Richard S Higgins
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Richard Higgins was a non-academic, yet core member of the Cash for Comments Economists Network run for the Tobacco Institute. Most of the 130-odd members (over a few years) were professors of Economics at State Universities who made some supplementary income working for the tobacco industry. The Cash for Comments Economists Network 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 eventually 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.
Higgins worked extensively with Fred McChesney who was one of the original group who advised the Tobacco Institute. Both had worked for the FTC during the early 1980s: Higgins as Deputy Director for Consumer Protection (1982-86), and McChesney as Associate Director for Policy and Evaluation in the Bureau of Consumer Protection, (1981-83). See a jointly authored paper in Anti-trust 2003-4 "Materiality and Method in FTC Advertising Regulations." 
|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.]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
1966 Louisiana State University B.A., Economics,
1969-1975 University of Georgia, Assistant Professor of Economics
1969 University of Virginia Ph.D., Economics,
1975 University of Chicago Post-doctoral study, Economics,
1976 - 80 Auburn University, Associate Professor of Economics
1981 - 87 FTC Deputy Director, Bureau of Economics [Note:} The FTC's Bureau of Consumer Protection has a Richard Higgins listed as Deputy Director.
1982 Sep The Annual Report of the FTC mentions two joint papers with Tollison and Shughart and other cash-for-comments economists.
In this paper, a model was developed which shows that independent dual enforcement leads to more antitrust activity at a lower unit cost than would be obtained with a single agency. On the other hand, the paper states that if the agencies collude, as they appear to do under present institutional arrangements, dual enforcement leads to less and more costly antitrust activity than would otherwise result. According to the paper, empirical tests using historical agency budget and case production figures do not refute the models main predictions. It concludes that more enforcement activity would be obtained at a lower unit cost if the 1948 FTC-Justice liaison agreement were abandoned.
Antitrust Over the Business Cycle, by Ryan Amacher, Richard Higgins, William Shughart, and Robert Tollison, September 1982.
According to this paper, two broad and venerable hypotheses can be deduced from the literature about collusion, antitrust, and economic activity. These are that both private collusive agreements and producer protection regulation should vary inversely with the business cycle. This paper gives evidence which supports both contentions. Employing data on general antitrust law enforcement activity and complaints charging violations of the Robinson-Patman Act, strong counter-cyclical tendencies are found in collusion and governmental regulatory intervention.
- [These economists all had first-hand experience with "collusion, antitrust, and economic activity.]
1982 Sep 17 A Tobacco Institute memo about "The Warning Label Inquiry" of the Federal Trade Commission.
The economist at the FTC in May -- Mr. John Brown had apparently been purged and was quitting his post, so he referred me to Ms. Pauline Ippolito who only had knowledge of the Legal staff report of 1981.
At this point, I was mistakenly directed into the Bureau of Consumer Protection to a Ms.Collette (?) Guerard, Ass't. Director for Advertising Products, then to lawyer Andy Sachs who was associated with the study on the effectiveness of the warning labels.
Eric Rubin had recommended calling the Deputy Director, Richard Higgins.
It seems that the Chilton study and the Waterson study which I reviewed were not economic studies. On hindsight, there were some cost impact analysis of cigarette labelling and rotational labelling going on, the economic approach of which were not available at that time (midsummer).
As you know, what has happened is that the FTC's Timothy Muris who had done these cost/benefit studies is now endorsing the House backers of a bill calling for rotational health warnings. He noted that some smokers"would be better able to estimate the health cost of smoking". [
1984 Apr 26-27 Proceedings of a Conference on "Consumer Protection Economics" sponsored by the FTC's Bureau of Economics. [Note Ryan Amacher of Clemson had just left the FTC] This document contains a study by Richard S Higgins (then FTC) and Fred S McChesney (then Emory University) "An Economic Analysis of the FTC's Ad Substatiation Program" which is an attack on the new principle that advertisers had to be able to prove that their claims were true -- as against the FTC being required to prove that they were false. Cigarette filters and health claims were one of the FTC's main focusses at this time.
The article carries the footnote
* The views expressed here are the authors'. They doubtless do not reflect the views of some Commissioners, and do not necessarily reflect the views of the Commission itself. We received helpful comments on earlier drafts from Ronald Bond, Gerard Butters, David Haddock, Cotton Lindsay , Robert Mackay, Michael Maloney, the late Steven Marston, Robert McCormick, William Shughart, Robert Tollison and Bruce Yandle 
- [The two authors, Ryan Amacher and the six [hotlinked] commentators were all tobacco network academics.]
1984 Apr 30 This 109 page DRAFT Tobacco Institute "Cigarette Excise Tax Plan" which was aimed at the Reagan Administration They had an immediate requirement of
- 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 53,000 @ $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]
It has draft copy and designs for a couple of different booklets aimed at different states, and at labor/union and racial groups. It also identifies the targetted Congress Committeemen and state Assembleymen most likely to be influenced, and adds 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 indusry; 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.
- 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.
- Massachusetts, Harlan Platt, Northeastern University.
- Minnesota, Thomas Stimson, University of Minnesota (St. Paul Campus).
- New York, Harold Hochman, City University of New York.
- Ohio, David Klingaman, Ohio University.
- Pennsylvania, Mark Pauly, University of Pennsylvania.
- Texas, Charles Maurice, Texas A&M University.
- Washington, Yoram Barazel, University of Washington.
- Washington, D.C. Robert D. Tollison, George Mason University.
- Wisconsin, Burton Weisbrod, University of Wisconsin.
Tollison is the most influential and prestigious on this list; he would be hired to consult on federal tax situations and to oversee efforts of the others throughout the country. See last page.
- Yoram Barazel is the only name on this list who appears to have resisted the Institute's overtures.
1984 Nov C/V for Ryan C Amacher of Clemson University sent to the Tobacco Industry lists:
1985 See Center for the Study of Public Choice 43 page self-congratulatory booklet.
During 1985 Center scholars made further contributions to an ongoing research program that seeks to test empirically various aspects of the interest-group theory of government. One implication of the theory is that regulatory activities will vary over the business cycle, tending to favor consumer interests during economic expansions and producer interests during contractions. Using data on the enforcement activities of the Federal Trade Commission under Section 2 of the Clayton Act, William Shughart and Robert Tollison (with Ryan Amacher of Clemson University and Richard Higgins of the Federal Trade Commission) published in the January 1985 issue of Economic Inquiry a paper offering evidence that anti-consumer regulation indeed intensifies during downturns in the economy and abates during expansionary phases. An extract of the paper will appear in the "Readings" section of Regulation magazine. 
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). 
1987 "Dual Enforcement of the Antitrust Laws" (by William Shughart, Richard S Higgins and Robert D Tollison), in Robert J Mackay, James C Miller III and Bruce Yandle (eds.)
, Public Choice and Regulation: A View from Inside the Federal Trade Commission, Stanford, CA: Hoover Institution Press
1988-2001 Higgins was with Capital Economics -- both as Vice president and President
This is an attempt to counter the argument that the society has a right to institute cigarette excise taxes and introduce public smoking bans because smokers impose a substantial additional burden on non-smokers through additional medical costs, cleaning, general pollution, etc.
Implementation of our 1988 "social cost" plan is well underway. A network of "social cost" economists has been identified and held an organizational meeting in Washington, D.C. Also, several projects are underway to demonstrate the significant historical and economic contribution of tobacco to our nation's heritage. Highlights: We have identified an initial group of economists to work on the "social cost" issue. They include:
- Bob Tollison, George Mason University;
- Richard Wagner, Florida State University;
- Dwight Lee, University of Georgia;
- Robert B. Ekelund, Jr ., Auburn University;
- Gary Anderson, California State at Northridge;
- Richard Higgins, Howrey & Simon; and
- James Savarese, Savarese & Associates.
We held an organizational meeting to review "social cost" issues and to brief the economists on our issue plan.
[* Howrey & Simon are listed along with the Scaife, Koch, Olin, Bradley, Smith-Richardson foundations as a financial contributor to the GMU Center for the Study of Public Choice. He is still VP/President of Capital Economics.]
Research needs presented to the economists included:
- review and critique of existing "social cost" literature;
- productivity and absenteeism;
- insurance costs;
- social security/Medicare cost; and,
- application of "social cost" economics to other industries
. We will receive research proposals in the next few weeks and will select projects to begin immediately. Robert Ekelund already has submitted a proposal concerning absenteeism.
Bob Tollison is preparing a proposal for an academic symposium on the "social cost" issue to be held once initial research is complete. The economists also are indentifying opportunities to deliver presentations on the issue before regional and national economic conferences.
The Tollison and Wagner "social cost" book is scheduled to be published in March. We met with Tollison and public affairs counsel to discuss a media tour and other promotional ideas.
We are negotiating with Chase Econometrics and other economic consulting firms on updating the Chase study on the economic impact of the tobacco industry. We will coordinate the project with State Activities Division's new economist once he comes on board. 
1988 Feb 2 James Savarese reports to the Tobacco Institute on a meeting with a "core group of economists"...
To exchange thoughts and ideas on the social cost issue with the goal of determining projects and making assignments for 1988. [In order to attack] Anti-smoking activists [who] have distorted the issue of social cost. Even though economists ridicule their statistics, politicians and the press believe them.
The core group consists of
with the support of PR/lobbyists from
- Leslie Dawson, Karen Hochberger, Richard Marcus .- from Ogilvy & Mather and James Savarese & Associates
- Mike Forscey - lawyer from Wunder and Diefenderfer, working for the Labor Management Committee of TI
- Jeff Ross, Carol Hyrcaj and Paula Duhaime from the Tobacco Institute
Conclusions: This is lobbying pure and simple: The conclusions of their report expose numerous outright admissions as to the scientific and academic subterfuge these people are knowlingly engaged in.
- 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: [Death benefits argument]
- 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.
- 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.
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.
They then allocated Research projects to the economists and disussed additional research 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. Major session of a university to bring together all relevant research on social cost will be planned after research projects are completed. Proceedings will be published in a monograph.
1988 Feb 20 /E Richard Higgins has submitted two research proposal to the Tobacco Institute. At this time he is working with Washington Economic Research Consultants
- The first carries the confusing title: "The Excess Costs to Smoking Employees of Employer-Provided Retirement Benefits." Inc.
A fundamental assumption in all the "social cost" studies of smoking, which provide the intellectual foundation for political opposition to smoking, is that smokers have higher mortality and morbidity rates than otherwise identical nonsmokers. The truth of this assumption has implications for labor market compensation since employees are typically paid in various nonprice ways.
Smokers fare better than nonsmokers for some benefits and worse for others. The present study focuses on retirement benefits. The difference in the values of retirement benefits received by smokers and nonsmokers, who are otherwise identical, will be estimated. This difference arises, according to the fundamental assumption, because the life expectancy of nonsmokers exceeds that for smokers.
Since otherwise identical employees will contribute equal amounts to their employer's pension plan, smokers pay too much, relative to nonsmokers, for retirement benefits. 
- [This is a variation on the 'death benefits' argument. However, it is difficult to see that the tobacco industry would be keen to promote this line. Shorter life-span = cost savings in retirement plans.]
As a matter of fact, the empirical basis for this assumption is methodologically flawed. Mortality and morbidity rates for smokers and nonsmokers have not been estimated for groups of individuals with identical relevant characteristics.
- [He then determines that black may actually be white, and that he may have a way of proving this via sleight-of-hand.]
1988 Dec 8 Savarese has billed the Tobacco Institute for
Phase II - Social Cost Research Project
First of three billings
- [Robert] Ekelund - "Revenue Substitution from Smoking Regulation and Taxation: An Econometric Analysis" $14,000
- [Robert] Tollison & [Richard] Wagner - "Rent Seeking, Bureaucracy and Public Health Regulation" $ 10,000
- [Dwight] Lee - a paper on "The Political Economy of User Charges and Tax Earmarking" $ 9,500
- [Richard] Higgins - "The Excess Costs to Smoking Employees of Employer-Provided Retirement Benefits" $ 9,500
TOTAL $43,000 
1989 Social Cost Issue, Consulting Economist Team. This document is assumed to be the Tobacco Institute informing their litigation team about the facts of the cash-for-comments academics network -- and its offshoot, the core team trained in Social Cost Issues.
These six consulting economists are specifically trained in the social cost issue, and are "prepared for a variety of assignments, from presenting testimony to conducting research."
How we use them
- Conduct research.
- Prepare op-eds and letters to the editor.
- Review and comment on (government and private sector] social cost studies and reports.
- Media tours to promote Smoking and the State .
- Conduct briefings on the issue/arguments with legislators, staff and lobbyists.
Kinds of things they do
- Conduct and publish economic research (constituting the basis of the social cost program).
- Write and place op-eds on discrete topics.
- Prepare and submit letters to the editor.
- Available to present testimony.
- Media tours.
- Make presentations to academic/economic peers.
- Conduct briefings on the issue (during social cost economist network meeting with PAD, SAD, lobbyists and legal counsel). 
1989 Aug 8 Leslie Dawson of Savarese & Associate gives a status report on the Social Cost Project
- Smoking & Absenteeism (Ekelund, Ault, Jackson, Saba, Saurman) -- submitted to the Southern Economic Journal , then revised and resubmitted -- no editorial decision yet.
- The Social Cost of Everyday Life (Gary Anderson) -- submitted to Contemporary Policy Issues -- no editorial decision yet.
- Smoking and the Problem of Social Cost (Tollison & Wagner -- accepted by Journal of Public Choice (they controlled the journal)
- Smoking and the Wealth of Nations (Wagner) -- submitted to Journal of Contemporary Business .
- Self-Interest, Public Interest, and Public Health (Tollison & Wagner) -- submitted to to Journal of Public Interest and Public Choice
- Smokers' Subsidy of Nonsmokers' Retirement Benefits (Higgins and Gordon Sufford from Capital Economics) -- submitted to Social Science and Medicine
- Social Cost and the Cigarette Excise Tax: A Misguided Rationale for an Inefficient and Unfair Policy (Dwight R. Lee) -- Unpublished
- Some Economic Consequences of the Koop Doctrine: National and State Revenue Shortfall from Smoking Regulation (Ekelund) - still at TI for review.
1990 Feb 1 Savarese's report to Susan Stuntz at the Tobacco Institute lists a number of projects involving the cash-for-comment economists:
- "Smoking and the Problem of Social Cost: A Survey" by Tollison and Wagner, published in Journal of Public Finance and Public Choice - reprints have been distributed.
- "Smoking and Absenteeism: An Empirical Study" by Ault, Ekelund, Jackson, Saba, and Saurman - submitted to Applied Economics .
- "Smokers Subsidy of Nonsmokers' Retirement Benefits" by Higgins and Shuford - submitted to Social Science and Medicine .
- "The Social Costs of Everyday Life" by [Gary] Anderson submitted to Contemporary Policy Studies .
- "Social Cost and the Cigarette Excise Tax: A Misguided Rationale for an Inefficient and Unfair Policy" by [Dwight] Lee - submitted to Contemporary Policy Studies .
- "Self Interest, Public Interest, and Public Health" by Tollison and Wagner - accepted for publication in Public Choice.
- "Some Economic Consequences of the Koop Doctrine: National and State Revenue Shortfall from Smoking Regulation" by Ekelund - returned to Ekelund for submission.
- "Smoking and the Wealth of Nations" by Wagner - submitted to Journal of Contemporary Business.
Began Phase III of the social cost research. Proposals have been submitted to TI.
The RICO Case against Tobacco.
2003 Aug Law and Economics Papers: Why Wonder Bread Lost No Dough: Materiality, Settlements and the FTC's Ad Substantiation Program by Richard S. Higgins, Law and Economics Consulting Group (LECG) and Fred S. McChesney, Northwestern University - Kellogg School of Management 
2012 Director of a Washington Economic lobbying firm, Berkeley Research Group (BRG).