Philip Morris's role in defeating Clinton's health care proposal

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

One of the central reform proposals advanced by Bill Clinton in his first term was to establish a more efficient and comprehensive system of public health care. The proposal was to be funded by a major ($1 U.S.) increase in federal excise on tobacco (FET).

Philip Morris (PM) -- which feared the impact the tax increase would have on cigarette sales -launched a massive lobbying campaign that succeeded in defeating the proposal. The release of millions of pages of internal tobacco industry documents as part of the Master Settlement Agreement between U.S. state governments and the tobacco industry has provided an unprecedented insight into their campaign.

Central to PM's strategy for fighting health care reform was mobilising a network of conservative media commentators to advance its policy agenda. In early 1993, PM canvassed options for expanding its work with its conservative media network beyond providing background information. "Seek additional coverage in magazines/newspapers by providing funds that would allow the publications to dedicate staff and resources solely to the health care issue," was one option.

Media outlets "that could possibly be mobilised" comprised The Washington Times, National Review, Texas Republic, American Spectator, Consumers' Research and National Empowerment Television.

PM was willing to put money into funding the media, too. "Support could be directed to 501(c)(3) organizations of the publications and/or food product advertising," the strategy paper suggested. [1]

In an internal February 1994 Philip Morris memo, Craig Fuller, Senior Vice President of Corporate Affairs, outlined some of their frantic behind-the-scenes activity: "Worked with PM USA to implement targeting 35 congressional districts, co-ordinate the anti-FET grassroots efforts including mailings, points-of-sales materials and similar activities and finalize details of the Washington, D.C. demonstration".[2]

But rather than mount a major campaign in its own name, Philip Morris Washington Relations Office (WRO), PM's lobbying, Office, sought to mobilise conservative groups that it funded to defend the company's interests. "The WRO is working behind the scenes with Citizens For A Sound Economy and other anti-tax groups to oppose the Clinton package. Specifically, through funding PM is providing, these groups are engaged in grassroots and/or public education efforts against the Clinton plan in districts of 'wing Democrats on the House Energy and Commerce Committee".

While mobilizing grassroots aimed at the key initial decision makers was useful, the company recognised more would be required. "Pro-actively leveraging contacts in the public policy arenas and the media to influence policy makers and public opinion; and working with prominent economists in the presentation of remarks at a variety of forums. Specific efforts include: development and placement of editorials, op-eds and other written materials in selected newspapers; obtaining active support from trade groups; and development of ad strategy for National Newspaper Association," Fuller wrote.

However, PM wasn't having it all its own way as it had to develop a strategy to persuade the U.S. Chamber of Commerce that they should spring to the defense of the tobacco industry.

Another internal PM document revealed the magnitude of the tensions with the peak industry groups. "As we all know, the Chamber has been all over the map, including on the wrong side, of this debate. However, we have been intensely lobbying them behind the scenes to "bring them in line" consistent with other major business organisations, especially on FET, but also on employer mandates". [3]

PM was impatient that the Chamber of Commerce was awaiting the results of a survey of members before deciding their position on the issue. … We should coalesce with other large corporate members of the chamber (who comprise just 10 of the membership but full 90% of the dues) to ensure not only that Chamber waffling be discontinued, but that the positions it takes be representative of its members interests. We are presently working on a strategy to accomplish this," the memo stated.

While the Business Roundtable (BRT) was opposing Clinton's health care proposal, PM wasn't entirely sure they could be trusted to hold the line in the thick of the debate. "BRT has had a history of softness on tax issues, and we need to be extra vigilant in monitoring their activities and positioning on this debate. In particular we need to be careful of White House efforts to divide the business community in exchange for some promised benefits, and especially of attempts by other BRT members to sell out the tobacco industry to save their own skins," PM candidly wrote.

Nor could the National Association of Manufacturers be trusted. "Similar to the BRT, but even more strongly, NAM (with our support) came out in opposition to the Clinton health care plan. Simultaneously, we have been working with the NAM Taxation Committee to ensure that regardless of what plan materializes, no selective excise taxes of any kind will be used to fund it," PM wrote.

They were more confident they would be able to prevent the Grocery Manufacturers of America (GMA) from straying. "We currently chair the GMA Tax committee and hence can ensure that no wayward positioning on excise ensues," they noted.

While PM was warily keeping an eye on their backs within the business community, advocacy on their behalf was proceeding more smoothly with corporate-friendly conservative activist groups such as Citizens for a Sound Economy (CSE). "We are funding a major (400k) grassroots initiative in the districts of House Energy & Commerce members to educate and mobilise consumers, through town hall meetings, radio and print ads, direct mail, patch through calls to the Capital switchboard, editorial board visits, polling data, meetings with Members and staff and the release of studies and other education pieces," PM noted.

"The goal of this effort is to show the Clinton plan as a government-run health care system replete with higher taxes and government spending, massive job losses, less choice, rationing of care and excessive bureaucracies," its memo stated.

With pride, PM reported its surrogates' activities were having an impact: "CSE is taking aim at the heart of the plan - employer mandates, new entitlements, price controls, mandatory health alliances, heavy load of new taxes and global budgets - and with the program well underway, is by all accounts getting rave reviews in the respective districts," PM noted.

Philip Morris was also working with other company-funded think tanks, too: "Working with the Heartland Institute in the planning of a health policy forum for state little think tanks to develop a unified strategy and action plan, and in the use of their fax-on-demand technology to promote healthcare positioning consistent with our interests to legislators, public opinion makers and the media", Fuller explained.

In California the company was working with the Claremont Institute "on a major policy paper detailing the (negative) impacts of the Clinton plan in California".

Fuller outlined to Michael A. Miles that PM was also working on getting the company's message out without filtering by journalists: "Working with the National Empowerment Television (NET) satellite broadcast at work to develop and produce a healthcare mini series consistent with our interests. This will be an excellent venue for public policy and media allies critical of the Clinton plan. We will also be working with NET to provide coverage of breaking news events of concern to PM, including, e.g., the tobacco industry march on Washington," he wrote.

At a cost of $200,000 Philip Morris had signed on as an Associate Broadcaster of the 24 hour-a-day cable/satellite network which boasted a potential viewership of 25 million people. The mini-series project, which PM staff were looking forward to developing with NET producers, would "focus on debunking the myths of the Clinton plan and the use of excises to fund such a plan, and to investigate more market-driven alternatives".

"NET will also seek to motivate constituents from influential congressional districts by engaging them in the policy debate through interviews and viewer call-ins. Participants will include policy group allies of PM who share our viewpoint on healthcare, " PM staff reported. [4]

The benefits of their status as an associate broadcaster extended to gaining favourable coverage on other tobacco related issues too "as evidence by their interview with Steven C. Parrish last week re FDA regulation and nicotine, and coverage if the march on Washington".

While the mini-series was to be the first major project PM had worked with NET on, they were hopeful it could prove to be a powerful campaign tool. "If the health care miniseries goes well, the possibilities of working with NET to present our side of the story are virtually limitless (VNR's, district by district canvassing, etc) … but will require a substantial amount of increased support", the internal report noted.

PM also sought to reach out directly to journalists but via intermediaries. "Working with the National Journalism Center (NJC) on a forum focusing on healthcare reform proposals, with particular emphasis on alternative financing mechanisms," Fuller wrote.[5]

Another internal Philip Morris memo explained the role and benefits to the company of working with the NJC. "The group was developed to train budding journalists in free market political and economic principles. As a direct result of our support we have been able to work with alumni of this program … about 15 years worth of journalists at print and visual media throughout the country … to get across our side of the story … which has resulted in numerous pieces consistent with our point of view," the strategy paper stated.[6]

PM thought the NJC could be very useful in derailing Clinton's health care proposal. "We also co-sponsored in December a policy mini-briefing on healthcare for a broad cross section of the Center's Alumni Council, and are now working with the Journalism Center in the development of a major health care policy conference (tentatively scheduled for late April/early May) that will debunk the myths of the Clinton plan, explain the ill-advised proposals to fund any such plan with excise taxes, and promote alternative, market-driven plans," the strategy stated.

"The forum will be chaired by Sen. Gramm (R-TX), and will have considerable participation from legislators, media and friendly policy group personell [sic]," it noted.

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