24 Walter Woodson (PR) to Sam Chilcote at the Tobacco Institute about ...

...the EPA/ETS economic numbers and the Canadian tax situation.
Bill [Oczechowski] and I continue to work with [politician/lobbyist] Charlie Whitley, Brennan Dawson [TI PR] and other TI staff, member company tax and ETS experts and consultants, Covington & Burling attorneys, TI's consultant economists, allies within organized labor and others to address these concerns.

He says about the EPA:

Our goal is to refute the claims of the EPA. The benefit and cost methods used by EPA is so flawed that is useless. Our greatest challenge lies in refuting the costs to non-smokers that allegedly arise due to ETS. The estimated benefits [of non-smoking] are based on the alleged economic cost of reduced life expectancy due to exposure to ETS. It would appear that EPA has probably used conventional cost inflators in their analysis.

Our best opportunity to set the record straight resides in assembling a group of economists to assess and address the claims of EPA. This idea stems from my discussions with Jane Gravelle, the Congressional Research Service (CRS) senior economist who is currently doing a tobacco tax study. She was appalled by the research methods used in the original EPA analysis and considered their work to be very weak - to say the least. We will, of course, use the CRS study when it is released next month.

[Note Jane Gravelle became a secret consultant shortly after]
Our approach would run along two lines: discredit the research methods used in the original EPA studies and critique its application to the workplace.

As Jane Gravelle put it, the statistical methods used in the original EPA study are similar to the methods used by economists. Economists call it econometrics and epidemiologists call it biometrics. In either case, the same statistical standards would be used.

We will ask a group of economists to inspect the statistical method employed. We hope to assemble a good group of economists that would reject the study and have the same reaction as Jane Gravelle. Since costs and benefits seem to be the new focus of EPA it would appear that this is a proper domain for economists.

About possible Allies and Support Groups, he points to the Washington University's Center for the Study of American Business, where (?) McKenzie is on secondment [and which receives a lot of tobacco funding]

We are attempting to interest economists and groups that are normally critical of EPA in general but have not been associated with tobacco issues in the past. Murray Wiedenbaum, formerly a member of the Committee of Economic Advisors (CEA) in the Reagan Administration, is president of the American Business Enterprise Center in St. Louis. His group focuses on the high costs of government regulation and often is critical of government studies. Dwight R Lee [Note:a notorious cash-for-comment economist] spent a year there as a resident scholar.

I also am looking into contacts at the American Enterprise Institute for economists.

The free market economists and groups also may help. [Robert D Tollison|Bob Tollison]] [Note: Who ran the cash-for-comments economists network] has good contacts with Bob Ekelund [Note: yet another cash-for-comments economist] and the Auburn University econometricians that have done work for us in the past -- notably a study of smoking and days lost from work. He also could group together other economists that could write op-eds for us.

I am working with Fred Smith's Competitive Enterprise Institute. They have been heavily critical of EPA in the past. They recently gave their annual research award to Michael Fumento. [Note: who worked with Steven J Milloy of TASSC] Fumento also wrote an article (1/28/93) in the Investor's Business Daily that criticized the ETS science.

Finally, the De Tocqueville Institute is considering a project that would analyze four or five recent EPA studies that were poorly designed. One of the studies would include the original ETS work. They are at the exploratory stages of the project and recently have asked me for the names of economists to help them. [33]

1996 Matt Winokur (PM Corp.Affairs) had a $2.7 million budget for ETS (passive smoking) fight-back activites. It includes funding of

  • The Advancement of Sound Science Coalition (TASSC) run by Steven J Milloy to lable adverse science as junk.
  • American Enterprise Institute (AEI) which was to promote publications on 'sound science' (generated by TASSC & ARISE),
  • International Democrat Union (IDU) a Tory/libertarian global network of right-wing politicians run by Keith Joseph for Margaret Thatcher. It had subsidiaries EDU and PDU (European and Pacific).
  • Associates for Research into the Science of Enjoyment (ARISE) a pseudo-scientific lobby group funded and controlled by Phillip Morris. [34] [35]

1996: A Million for your Thoughts a Nader/Public Citizen report on industry-funded campaignby conservative think-tank who were lined up against the FDA.

Public Citizen says that seven think tanks:

  • the American Enterprise Institute,
  • the Cato Institute,
  • the Competitive Enterprise Institute,
  • the Heritage Foundation,
  • the Hudson Institute,
  • the Progress and Freedom Foundation and
  • the Washington Legal Foundation
    received at least $3.5 million between 1992 and 1995 from drug, medical device, biotechnology and tobacco manufacturers and their corporate foundations. [36]

1996 Mar 3:Annapolis Center for Environmental Quality. Support and Cautions for Cost Benefit Analysis
Benefit-Cost Analysis in Environmental Health and Safety Regulation

Cost-Benefit/Cost Effectiveness Analysis

In February, a group of prominent economists led by Robert Hahn and Paul Portney, which was funded by the American Enterprise Institute, Resources For the Future, and the Annapolis Center for Environmental Quality published a report which concluded that decision makers should formally consider the economic costs and benefits associated with environmental, safety, and health regulations.

The economists were brought together due to the mischaracterization and misunderstanding of benefit-cost analysis in recent congressional regulatory reform debates. Members of Congress failed to comprehend the uses and limits of these tools. The economists noted that Republican supporters of cost benefit analysis did not disclose how imprecise the analysis can be, while Democrats need to learn that it is a tool which should be taken more seriously.

They strongly recommended that laws which have been interpreted to prohibit the consideration of costs should be revised. A copy of the 13 page report is available free from Megan Hayward at the Annapolis Center for Environmental Quality (419) 268-3302 "Benefit-Cost Analysis in Environmental Health and Safety Regulation" Annapolis Center for Environmental Quality (419) 268-3302 (Type-in Bates Number) 2082658823