Capital Research Center and the tobacco industry
While the Capital Research Center has been keen to criticise non-profit groups that it perceives as liberal for accepting corporate donations, it has been coy about it's own relationship with corporate sponsors, including the tobacco industry.
In 1990 the CRC published a major report by James T. Bennett titled Health Research Charities: Image and Reality. The report, released in June 1990, claimed that the three charities studied - the American Lung Association (ALA), the American Heart Association and the American Cancer Society - collectively spent less than one-quarter of their income on research.
It was a claim rejected by the three groups, which argued that their research expenditure had been underestimated while the ALA had not been created to fund research and had only recently started awarding research grants.
While CRC was keen to attack the health charities about their funding, it was less forthcoming when asked whether the report had been funded by the tobacco industry. CRC's Chairman Willa Johnson attempted to sidestep the issue when asked by USA Today reporter. "Even if they were involved, the study would stand on its own merit," she said.
In a subsequent editorial criticising CRC's report, Johnson was quoted as stating the CRC's role is "solely to study, as objectively as possible, and from an avowedly free-market perspective, issues and trends in American philanthropy".
For the tobacco companies the report provided useful ammunition from an apparently disinterested party that could be used to criticise groups proposing restrictions on the tobacco industry. "Survey finds health groups spend more on lobbying, administrative costs than on medical research," the headline read on the front page of the September 1990 edition of Philip Morris's Smokers Advocate newsletter.
PM approvingly cited Johnson complaining that the charities weren't spending enough on funding research for "cures for these deadly diseases". "Our investigation shows that far too much of the money amassed by these charities is being used to raise additional money for political endeavours," she was quoted as stating.
Having third party reports and articles handy was useful for keeping the tobacco companies themselves out of the story as much as possible. When in January 1992 a freelance writer for The Atlantic inquired about PM's lobbying efforts in California and at the federal level an internal memo noted: "sent background material on Capital Research Center findings and Reason magazine pieces about anti-smoking movement and referred to smoker's rights spokespersons". 
In June 1992 Posie Di Sese penned a memo to George Knox listing media inquiries for the preceding month. A May 20 inquiry from a journalist with the Journal of the National Cancer Institute, according to the memo, wanted to know "has PM given grants to the Capital Research Center?". The memo noted in the 'action' column "nothing in '91 or to date in '92. Have received a proposal & have contributed in the past".
Additional information from tobacco industry documents
Internal Philip Morris documents reveal that in 1995 CRC received $50,000 from the company. However, by 1998 the tobacco company's support for CRC had dwindled to a meager $10,000.  A 1997 internal briefing sheet on possible questions about PM funding of CRC stated "we have supported this organization for about ten years. Our level of support has averaged about $30,000 a year". 
In September 1993 Craig L. Fuller from Philip Morris's Washington office sent a report on his activities in August to Michael Miles. "Leveraged numerous contacts in the public policy arena and the media to generate positive publicity for PM and/or a fair hearing on our issues, with particular reference to the misappropriation of science by the EPA and the resulting poor public policy," he reported. One of the five organisations listed as having helped PM was CRC. 
While stating that the Health Research Charities: Image and Reality report had gained "wide attention in the popular press and media", Bennett considered more needed to be done in "exposing the reality of their operations and aims".
In December 1993 Bennett and Thomas J. DiLorenzo, a professor of economics at the Chattanooga campus of the University of Tennessee penned a proposal to R.J. Reynolds. Their first report, they stated, "revealed for the first time that so-called health research charities have a far broader and more insidious agenda than sponsoring research on disease and aiding the afflicted, which are the basis of their fundraising appeals to the American public".
According to Bennett and DiLorenzo, "there is a large and growing commitment to political advocacy aimed principally at anti-smoking legislation" amongst such charities. What they proposed was to trawl through lobbying disclosure forms of the Lung, Cancer and Heart Associations in California and Masschussetts in the hope that a "'credibility gap' can be created to undermine the public image of these groups". 
"Our work will be aimed at the general public and specifically at the donors who support health charities with their contributions," they proposed. With CRC they suggested they would produce a series of reports and, based on those, spin off a series of op-eds and articles for the media.
Bennett and DiLorenzo stressed that what they proposed would not be dispassionate research work. "Our ultimate goal is twofold: (1) to discredit the voluntary health agencies in the minds of the public so that they are forced to return to their charitable 'roots' and abandon political advocacy and (2) to raise so many questions about the true goals and objectives of health charities that the media will take up the task of investigating these groups".
Bennett and DiLorenzo proposal came with a hefty pricetag - $150,000 all up with $65,000 between themselves for "professional services", $16,000 to hire two part-time graduate assistants for a year, $37,300 for CRC and the remainder in expenses.
While CRC's role would be restricted to the publishing of the reports and follow up media work Bennett made clear that the remainder of the payment should be via the Institute for Humane Studies at George Mason University.
While CRC state they are a research organisation, they undertake lobbying work as well. In December 1995 Scanlon wrote a three-page letter to Food and Drug Administration (FDA) Commissioner, David Kessler, opposing the FDA proposal to restrict the advertising and promotion of cigarettes. "The FDA's emphasis on restricting cigarette advertising is unwarranted, since research has shown that such restrictions have no significant effect on consumption. The main goal of advertising is to encourage smokers to switch brands," he wrote.
Proposals to ban outdoor advertising within 1,000 feet of a school he wrote, would 'violate the First Amendment". The same argument, he wrote, applied to restricting the advertising to black text only, the giveway of free items of clothing sporting tobacco brand names. "The FDA fails to recognize that discouraging children from smoking is a parental responsibility," he wrote. 
In January 1996 Scanlon sent Philip Morris advance copies of CRC's February edition of Alternatives in Philanthropy, which featured articles by Bennett criticizing the American Stop Smoking Intervention Study program - otherwise known as Project ASSIST - that was funded by the National Cancer Institute. It also carried an article by DiLorenzo criticising the Center for Disease Control and the American Lung Association.  
In August 1996 Scanlon met with R.J Reynolds executive, John Fish. At the meeting Fish expressed concerns the company had with ASSIST. "I promised to send you some information about their use of federal money for lobbying," Fish wrote in a follow up note. "As I indicated, this is a program that has given our state folks a lot of heartburn. It is supposed to expire after this fiscal year. My efforts have focussed on making sure it does not continue. If you have any further questions, or would like more information, please call," he wrote. 
In May 1998 Phillip Morris convened a planning meeting of its public policy advisory committee at its Park Avenue headquarters in New York. At issue was the rationalisation the tobacco company's financial support to public policy groups. Under the ranking system adopted by the PM staff CRC only scored a "low" priority classification for the proposed 1999 budget, which translated into the continuation of its $10,000 contribution. 
In 1998 Philip Morris was canvassing possible organisations that might be an ally in its Youth Smoking Prevention programs. A memo from Roy Marden described Capital Research Center as a "DC policy group focused on evaluating philanthropic efforts of corporations & foundations. Long-time friend of PM (& recipient of policy group support); has been active on analysis of antis & govt anti-tobacco programs, e.g. ASSIST. Could be helpful on the concept of effective spending of YSP funds”. 
- T Friend, "Charities anti-tobacco lobbying is criticized", USA Today, Bates no 2023914980, June 28, 1990.
- "Congressional Tyranny", Richmond Times Dispatch, Bates No 2047079595/9596, July 28, 1990.
- Posie Di Sese, "Re:Media Inquiries", Bates No 2047916157, June 15, 1992.
- Philip Morris, "Survey finds health groups spend more on lobbying, administrative costs than on medical research, Smokers Advocate, Bates No 20243332579, September 1990, page 1.
- Philip Morris. "Budget review", Bates No 2057495923, May 22, 1996.
- Philip Morris, "1998 public policy contributions, Bates No 2065243966, December 17, 1998.
- Philip Morris, "Public policy grants 99 proposed budget", Bates No 2065243957/3964, May 1999 (approx), page 2.
- Philip Morris, "CancerScam message track", May 1997 (approx).
- Craig Fuller, "Monthly Report", Bates No 2041424327, September 16, 1993.
- J.T. Bennett and T.J. DiLorenzo, "Research proposal health research charities and anti-smoking initiatives", Bates no 507787238, December 3, 1990.
- Terrence Scanlon, "letter to David Dessler", Bates No 511408171, December 8, 1995.
- Terrence Scanlon, "letter to Mr Howard Liebengood, Vice President Government Affairs, Philip Morris", Bates No 2077651840, January 29, 1996.
- John Fish, "letter to Terrence Scanlon", Bates No 522629274, August 6, 1996.
- Roy Marden, “YSP Ally possibilities”, Bates No 2069615360, October 22, 1998.