Independent Institute (Doc Index)

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

The Independent Institute was one of the later libertarian think-tanks which saw the opportunity to function at a high level with massive corporate funding. (don't confuse it with the Colorado Independence Institute). It has managed to attract very substantial sums of cash from the tobacco industry over the years, and appears to have taken over the administration of their Cash for Comments Economists Network from Robert Tollison, James Savarese and the Center for the Study of Public Choice.

Bill Gates Microsoft Corporation had also funding it very generously for a variety of project. On its website the Institute states that it "receives no government funding. Instead, it draws its support from a diverse range of foundations, businesses and individuals, and the sale of its publications and other services." [2]

The Independent Institute/Personnel
Independent Institute (Doc Index)
David J. Theroux   &   Robert Higgs
Cash for Comments Economists Network

Documents & Timeline

1994 Aug 11 the Institute's Advisory Board and Research and Senior Fellows now lists a large number from the tobacco Institute's Cash for Comments Economists Network: Robert D. Tollison, Richard E. Wagner, Thomas Gale Moore, Gary M. Anderson, Robert Ekelund, Dwight R. Lee, Mark Thornton and Richard Vedder. All of the above have a long history of working for the Tobacco Institute (TI) and/or Philip Morris and they were all also members of the Academic Advisory Board on the publication of a pro-tobacco junk science report 'Science, Economics, and Environmental Policy: A Critical Examination'. This had been published by the Alexis de Tocqueville Institution (AdTI) with money from both TI and Philip Morris. (See: AdTI-Funding)

1994 Aug 11 S. Fred Singer who ran the climate-denial tobacco-funded organisation Science & Environmental Policy Project (SEPP) was also listed as a Research Fellow. SEPP was established by APCO, the private PR firm of Philip Morris, who also created the infamous The Advancement of Sound Science Coalition]] (TASSC) with "junk-man" Steven J Milloy for Philip Morris at about the same time in late 1992. SEPP was also a "junk-science" operation which differed from TASSC only in having a narrower focus on ridiculing and dismissing climate-change science.

1994 Oct 14: David Theroux at the Independent Institute sends a copy of their proposal for a book to be called "Sin Taxes" to William Orzechowski at the Tobacco Institute. It implies that excise taxes are imposed on cigarettes simply because the tobacco industry is unpopular and an easy target.

It doesn't single out cigarettes (that would be too obvious) but raises the threat of Alcohol, Prohibition: The Ultimate "Sin", Gun Control, the War on Drugs, and the evils of 'Earmarking' such excises to prop up the health care system. Constitutional Liberties are also dealt up in the penultimate chapters.

The Institute is prepared to print and promote 810,000 books (cheap enough to be used as text-books) and there will be other benefits, such as "reprints in journals and magazines, syndication of Op-Eds and wire stories to major newspapers, media intereviews and government testimony by authors. Also lecture tours, etc. etc.

It will be edited by William Shughart under the direction of the Independent Institute's Research Director, Dr Robert Higgs, and have chapters written by the old Cash for Comment crowd.

William F Shughart, Uni of Mississippi
Adam C Gifford Jr, California State Uni, Northridge
Randall G Holcombe, Florida State Uni
Dwight R Lee, University of Georgia
Thomas J DiLorenzo, Loyola College in Maryland
Richard K Vedder, Ohio University
Mark Thornton, Auburn University
Bruce L Benson and David W Rasmussen, Florida State Uni
Richard E Wagner, George Mason University
Robert B Ekelund Jr and Paula A Gant, Auburn University
Bruce Kobayashi, George Mason University
Jonathan Macey, (Law) Cornell University
Gary M Anderson, Cailfornia State Uni, Northbridge
Donald J Boudreaux and Adam C Pritchard (Law) Clemson Uni
Gordon Tullock, Arizona State University. [3]
The book reached the drafting stages, and William Shughart sent his detailed Introduction along to the Tobacco Institute for their approval. [4]

1995 July: The remnants of the Cash-for-Comments Network has now transferred over to work through the Independent Institute. 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:

(With the exception of a few new names this is the remnants of the old Cash for Comments Economists Network)

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 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. [5] [6]

1997 Joshua S Slavitt at Philip Morris was Senior Manager, Issues Planning and handled the generous company donations to both real and phantom think-tanks and institutes which supported the company and tobacco industry. (His associates in this brown paper-bag operation were Roy Marden, John R Dunham and Tracy Mihaus)

Slavitt reports many millions of dollars given to various think-tanks over the 1997 year with $10,000 for the Independent Institute [They gave more to the Independence Institute = $25K) [7]

Microsoft-Oracle debacle

1999 New York Times reporter Joel Brinkley revealed (after investigation later in 1999) that Microsoft "has secretly served as the institute's largest outside financial benefactor in the last year." [8] Institute internal documents revealed that Microsoft had contributed $203,217 for the year to June 1999, making it the single largest contributor. Brinkley calculated that Microsoft's contribution amounted to approximately 20% of the funds in that year from external sources,excluding $304,725 that founder David Theroux contributed to his own foundation. [9]

1999 May The Independent Institute published the book Winners, Losers and Microsoft: Competition and Antitrust in High Technology by Stan J. Liebowitz and Stephen E. Margolis. A media release promoting the book stated that the book "makes a compelling case that the real danger to American high technology leadership is a too powerful, too intrusive government which believes it knows consumer preferences and needs better than they do." [10] Stan Liebowitz, one of the authors of the book claimed not to know of Microsoft's funding though he stated "it doesn't matter to me." [11]

1999 June 2 The Institute "sponsored" full-page advertisements - titled Open Letter on Antitrust Protectionism - in the Washington Post and the New York Times with the signatures of 240 academic economists. On the same day it held a media conference in Washington DC.

These ads were supposedly in reaction to

..."headline-grabbing cases against Microsoft, Intel, Cisco Systems, Visa and MasterCard, along with a flurry of merger investigations now under way, (that) would appear to demonstrate the need for a vigorously enforced antitrust policy that will create checks and balances to eliminate consumer harm."

The advertisements, (presumably with the agreement of the 240 economists) claimed:

However, consumers did not ask for these antitrust actions — rival business firms did.

[12] (Pdf) (See accompanying media release). The advertisement also promoted the Liebowitz/Margolis book Winners, Losers and Microsoft: Competition and Antitrust in High Technology.

The same day, the Independent Institute held a media conference in Washington D.C. to unveil the advertisements. This co-incided with the resumption of an anti-trust trial involving Microsoft.

New York Times reporter Joel Brinkley later revealed that the advertisements had been paid for by Microsoft. [13] One of the documents provided to Brinkley was a bill for $153,868.67 covering the cost of the ads plus Theroux's travel expenses from San Francisco to Washington for the news conference. The bill was sent to Microsoft's John Kelly. When asked about the bill Theroux confimed that Microsoft had paid for the ads but claimed it made no difference. "The academic process we use is independent of sources of revenue," he said. [14] [15]

In June 2000 the Wall Street Journal revealed that the the Independent Institute funding documents had been obtained by by staff of Investigative Group International, a private investigation firm hired by Microsoft's rival Oracle -- probably by rifling through the think tank's office trash. [16]