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Richard E. Wagner

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

Richard E. Wagner, (often known as "Dick Wagner") was a professor of economics at Florida State University ... then at George Mason University, and also a life-long tout for the tobacco industry, He co-authored numerous publications with Robert D. Tollison dismissing suggestions that there were any social (as distinct for private) costs arising from smoking. He also shared with Tollison in the general administration of the Cash for Comments Economists Network that was run for the Tobacco Institute through James Savarese & Associates and George Mason's Center for Study of Public Choice (CSPC) which he often headed.

His value to the continued sale of cigarettes was derived mainly through the publication of a much-promoted book: Smoking and The State co-written by Tollison and Wagner. About fifty of their paid fellow network members (all members of the Public Choice Society and CSPC) were set to work to promote the book and its ideology of free-markets. This was extended to a lack of regulation as it applied to smoking sales, excise taxes and general behaviour. The tobacco industry's executive summary of the report states:

"Tobacco products are among the most highly taxed and strictly regulated products in America. The economic penalties imposed upon these products are justified by anti-smoking advocates by the supposed costs to society that result from the claimed health effects of cigarette use. These costs are known as "social costs".

But to the extent that any costs associated with smoking exist, these costs actually are "private costs"-- costs borne by the individual rather than society. This is the critical finding: of a new book, Smoking and The State written by Professors Robert D. Tollison and Richard Wagner of the Center for Public Choice at George Mason University."

"Wagner and Tollison conclude that there is no convincing basis for the claim that any economic costs of smoking are imposed on nonsmokers. Nor, the authors say, do smokers impose an uncompensated cost on nonsmokers from the claimed consequences of environmental tobacco smoke." [2]

Wagner and Tollison stayed as industry helpers trying to maintain the unrestricted market for cigarettes for most of their working lives. Their line of scholarship simply ignored or downplayed the health and environmental consequences, and dealing only with obscure economic theories of who pays the market costs.

Richard Wagner was a member of the Board of Scholars of the Virginia Institute for Public Policy and in the summer of 1978 he was a Visiting Fellow at the Institute for Humane Studies (IHS). At that time the IHS was the central hub for the expansion of the extreme libertarian network of think-tanks, now known as the Atlas Group. [3]



The Cash-for-Comments Economists' Network was run by Savarese through a partnership with Professor Robert D Tollison who used the staff and facilities of the Center for Study of Public Choice at George Mason University to prove cut-out and organisation services. They developed and maintained a network of Economics Professors with at least one on tap in virtually every US state. As one Professor transferred or dropped out (there was a regular turn-over) a new one would be recruited in that State. In all, about 130 university professors were involved in the period 1985-1995, and costs ran to $3 million/year at a time when professor's salaries were in the $30-40,000 pa range. An active network member at a State university could almost double his normal salary.

  The main focus of the group was to write commissioned op-ed articles on a subject determined by the Tobacco Institute. The draft article would then pass back through the network to TI staff, who were essentially public relations experts. Here they were 'improved' and refined; then sent to the Institute's outside lawyers for vetting. Modified articles then returned to the professor, who would then send them to a designated State newspaper as if they were his 'independent expert opinion'. The professors received a base amount for writing and bonuses for successfully planting the article on the newspaper. Some, but not all, received a small (eg.$1000) annual retainer.[4]]

  Published papers would also be copied by the professor and sent to his local Federal Representative and Senator (for a further bonus). Sometimes there were special commissions, but generally the work was writing op-eds and LTE's where they were paid just on results (varied from about $700 to $3000 over the years). Network members could also be called upon to provide witness services and promote the cigarette companies' political/economic line at local ordinance or State legislative hearings. An active professor of economics at a State University could almost double his salary with these activities and with some further appearances, for instance, speaking on the importance of cigarettes in economic terms at major economic conferences, etc.
      Cash for Comments Economists Network   &   Robert Tollison   &   James Savarese   &   Network Document Index


Documents & Timeline

1941 Apr 28: Born Jamestown, North Dakota

1963: BS University of Southern California

1966: PhD University of Virginia

1966-68: Assistant Professor of Economics, Uni of California, Irvine

1968-72: Associate Professor of Economics, Tulane University

1972-73: "Senior Research Associate" The Urban Institute

1973-79: Associate/Profesor of Economic, Virginia Polytechnic Institute and State University

1978 Summer: Visiting Fellow at the Institute for Humane Studies (another Atlas Group think-tank) 1978-79 Winter: Visiting Professor of Economics, University of Konstanz, West Germany

1979-81: Professor of Economics, Auburn Uni

1981-88: Professor of Economics, Florida State Uni

1988- : Professor of Economics, George Mason Uni (maybe only Director of CSPC)

1984 Apr 30: This 109- page DRAFT Tobacco Institute Cigarette Excise Tax Plan' was being developed to covertly battle against a tax proposal being considered by the Reagan Administration; they were facing a budget crisis. The tobacco industry suspected that the Administration (under pressure to create tax cuts for the wealthy) was about to extend the life of a temporary excise tax which had been imposed on cigarettes (16¢ per pack).

They had an urgent requirement for some 'independent' experts to lobby on their behalf at the State level. Their lobbying budget specified the average cost per State worth lobbying:

  • One public finance economist for 10 days @ $1,000, [Total $ 10,000] including meetings with coalition members and/or the Governor's staff; research and preparation; and testimony.
  • One economist for a union workshop on the tax issue, [Total $5,000] including 3 or 4 training sessions over the course of a convention.
  • Six economists @ $5,000 and one senior economist @ $20,000 for a tax symposium, including publishing of the proceedings at $3,000. [Total $53,000] The senior economist would play an oversight/organizational role and would be responsible for editing the proceedings. Such a symposium would be staged for regional or national impact.
  • One economist provided to a public employee union to do original research on the need for adequate services to be funded by broad-based taxes; this would include the final report and testimony. [Total $ 25,000]

Also included in this bundle was draft copy and designs for a couple of different booklets aimed at different States, and others aimed at labor/union and racial groups. It also identifies the Congress Committeemen and state Assemblymen who should be targetted as most likely to be influenced, and it had an appendix which lists economists who can be enlisted to help.

Potential Economic Consultants:
Following is a list of economists in key states who might assist us as consultants. We have begun contacting them to ensure their willingness and expertise. We are asking each about past experience; work with similar issues; previous work with the industry; published articles or research; and speaking availability. As discussed in the body of this program, our intent is to have a group of individuals who we can call upon regularly to testify, conduct special research projects, and discuss their research and/or views on excise taxes with the media.

Tollison is the most influential and prestigious on this list; he was hired to consult on federal tax issues, to publish books promoting the cigarette industry's position, and to oversee efforts of the other cash-for-comments economists throughout the country. See last page
They are already designating key states for the economists to influence through op-eds and politicians, and allocating a recruited academic to perform their lobbying services. Yoram Barzel is the only name on the above list who appears to have had second thoughts. He resisted the Institute's overtures entirely -- although they quoted his papers extensively.

1984 Jul The following month the Tobacco Institute circulated a formal document to the cigarette company members:

Cigarette Excise Tax Plan.
The plan augments our basic lobbying efforts by relying on groups outside the industry -- some not regularly associated with the industry -- to argue against excise taxes for us.

It is an ambitious program, based on the notion that many of the most effective protests against tobacco taxes will come from groups philosophically distant from The Institute. Many such groups agree with us on the excise issue, even though they disagree with us on other matters.

At the federal level, supporting Congressional members from the tobacco states is essential to our lobbyists. The tobacco members consistently vote as a unified group -- something that is rarely seen in Congress today. They are our lobbyists' most important resource.

The program recommends that economic and other consultants assist us in developing, "packaging," and presenting our anti-excise arguments in legislative testimony or meetings with coalition members. Resources:
Economic consultants with different areas of expertise will conduct research and act as spokespersons for The Institute and organizations supported by The Institute. Specific activities with economists are discussed throughout the tactics.

  • Stimulate reputable public finance economists at key state universities to determine the validity of state revenue forecasts, perhaps on behalf of state business organizations and present arguments against excise taxes in various forums; e.g., meetings with potential coalition members or budget officials.
  • Encourage economists to make the case against regressive taxation in meetings with potential coalition members and legislators.
  • Retain public finance economists affiliated with non-profit organizations to research the subject and use their findings in forums such as:
    • Private meetings with state legislators or staff ;
    • formal testimony before government bodies ;
    • targeted media appearances;
    • speeches before business, civic, labor, and other groups ;
    • tax symposia in key states where the proceedings could be published for use in other states ; and
    • articles which raise the visibility of key arguments in the business, academic, and popular press.
  • Presenting specific members of the House Ways and Means and Senate Finance Committees with arguments prepared by economists with whom they share some common interest; e.g college affiliation, service on the same commission.
  • Gaining the support of Citizens for Tax Justice (CTJ), the most influential labor/liberal tax reform group in the country, in opposition to excise taxes.
  • Relying on the AFL-CIO -- via The Bakery, Confectionery, and Tobacco Workers Union -- to ensure that the labor/liberal tax package that emerges in the next session of Congress does not include tobacco.
Appendix: A list of economists in key states who may be willing to act as industry and third-party spokespersons on the tax issue. Following is a list of economists in key states who might assist us as experts receiving honoraria. We have begun contacting them to ensure their willingness and expertise. We are asking each about past experience; work with similar issues; previous work with the industry; published articles or research; and availability.
Cash-for-Comment Economists
State Economists   and their institutions
California Thomas Borcherding, Claremont College
Connecticut William McEachern, University of Washington
Florida Richard Wagner, Florida State University
Georgia Fred McChesney, Emory University Law School
Illinois James Heins, University of Illinois
Mass. Harlan Platt, Northeastern University
Minnesota Thomas Stimson, University of Minnesota (St.P)
New York Harold Hochman, City University of New York
Ohio David Klingaman, Ohio University
Penn. Mark Pauly, University of Pennsylvania
Texas Charles Maurice, Texas A&M University
Wash.DC. Robert D Tollison, George Mason University.
Wisconsin Burton Weisbord, University of Wisconsin
"Our intent is to have a group of individuals whom we can call upon as needed to testify, conduct special research and discuss their research projects and/or views on excise taxes with budget officials, potential coalition members, legislators and the media."[5]
[The only change here is that Yoram Barzel from the University of Washington, had dropped out. (There was always a regular turnover)
This was the core Cash for Comments Economists' Network. Over the years they recruited over 160 professors of economics.]

1985 Dec 12: Annual Report of the Tobacco Institute's Public Relations division lists Professor Adams as having served them well:

We believe that the active and creative use of experts -- our scientists in particular -- gives us an edge. But without question, public smoking is our toughest challenge. A close second is taxation. In 1985, most of our resources in this area were focused on the federal situation. That being the case, we concentrated almost exclusively on the home districts and offices of the 56 members of the House Ways and Means and Senate Finance Committees.

We identified and utilized economists from universities in 48 of those districts. Some testified at the four federal tax hearings in which had interest. Others participated in academic symposia attended by Congressional staffers. Others communicated directly with their Congressmen.
And 34 of them wrote op-ed articles on the need to consider excises as part of tax reform. Many of these articles appeared in the principal newspaper in the targeted districts which have, by our estimation, a total circulation of nearly 4 million. The economists were of great help. [SNIP]
Citizens: 50 Vietnam veterans from the Miami area wrote individual letters opposing cigarette excise taxes to Rep. Gibbons (Ways & Means Committee) and both Florida Senators.

Academics: Professor Richard Wagner (Florida State University) wrote an op-ed article on tax reform and submitted to the Tampa Tribune and the Washington Times. Although neither paper could use the piece; copies were sent to Ways & Means Member Gibbons. [6]

1988- : Professor of Economics, George Mason Uni (maybe initially only Director of CSPC) Later Chairman of Department of Economics.

Report on a Savarese "brain-storming" meeting with the leaders of the Cash for Comments Economists Network

1988 Feb 2 James Savarese reports to the Tobacco Institute on a "brain-storming" meeting with a "core group of economists and lawyers to exchange thoughts and ideas on the Social Cost issue. [The total cost to the economy of smoking: related to health, pollution, cleaning, etc.]. Their goal was to determine project priorities and making assignments for 1988. The meeting was directed at ... [attacking] Anti-smoking activists [who] have distorted the issue of Social Cost. Even though economists ridicule their statistics, [the] politicians and the press believe them.
The core group of economists were:

[Note: This is lobbying pure and simple: The report's conclusions contain outright admissions. They expose the scientific and academic subterfuges being employed. This is not the result of a simple difference in economic opinion: network members were knowingly acting as paid lobbyists.]

Report Conclusions:

  • The higher rate of illness of smokers is a 'private cost' not a social cost '[and therefore should be ignored!]
  • It is not politically useful for us to argue the primary health statistics.
  • Up to this time, ETS has not been translated effectively by the opposition into cost numbers. Rather, it is a regulatory issue.
  • We cannot afford to lose the argument among people who think they are being harmed by ETS. If ETS causes harm, it becomes a classic case of real social cost.
  • We must make sure that primary costs of smoking be kept out of any social cost calculation. We must separate primary smoking statistics from ETS statistics.
  • More research is needed on ETS in order to deny health consequences.

Primary assumptions that need to be countered.

  • Insurance and Health Costs:
Health problems exist for smokers.
The cost for health care due to excess illness or death of smokers equals smokers' cost to society.
Insurance premium -- Discounts for non-smoker (not justified?)
Pension Plans -- Increased mortality rates saves money
  • Productivity and Absenteeism:
Smokers are absent more frequently than non-smokers.
The time spent by a employee smoking on the job is time spent not working. These factors make the smoker a less productive member of society than a non-smoker.
The worker bears the cost of absenteeism via fewer raises, less advancement, or termination. Society bears no burden.
  • Social Security and Medicare:
Based on lifetime calculations, smokers should be getting a rebate. We should propose a rebate program, rather than a tax program.
If non-smokers live longer, when the baby boomers reach retirement age, very high tax rates will be necessary to finance Medicare and Social Security.
If smoking is banned, it would cause some serious problems in future years.
Note: see here the infamous Death benefits argument... (paraphrased as...) "When people die young they are less of a burden on society."
  • Fires: It is not a social cost for a smoker to burn his house down, just a private cost.
Social cost only exists if a neighbor's house burns down (a much smaller number).
  • ETS: Blanket smoking.restrictions raise costs to private employers.
If restrictions are cost effective, individual companies will adopt them.

Goals: As a result of this meeting, we should devise a specific plan and timetable of implementation with assignments for specific projects.

We need to review and critique existing materials and develop our own core of research.
Note: They then allocated research projects to the economists and discussed additional ideas which might prove useful to the industry.
Both the Southern and Eastern Economic Association presented forums at which the economists could present papers and ...
  • Tollison is looking for one or two others.
  • (potentially a) major session at a university to bring together all relevant research on Social Cost will be planned after projects are completed.
  • Proceedings will be published in a monograph.   [7]

1978 :

1988 /ERichard Wagner was transfered out of Florida State Uni to George Mason Uni as manager of the Center for Study of Public Choice which Tollison , Buchanan and Tullock controlled. [8]

1988 to 1993 Diana L Avedon at the Tobacco Institute ran a major media-tour operation called the Scientific Witness Teams. This operation circulated variable teams of TI staff spokespersons, contracted sham air-testing company staff, one or more Covington & Burling lawyers, and other more specialied tobacco lobbyists. They were used in two ways:

  1. As fire-fighters, to turn up in some town or region when problem about public or workplace smoking was arising, and do media interviews.
  2. To make regular media tours through various parts of the country to promote Tobacco Institute propaganda.

They were paid to visit major cities in each state, where the Regional Tobacco Institute staff would have arranged radio, TV or news coverage, and set up meetings with key officials at the local councils, counter air-ports (smoking bans) and meet with the editorial boards of media outlets. This is Diana Avedon's list of the key contractors on these group media-tours. It had the advantage of each participant getting to know the others, which introduced a collegial element to their shared message distortions.

1993 Jun 1   TI list of "Witness/Expert Appearances Scientific/Legal/Spokespersons."
Thomas Lauria
Assistant to the Tobacco Institute President,
Mike Buckley
lawyer-lobbyist with Covington & Burling,
Simon Turner
IAQ witness/executive of ACVA/HBI,
Gio Batta Gori
Corrupt science researcher at Nat. Cancer Institute
He ran the Tobacco Working Group for the industry until fired.
Bill Wordham
Tobacco Institute's Media spokesperson
Gray Robertson
Partner in ACVA then owner of HBI
Lifelong contractor for sham air-testing with TI
Peter Binnie
owner/partner of ACVA and HBI
He sold his share of HBI to Gray Robertson
Larry Holcomb
Ran sham air-testing company (airlines)
Holcomb Environmental Services
John C Fox
Lawyer lobbyist for TI via Pettit & Martin
Later also through Pillsbury Madison & Sutro
Richard Silberman
Healthy Buildings International (HBI)
spokesman on 'sick buildings'
Walter Merryman
TI Public Relations, then Issues Management
Later VP at the Tobacco Institute.
David Remes
legal strategist from the main law firm
Covington & Burling (C&B)
Frank Powell
National Energy Management Institute
(NEMI) organiser who worked for TI
Melinda L Sidak
C&B lawyer; strategist in science corruption
Worked on recruitment of scientists.
Rudy Cole
He ran restaurant front-group RSVP
He organised lobby against smoking bans.
Larry Halfen
Environmental Consultants; TI witness
An attached 1991 Witness List includes
Brennan Dawson
Media relations at the Tobacco Institute
Jeff Seckler
Exec. in charge of HBI's sham air testing
He later turned whistleblower.
Jim Goold
Lawyer sent on media tours by the Tobacco institute to train witnesses.
Joe Pedelty
worked for Holcomb Environmental Services
Did sham air-testing for TI
Jolly Ann Davidson
NASBE school/educational lobbyist,
ran "Helping Youth Decide" program for TI
Dick Wagner
GMU economics professor (Tollison aide)
Key in cash-for-comments network
Bernadette Davidson
lawyer and media lobbyist with John Fox
She was retained by TI as IAQ witness
Walter J Decker
Ran Toxicology Consultancy Services
Provide witness services for the TI
Also attached is a 1990 Witness List (page 35) includes
Bill Orzechowski
TI Director of Economic Issues
He was ex-US Chambers of Commerce
Mike Davis (Dallas Texas)
Prof of Econ. and Business Management
Witness for the Tobacco Institute.
Morris Coats
Prof Economics West Virginia.
Worked in cash-for-comments net.
The main long document has this 1989 witness list attached with the addition (to above)
Dwight Lee
economics professor and leader of
cash-for-comments economists network
David A Weeks
Boise Idaho physician, TI Witness
Partner of S James Kilpatrick in Per-Med Corp.
Alan Kassman
Ex tobacco industry scientist. Retrained
to provide legislative and media briefings.
Robert Tollison
GMU professor of economics who ran the
cash-for-comments economists network
Richard Wagner
Economics professor and TI witness.
Tollison's understudy in c-for-c network
Jack E Peterson
Industrial hygienist; ran Peterson Assoc.
Also worked for Dow Chemicals
Bestype Consulting Corporation
they ran TI's "Sick Building Syndrome"
and "Tight Building Syndrome" seminars.
Dennis A Vaughn
Lawyer-lobbyist for Tobacco Institute,
Associate of John Fox at P&M and PM & Sutro
The 1988 List includes most of above with the additions of:
Alan W Katzenstein
Biostatistician with Katzenstein Assoc.
Witness for Tobacco Institute,
David Brenton
Ran the Smokers Rights Alliance
His wife Sue had her focus on airline smoking.

[Numerous other documents detail the day-to-day organization of these groups spread over five or more years.]

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." [9]

"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."


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 [11]
  • 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. [12]
  • The final report was called Science, Economics, and Environmental Policy: A Critical Examination.' It had the approval of the Cash for Comments Economists Network. [13]


  • Robert D. Tollison, Richard E. Wagner, "Smoking and the state: social costs, rent seeking, and public policy", Lexington Books, Lexington, Massachussetts, c1988. ISBN 0-66917-100-X.
  • Robert D. Tollison, Richard E. Wagner, "The Economics of Smoking", Kluwer Academic Publishers, October 1991, ISBN 0792392248

External links