"WATCHDOG" GROUP EXPOSED AS PHILIP MORRIS FRONT [09/30]

Once again the tobacco industry has been exposed as it tried to hide behind a front group.

This time the deception is even more outrageous, because the front group pretended to be a consumer watchdog organization, exposing wrongdoing by others.

FIRST, below is an excerpt from an article about this "watchdog group" formed and funded by Philip Morris.

SECOND is additional information about how the tobacco industry has engaged in similar deception in the past, including an excerpt from Consumer Reports.

TOBACCO LOBBY CREATED CAMPAIGN 'WATCHDOG'; NONPROFIT GROUP TIED TO PHILIP MORRIS MONITORED TRIAL LAWYER DONATIONS
Ruth Marcus, Washington Post [09/30]

A self-styled campaign watchdog group, which recently released a study detailing millions of dollars of political contributions by trial lawyers, was created by a public relations firm hired by Philip Morris Cos. and secretly conducted the study for Philip Morris and other tobacco clients.

Documents provided to The Washington Post show how Contributions Watch, a supposedly independent and nonpartisan group that says its mission is improving campaign finance disclosure at the state level, was formed by a lobbying firm, State Affairs Co. That firm, in turn, worked with Philip Morris and Covington & Burling, a major Washington law firm that represents the tobacco industry, to orchestrate the release of the data collected by Contributions Watch. The study was issued by Contributions Watch. The connections among Contributions Watch, State Affairs and the tobacco industry represent a new frontier in lobbying. It has become common for lobbying firms to create "grass-roots" citizen coalitions to buttress their causes. But the creation of a nonprofit "watchdog" group to generate press coverage helpful to the client's cause represents a new twist on that technique.

"Of all the outrageous and unbelievable things that happen in Washington, this one takes the cake," said Ellen Miller of the Center for Responsive Politics, which studies campaign contributions and fully discloses its own funding, which comes from foundations. "Posing as a nonpartisan, nonprofit research organization to be unveiled as nothing but a special interest tool is really the bottom line of gall."

State Affairs, whose biggest client this year has been Philip Morris, specializes in state-level public relations and grass-roots lobbying work and, according to a promotional brochure, prides itself on its ability to "remain anonymous."

State Affairs partners Charles Francis and John E. Davis confirmed in an interview Friday that the Contributions Watch study was done for Philip Morris and other tobacco clients.

Asked why Contributions Watch did not disclose its funding sources up front, Davis said, "If we led a press release saying, 'State Affairs Company, working with a number of corporate clients, has formed Contributions Watch,' how do you think that would go?" He argued that Contributions Watch was no different from self-styled public interest groups on the other side of the debate over legal reform that take funding from interested parties and also do not disclose their sources of revenue.

Questioned earlier this month about how the study was funded, Contributions Watch director Miller, a former analyst at the Federal Election Commission, would say only that the payments came from "an organization with an interest in legal reform."

DON'T BE MISLED BY PHONY GROUPS OR FIGURES CONCERNING SMOKING

The highly-respected and impartial Consumer Reports magazine featured an article in its May 1994 issue entitled: "PUBLIC-INTEREST PRETENDERS þ That Group With the Do-Good Name May Not Be What It Seems."

As might be expected, the tobacco industry þ which frequently operates under or from behind phony organizations, and which is a master of creating and disseminating false or misleading data þ was featured prominently in the article.

Following are excerpts from the article, especially those portions dealing with the tobacco industry. Not surprisingly, the tobacco industry often operates under front groups which appear to be related to the restaurant industry when their goals is to block restrictions on smoking.

Also attached is a copy of a major sidebar about how the tobacco industry generated misleading data supposedly suggesting that bans on smoking in restaurants caused them to lose business. As Consumer Reports established, the claims is false!:

In a recent ad in National Geographic, a sincere- looking man poses in front of a snowy landscape. "Mayor Oscar Welsh won't hesitate to tell you," the ad's headline says, "that nuclear energy helps keep his town clean." But the ad's sponsor, the U.S. Council for Energy Awareness, will hesitate to tell you what it represents: the nuclear-power industry.

There was a time when one usually could tell what an advocacy group stood for -- and who stood behind it -- simply by its name. Today, "councils," "coalitions," "alliances," and groups with "citizens" and "consumers" in their names could as likely be fronts for corporations and trade associations as representatives of "citizens" or "consumers." These public-interest pretenders work in so many ways -- through advertisements, press releases, public testimony, bogus surveys, questionable public- opinion polls, and general disinformation -- that it's hard to figure out who's who or what the group's real agenda might be.

WHERE THERE'S SMOKE

No one plays the public-interest pretender game better than the tobacco industry. In the past, it organized and supported smokers' rights groups to carry its message. Now it creates and funds taxpayers' groups and restaurant associations to oppose tobacco taxes and bans on smoking in public places. These groups have managed to defeat or soften laws and regulations in several states.

In 1988, the tobacco industry spent $21.2-million in an unsuccessful attempt to defeat a ballot initiative in California that would have raised cigarette taxes by 25 cents a pack. While proponents of the initiative promoted the health benefits of the tax -- discouraging tobacco consumption and increasing the tax revenues available for health care and education -- the tobacco industry argued that the tax was regressive, would only serve special interests, and could increase crime from interstate cigarette bootlegging. Rather than using its own name, however, it campaigned under the banner of Californians Against Unfair Tax Increases. Campaign finance documents show most of the group's money came from the tobacco industry.

Since the initiative became law, the tobacco industry has increasingly worked to oppose local smoking bans, often through the California Business and Restaurant Alliance. The alliance is run by Fred Karger, an executive of the Dolphin Group, a public-relations firm that serves tobacco giant Philip Morris USA.

One group that worked against a smoking ban in Los Angeles was Restaurants for a Sensible Voluntary Policy (RSVP), which has received substantial funding from the Tobacco Institute. This organization, in association with the Dolphin Group, produced a survey purporting to show that restaurant business was off 30 percent, on average, in one Los Angeles suburb that banned smoking in all restaurants (see "the 30 Percent Myth," page 320). Although the survey results were contradicted by two independent studies, pro-tobacco forces later used the same figure in at least one other California community in an effort to weaken the smoking ordinance there.

MORE SMOKESCREENS

Eventually, Los Angeles did ban smoking in restaurants, but the tobacco fronts continued their campaign. The so-called Los Angeles Hospitality Coalition is challenging the ban in court. Campaign disclosure forms show some 80 businesses and individuals have given a total of about $9000 to the coalition, a figure dwarfed by the more than $3380,000 donated by Philip Morris USA, R.J. Reynolds Tobacco Co., and others connected to the tobacco industry.

In neighboring Long Beach, a group known as Californians for Fair Business Policy spent more than $87,000 in 1991 to fund a petition drive to overturn an antismoking ordinance. According to its statement of organization, the group was a statewide political action committee sponsored by tobacco manufacturers, wholesalers, and restaurants. The petition drive prompted members of the city council to examine the ban again -- and to weaken it.

Long Beach was scheduled to vote on another smoking ban in April. Perhaps not surprisingly, a new group called the Long Beach Business & Convention Coalition was formed. In campaign filings, the coalition said it was sponsored by "hotels, restaurants, nightclubs, taverns, tobacco manufacturers and wholesalers." But its $85,000 opening balance in September 1993 came from just two sponsors: the Tobacco Institute, in Washington, D.C., and the Oregon Executive Committee, a political action committee managed by a lobbyist for R.J. Reynolds.

"If they can slow down the process even a year, they will have recouped their investment in these groups many times over," says Stanton Glantz, a University of California researcher who has studied tobacco-industry fronts. Meanwhile, Glantz points out, eight California communities that were forced to revisit their smoking codes spent a total of more than $300,000 to validate petition signatures and run new referenda.

With nearly 300 local smoking bans in force, California is the principal target of the tobacco fronts. But groups have surfaced in other states where the industry has been challenged. A group called the Committee Against More Tax and Bureaucracy was created in Montana to battle a 1990 initiative that would have increased the state cigarette tax by 25 cents a pack. Campaign filings show the group's sponsors received 99 percent of their funding from cigarette makers, the Tobacco Institute, and others connected to the industry. But by downplaying its origins and focusing on the twin evils of taxes and bureaucracy, the group helped foil the initiative. In Arkansas, a tobacco-backed group called the Arkansas Executive Committee kept a similar initiative off the ballot entirely.

IMPERFECTLY LEGAL

Groups that pretend to represent the public interest when they really represent the interests of a company or an industry may be guilty of cynicism, but they do not appear to be breaking any laws. On the Federal level and in many states, groups lobbying on a particular issue or bill must file campaign disclosure forms listing their major financial contributors -- a help to reporters or activists willing to do a little digging but not to the general public. No federal law requires advertising, telemarketing, or mail solicitations to identify their major sponsors. And for now, no such proposals are pending.

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