Contributions Watch

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

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

Contributions Watch (now defunct) was a tobacco front group created to attack consumer groups and trial lawyers who sue corporations. It posed as a "non-profit citizen advocacy group" with a mission to expose the "hidden role" of money in state politics. However, Contributions Watch carefully concealed the fact that its own funding came from the Philip Morris tobacco company.

Contributions Watch was created in early 1996 by the State Affairs Company, a Washington, DC-area PR firm. It disbanded later that year, after its hidden tobacco funding was exposed in the article "Wolves in Sheep's Clothing: "Special-interest Watchdogs" Exposed as Tobacco Industry Front Group" by John Stauber and Sheldon Rampton in in PR Watch, Volume 3, No. 3, 3rd Quarter 1996. It is used here with permission. As with all SourceWatch articles, feel free to edit and revise.

Contributions Watch - a State Affairs Company Creation

PR Watch has obtained documents detailing the secret relationship between Philip Morris, the tobacco-and-food conglomerate, and "Contributions Watch," a PR front group which poses as a "public interest" campaign reform organization. CW's hidden agenda is to dig up dirt at the state level for the corporate clients of its creator, a Washington, DC public relations firm called the State Affairs Company (SAC). SAC and CW work to attack the political enemies of their clients, and to smear the "hidden, undisclosed consumerist agendas" of real public interest groups like Consumers Union, the Center for Science in the Public Interest, Ralph Nader's Public Interest Research Group, and Trial Lawyers for Public Justice.

When PR Watch phoned CW Executive Director Warren Miller on September 26, he refused to take our call. We left a question on his voicemail anyway: "Who funds Contributions Watch, and what is the connection between it and the State Affairs Company?" Miller never responded, but we suspect the question must have put his hair on end.

Fortunately, we knew the answer even before we asked. The State Affairs Company (SAC) is the Washington, DC-area PR firm which created Contributions Watch as a nonprofit front group with the goal of positioning CW in the minds of the news media and the general public as "the leading authority on money and politics in the states."

Through Contributions Watch, SAC proposed to "monitor special interest group activity" and to develop Miller into "an expert source and guide to investigative reporters, editors and opinion writers."

The scope and scale of Contributions Watch is nationwide. Since its launch in early 1996, the organization has successfully fooled news media--ranging from the Wall Street Journal to national wire services to local papers--into running stories that either depict CW as public interest reformers, or attack the US consumer movement as a "handmaiden" of special interests, especially trial lawyers.

CW was even successful in deceiving the Center for Responsive Politics, one of the most respected--and genuinely independent--sources for nonpartisan information about election funding and campaigns. In June, CW lined up a meeting between Warren Miller and Center Director Ellen Miller (no relation) at which Warren pitched her with ideas for "how we might work together."

In September, when PR Watch informed Ellen Miller that Philip Morris was bankrolling CW, she was aghast. "It's a shocking development to portray an organization as non-partisan, non-profit, and operating in the public interest while having a very specific private interest in mind," she said. "It's one of the most outrageous things you can do! I think this will shut them down. There is no legitimacy to this group. No one would believe anything they produced. It would have absolutely no validity. No one would believe their numbers."

Bad Company

The State Affairs Company, through which money and marching orders flow to Contributions Watch, is a two-year-old PR firm based in Reston, Virginia. Prior to launching their own company, SAC's partners were top executives at Burson-Marsteller (B-M) and Hill & Knowlton, two of the world's largest PR firms, which have extensive ties to both the Democrat and Republican parties and a lengthy and lucrative history of lobbying on behalf of big tobacco and insurance interests.

SAC's internal documents state that it is a "key principle" of the company to "remain anonymous," and for good reason. The best PR is invisible, and linking SAC to CW would begin the unravelling of CW's secret agenda. In addition, some might balk at being publicly linked to some of the company's partners, whose sordid backgrounds raise serious concerns.

Two of SAC's founding partners, David K. McCloud and Bobby L. Watson, previously worked as top aides to now-Senator Chuck Robb until they were forced to resign and plead guilty in federal court to charges stemming from a nasty scandal that involved cocaine, prostitutes, illegal phone tapping of Robb's political rivals, and even apparent death threats in a desperate attempt to cover up the scandal. (See related story on page 9.)

After copping pleas on lesser charges, McCloud went on to work as a senior vice president at Burson-Marsteller, and Bobby Watson became Chief of Staff for the Democratic National Committee. The other founding partners of SAC are John E. Davis, another former senior vice president at B-M who is a veteran of more than 25 political campaigns for Bob Dole and other Republicans, and Chuck Francis, a former speechwriter for David Rockefeller before taking charge of B-M's Financial Service Group. Other executives at the small but influential firm are Bill Timmons, Jr., a Republican consultant, and Ken Hoagland, a grassroots consultant.

In addition to the State Affairs Company, Contribution Watch receives strategic and tactical direction from the much larger APCO & Associates, another Washington PR firm which is also funded by Philip Morris and is leading a nationwide fight on behalf of tobacco and insurance companies to pass so-called "tort reform" legislation aimed at limiting the damages that consumers can collect when suing companies that manufacture defective or dangerous products.

Smoke Trails

Internal documents reveal the origins, plans and activities of Contributions Watch and place it in the larger overall context of the other work that State Affairs performs on behalf of big tobacco and big insurance interests.

CW's early "Draft Business Plan" listed "research" for Philip Morris (PM) as its primary source of income in what it called a "proposal for advocacy groups project for PM." By March 1, 1996, according to a letter from SAC's David McCloud, "The State Affairs Company has provided the initial seed money for the organization. . . . The legal work . . . was done by Henry Hart of Hazel & Thomas." In a draft letter, addressed to Stewart Gamage of the Office of Public Affairs at the College of William and Mary, McCloud attempted to recruit Gamage to join CW's board of directors. "Currently we have recruited four members of the Board. . . . Henry Hart; . . . Jim Lindheim, former World Wide Chairman of Burson-Marsteller; David Umansky, Director of Public Affairs for the Smithsonian Institute; and Fred Pownall, partner at Landles, Ripley & Diamond in Sacramento."

A more refined draft of the business plan, written in May 1996, sought to position the group as "the leading authority on money and politics . . . monitoring special interest group activity in the states." It noted that a Philip Morris-funded "ongoing project of trial lawyer contributions in the states is slated to occupy most of CW's research time over the next six months." Indeed, this PM money, moved through SAC to CW, is the phony watchdog's lifeblood.

Part of the plan entailed creating an "Advocacy Research Section" within CW, a sweeping effort to investigate legitimate consumer and environmental groups, developing and packaging information to be used against them.

Through the magical distorting lens of CW's topsy-turvy worldview, SAC proposed to transform these groups--mainstream organizations funded primarily by contributions from the public at large--into nefarious "special interests."

Educating Warren

Warren Miller, the young executive director of Contributions Watch, worked at the Federal Elections Commission before being hired by SAC. He gives CW a veneer of independence and integrity, but in fact he reports to and is directed by his creators at State Affairs Company. SAC's Chuck Francis retained the services of the PR firm of Robert Witeck and Wesley Combs to "help with the debut of Contributions Watch."

"It was a pleasure to work directly with Warren Miller and to give him our counsel on his messages and presentation," said an April 18 letter from Witeck and Combs. "I think we made a good start. . . . there are significant opportunities to position an independent 'watchdog' organization such as Contributions Watch."

Witeck and Combs proposed that they be put on a $2,500-a-month retainer to help with "Media Counsel and Relations-Building . . . Board and Ally Development . . . Publications and Public Events." They added, "Contributions Watch and Warren Miller, in particular, need to develop a reliable and reachable circle of media contacts and continued recognition. As spokesman and advocate for Contributions Watch, over time Warren should become an expert source and guide to investigative reporters, editors and opinion writers. . . . Initial targets . . . should include . . . National Journal, New Republic, [Congressional Quarterly], Legal Times, Washington Monthly. . . . I also recommend that we continue working one-on-one with Warren Miller to build his presentation skills and confidence in talking with the media and other influentials . . . to develop a stronger, public persona to serve as spokesperson for the organization."

The proposal contained a warning, however: "Contributions Watch will also be watched by others. It will be judged most by the company it keeps and the integrity of its products. It will be important to ensure that Contributions Watch is not only perceived as independent, but that it demonstrates allegiance to no vested or partisan interests." Now that the real money and agenda behind Contributions Watch are exposed, these words have taken on an ironically prophetic quality.

Stick to the Script

As Contributions Watch began its effort to place stories in the news media, it faced an obvious dilemma: How do you pose as an idealistic crusader for full disclosure while simultaneously hiding your special-interest agenda? To resolve this dilemma, legal advisor Henry Hart outlined a two-track media strategy--one approach for spoonfeeding stories to "unequivocal supporters," and another for dealing with reporters who asked real questions.

"Charles Francis asked me to provide you with some suggested responses to public inquiries," Hart stated in a May 17 letter to Miller. "To my knowledge, the only document which is currently a matter of public record concerning Contributions Watch is the Articles of Incorporation . . . Those articles do not reveal the name of the directors or officers or of any person other than myself."

Hart gave Warren Miller a script for deflecting reporters questions, adding that "the above responses are directed at the situation where you cannot preclude the possibility that the person making the inquiry has interests hostile to Contributions Watch. I understand that if you receive an inquiry from an unequivocal supporter, you may choose to provide more detailed responses."

If asked about any relationship between SAC and CW, the script called for Miller to downplay the ties by saying, "I worked for the [Federal Elections Commission] . . . and then worked for a time at the SAC as a research wonk. Back last year, I approached the SAC with the idea of spinning me off as a non-profit organization. I'm happy to say that CW is now an independent organization with our own offices and own board of directors."

What Warren Miller was not supposed to mention was the fact that he is paid with Philip Morris money from SAC and files weekly "CW activities reports" to SAC partner David McCloud, his de facto boss.

The Watchdog's Lapdogs

In the summer of 1996, CW rolled out a report titled "Best and Worst Campaign Disclosure Agencies," which evaluated how each state government handled campaign funding disclosure. In his June 17 report to McCloud, Miller wrote that the report "has been an unqualified success. It was carried on Associated Press, The Hotline and at least twenty state newspapers. The Miami Herald editorialized on it Sunday. I am scheduled to give an interview with NPR today."

This report was a major PR coup for Contributions Watch because it established them in the minds of many as a legitimate "non-profit citizen advocacy group" with no hidden agenda. "We continue to receive calls regarding [the study]," Miller stated in his June 24 report to McCloud, which also noted that he was feeding information to Wall Street Journal writer Glenn Simpson for an upcoming piece. "Please let me know if you need an invoice which details the hours spent on behalf of the Wall Street Journal article," Miller wrote.

The Wall Street Journal story ran on July 16. It described CW's second report, titled "Off the Radar Screen," as "the most comprehensive examination of trial-lawyer giving to date." As hoped, Simpson made no mention of Philip Morris or SAC, noting simply that the study was "funded by industry backers of tort reform."

Another reporter, Carolyn Lochhead of the San Francisco Chronicle, proved even more pliant. Miller spent all summer spoonfeeding her material for a cover story that appeared in the September 23 issue of William Kristol's far-right The Weekly Standard. Lochhead proved to be such an "unequivocal supporter" that the State Affairs Company worked with her directly, yet her article never mentioned SAC's role in feeding her the story, or the tobacco money behind the whole SAC/CW operation.

Lochhead's article, however, intrigued Washington Post reporter Ruth Marcus, who tried to find out who was really behind Contribution Watch but was sandbagged by Warren Miller. In her September 20th column for the Washington Post she wrote that The Weekly Standard's "editor, William Kristol, said it was a 'fair point' to ask whether the funding should have been discussed but said of the study 'if it's accurate I don't think it matters.' "

Knowingly or not, Kristol's reply parroted one of the scripted responses prepared to prevent reporters from digging deeper. If asked about SAC/CW's own source of funding, the script advised answering, "Do you have some question about the accuracy of our numbers? That is the important thing. The numbers speak for themselves."

Broadcast Facts

On August 9, SAC's John Davis sent a memo to APCO & Associates' Neal Cohen along with the data that SAC/CW had compiled on trial lawyer contributions. Copies of the memo also went to former Burson-Marsteller executive Jim Lindheim; to David Laufer, the head of Philip Morris's Corporate Communications office in New York; and to Keith Teel at PM's law firm of Covington and Burling. Cohen responded with a memo four days later outlining a strategy for packaging and releasing the data to the news media.

"In considering uses of the current Contribution Watch data," Cohen wrote, "our primary goals have been to do the following: Get the data out in the public domain quickly and with credibility prior to the elections. Utilize existing entities to ensure that the data has 'legs' beyond its initial release. Influence the debate about and understanding of the trial bar's role in the political process."

To achieve these goals, Cohen recommended "that CW release a state-by-state abstract of its information, either through a press release or through a press conference after labor Day. CW should provide the information with minimum of interpretation or commentary . . . in addition to the CW release, we believe that [American Tort Reform Association] . . . should be encouraged to put the CW information on the Internet."

Cohen recommended a "roll-out of CW information by state", so for instance "CW holds a press conference with [Alabama Voters Against Lawsuit Abuse] to release the specifics in Alabama, providing for a second-day story. . . . In-state follow up by local activists including: letters to the editor; opinion columns; distribution of materials to key elected officials."

SAC agreed in general with Cohen's strategy, but worried that coordinating its activities so publicly with tort reform groups would undermine CW's facade of independence.

Miller expressed similar concerns in his August 15th activities report to McCloud. "CW is at a critical point right now," he wrote. "With the success of our 'Best and Worst' study we have begun to establish ourselves in this field. . . . However, when the trial lawyer stories currently in the pipeline are released, CW will become extremely vulnerable to attacks that we are nothing more than an arm of the tort-reform industry."

As these documents reveal, of course, Contributions Watch is an arm of the tort-reform industry, its work almost completely bankrolled by one company, Philip Morris. On September 13 David McCloud sent Keith Teel at the PM law firm of Covington & Burling "our two most recent studies as well as our invoice number 231 covering services conducted on behalf of Covington & Burling for the period August 1, 1996, through August 31, 1996." The one-month bill totaled $65,547.86.

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