D. Allen Dalton

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

D. Allen Dalton was an Assistant Professor of Economics at Boise State University, Idaho. He was also a member of the Cash for Comments Economists Network which 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 (located on the grounds of George Mason University).

Overall, this pair recruited (in total) between 120 and 130 professors of economics (usually Libertarian - Public Choice zealots at State Universities). Some stayed for the duration while others washing temporarily through this lobbying scam. Most of the recruits were members of Tollison's Public Choice Society which had the public-choice libertarian economics guru James Buchanan at its head. Anna Tollison (wife) also appears to have handled the Society and some network administation, while Savarese had Leslie Dawson (wife of Sam Dawson from United Steel Worker's Assoc/union) and Kelleigh Varnum (aka Kelleigh Varnum-Roffman) as his key assistants.

Dalton himself realised the career benefits of think-tanks andlater took over one in Boise called the "Center for the Study of Market Alternatives. This was linked through the libertarian lobby, the Atlas Research Group with the Atlas Group network.[2] See his C/V

The recruited professors would be instructed on occasions to write a 1200-1400 word opinion article (known as 'op-eds') for their local newspaper. The subject to be discussed or the claim to be challenged, and any important statistical information and possibly a broad outline, would be sent to them along with the names of (usually two) selected newspapers. They would also be given the name of two local Federal or State politicians to lobby by sending a copy of their article, along with a personal note.

They were paid on the basis of work performed -- at rates which varied between $600 and $3,000 for each article. This was good money for a second-rate State university professor of economics at the time. See longer explanations: Economists' network and the full-blown Cash for Comments Economists Network.

The Cash for Comments Economists Network later 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.

 

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.[3]]

  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

1954 Jan 11 Born

1976 April 23 The Center for the Study of Market Alternatives Inc, gives either 1976 or 1977 as the year that it was founded by Ralph Smeed. Dalton became the Director much later. [4]

1979 MA Economics, Virginia Polytechnic Inst. & State Uni

1980 Aug Assistant Professor of Economics, Arizona State Uni

1982 Aug Assistant Professor of Economics, Boise State University.

1984 Jul The Tobacco Institute's Cigarette Excise Tax Plan.

The plan augments our basic lobbying efforts by relying on groups outside the industry -- some not regularly associated with the industry -- to argue against excise taxes for us.

It is an ambitious program, based on the notion that many of the most effective protests against tobacco taxes will come from groups philosophically distant from The Institute. Many such groups agree with us on the excise issue, even though they disagree with us on other matters. At the federal level, supporting Congressional members from the tobacco states is essential to our lobbyists. The tobacco members consistently vote as a unified group -- something that is rarely seen in Congress today. They are our lobbyists' most important resource.

The program recommends that economic and other consultants assist us in developing, "packaging," and presenting our anti-excise arguments in legislative testimony or meetings with coalition members.

Resources:
Economic consultants with different areas of expertise will conduct research and act as spokespersons for The Institute and organizations supported by The Institute. Specific activities with economists are discussed throughout the tactics.

Tactics:

  • Stimulate reputable public finance economists at key state universities to determine the validity of state revenue forecasts, perhaps on behalf of state business organizations and present arguments against excise taxes in various forums; e.g., meetings with potential coalition members or budget officials.
  • Encourage economists to make the case against regressive taxation in meetings with potential coalition members and legislators.
  • Retain public finance economists affiliated with non-profit organizations to research the subject and use their findings in forums such as:
    • Private meetings with state legislators or staff ;
    • formal testimony before government bodies ;
    • targeted media appearances;
    • speeches before business, civic, labor, and other groups ;
    • tax symposia in key states where the proceedings could be published for use in other states ; and
    • articles which raise the visibility of key arguments in the business, academic, and popular press.

Strategies:

  • Presenting specific members of the House Ways and Means and Senate Finance Committees with arguments prepared by economists with whom they share some common interest; e.g college affiliation, service on the same commission.
  • Gaining the support of Citizens for Tax Justice (CTJ), the most influential labor/liberal tax reform group in the country, in opposition to excise taxes.
  • Relying on the AFL-CIO -- via The Bakery, Confectionery, and Tobacco Workers Union -- to ensure that the labor/liberal tax package that emerges in the next session of Congress does not include tobacco.

Appendix: A list of economists in key states who may be willing to act as industry and third-party spokespersons on the tax issue. Following is a list of economists in key states who might assist us as experts receiving honoraria. 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 industry; published articles or research; and availability.

Our intent is to have a group of individuals whom we can call upon as needed to testify, conduct special research and discuss their research projects and/or views on excise taxes with budget officials, potential coalition members, legislators and the media.

Professor Allen Dalton joined this scheme a year or so later. [5]

Dalton must have been recruited towards the end of 1984.

1985 Jan 1 A draft of his article "Tax Revision: Reform of Fraud?" has been sent to the Tobacco Institute along with a number of articles written for the TI by other academic economists. President Reagan, at the beginning of his second term, had asked Senator Robert Packwood (R-OR) to devise a plan to increase taxes without changing the income tax laws. This essentially meant an increase in excises on such products as cigarettes -- and so the tobacco industry mounted a full-scale attack on the 'Packwood Plan'.

They enlisted a new set of op-ed economist authors:

[All of the articles written by this new batch of economists attack the Packwood Tax Plan, and all have been carefully retyped by Tobacco Institute secretaries ready for distribution to appropriate local newspapers. This is the first indication in the archives that Allen Dalton is working on commission for the tobacco industry.]

Allen Dalton writes:

What began as a noble attempt by the Reagan Administration to affect fundamental tax reform in the United States appears about to become a massive exercise in politics as usual. In January, 1985 President Reagan called for tax reform that would reduce rates, close special-interest loopholes, increase fairness, expand economic growth and increase American international competitiveness. Reagan's proposals, in the words of Treasury Secretary Baker, were based on the simple premise that "the tax system must not be used to favor one taxpayer over another, to favor one industry over another, to favor one form of consumption over another, or to favor one investment over another."

This was an attack on the Packwood Proposal because it involves the removal of deductability of advertising costs, and use of excise taxes to discourage unhealthy products like cigarettes.

In order to finance this multi-billion dollar giveaway and remain faithful to the President's call for revenue-neutral tax reform, the Packwood plan seeks to increase the most regressive, most inefficient, most anti-production, most anti-competitive, most anti-democratic tax in the tax code: federal excise taxes. [6]

[He manages to write the article without mentioning cigarettes -- or that he was paid by the tobacco industry. This is one of eight draft articles from network economists here].

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). [7]
This was a massive amount of propaganda coverage for a payment of less than $1000 each to these Professors at that time.

 

1986 Apr 4: As a come-on, James Savarese has written to all his network economists to "alert them to some new research opportunities that may be available in the coming weeks". The Tobacco Institute would ...

... like to examine proposals for research that test, in a quantitative way, a number propositions on the relevant cost considerations that apply to the smoking issue. It is not interested in more generalizd formulations of private/social cost distinctions, but rather in testing a specific application of this economic orthodoxy.

He wanted 1-2 page descriptions and a cost approximation. And he enclosed an OTA report which was "representative of the kind of research being put forth by anti-tobacco activists" -- together with some "rebuttals developed by Bob Tollison and Richard Wagner". [8]

 

1986 May /E A Tobacco Institute list of "Schedule of Payments - Excise Tax Op-Ed project." (April-May 1986) This lists those academic economists who have already planted their article on a local newspaper, and the amount they are to be paid. They appear to have been paid $900 for each article, and $1025 if they had also made contact with their local Congressman. However a number of the cash-for-comments network members still have not completed their commission.

The George Mason (Uni) production staff of Bob Tollison, Bill Shughart, and Gary Anderson were paid for "rewrites, editing and research, 18 articles", and Carol Robert for the "production of final product. " A total of $18,000 + $1067 expenses [or $1000 per article to make them into saleable propaganda for their local newspapers]

The individual payments to network participants are listed here [9] and later supplementary payments here [10]. The GMU production staff were also being paid another $9,500 for rewrites, editing and research on 9 additional articles, while Savarese seems to have been charging $5,800 + $235 in expenses for recruiting replacement economists in California, Montana, New York, Ohio and Tennessee.

1986 Jul 21 Sam Chilcote the CEO of the Tobacco Institute writes to the members of his Executive Committee detailing the TI's successes in generating objections to the proposed GSA {Government Services Administration] anti-smoking bans.

They have persuaded the American Federation of Government Employees (AFGE) to help having the rules amended, and have turned out their friends and associated companies to generate letters of objection.

Included among the comments received by GSA thus far are thousands generated as a result of contact with TAN [Tobacco Action Network] activists, other tobacco family organizations, key coalitions, organized labor and economists.

The State Activities Division's alert of key contacts in the field, as well as TAN activists, has generated at least 3,100 letters of opposition. These are letters for which copies have been sent to division headquarters; there are no doubt many others.

Among member companies, all have asked their employees to write letters of opposition. In addition, RJ Reynolds reports its phone bank efforts to reach Washington, DC residents, may have resulted in up to 3,700 opposition letters. Reynolds also sought letters from respondents to an earlier mailing on the federal excise tax issue. Philip Morris initiated a program designed to generate up to 10,000 mailgrams to GSA by the comment deadline.

Letters of objection (all remarkably similar in content) from numerous academic economists were also attached. They all seemed to focus on one extraordinary aspect: the cost of implementating the ban -- rather than the rights of non-smokers to breathe clean air.

The economist's letters all attacked the GSA's calculation ... "that the costs of NO-SMOKING signs in government buildings would cost less than $100 million annually." Apparently Robert Tollison had circulated a much higher estimate of costs (which some of the letter-writers mentioned) ... and all of the economists' letters completely ignored any cost savings, such as lower cleaning and painting costs in government buildings; reduced sick days; higher productivity, etc. which you would normally figure to be of significance to an economist.

These letters, were all written within a few days of each other by university professors (sometimes with multiple signatures) spread across the country, and they came from:

1987 May 28 Paul A Jacobson, the Tobacco Institute's Region V Supervisor, has been evaluating the value of the economists that Savarese and Tollison had recruited to cover his area of the country. He had interviewed the TI's State lobbyists to see what their impressions were as to the value of various economists. He says about this economist:

Professor Allan Dalton
Economics Department, Boise State University

Counsel Bill Roden has met and talked with Professor Dalton on several occasions, however they have never discussed excise taxes.

Professor Dalton's professional reputation is excellent and Bill feels that he would be an articulate witness for a legislative hearing. Counsel Roden has not asked Professor Dalton to testify in the past, but will discuss possible future testimony with the Professor before the start of the next legislative session . [12]


If there are any lingering doubts that these economist knew exactly what they were doing, it should be dispelled by a Tobacco Institute memo of June 3 1987. [13]. This shows that they knew that this work was unethical - that it needed to be done surreptitiously - and that they were working for the Tobacco Institute ... but in a way that was deniable since no formal contracts existed.

Apparently Prof. McMahon has " … reviewed and agreed to "author" an economic impact study on the effects of a smoking bill …"
The writer puts "author" in quotes ... leaving no doubt that the professor was being paid to put his name to a tobacco industry paper.

The same file has an letter from Professor K. Celeste Gaspari, an economist from the University of Vermont. She tells us that:
    • She had been contacted in Sep 1985 by the Center for Study of Public Choice at George Mason Uni (Tollison's think-tank)
    • She was offered an annual retainer of $1000 + paid work for the Tobacco Institute.
    • In 1986 she had been paid the retainer and had written a paper for them.
    • It was now March '87 and her retainer hadn't arrived. She'd complained but still hadn't received the retainer.
    • She has now been asked to do more work, but is on strike until her $1000 annual retainer is paid.

I am very disappointed with the Tobacco Institute's policies on making good on verbal agreements.
It is true I never had a written agreement with the Institute -- we only spoke over the phone. I did, however naively, trust that a verbal agreement with a prestigious institute was as good as a formal contract. I was evidently mistaken.
I am not interested in working with your group at this time if this is the way you do business.

Sincerely K. Celeste Gaspari

References

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