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Contemporary health care reformers, like those who promoted the failed Clinton era plan, face opposition from multiple corporate interests. However, scant literature has examined how relationships between corporations and other stakeholders, such as think tanks and advocacy groups, shape health care reform debate.
We show how the 2 biggest US tobacco companies, Philip Morris and RJ Reynolds, and their trade association coordinated in mobilizing ideologically diverse constituencies to help defeat the Clinton plan. Unwittingly perhaps, some reform supporters advanced the tobacco industry’s public relations blitz, contributing to perceptions of public opposition to the plan.
As the current reform debate unfolds, this case highlights the importance of funding transparency for interpreting the activities of think tanks, advocacy groups, and “grass-roots” movements.
Health care reform is an Obama administration priority.1 The Clinton Health Care Security Act, the last federal attempt at comprehensive reform, failed to pass in 1994. That plan, introduced in September 1993,2 represented a compromise between constituencies favoring government-guaranteed universal coverage and those favoring free-market competition. It proposed universal coverage through “managed competition”: competing government-regulated private plans.2 To be funded through employer mandates, business and health care provider charges, and a 75-cent per pack tobacco excise tax,2 the plan initially received strong public support. However, ensuing compromises satisfied few, and criticisms that had begun months earlier continued: diverse constituencies intensified public relations and lobbying efforts.2,3 Ultimately, Congress abandoned the legislation; efforts to enact alternatives failed.2
Media coverage of Obama’s efforts suggests that, as for the Clinton plan, corporate influence and contention over financing pose challenges.2,4–10 Previous research on the Clinton plan’s demise faulted its complexity, divisions among reform supporters, and the administration’s failure to effectively communicate the plan’s features, enabling opposition to mobilize.3,11–17 Although lobbying and advertising by multiple corporate interests also played important roles,13,18–20 scant literature has examined how relationships between corporations and other stakeholders, such as think tanks, advocacy groups, and “grass-roots” movements, affected reform debates.
We explore how the 2 biggest US tobacco companies, Philip Morris and RJ Reynolds, and their now-defunct trade association, the Tobacco Institute, worked together to mobilize right-leaning think tanks and smokers’ rights, labor, and left-leaning public policy groups to help defeat the Clinton plan. Through a coordinated, nationwide initiative, the industry helped persuade policy makers that considerable public opposition existed to both a funding mechanism—a tobacco excise tax increase—and the plan as a whole. This case offers lessons for the current health care debate, highlighting the importance of funding transparency for interpreting activities of think tanks, advocacy groups, and “grassroots” movements and the need for advocacy organizations to consider how accepting corporate donations may compromise their agendas.
Between January 2008 and June 2009, we searched the Legacy Tobacco Documents Library (http://legacy.library.ucsf.edu), which includes more than 10 million internal tobacco industry documents obtained following the 1998 Master Settlement Agreement.21,22 Using snowball sampling,21,23 we identified documents dated 1992–1995, beginning with search terms including “Clinton plan” and extending to names of organizations and industry personnel. Searches produced approximately 7000 hits. Reviewing index entries and page content to exclude duplicate or irrelevant documents yielded a final sample of approximately 500 documents. We searched LexisNexis, NewsBank, and ProQuest Newspapers databases for related coverage on third-party allies and the Web sites of identified organizations.
We used an interpretive approach for data collection and analysis.24 Iteratively reviewing successive collections of documents, we summarized, discussed, and revised ongoing interpretations, considered emergent themes, and identified gaps. We continued until the last wave of data collection yielded no new information.24–26 We organized documents chronologically, constructing timelines of events, and assembled a case history.24,26,27
Although tobacco companies shared other industries’ concerns about the plan’s potential impact on businesses, the proposed excise tax spurred their activities.28,29 Tobacco companies had monitored health care legislation since at least the mid-1970s, when tobacco excise taxes were first proposed as a funding mechanism.30,31 Paid by consumers, excise tax increases result in declining cigarette sales, threatening tobacco company profits.32–35 During the 1980s, federal and state legislators increasingly used excise taxes both as a politically popular alternative to other forms of taxation and as a health policy mechanism to reduce cigarette consumption.36 By 1992, more than 20 national and state health care reform bills were under development, several including cigarette tax increases.37
During the early 1990s, low public approval ratings and a negative image diminished Philip Morris’s credibility,38 limiting its options for publicly opposing health care reform. Given its vested interests in minimizing tobacco taxes and its concerns about tobacco control initiatives included in most health care legislation,28 Philip Morris sought to influence the health care reform debate through third parties. As Philip Morris’s Washington relations director Kathleen Linehan explained, “PM [Phillip Morris] has been and continues to work behind the scenes to achieve its strategic objectives and keeps its public visibility on the healthcare reform issue very low.”28 Likewise, RJ Reynolds sought to “explore existing organizations we might join/influence … [a] credible, non-tobacco voice for hearings and for generating information on issue to media, op-eds, letters, etc.”39 In March 1993, when the Clinton administration publicly suggested cigarette excise taxes to fund health care,40 the 2 companies joined forces to “develop a coordinated plan.”29
The resulting “PM/RJR Tobacco Task Force” included representatives from both companies, the Tobacco Institute, and 4 public relations firms (Figure 1).41–43 Company and Tobacco Institute personnel held weekly meetings.44 Their work plan included soliciting support from credible “message carriers,”45 including tobacco farmers and industry suppliers (e.g., suppliers of seed, pesticides, and paper), think tanks, advocacy groups, smokers, other businesses, and organized labor.41,46 To appeal across the ideological spectrum, the task force initially selected 4 core arguments: excise taxes were unfair to the country’s 50 million smokers, were regressive for the poor, were likely to encourage a black market, and could result in more than 785000 tobacco-related jobs lost because of reduced cigarette sales.43,47 Later arguments attacked the Clinton plan more broadly, claiming it would create new bureaucracy and limit health care options.48,49
Task force members created a liaison with third-party allies on the basis of the strengths of their preexisting contacts (Table 1). “Leveraging” relationships already established through its corporate contributions department, Philip Morris prioritized the funding of right-leaning think tanks and anti-tax organizations ideologically opposed to tax increases and government regulation, “strategically directing certain of our assets … consistent with Philip Morris’ positioning on the healthcare issue.”50 RJ Reynolds coordinated local-level “coalition-building,” hiring the Ramhurst Corporation, a firm started by former RJ Reynolds employees,51–53 to work with local antitax groups, tobacco industry-affiliated businesses such as retailers, and smokers’ rights groups (SRGs). Since 1988, RJ Reynolds had organized hundreds of SRGs nationwide; by 1991, it had used SRGs to “respond to swiftly emerging issues” with “grassroots” action on 175 federal, state, and local level issues.54 The Tobacco Institute sought to mobilize labor unions and left-leaning policy organizations with whom it had already established relationships through its umbrella organization, the Labor Management Committee.41,55 The Labor Management Committee had been developing these relationships since its creation in 1984, persuading 5 unions to join its board,56 providing funding to labor-aligned policy organizations, and mediating most communications through paid consultants with preexisting union or policy group affiliations.36,56–61 Joint membership of labor unions in this association conferred on it legitimacy and the appearance of autonomy.36,61,62 Previous research has examined the industry’s funding and tactical relationships with both independent SRGs and industry front groups for other legislative issues.51,52,63–67
Whereas right-leaning think tanks funded by Philip Morris already opposed the Clinton plan, the Tobacco Institute faced the challenge of soliciting assistance from organizations considered to be key plan supporters.11 However, in response to earlier legislation proposing cigarette taxes, Tobacco Institute staff had already begun strategizing. In January 1992, Susan Stuntz, Tobacco Institute vice president of public affairs and Labor Management Committee treasurer, noted, “Although the labor movement and many interest groups have stood firmly against excise taxes as a mechanism for raising general revenues, many of these groups view healthcare financing as a fundamentally different issue.”37 Therefore, the Tobacco Institute sought to establish common ground by “encouraging” organizations to back “a comprehensive healthcare reform package that includes … funding through broad-based progressive taxes instead of regressive excise taxes” and by working with them to identify alternative funding.68
The industry embarked on a media blitz with anti–excise tax messages and other criticisms of the Clinton plan. From 1993 to 1994, at least 28 tobacco industry–funded think tanks, antitax groups, labor organizations, and left-leaning organizations published studies or organized conferences (Table 1). Some, such as Americans for Tax Reform and Citizens for a Sound Economy, sponsored paid print and radio advertising and direct mail campaigns.69 Organizations garnered major US newspaper coverage through op-eds, interviews, and reports.70–83 Targeting social conservatives who might otherwise support “sin taxes,” Philip Morris funded a 6-part miniseries on the Clinton plan by the Free Congress Foundation, aired on its National Empowerment Television network.84–86 An Alexis de Tocqueville Institute critique of the Clinton plan brought author interviews on right-leaning radio, including a syndicated broadcast to 1000 religious stations.70,87–89 Philip Morris also collaborated with the right-leaning Manhattan Institute, providing “off-the-record” input to one of its fellows, Betsy McCaughey, for her widely read Clinton plan critique published in The New Republic.69,90
To generate the appearance of “grassroots” opposition to excise taxes, RJ Reynolds’s Ramhurst coordinators worked with SRGs to hold press conferences and rallies, issue press releases, and conduct media interviews.91–103 Consultants provided groups with petitions104–106 and held training sessions on excise taxes, health care reform, and communicating with media.92,104,107–115 SRGs received a briefing book containing talking points, media guides, and resources about speaking opportunities.110 To facilitate letter-writing campaigns, RJ Reynolds staff prepared 80 unique “Letters to the Editor” templates for SRGs and samples of letters to elected officials.116–121 When Clinton formally announced the health care plan in September 1993,122 SRGs alone generated more than 300 media hits, including op-eds, talk show interviews, and press release coverage.92
Philip Morris and RJ Reynolds collaborated on tax increase alerts to 50 million US consumers in their databases, who reportedly sent approximately 50000 letters to Congress.29,44,123 For politically sympathetic elected officials (particularly those representing tobacco states), the companies shared lobbying responsibilities.41,44,69,124 To supplement direct outreach, Philip Morris organized grassroots lobbying by right-leaning think tanks.48 At Philip Morris’s request, for example, Heartland Institute staff met with 2 Republican congressmen “to encourage opposition to the Clinton plan and FET [Federal Excise Tax] hikes.”85 The Alexis de Tocqueville Institute distributed studies and op-ed pieces to Congress members through 4 “Dear Colleague” letters; 2 senators who served on its board entered Alexis de Tocqueville Institute pieces into the Congressional Record.70,125,126 Citizens for a Sound Economy helped organize protests at town hall meetings (sessions between elected officials and constituents).69,127
Labor Management Committee–funded organizations enjoyed credibility within Democratic Party circles, the Tobacco Institute noted in reports to member companies,128 and were well positioned to influence policy makers. Former personnel of some organizations had been appointed to high-ranking party and Clinton administration positions. Former Citizens for Tax Justice executive director David Wilhelm, for example, was appointed Democratic National Committee chair.128 Tobacco Institute personnel were initially concerned that left-leaning allies would be reluctant to criticize the Clinton plan. However, Tobacco Institute president Sam Chilcote reported in February 1993 that Wilhelm had informed Tobacco Institute staff that he advised the Citizens for Tax Justice executive director not to give Clinton a “honeymoon” period but to “keep the heat on the White House through the media,” because this empowered cabinet members who opposed excise taxes.128
Citizen Action also enjoyed a high profile among congressional staff and the Clinton administration.129,130 Tobacco Institute staff noted that Citizen Action personnel visited the White House regularly to discuss health care.131 Citizen Action also lobbied the House Ways and Means Committee, arguing that excise taxes would hurt the middle class,128 and held a briefing opposing excise tax health care funding for 300 house members, staff, labor unions, and interest groups.128
To influence policy makers and public opinion about excise taxes in general and the Clinton plan specifically, RJ Reynolds’s Ramhurst coordinators met with existing SRGs, helped create at least 20 new ones,99,107,113,132–137 trained leaders, and coordinated statewide coalition meetings in at least 44 states (see Table 1).51,52,114,133,137–140 Coordinators also held “smokers’ rights meetings” in regions lacking formal groups; participants signed petitions or wrote letters to congressmembers.99,133,141–144 Coordinators were urged to maintain a variety of SRG activities targeting elected officials:
We won’t make an impression with congressmen with one or two blow-out events. Rather we will make our point by hitting his/her office with a barrage of letters one week, petitions the next, a well-designed questionnaire the next, some media hits next, steady opposition made known via town meetings and other personal visits ….145
By February 1994, SRGs had reportedly made at least 20 000 phone calls to Congress members, sent 100 000 letters, and attended 140 town hall meetings nationwide.92 In reports to RJ Reynolds, Ramhurst characterized several meetings as confrontational.107,115,146,147 In April 1993, for example, Minnesota Smokers’ Coalition members attended a town hall meeting with Senator Paul Wellstone (D, MN), presented 50000 petition signatures, and solicited his position on cigarette taxes. When the senator affirmed support for the tax, “what should have been a friendly town meeting in his home town turned hostile and Wellstone abruptly ended the meeting and left ….”107 A Ramhurst coordinator reported learning that Congressman Tim Johnson (D, SD) had described his town hall meetings in late 1993 as
not only the worst 4 weeks of his political career but the worst 4 weeks of his life …. Our groups should be commended for their efforts for being in his face everywhere he went …. He certainly will be thinking about the political ramifications of supporting the presidents [sic] plan as it is now.147
SRG members met with elected officials locally, expressing home state opposition.93,94,101,107,109,137,144,148–155 In April 1994, SRGs in North and South Dakota organized a 2-week program targeting Senate Finance Committee members Tom Daschle (D, SD) and Kent Conrad (D, ND).150 Groups submitted formal resolutions against excise taxes to the senators’ offices and activated phone trees.101,150 Ultimately, one group met with Senator Daschle,136 and another received a response from Senator Conrad’s office indicating “he wants to get a healthcare bill passed that has no new taxes.”101 By June 1994, Ramhurst reported, Conrad had expressed opposition to the entire Clinton health plan during 3 town meetings attended by “hostile” crowds.115
SRGs also targeted events where the Clintons were promoting health care reform. In September 1993, 2 Florida-based SRGs and “volunteers from RJR [RJ Reynolds] field sales” staged a protest outside the building where ABC’s Nightline program was conducting a town hall meeting with President Clinton, drawing coverage from rival media.91,156 A Ramhurst coordinator organized an antitax rally at the site of a Kansas City health care forum attended by Hillary Clinton and Senator Bob Dole,157 and a Kentucky SRG burned an effigy of the first lady at a rally attended by elected officials of both parties.154,158,159
In a strategy to either minimize the proposed excise tax increase or defeat the Clinton plan altogether, Philip Morris funded right-leaning policy organizations to organize conferences critiquing the plan and promoting free-market alternatives.69 Philip Morris also “worked with” the National Center for Policy Analysis and the Heritage Foundation in the development and promotion of alternative health care proposals.69
The Tobacco Institute provided funding and public relations support to left-leaning groups pressuring the Clinton administration toward a single-payer plan.160–176 By early 1994, the Clinton plan’s most significant left-leaning rival, the McDermott-Wellstone single-payer plan, was supported by more than 90 congress members.177–179 Although an insufficient number for bill passage, it constituted a powerful minority.179 At the Labor Management Committee’s request, several left-leaning groups requested appearances before the House Ways and Means Committee in November 1993, opposing “regressive elements of the Clinton plan including tobacco taxes.”180 Public relations firm Ogilvy, Adams, & Rinehart, hired by the Labor Management Committee,160,181,182 met with organizations to help them prepare and publicize their statements.180,183–185 In testimony, Citizen Action, the Coalition of Labor Union Women, the A. Philip Randolph Institute, the Labor Council for Latin American Advancement, and the National Council for Senior Citizens mitigated support for the Clinton plan by framing it as an acceptable but temporary alternative to single payer.186 All explicitly criticized the tobacco excise tax.186
Ironically, whereas the Clinton plan proposed a 75-cent per pack tax increase, a $2 per pack increase was added to the single-payer legislation in early 1994.187 Citizen Action had initially claimed it would not support legislation with a cigarette tax increase188 but continued to endorse McDermott-Wellstone, limiting its support for the Clinton plan.189–192 Although in one respect this conflicted with the Tobacco Institute’s agenda, support for rival plans still served tobacco industry interests by maintaining divisions among left-leaning constituents, helping defeat the Clinton plan; indeed, the Tobacco Institute continued to fund Citizen Action the following year.193,194
By September 1994, the Clinton plan was “dead.”20 Although multiple factors accounted for its defeat, the tobacco industry credited itself with a significant role. According to Philip Morris’s Linehan, the
industry was confronted with a multitude of healthcare reform proposals, the majority of which relied heavily on increased tobacco excise taxes …. With the valuable assistance of tobacco growers, industry suppliers, third-party activists and congressional allies, the industry worked to defeat these tax proposals.195
Philip Morris viewed its funding of right-leaning groups as money well spent. An internal company presentation commented, “The question is fairly asked, are we getting enough out of groups we support …. Our reach is wide by any corporate standard.”196 RJ Reynolds was similarly pleased with the SRGs’ results: “We chased ‘Clintoncare’ I all over the country and the ‘beast’ is currently hiding in a cave, somewhere inside a belt-way.”197 Although SRGs helped persuade elected officials that widespread public opposition to excise taxes existed, RJ Reynolds’s own data showed that in late 1994, 69% of Americans still supported increasing tobacco taxes to fund health care.198
Although taxes on tobacco, alcohol, and sugared soft drinks have been identified as potential funding mechanisms for current health care reform, to date they have not been included.199 Although the tobacco industry may, therefore, have little incentive to fund third-party allies to oppose present reforms, several organizations that received tobacco industry funding to help defeat the Clinton plan have publicly opposed elements of the current legislation.9,200–207 None of these groups publicly disclose their funding sources through Web sites or annual reports.
In addition, as occurred with the Clinton plan, numerous opposing coalitions and “grassroots” groups have appeared.208 Patients United Now and Patients First were created by Americans for Prosperity,209–211 formerly Citizens for a Sound Economy,212 the single largest recipient of Philip Morris funding to generate opposition to the Clinton plan.127,213,214 These and other groups have deployed similar tactics, including organizing protests at town hall meetings215 and hanging a Congress member in effigy,216,217 just as an SRG burned an effigy of Hillary Clinton.158 Several organizations claiming to represent grassroots or popular movements have ties with corporate interests across multiple industries, including FreedomWorks, another Citizens for a Sound Economy spinoff.218–220 Conservatives for Patients’ Rights has disclosed that its founder, formerly chief executive officer of Columbia/HCA Health-care Company, contributed approximately $5 million but provided no details on the remaining 75% of its $20 million budget.221,222 Betsy McCaughey, to whom Philip Morris provided input for a Clinton plan critique, recently published articles opposing the current legislation,223–225 just before resigning from a medical device corporation to “avoid the appearance of a conflict of interest.”226 Although media coverage has noted participation of industries or individuals with close industry ties in some coalitions,227–229 not all articles make these ties explicit.230–232
The tobacco industry’s success in mobilizing opposition to the Clinton plan among ideologically diverse constituencies underscores the challenge of overcoming corporate efforts to obstruct health care reform. By encouraging organizations to focus on points of contention, the tobacco industry fostered a climate in which inaction seemed preferable to the solidarity needed for reform legislation to pass. Key to the tobacco industry’s strategic alliances was its ability to keep these relationships largely hidden. Perceptions of these groups as autonomous and representing the “public interest” enhanced the credibility of the industry messages they carried.
These findings demonstrate the need for full disclosure of corporate funding sources in publications, congressional testimony, and lobbying. As Balbach and Campbell observed, “Acceptance of funding is less important than the transparent admission of funding sources.”36 Transparency is critical to the passage of health care reform legislation, because arguments advanced by interest groups should be evaluated in light of their corporate sponsors’ agendas. Although the tobacco industry may not have the same vested interests in influencing the health care reform efforts of the Obama administration, other industries appear to be using the same tactics.
Skocpol2 has argued that single-payer supporters considered the Clinton plan an acceptable compromise but believed they could gain further concessions from the president by leveraging their endorsements, in some cases by publicly criticizing the plan. Left-leaning groups helped diminish public understanding of and support for the Clinton plan, albeit unintentionally.2 They failed to comprehend their role in a broader, but weak, coalition for universal health coverage that required unconditional support from all members to enact legislation.2
As one newspaper described in May 1993,
Groups like Citizen Action, the National Council of Senior Citizens and unions are being counted on as front-line troops whose money and members will help balance well-funded industry public relations campaigns against particular elements.233
Instead, perhaps unwittingly, they participated in an industry public relations campaign, accepting support from the tobacco-funded Labor Management Committee and ongoing “assistance” from its public relations firms, prioritizing the tax issue and “progressive” health care financing at the expense of universal coverage and other Clinton plan elements. As Tobacco Institute personnel described, “Institute funding provided the necessary seed money to … move our issues to the top of these groups’ agendas … or where we disagreed, it helped to move antitobacco issues to the bottom ….”131
Whether these groups genuinely believed they shared common ground with the industry on promoting progressive tax structures or made a strategic decision to promote the industry’s messages in exchange for funding and public relations assistance, this concession to corporate interests proved costly. Organizations should recognize that relationships with corporations pose conflicts of interest in the health care arena because (1) the primary function of the corporate entity is to maximize profits, regardless of social consequences,234 and (2) many corporate practices deployed to maximize profits, from selling harmful products to lobbying against public health regulations, actually promote disease.235
Our study has limitations. Because of the archive’s volume and types of litigation requests, there may be additional, unretrieved relevant documents. Our analysis of policy and advocacy organizations was limited to those receiving tobacco industry funding during 1992–1994 that were explicitly identified in documents as assisting industry efforts to oppose the Clinton plan. It is possible that the industry collaborated with additional organizations. Internal industry documents strategically classified think tanks and advocacy groups as either right leaning or left leaning; similar classifications appear in the media and academic literature, but this dichotomy cannot capture the full spectrum of beliefs among such groups.
To enable both the public and policy makers to critically evaluate arguments about prospective health care legislation, public disclosure of all corporate contributions to think tanks and public interest groups attempting to influence public opinion is vital. The media should investigate funding sources of interest groups that appear when major legislation is pending. Proponents of universal health coverage should decline donations from corporations in health-damaging industries234,235 or any other industry whose broader agenda may pose conflicts of interest.
This research was supported by National Institutes of Health fellowship funding (grant CA113710) and the National Cancer Institute (grant CA120138).
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ContributorsL. E. Tesler conducted the Tobacco Industry and newspaper document searches, analyzed documents, wrote the first draft, and revised successive drafts. R. E. Malone analyzed documents and reviewed, edited, and revised all drafts. Both authors originated the study.
Note. R. E. Malone owns one share each of Philip Morris (Altria), Philip Morris International, and Reynolds American stock for research and shareholder advocacy purposes.
Human Participant Protection
No institutional review board approval was required for this study.
Laura E. Tesler, Department of Social and Behavioral Sciences, School of Nursing, University of California, San Francisco.
Ruth E. Malone, Department of Social and Behavioral Sciences, School of Nursing, University of California, San Francisco.