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WARNING: This site deals only with the corporate corruption of science, and makes no inference about the motives or activities of individuals involved.
    There are many reasons why individuals become embroiled in corporate corruption activities - from political zealotry to over-enthusiastic activism; from gullibility to greed.
    Please read the OVERVIEW carefully, and make up your own mind.


Smoking-Gun docs.


Cash-for-comment economists' network
Richard K Vedder
Lowell Gallaway




Border Ohio Business Coalition Against Taxes    


— A Philip Morris operation in OHIO, which was part of their CART program. —  

This organisation, known as BOBCAT, was a genuine group of retailers, grocers, etc. who lived near the Ohio borders, and therefore were subject to a reduction in sales whenever State excise taxes increased. A large number of their customers would cross the border to buy such 'essentials' as beer and tobacco in a nearby state with lower state excise taxes.

The tobacco industry promoted this 'bootlegging' and 'smuggling' as if it were a major cause of crime, and a serious drain on a States revenues, when, in fact, the influences were only ever trivial. Philip Morris therefore became the main organizer and funder of BOBCAT, and they paid Professors Richard Vedder and Lowell Gallaway to conduct a study which would exaggerate the effect of excise tax increases.

[Vedder and Gallaway worked for the Tobacco Institute's cash-for-comments network]

Some key documents

1992 June 23: Cincinnati Post article mainly on Richard Vedder and Lowell Gllaway: "Study: sin tax a drain" reports

Hamilton County would be the biggest loser in Ohio — $85 millon in retail sales and 500 to 600 jobs — if the Legislature incressses cigarette taxes, aceording to a study.

    A 12-cent increase in Ohio cigarette taxes, from 18 cents to 30 cents a pack would increase Cincinnatian's trips across the Ohio River to buy Kentucky's much cheaper (3 cents state tax) cigarettes, the study found.

    The study by three Ohio University economists found increasing the cigarette tax would cause the loss of S263 million in retail sales and about 2,000 jobs in Ohio's 27 border counties [because of cross-border bootlegging].

    As Ohio's largest border county, Hamilton County's share of those figures would be about $63 million and 500 to 600 jobs, said Richard Vedder, professor of economics at Ohio University, Athens. Vedder has done several studies of the impact of tax on economic growth.

    The Ohio Oniverslty study was commissioned by Border Ohio Business Coalition Against Taxes [BOBCAT], a group of grocery and convenience store owners, beer and wine wholesalers and tobacco interests concerned about excise taxes and the possibility of cross-border smuggling.

[Vedder had obviously used the statistical resources of the Tobacco Institute to provide him with all these figures to simplify his study — and BOBCAT was a tobacco front operation run by Philip Morris rather than the Tobacco Institute. In effect, Vedder was reselling TI's economic material to Philip Morris.

    An attached note on this document from Susan Stuntz says "I think Vedder is one of the [Jim] Savarese Economists. I know BOBCAT — the PM sponsored CART in Ohio. Did Jim know what he was up to ?"]

1992 July 15: Jim Savarese replies to the Marty Gleason's (Tobacco Institute) query about Vedder's bootlegging article and his knowledge of this moonlighting work for BOBCAT, saying:

Regarding the attached article from the Cincinnati Post, I talked to Richard Vedder. He said his study was done for BOBCAT but that BOBCAT is not 100% sponsored by PM [Philip Morris].

    I have requested a copy of the study and will be glad to give you a copy when it comes. Vedder also said that the study was quoted extensively before the legislature.
[Susan Stuntz has attached another note to this memo also; it says:

"Marty, thanks. BOBCAT is Ohio CART — not 100% PM sponsored since there are other members,"

    CART = [Coalition Against Regressive Tax] This was a tax front organization set up by Philip Morris with Tom Donahue of the American Trucking Association, and with other support from the National Chamber Foundation]

Vedder was clearly working for both the Tobacco Institute and for Philip Morris — and discoveries like this eventually raised suspicious that many industry contractors were billing both organizations for the same work.

1994 Sep 7: The Tobacco Institute State Division allocated a budget of $5,000 for a taxation study in Ohio.

TAXES: A 25-cent tax threat is a great possibility for Medicaid/health care funding. They will target tobacco because of Michigan's high tax rate. We are requesting $5,000 for a BOBCAT and Gary Peterson cross-border study on taxes. The cross-border study will focus on the Kentucky, Pennsylvania, Michigan and Indiana borders.

1995 June 1: The Tobacco Institute's State Affairs Department has a budget allocation in Ohio of $1000 for OH Grocers Assoc, $1000 for BOBCAT, and $3000 for ITECH (Peterson) [All Grouped together = $5,000]

[These appear to be annual payments for at least 3 years]

1996: TI Budget Proposal papers have figures of $5,000 (Ohio) and $2,000 (Indiana) allocated for Gary Peterson Economic Studies. He is also listed against ITECH for a further $3,000.

[There are dozens of documents with essentially the same details]

1996 Dec 11: a 125 page file suggests the Bob Cat payments had increased to $2000.


CONTRIBUTORS:samf dlo2 sjc2

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