John S Howe

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John S Howe was a professor at the School of Business, University of Kansas, Lawrence. He was also a member of the Cash for Comments Economists Network which was run for the Tobacco Institute by Professor Robert D. Tollison and lobbyist James Savarese with the help of Tollison's wife Anna and the staff from the Center for Study of Public Choice which was located on the grounds of George Mason University.

The network later split up and most of the members transferred over to work for the tobacco industry under the cover of the Independent Institute with William F Shughart taking a leading role. Savarese and Tollison then appeared to have formalised their partnership, with Tollison and his wife becoming part of James Savarese & Associates.

 

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

1978 to 1980 Graduate Instructor, Purdue University.


1981 to 1988, Assistant Professor of Business, University of Kansas.


1984 Jul The Tobacco Institute's 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.

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.

Professor John Howe joined this scheme about a year later. [3]


1985 June/1986 March-July The Cash for Comments Economists Network was commissioned by the Tobacco Institute to write economic opinion pieces opposing excise taxes on cigarettes in mid-year-1985. This propaganda requirment resurfaced as a major project for the economist in the peak of the Tobacco Industry's PR campaign against the Packwood tax plan (although the threat was obviously still a possibility until the end of 1986r).

The Tobacco institute (much later) put together a package of commissioned economics reports (see front section of document), followed by about thirty op-eds and composite pieces which were generated by the Tollison/Savarese Cash for Comments Economists Network in this 1985-86 time frame. It illustrates the propaganda value of this network -- and shows what it can accomplish in a very short time for just a few thousand dollars in academic bribes.

These op-eds attacking the Packwood tax plan were all published in local newspaper across the USA. (Copies needed to be sent in for payment to be made.) A few are from July 1985 and the rest appeared in local newspapers during March-July 1986. These spontaneous independent expressions of expert opinion all miraculously come from Professors of Economics attached to the Center for Study of Public Choice ...

Joseph M Jadlow, Oklahoma State Uni. (He had two op-eds in different papers.);   William C Mitchell Uni of Oregon, Eugene;   Lee G Anderson, Uni of Delaware;   John S Howe Uni of Kansas, Lawrence;   D. Allen Dalton, Boise State University;   Thomas F Pogue, Uni of Iowa, Iowa City (He had two.);   Scott Atkinson, Uni of Wyoming. (He had two in different papers.);   S. Charles Maurice, Texas A&M Uni;   Todd Sandler, Uni of Wyoming;   Michael A Crew, Rutgers Uni, Newark;   Robert B Ekelund Jr., Auburn Uni (He had two.) ;   Ann Harper-Fender, Gettysburg College;   Lee Alston, Williams College;   Paul L Menchik, Michigan State Uni;   Henry N Butler, Texas A&M Uni;   Burton A Abrams, Uni of Delaware;   Ryan C Amacher, Clemson Uni (He had two.);   Dominick T Armentano, Uni of Hartford;   Fred McChesney, Emory Uni;   and a think-tanker David Wilhelm (Citizens for Tax Justice);

Also short extract pieces and letters-to-the-editor from A James Heins, Uni of Illinois, Champaign-Urbana;   William J Hunter, Marquette Uni, Milwaukee;   Dennis E Logue, Dartmouth College;   William F Shughart, George Mason Uni;   Harold Hochman, Baruch College, City Uni of New York;

Also uncredited overviews in the Newport Daily News, the Times-Review in Texas, Herald PA, etc. which expresses the encapsulated wisdom of most of the above with the addition of Thomas Borcherding (Claremont Graduate School, Calif);   K. Celeste Gaspari, Uni of Vermont, Birmingham;   David N Laband, Uni of Maryland;   Dean Tipps (Service Employees Intl. Union);   Allen M Parkman, Uni of New Mexico, Alburquerque, NM;   Richard K Vedder, Ohio Uni, Athens;   Roger L Faith, Arizona State Uni, Tempe;   Lee Alston, Williams College Mass;   and William J Hunter, Marquette Uni, Wisc.; (Some sections were published in multiple papers). [4]
This was a massive amount of propaganda coverage for a payment of less than $1000 each to these Professors at that time.


1985 Dec /E President Ronald Reagan asked Senator Bob Packwood, chairman of the US Senate Finance Committee, to design a proposal for comprehensive tax reform

... which would reduce the highest individual income tax rate down to 35% from its current 50% level, but retain adequate incentives for business investment, and avoid inclusion of any new taxes.

In an attempt to do this without reducing the total amount of tax revenue that is currently collected, the Packwood plan proposes to offset reduced revenues from income taxes by what the Wall Street Journal has referred to as a "backdoor increase in excise taxes."

The Packwood plan proposes to eliminate the income tax deductibility of excise taxes and import tariffs paid by businesses [and it] would increase federal excise tax receipts by an estimated $75 billion over five years. Approximately $13 billion of this would be a result of a direct increase in excise taxes on motor fuel, wine, distilled spirits, and tobacco.

See also in this document James Savarese's report to Fred Panzer at the Tobacco Institute on the progress of his Packwood Excise Tax/Op-Ed project. This economist and 18 others are writing opinion pieces for their local newspapers, and sending letters to their congressmen. [5]

[The Packwood tax plan triggered a substantial increase in the activities of the cash-for-comments economists already employed by the tobacco industry and led to the creation of the very substantial network of academic economists in every state who could be called upon to help fight tax increases on cigarettes -- and later public smoking bans.] Howe's involvement is confirmed by a listing of the network on a state-by-state basis:

KANSAS Prof. John Howe
Submitted to Paper: 3/22/86, Wichita Eagle Beacon
Letters to Senators: 3/22/86, Dole, Kassebaum
Current Status: Published 4/6/86 Eagle Beacon

A copy of the article clipping was attached. [6]

1986 March Copies of the letters that the cash-for-comments economists wrote to various newspapers editors, and also the ones they wrote to their Senators -- none of which mentioned that they'd been paid by the Tobacco Institute to write both the op-eds and the Congressional letters. These were sent to the Tobacco Institute as proof of their activities.

John Howe, School of Business, University of Kansas, wrote to the editorial board of the Wicheta Eagle-Beacon (with his op-ed) and also to Senator Robert Dole and Senator Nancy Kassebaum.

Accompanying this letter you will find a brief paper which summarises my analysis of the excise tax provision of the Packwood tax reform bill. Foremost among the conclusions: this provision will have a disproportionately adverse impact on the Kansas economy. I urge you not to increase tax revenues by raising excise taxes (either directly or indirectly). See Pages 4 to 6

Clippings of some of the network members' published articles for this project are grouped here for Professors Jadlow, Dalton, Maurice, and Scott Atkinson. [7]

Howe's op-ed for the Wichita Eagle-Beacon was titled: "Excise taxes: Backdoor Tax Increase". One part says about excises:

"This method of raising tax revenues is particularly repugnant, for a variety of reasons.

  • First it disproportionately impacts industries subject to federal excise taxes and their customers.
  • Second, it is a hidden tax: this is, of course, politically expedient.
  • Third, it is likely to be a regressive tax, falling more on persons with lower income,...offset[ing] the proposed reduction in personal income taxes...
  • Fourth, it violates the long-established principle of allowing as deductions legitimate costs of doing business " [8]
Many people find it "particularly repugnant" that a paid professor at a State university should also be secretly acting as a tobacco lobbyist.

1986 Apr 1 An Open Letter to Senator Robert Packwood (by William Mitchell) has been sent to the network economists to help them write their articles. This is a checklist of those in the 1) Writing Stage 2) Submitted to Newspapers 3) Letters Written to Senators.

This cash-for-comments participant has written both the article and the letters to Senators, and has obediently attached copies of both, which are sent back to the Tobacco Institute. [9]


1986 Apr 15 Jim Savarese is reporting to Fred Panzer at the TI about the [anti] Packwood Tax Plan project.

We have contacted the following people and have asked them to request to testify before the Senate Finance Committee on April 21, 1986. As of today, no one has been asked to testify, but here is the current status.

We will check back with these people daily to see if they have heard anything and I'll let you know as soon as we are successful. [10]

1986 May /E A Tobacco Institute list of "Schedule of Payments - Excise Tax Op-Ed project." (April-May 1986) This lists those academic economists who have already planted their article on a local newspaper, and the amount they are to be paid. They appear to have been paid $900 for each article, and $1025 if they had also made contact with their local Congressman. However a number of the cash-for-comments network members still have not completed their commission.

The George Mason (Uni) production staff of Bob Tollison, Bill Shughart, and Gary Anderson were paid for "rewrites, editing and research, 18 articles", and Carol Robert for the "production of final product. " A total of $18,000 + $1067 expenses [or $1000 per article to make them into saleable propaganda for their local newspapers]

Howe in Kansas has been given the target of planting his article on the Topeka Cap. Journal and was due for payment of $1025.00. [11] A later Schedule of Payments increases this amount by another "$800.00 -- Paid in Full" [12] The GMU production staff were also being paid another $9,500 for rewrites, editing and research on 9 additional articles, while Savarese seems to have been charging $5,800 + $235 in expenses for recruiting replacement economists in California, Montana, New York, Ohio and Tennessee.

References