David Klingaman

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

David Klingaman was a Cash for Comments Economists Network member for the tobacco industry while also a Professor of Economics at Ohio University. He was one of a group of about 120 economists who worked secretly for the tobacco industry.

The network was organised by the Tobacco Institute through Ogilvy & Mather PR, whose employee lobbyist James Savarese later tookover himself and established James Savarese & Associates in partnership with Robert Tollison and his wife Anna Tollison. Over the years it emboiled about 120 Professors of Economics (they tried to maintain one in each state) to write op-eds for local newspapers on behalf of the tobacco industry; and to attend ordinance and other hearings on the industry's behalf, and to approach local Assemblymen and Congressmen. The whole operation was kept secret and the economists were paid via the Center for Study of Public Choice (CSPC) at George Mason University.

 

HOW THE NETWORK WORKED

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.[2]]

  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


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.

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.
Strategies:
  • 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."[3]
[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.]

The Buckeye Institute.
David Klingaman appears to have recruited Richard Vedder and Lowell E Gallaway into the Cash for Comments Economists Network. They were both "Distinguished Professors" in economics at Ohio University who also became diligent workers for the tobacco network.

This group also established (1994-95) their own think-tank, the <a href="../ATN166/00803.html" class="side"> Buckeye Institute for Public Policy Solutions.</a>, and there are 101 documents in the tobacco archives which refer to this organisation. It must have been of considerable value to the tobacco industry since they made regular donations and grants-in-aid (a euphemism for 'commissions').

The 1995 Philip Morris regional report from Columbus Ohio records numerous 'donations' made to Ohio organisations, including $10,000 to the Buckeye Institute for 'Policy' in 1995. and in the 1996 Budget year they provided two further donations of $2,500 each to the Buckeye Center in Dayton. For what it is worth -- they claimed that this was...

"To provide renewed general support for this public policy organization whose mission is to offer market-based solutions to issues effecting all Ohioans in the areas of regulation, education, state spending and taxation the environment and others."

The Tobacco Institute also gave the Buckeye Institute a grant of $1000 a year, which probably means that RJ Reynolds also gave them a regular donation. http://legacy.library.ucsf.edu/tid/obx45c00/pdf