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Dwight R Lee

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

Economics professor Dwight Lee was a major figure in the Cash for Comments Economists Network primarily run by Robert Tollison out of the libertarian think-tank, the Center for Study of Public Choice at George Mason University. The tobacco industry paid James Savarese and his staff (at James Savarese & Associates) to organise and oversee the operations and keep it at arm's length. This was a Tobacco Institute operation which went on for many years.

Its aim was to keep pressure on Congress and State Assemblies not to increase excise taxes on cigarettes - or to pass legislation that would ban cigarette advertising - and to stop them blocking sales via vending machines (mainly to minors). Because of the ad-ban threat, they had the tacit support of many media outlets in promoting this message. Their input was generally in the form of 1000-1200 word op-eds for a designated newspaper, or a letter to the editor on a subject the Tobacco Institute wanted promoted. They would be paid $700 to $1500 for each piece published, with a bonus if personal letters were sent to two local Congressmen.

About 130 professors of economics passed through this network over the years -- with close to 50 being available at any one time. They were ideally chosen from State Universities where they would have some local contact with the editors of major State newspapers, and where they could effectively lobby local Congressmen and State Representatives. Some were paid an annual $1000 retainer via the laundry channels of the GMU Center and/or James Savarese. However most of the payments depend on results -- which an astute editor might recognise as tobacco propaganda -- which presumably was the cause of the regular turnover of participants in each state, with many dropping out and needing to be replaced.

A core group (of which William Shughart and Dwight Lee were two at the top) were also given well paid speaking engagements, research projects, and book writing/editing and reviewing jobs and they often had some direct contact with the Tobacco Institute (the others were in the know, but largely insulated (by mutual consent) from direct contact with TI staff. The network economist also played a you-scratch-my-back/peer-review game where each would generate favourable "peer reviews" of each other's work.

In the mid 1990s there appears to have been a break up of the larger network with most of the non-core members joining William Shughart and Dwight Lee in working through the Independent Institute. Savarese and Tollision, however, continued to work through George Mason University.

Dwight R. Lee served as "peer-review for a Tobacco Institute hogwash study: Science, Economics, and Environmental Policy: A Critical Examination.

Documents & Timelines

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. [2]

This appears to be the first operation of what was to become the Cash for Comments Economists Network
Dwight Lee was not involved in this initial listing, but he was added a few days later.

1984 Nov 27 Fred Panzer and Peter Sparber at the Tobacco Institute receive another memo from O&M confirming that the Atlanta Tax Symposium will be held on January 18th and that Congressman Wyche Fowler will be the main speaker.

He has agreed to accept an honorarium from The Tobacco Institute.

Tom Morgan, Dean of Emory Law School, will be the moderator. Robert Tollison and Fred McChesney will present remarks, which Jim Savarese will assist in preparing. We are contacting Emory Law School's publicity director, Kathryn Heath, today to discuss preliminary details, but we will wait until we discuss the event with you and Pete to confirm any promotion plans.

On another subject, attached you will find CV's on William Shughart and Dwight Lee, who will participate in the Public Choice Society meeting in February.[3]

They recommend the Public Choice Society as a source of expert witnesses, etc. And give some basic details:

It was founded in 1960.

Dennis Mueller, an economist from the University of Maryland, is this year's president.

The organization has Japanese and European divisions, in addition to the American division. It has a membership of 1,500 to 2,000.

Bob Tollison is a member.
Tollison took it over at George Mason University shortly after and ran it as his private lobbyshop.

1985 The tobacco archives show that Dwight Lee must have jumped into the tobacco industry money-making scheme with both feet. His references jump from one document in 1984, to fifty in 1985. There is no previous evidence that he had any interest in the economics of smoking before the industry offered to pay him for his participation in solving their problems; overnight be becomes a zealot. He was at George Mason Uni, but working through the Center for Study of Public Choice rather than holding a University Professorship.


1985 Apr 19 Lee is writing to the Minnesota House Tax Committee opposing an increase in taxes on cigarettes.[4]


1985 Aug 15 He has given evidence at a hearing of the Nassau County Board of Health. [5]


1985 June 20 He has testified before the House Ways & Means Committee hearing on User Fees. [6]


1985 July A later document says "Lee testified against proposed public smoking legislation in Harrisburg and Philadelphia, PA in mid 1985."[7]


Circa December 1985 Dwight Lee got a real job and transferred to the University of Georgia

If there are any lingering doubts that these economist knew exactly what they were doing, it should be dispelled by a Tobacco Institute memo of June 3 1987. [8]. This shows that they knew that this work was unethical - that it needed to be done surreptitiously - and that they were working for the Tobacco Institute ... but in a way that was deniable since no formal contracts existed.

Apparently Prof. McMahon has " … reviewed and agreed to "author" an economic impact study on the effects of a smoking bill …"
The writer puts "author" in quotes
... leaving no doubt that the professor was being paid to put his name to a tobacco industry paper.

The same file has an letter from Professor K. Celeste Gaspari, an economist from the University of Vermont. She tells us that:
  • She had been contacted in Sep 1985 by the Center for Study of Public Choice at George Mason Uni (Tollison's think-tank)
  • She was offered an annual retainer of $1000 + paid work for the Tobacco Institute.
  • In 1986 she had been paid the retainer and had written a paper for them.
  • It was now March '87 and her retainer hadn't arrived. She'd complained but still hadn't received the retainer.
  • She has now been asked to do more work, but is on strike until her $1000 annual retainer is paid.

I am very disappointed with the Tobacco Institute's policies on making good on verbal agreements.
It is true I never had a written agreement with the Institute -- we only spoke over the phone. I did, however naively, trust that a verbal agreement with a prestigious institute was as good as a formal contract. I was evidently mistaken.
I am not interested in working with your group at this time if this is the way you do business.

Sincerely K. Celeste Gaspari

 

1986 Jan 13 Statement of Dr. Dwight R. Lee, Ramsay Professor of Private Institutions University of Georgia, USA:

I appreciate the opportunity of appear here today. I appear on behalf of the Tobacco Institute. My name is Dwight R. Lee, and I currently hold the Ramsay Chair in Private Institutions in the Department of Economics at the University of Georgia. I have testified on public smoking issues in Nassau County, New York, and the State of Pennsylvania. My written testimony is too long to read, so with your permission, I should like to submit it for the record and to summarize my testimony in my remarks today. [9]


1991 Jan Dwight, R. Lee, "Environmental Economics and the Social Cost of Smoking." Contemporary Policy Issues, January 1991, 83-91


1992 Nov 23Savarese & Associates are billing the Tobacco Institute $4,888 on behalf o Dwight Lee. He has prepared a commentary for a State Fire Marshall Convention in Dallas, TX. [10]


1991 Spring Dwight, R. Lee, "Government v. Coase: The Case of Smoking.", The Cato Journal, Spring 1991, 151-165.


1993 May 6The Cash-for-comments network has largely disintegrated with the rump transferring to the Independent Institute. However Dwight Lee continued to work for both. Here he is charging the Tobacco Institute (via Savarese) $3,816 for attending and making a speech at the National Association of State Fire Marshals. [11]


1994 Savarese and Tollison lost the Cash for Comments Network, which shifted to the Independent Institute under the direction of Robert Higgs and William Shughart. There were outstanding bills which the Tobacco Institute hadn't paid since February 1992. Dwight Lee was owed:

  • $1,000 for helping prepare a report on a smoking ban in Los Angeles
  • $1,000 for preparing a report on the Colorado general fund following an increase in excises
  • $2,500 for an Economic Impact Study + press conference on a LA smoking ban (plus $1,740 expenses) [12]



1994 Aug A Alexis de Tocqueville report "The EPA and the Science of ETS" has been funded by the Tobacco Institute. The author was Adjunct Scholar Kent Jeffreys, and the senior reviewer was S. Fred Singer, a Professor of Environmental Science (on leave from the University of Virginia) and a Senior Fellow at the Institute. The final report was scheduled to be complete mid-June and it would be entitled "Science and Environmentalism".

A confidential memo by the president of the Tobacco Institute, Samuel D. Chilcote, Jr., described how this secret tobacco-funded report was being used in legislative lobbying:

This morning Reps. Peter Geren (D-TX) and John Mica (R-FL) held a press conference announcing the release of a study by the Alexis de Tocqueville Institution that evaluates the Environmental Protection Agency's (EPA) scientific principles used to justify policy decisions. Geren and Mica were joined by Cesar Conda, executive director of the de Tocqueville Institution and coauthors Dr. S. Fred Singer and Kent Jeffreys." [13]

"Press coverage included States News Service, Stephens Publishing and Cable Congress. Several congressional staffers also attended, copies of the Geren/Mica "Dear Colleague" letter, press release and the study are enclosed."

[14]

This report is part of a larger coordinated effort to blindside the EPA. A "panel of experts" was assembled to "peer-review" the report. Naturally the majority were people with identified links to tobacco-funded institutes and think tanks, and some who share the same small set of funders.

Academic Advisory Board:

Senior Staff and Contributing Associates
Rachael Applegate,   Bruce Bartlett,   Merrick Carey,   Cesar Conda,   Gregory Fossedal,   Dave Juday,   Felix Rouse,   Aaron Stevens

Ten of the 19 names of the Academic Advisory Board are members of the Cash for Comments Economists Network. At this time S. Fred Singer was a Senior Fellow at the Alexis de Tocqueville Institute, but they chose not to credit him with such close links.

These attempt to link the tobacco industry's problems to arguments about climate change were part funded by the Olin Foundation, Koch Family Foundations and Scaife Foundations.

  • 20 page Draft document sent to the Tobacco Institute [15]
  • The release about the final report (August 11 1994) It is now an attack on "environmental regulation" -- ETS, radon, pesticides and agricultural regulation, and the Superfund toxic waste cleanup program ... and based, supposedly, on the quality of the science used by the EPA. [16]
  • The final report was called Science, Economics, and Environmental Policy: A Critical Examination.' It had the approval of the Cash for Comments Economists Network. [17]



1995 July: William F Shughart II (U of Mississippi is editing "Taxing Liberty and Other "Sins": Predatory Politics and Taxation" for the Tobacco Institute. It has chapters by:

  • Brenda Yelvington (Professor of Economics, Clemson University)
  • Adam C. Gifford (Professor of Economics, California State University, Northridge)
  • Randall G. Holcombe (Professor of Economics, Florida State University)
  • Dwight R. Lee (Professor of Economics, University of Georgia)
  • Thomas J. DiLorenzo (Professor of Economics, Loyola College in Maryland)
  • Gary M. Anderson (Professor of Economics, California State University, Northridge)
  • Mark Thornton (Professor of Economics, Auburn University)
  • Bruce L. Benson and David W. Rasmussen (Professors of Economics, Florida State U .)
  • Richard E . Wagner (Professor of Economics. George Mason University)
  • Robert B. Ekelund, Jr . and Paula A. Gant (Professors of Economics, Auburn University)
  • Richard K. Vedder (Professor of Economics, Ohio University)
  • Jonathan R Macey (Professor of Law, Cornell University)
  • Bruce Kobayashi (Professor of Law, George Mason University)
  • Donald J. Boudreaux and Adam C. Pritchard (Professors of Law, Clemson University)
  • Gordon Tullock (Professor of Economics and Political Science, Arizona State University)

(The hot-linked names are a roll call of the old Cash for Comments Economists Network)

William Shughart pretends that the book was initiated by the Independent Institute (rather than the tobacco industry):

Hence, when David Theroux of the Independent Institute contacted me to ask whether I might be interested in putting together a volume that would explore the purposes and effects of tax policy in regulating consumption choices, I eagerly accepted. Let me here acknowledge the Independent Institute's financial sponsorship and David Theroux's encouragement along the way.

This draft copy was in Philip Morris files, and it has additions and corrections in handwritten form. For instance "politically incorrect" has been inserted before"products" and "excise" inserted before taxes. "Sin" taxes have been quoted. New chapter titles have been added. [18] [19]

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