Friday, September 30, 2005

ANR-Proclaimed Big Tobacco Front Group/Ally Helps Lay Path to Bring Down Big Tobacco's Master Settlement

Despite being listed as a front group (or possibly ally) of Big Tobacco on the Americans for Nonsmokers' Rights (ANR) hitlist-like inventory of fronts for Big Tobacco, the Cato Institute has helped develop many of the legal theories that are now being used in an attempt to bring down the 1998 Master Settlement Agreement (MSA) between the major tobacco companies and 46 states.

In a 2000 policy analysis of the MSA featured on the Cato Institute's web site, entitled "Constitutional and Antitrust Violations of the Multistate Tobacco Settlement," the Cato Institute helped to identify and elucidate many of the legal theories that are now being used by the Competitive Enterprise Institute (another ANR-proclaimed Big Tobacco front group) to challenge the constitutionality of the MSA and to attempt to overturn it.

And yet another ANR-proclaimed Big Tobacco front group/ally - FORCES International - is now highlighting the questionable legality of the MSA and the multi-pronged attempts to overturn it.

In the policy analysis provided by the Cato Institute, the brief's author - Thomas C. O'Brien - suggests that the MSA violates the Commerce Clause and the Compact Clause of the U.S. Constitution and that the MSA violates federal antitrust laws: "The collusive actions of the tobacco companies under the MSA are destructive of competition; they are the types of actions that constitute per se violations of the antitrust laws."

And in its introduction to the policy analysis, the Cato Institute states: "The 1998 tobacco settlement is a sophisticated, white-collar crime instigated by contingency fee lawyers in pursuit of unimaginable riches. In collaboration with state attorneys general and the four leading tobacco companies, they concocted a scheme that forces all tobacco companies—even new companies and companies that didn't join the settlement—to engage in a program of price fixing and monopolization."

The introductory statement makes it clear that the purpose of the policy brief is to explore ways that Big Tobacco can be prosecuted for its antitrust violations: "States that are receiving billions of dollars from the settlement can hardly be expected to prosecute tobacco companies for antitrust infractions. Nor can the Clinton administration, which helped negotiate the MSA and is now pursuing a similar federal settlement with the industry. Fortunately, there are alternatives to public-sector enforcement. Injunctive relief and treble damage remedies are available in private lawsuits brought directly by injured parties, including smokers and nonparticipating tobacco companies."

The Rest of the Story

If ANR is correct and the Cato Institute and Competitive Enterprise Institute are merely tobacco industry front groups, then they deserve failing grades as fronts. Even as allies, they are not doing too well right now, as they have helped play a critical role in developing and implementing a legal action that threatens to bring down the settlement that is of great benefit to Big Tobacco.

And if FORCES is merely a front group or ally of Big Tobacco, it is not doing well either, as it is basking in the glory of seeing Big Tobacco and its price-fixing cartel with the states being seriously threatened.

After all, isn't a front group or an ally of Big Tobacco supposed to help Big Tobacco, rather than hurt it? Isn't a Big Tobacco front group supposed to promote the interests of the major tobacco companies, rather than to develop, pursue, or delight in a lawsuit that could, if successful, greatly harm the interests of these companies?

You'd have to think that the Cato Institute is a pretty pathetic front group if it is accusing the companies it is allegedly fronting for of being "white-collar" criminals. If that's what a front group does for you, then I certainly wouldn't want one for my organization.

Perhaps ANR was simply not aware of the Cato Institute's actions in going up against Big Tobacco. But to make matters worse, ANR itself admits that it was aware of them, citing on its web site the fact that the Cato Institute co-filed a brief alleging that the Master Settlement Agreement violated U.S. antitrust law.

Interestingly, ANR cites the Cato Institute's opposition to Big Tobacco's Master Settlement as a negative action taken by the Institute. By inference, that seems to mean that ANR is criticizing Cato for opposing the settlement, and ANR therefore appears to be defending Big Tobacco and its settlement.

Aha! It must be that ANR is an ally of Big Tobacco. After all, they are most certainly supporting Big Tobacco's best interests by criticizing a group for threatening Big Tobacco in court. Perhaps ANR should add itself to its "hit list."

Is ANR simply unaware of what the Cato Institute is trying to do here? Or is their bias against the Institute and their desire to portray this group as a Big Tobacco front simply so strong that they are unable to see an action that is not in the interests of Big Tobacco when it hits them over the head?

Most sadly, ANR is not simply providing useful information here, such as background factual information about the Cato Institute. Instead, its site really does read like a "hit list": ANR concludes its "fact sheet" by stating: "When sources from the Cato Institute appear in your community, please contact ANR at (510) 841-3032 or"

It makes Cato sound like criminals. And what exactly is ANR going to do if "sources" from the Cato Institute do appear in a community?

You know what - if "sources" from the Cato Institute appear in my community, the first thing I'll do is buy them a drink and show them around the town. Then I'll commend them for having the guts to go up against Big Tobacco in the courtroom, despite the hundreds of thousands of dollars they have received from them. At least they're willing to stand up for the principles in which they believe, even if their funding will most certainly be threatened. That's more than we can say for the states and their AGs, who put on a huge charade about caring so much about kids smoking, and now are defending the financial interests of Big Tobacco everywhere they can so that their own funding is not threatened.


Bill Godshall said...

Before defending CATO, perhaps you should review CATO's claims about secondhand tobacco smoke a decade ago when CATO was receiving lots of money from Philip Morris.

CATO never revealed those huge contributions from PM even when CATO hosted a so-called scientific conference on the hazards of secondhand smoke, where cigarette company spokespersons joined with CATO's chairman in claiming that secondhand smoke research was junk science.

Michael Siegel said...

I wouldn't characterize what I'm doing as "defending" Cato; what I'm arguing is that they are not a Big Tobacco front group as claimed by ANR. What happened at a secondhand smoke conference a decade ago is not necessarily the most relevant factor in deciding what claims should be publicly made on a website in 2005. And in light of the Cato Institute's role in attacking Big Tobacco in the courtroom, I simply don't think that they belong on a list of Big Tobacco front groups.

I also think it's disingenuous to list as an example of how the e tobacco industry contributions "paid off" Cato's lawsuit against the MSA. That's essentially a lawsuit against Big Tobacco. The fact that it showed up on the list suggests to me that ANR was in such a hurry to indict Cato that they lost sight of the larger picture here, which is that the Cato Institute has some over-riding principles and protecting Big Tobacco is not one of them (although it certainly coincides with its libertarian goals much of the time).

Bill Godshall said...

Your underlying rationale (that a PM front group wouldn't oppose litigation or policy goals of PM) ignores the fact that the National Smokers Alliance (which was clearly a front group for Philip Morris) co-filed the brief with CATO claiming the MSA violates federal antitrust laws.

So why would the NSA engage in litigation against PM if the NSA was created and controlled by PM?

When I debated CATO's Robert Levy on the June 1997 deal (both CATO and I opposed the deal, but for diametrically opposed reasons), Levy repeatedly portrayed the cigarette companies as poor innocent victims that were being extorted and shaken down by evil State AGs and greedy plaintiffs attorneys.

And as I recall, FORCES and the NSA similarly portrayed the lawsuits against the companies and the June 1997 deal.

Perhaps it was part of PM's strategy to fund organizations that would generate media coverage portraying cigarette companies as innocent and abused victims (and portray State AGs and plaintiff's attorneys as evil and abusive), while fooling the public into thinking that their organizations were independent of cigarette companies by filing a legal brief against the MSA that they knew would be unsuccessful.

I helped mobilize legal challenges to the MSA in multiple states, but I'm not aware that CATO (which has vastly more resources than I) challenged the MSA in any state courts (which needed to approve the MSA before it could attain Final Approval).

Michael J. McFadden said...

This is a bit confusing. Forces is a big tobacco front group because it worked with Bill Godshall and the NSA to bring down the MSA?

Michael J. McFadden
Author of "Dissecting Antismokers' Brains"

Anonymous said...

Michael -- you usually have inteesting things to say about the motivations and analysis of Tobacco Free Kids -- what do you make of the follwong release? Maybe you'd consider dissecting this on your site?

For Immediate Release
October 3, 2005

TFK Contact: Nicole Yazdanseta @ (202) 296-5469
Common Cause Contact: Mary Boyle @ (202) 736-5770

Tobacco Industry Gave More Than $1.1 Million in Federal Political
Contributions So Far in the 2005-2006 Election Cycle
Contributions to Congressional Members and Candidates Available At

Washington, DC (October 3, 2005) - The tobacco industry made more than $1.1
million in political contributions to federal candidates, political parties
and political committees so far in the 2005-2006 election cycle, according
to an annual report issued by the Tobacco-Free Kids Action Fund and Common

Since 1997, the tobacco industry has contributed more than $30.9 million,
including $16.8 million in soft money and more than $14.1 million in
political action committee (PAC) contributions. Since 1999, the tobacco
companies have spent more than $129 million on lobbying the U.S. Congress.
The tobacco industry spent more than $23 million to lobby Congress in 2004
(the most recent data available). That amounts to more than $173,000 spent
on lobbying for every day Congress was in session.

"The tobacco companies are continuing their decades-long effort to purchase
political influence with campaign contributions," said William V. Corr,
Executive Director of the Tobacco-Free Kids Action Fund. "Members of
Congress are still taking millions of dollars from the tobacco industry and
failing to take action to protect kids, despite the fact that the tobacco
industry spends $15.15 billion a year marketing their products, nearly one
quarter of high school kids smoke and more than 400,000 Americans die every
year from tobacco use,."

The report details tobacco industry contributions and lobbying expenditures
so far during the 2005-2006 election cycle:

* Tobacco company PACs donated more than $623,000 directly to federal
candidates, with 78 percent ($487,878) of the total donations going to
Republican candidates and 22 percent ($135,500) going to Democratic
* Tobacco PACs have donated more than $492,000 to non-candidate
committees, including Democratic and Republican party committees and
leadership PACs established by individual members of Congress. Of the total,
$366,128 (74 percent) went to the Republicans, $68,000 (14 percent) to the
Democrats and $58,500 (12 percent) to non-party committees.
* The report's appendix details tobacco contributions to every current
Member of Congress since January 1, 1997, and current challengers. To look
up contributions to a specific Member, go to:

"By spending over $20 million a year on lobbying and spreading millions of
dollars to hundreds of legislators over the past decade, Big Tobacco has
become one of the most well-oiled machines in Washington DC," said Common
Cause President Chellie Pingree. "With over $600,000 already donated to
candidates this year, the tobacco interests are hoping to continue to see
federal policies that favor their bottom line over the public's health."

Campaign Contributions by Tobacco Interests is the latest issue of an annual
report on the tobacco industry's political influence. The report is issued
by the Tobacco-Free Kids Action Fund and Common Cause and all the
contributions cited in this reported are based on data released by the FEC
as of August 2, 2005.

Tobacco use is the leading preventable cause of death in the United States,
killing more than 400,000 Americans every year and causing more than $167
billion in health care costs and lost productivity. Nearly 90 percent of
smokers begin at or before age 18.

This annual report's development and distribution are meant to provide
information and analysis on the tobacco industry's extraordinary political
influence, especially in regard to the U.S. Congress and the federal
government. Toward this end, this report offers a range of information,
including data on direct and indirect tobacco industry contributions to
Members of Congress, other elected officials and other candidates for
elected office. Nothing in this report is meant in any way to endorse,
support or oppose the election of any candidate or to indicate any support
or opposition to any candidate's election by any of the sponsoring

(More information on tobacco industry political contributions can be found


Bill Godshall said...

Consistent with McFadden's previous postings, his most recent posting mischaracterized what I stated.

I didn't say I was trying to bring down the MSA. Rather, I was trying to improve some public health and civil justice provisions in the MSA, which could only be achieved via court interventions.

I also didn't state that FORCES is a front group of the tobacco industry, nor did I state that I worked with FORCES. And I don't think that FORCES, Cato or CEI were/are truly interested in bringing down the MSA (as many different interventions and legal challenges could have been filed by those organizations in many different state courts before those state courts approved the MSA).

But back to Mike Siegel's two primary assertions in his posting, which I think are both inaccurate and should be retracted (i.e. ANR claims that Cato is a front group for the tobacco industry, and that cigarette industry front groups or allies wouldn't criticize or oppose the MSA or other cigarette industry policy goals).

I couldn't find anything on ANR's website stating that Cato was a tobacco industry front group, as Mike Siegel alleged. ANR merely (and I think correctly) listed Cato among many organizations within a category entilted "Front groups and allies."

Mike Siegel's assertion that no tobacco industry ally would file litigation against the MSA fails to recognize that during the past decade many entities within the tobacco industry have filed lawsuits against many other entities within the industry.

If one organization agrees with another organization on 90% of their policy and legal goals, I think that they can be considered allies.

For example, while many public health organizations have sharply disagreed with CTFK on some of its policy and legal goals (as has been repeatedly exposed on this blog), I think that most of those health organizations would still consider themselves to be allies of CTFK.

Although I helped lead the campaign to defeat the 1997 deal (between AGs and big cigarette companies), and while I've helped lead the campaign to defeat the PM/CTFK supported FDA legislation, I still consider CTFK as an ally.

And while I disagree with many of Mike Siegel's policy views, I still consider him an ally.

Michael Siegel said...

Thanks for your comments. You are correct that ANR doesn't necessarily make it clear whether they are calling the Cato Institute a Big Tobacco ally or a front group because it uses the term Front Groups/Allies. However, in the introduction to the web site section, ANR clearly explains that what they are talking about are front groups. So while they may not technically make the accusation directly, I think they clearly imply that Cato is a front group. So I don't find the distinction you are making to be a valid defense of their actions.

As far as the issue of allies sometimes disagreeing on an occasional issue. You are correct. I wouldn't necessarily be blogging about this if ANR simply maintained a list of tobacco industry allies and listed some of these groups, since you are right - they probably could be considered allies - at least on some issues.

However, they are doing something far different here, which is to lump these groups together under a heading that is implying to readers, I believe, that these groups are front groups and that they are basically being run by the tobacco industry as a ploy to try to hide the industry's involvement in the issue behind the scenes.

But I simply don't think that is accurate.

benpal said...

Bill: "both CATO and I opposed the deal, but for diametrically opposed reasons". Following your logic, doesn't that mean that you are an ally of CATO? You want to achieve the same goal; nobody cares about your reasons and motivations at the end, it's the result which counts. CATO certainly doesn't have the same reasons as Big Tobacco either. Cato fights for the preservation of constitutional rights, Big Tobacco for its market.

Bill Godshall said...

With funding from, and in collaboration with, the largest cigarette companies, Cato has been a leading proponent of expanding cigarette addiction markets and opposing smokefree indoor air policies.

Where they differ is that cigarette companies want to preserve their oligopoly so they control the cigarette addiction market, while Cato prefers having additional cigarette companies supplying the addicts at even lower price cigarettes.

Despite those different cigarette market preferences, they a very clearly allies.

Michael J. McFadden said...

Bill wrote "With funding from, and in collaboration with, the largest cigarette companies, Cato has..."

Bill, would you mind detailing the percentage of Cato's funding that comes from the cigarette companies? Also, would you provide details about the "collaboration" ? Collaboration clearly denotes a consciously coordinated back-and-forth-communication planning. You must have evidence of such to make this posting and it would be interesting to see it.

Thank you.

Michael J. McFadden
Author of "Dissecting Antismokers' Brains"

Bill Godshall said...

Check out ANR's webpage on Cato, which was the original subject of this blog posting by Siegel.

Michael J. McFadden said...

"We should articulate our case in the pages of the Cato Journal, Public Interest, American Spectator and other conservative journals."

Bill, rather than support your statements on your own, you referred me to the ANR page on Cato. I assume you have been to the page if you felt confident in making that referral, so I must ask: Why did you send me there when you knew it did not even touch upon the questions I asked of you?

There is nothing there that I could see that spoke of the percentage of Cato's budget supplied by Big Tobacco, nor is there anything about Cato collaborating with Big Tobacco.

Indeed, the only thing that comes close is what looks to me to be an outright slanderous statement where ANR says, "Cato Institute continues to work directly and indirectly with the tobacco industry...." The only supporting reference they offer is keyed off the word "indirectly" (which would indicate the the "directly" is likely pure slander) and the extent of that "indirect" collaboration is simply that someone at RJ Reynolds wrote a letter to someone else saying that it would be good to have someone outside RJR write some supportive things and try to get them "in the pages of the Cato Journal, The American Spectator, Public Interest, and other conservative journals."

Someone in RJR suggests that conservative journals might be a good place to articulate the case against smoking bans and you feel that that justifies your accusation that these journals are "collaborators" with Big Tobacco?

Perhaps you're referring to the page ANR links to that lists such groups as Fraternal Orders of Police, Insurance companies, Citizens for Civil Justice Reform, Supermarkets, Beverage and Petroleum Associations along with Cato as "national allies" without further elaboration?

Bill, I don't know what dictionary you're using, but in mine the word "collaborator" would not quite fit. Please explain your justification.

Also: since, perhaps due to my poor research skills, I was not able to find the percentage of Cato's budget from Big Tobacco that you indicated I would find there, could you provide me with a somewhat more specific location or URL if you don't want to share the numbers yourself?

The only link ANR seemed to have was one indicating through what I would consider at least somewhat questionable documentation that PM and RJR contributed about $100,000 a year to Cato during a four year period in the 1990s and a $10,000 grant from PM in 1991. There was no indication as to what percent of Cato's budget was tobacco sourced, nor any indication as to collaboration in return for money. Do you consider every organization that receives any charitable grants from any company to then be a "collaborator" with that company? If PM gives $50,000 to the American Cancer Society, is the ACS then a "Big Tobacco Collaborator" ?

I am assuming you have more information behind your statement... could you please elaborate?

Thank you.

Michael J. McFadden
Author of "Dissecting Antismokers' Brains"

Michael Siegel said...

I think you make some very important points. I think there is a significant difference between receiving money from a company and collaborating with that company.

Philip Morris has, for example, given huge amounts of money to a number of domestic violence organizations. But I certainly wouldn't argue that those organizations are collaborators with Philip Morris.

The documents that ANR references certainly do indicate a desire on the part of tobacco companies to collaborate with the Cato Institute, but what the documents don't establish is the other side of the picture - did the Cato Institute desire to, and follow through with, collaborating with the industry to help further the industry's goals?

The evidence on that does not seem particularly clear or convincing to me, but perhaps there is information that I'm not aware of. (But note that since the claim is being made, I think the burden is on ANR to document the point - merely raising the specter of potential collaboration by pointing to some documents which show that the companies strategized to use Cato for their own purposes doesn't prove the claim).

But perhaps most importantly here, I would note that all of the evidence presented by ANR is rather ancient. Even if one accepts that they have proven the claim, the most recent evidence seems to be from around 1995, a full decade ago.

But the claim they are making is current - it is on ANR's web site right now. Unless they can prove that the collaboration is ongoing, then I think they cannot justify placing Cato on their front group inventory in 2005. And I haven't seen any evidence, much less weak evidence, that there is an ongoing collaboration that continues as we speak.