by Dr. James T. Bennett

The July 1995 issue of Alternatives in Philanthropy ("Project ASSIST: Image and Reality") described how the National Cancer Institute (NCI), part of the federal government's National Institutes of Health, has provided anti-smoking organizations with as much as $100 million in federal tax revenues to lobby for higher tobacco taxes at the state level. The NCI's Project ASSIST, the American Stop Smoking Intervention Study for Cancer Prevention, is the major funding vehicle for this campaign.

Project ASSIST was largely spearheaded by the American Cancer Society (ACS), the nation's largest and best known charity. Officially launched in 1991, ASSIST ostensibly supports grassroots groups that organize public education campaigns to discourage smoking. This follow-up article examines the actual operation of ASSIST in the state of Colorado. It shows how federal funds were illegally used to promote a ballot initiative to raise the state's tobacco tax.

Far more is known about operations of ASSIST in Colorado than in other states where ASSIST grants have been awarded because a lawsuit was recently filed against the Colorado Department of Health, the agency charged with disbursing ASSIST funds in that state. The suit alleged the improper use of ASSIST funds and illegal lobbying by state health department officials. Documents related to this case provide revealing information about how ASSIST was developed in Colorado, its activities, and the personalities involved.

What emerges is a complex and twisted tale: front groups were created to provide a smokescreen for lobbying; state bureaucrats used state offices to facilitate lobbying; and positions of authority were sold, with those hoping to acquire a share of the projected tax revenue paying "front money" to secure positions.

Colorado's Amendment 1:
Self-Interest Disguised as Public Health

Colorado was in many ways an ideal state from the perspective of those organizing Project ASSIST. For more than a decade, anti-smoking groups had been active, and one of their prime objectives had been to raise tobacco taxes. Colorado's constitution also allowed citizen-initiated referenda. Against this backdrop, the National Cancer Institute awarded the Colorado Department of Health (CDH) an ASSIST contract, providing $6,976,683 for the period September 20, 1991 to September 29, 1998. The CDH would in turn provide ASSIST funds to local anti-smoking groups.

On November 19, 1993, anti-smoking activists filed an "initiative regarding Tobacco Taxes" with the Colorado Department of State. If the initiative passed, taxes on cigarettes would be raised on July 1, 1995 by 50 cents per pack and taxes on cigars and smokeless tobacco would be increased by 50 percent of the manufacturer's list price.

Purportedly, the goal of anti-smoking activists was to reduce smoking by 43 percent in Colorado. If improved public health were the sole objective, however, the disincentive of higher tobacco prices should have been sufficient. But substantial tax revenues--an estimated $130 million per year--were to be distributed as follows:

• $65 million to medical professionals and hospitals for health care of the needy;
• $39 million to anti-smoking activists and health charities for educational programs to reduce tobacco use;
• $13 million to academics and public interest groups for research on tobacco use.

Another $13 million was to be divided among municipalities, counties, economic development initiatives, and an 11-member citizens' commission. This would be composed of individuals--most likely health charity officials, medical professionals, and the anti-smoking activists--who would oversee the disbursement of revenues. While they would be unpaid, no doubt they would take many expense account trips to anti-smoking meetings held at pleasant venues in the U.S. and abroad.

The Fair Share For Health Committee and Colorado ASSIST

In March of 1993, the Fair Share for Health Committee (FSFHC), a 501(c)(4) lobbying organization, was created to promote the tax initiative. As shown in Table 1, its membership was essentially a who's who of the Colorado hospital, medical, and health charity professions. The overlap between FSFHC membership and membership in Colorado ASSIST, a 501(c)(3) educational organization created to receive Project ASSIST funds, is substantial. Colorado ASSIST's executive committee included representatives of the American Cancer Society, Colorado Department of Health, and the Coalition for a Tobacco-Free Colorado (CTFC), a 501 (c)(3) organization instrumental in securing the ASSIST grant.

The activities of one anti-smoking activist, Arnold Levinson, illustrate the ties between FSFHC and Colorado ASSIST. Levinson, formerly an assistant city editor for the Colorado Springs Gazette, served as a Colorado ASSIST consultant, helping "extensively in the design of Colorado ASSIST." He was also executive director of FSFHC, and was thus in charge of promoting the tobacco tax initiative.

Colorado ASSIST paid Levinson $50 per hour for his services under an initial contract for 930 hours. Other contracts followed--one for $46,500 during the period 1992-1993 and another for $60 per hour for the period 1993-1998. Thus, Colorado ASSIST, a federally funded organization, paid Levinson while he organized the tax initiative. It also reimbursed Levinson for travel costs to Grand Junction and Durango, where he gave "presentation[s] on tobacco taxes."

The Coalition for a Tobacco-Free Colorado

Another anti-smoking activist, Walter F. "Snip" Young, served as director of Prevention Programs at the Colorado Department of Health and was also the director of Colorado ASSIST. CDH's "Best and Final" grant proposal to the NCI noted that Young learned in 1987 of a possible ASSIST grant in Colorado: "[Young] informed the Coalition for a Tobacco-Free Colorado, which includes representatives of the American Heart Association of Colorado and the American Lung Association...In Spring 1988..., Mr. Young convened a series of informal discussions with the executive directors of ALA-Colorado and AHA-Colorado to discuss their perspective roles in the project. As national ASSIST planners disclosed information about the Project, Mr. Young shared this information with the voluntary health agencies through formal discussions with an ad hoc committee of the [CTFC]..."

CTFC's 501(c)(3) status would seem to preclude political activity, but this restriction was ignored in the early stages of the tax initiative. On January 6, 1993, Young and Peter Bialick, president of the anti-smoking group GASP of Colorado, sent a letter on CTFC stationary(sic) to anti-smoking activists. It said that "The Coalition for a Tobacco-Free Colorado is on its way to placing a ballot initiative to increase the state tobacco tax before the voters in 1994. We need your help to construct the language of the petition [at a day-long retreat]....Morning presentations will explain the rationale for tobacco taxes and the successful experiences of California and Massachusetts. The afternoon will be a work session where we will discuss and agree on the principal objectives of the petition language..."

A main topic of the retreat was money. Participants approved an organizational structure for promoting the initiative that included a board of directors and an executive committee charged with conducting campaign operations. Organizations that wanted to obtain a seat on the board--and thus influence in determining what groups would receive the projected tax revenue--were required to pay $10,000.

Significantly, more than half the organizations on CTFC's initial board were also members of the lobbying group Fair Share for Health Committee (see Table 1, entries marked §). Four other groups involved in FSFHC were also affiliated with CTFC (Table 1, entries marked ‡). By January 1993, CTFC had more than a dozen sponsors or affiliated organizations who were also members of FSFHC. Thus, for all intents and purposes, these two organizations were indistinguishable, even though one was ostensibly a tax-deductible, tax-funded educational group and the other a political lobbying organization.

The National Cancer Institute

NCI was aware that the objective of Colorado ASSIST was to raise state taxes and that federal funds would be used for this purpose. Documents that the Colorado Department of Health submitted to NCI clearly and repeatedly emphasize the tax theme:

• Colorado should "increase economic incentives and taxation to discourage the use of tobacco products;"
• "The price of tobacco products needs to be greatly increased through taxes and/or sales-license fees;"
• "The Colorado ASSIST Alliance will work to increase public knowledge of the need to increase the cigarette tax substantially;"
• "Educational presentations will be made to all [areas] regarding the need and current efforts to increase tobacco taxes;"
• "Strategies to advocate increased tobacco taxes will be incorporated into the ASSIST media plan;"
• "Information will be presented ... regarding the rationale and need for sales license fees on tobacco sales."

Other CDH materials clearly show that ASSIST funds were used for political activity. Expense reports submitted by Connie Acott, an ASSIST consultant and founding board member of CTFC, to the CDH note that Colorado ASSIST meetings concerning the "tax initiative" and the "coalition tax initiative" were held in August and November 1992. Another Colorado ASSIST expense report refers to a meeting of the organization's "Political Advocacy Team," held on April 15, 1993.

Tax Dollars Down the Drain

Organizations promoting the tax initiative lost little time in obtaining ASSIST money from the CDH. Table 2 is a partial list of groups that received ASSIST contracts during 1993-1994. A comparison of Tables 1 and 2 shows that substantial funds were given to organizations involved in the Fair Shair For Health's tax initiative.

How were these funds used? Recipients were required to complete contract reimbursement forms and an "Activity Matrix," one of whose goals--"Economic Incentive to Decrease Tobacco Use"--lists the following activities: "Educate re excise taxes," "attend training," and "coordinate publicity/media." Activities related to the tax initiative were reported on this form. Reports submitted by grant recipients requesting payment are also revealing. They show that substantial amounts were paid for activities that apparently involved very little effort:

• The American Lung Association received $5,000 in October 1993 for having "completed orientation and review of implementation responsibilities for the Annual Action Plan" and for "[establishing] recruitment and operating systems for Field Coordinator." In November 1993, the ALA received $5,000 for exploring "preparations for a legislative breakfast." The following month, it received $5,000 for identifying speakers to make "presentations on tobacco taxation," initiating "development of a list of influential contacts," and examining "existing databases and resource directories that identify Denver Metro tobacco youth cessation resources;"
• Valley Wide Health Services received $2,083 in October 1993 for "papers contacted/articles written." Similar amounts were given in November and December 1993 for identifying "community groups" and writing articles for newsletters;
• The Weld County Health Department received $2,000 in December 1993 for having "developed Action Plans" and for attending a CTFC meeting.

ASSIST funds were also spent freely on business amenities:

• That Personal Touch Catering company received approximately $300-$400 per month for catering Colorado ASSIST executive committee and Alliance board meetings;
• Nearly $5,000 was spent in 1993 to host a Colorado ASSIST banquet;
• Throughout 1990 and 1991, an average of $1,000 per month was spent on temporary employees;
• Ramada Inn was paid $1,055 to host a Colorado ASSIST board meeting;
• Nancy Salas, a CDH employee who often attended ASSIST training sessions in Washington, was reimbursed $36.70 for a letter opener.

Politicking in the PICS

Petitioners for the tax initiative were organized in twelve cities and regions, called "Primary Intervention Communities" or PICs." Active in Aspen, Alamosa, Boulder, Colorado Springs, Craig, Denver, Durango, Fort Collins, Grand Junction, Greeley, Montrose, and Pueblo, their role was to raise funds for the initiative and gather signatures. Additionally, 130 "community organizations" throughout Colorado formed a coalition called the Colorado ASSIST Alliance. Evidence of widespread lobbying by these organizations can be found in the minutes of their meetings and in newsletters used to communicate with and motivate the petitioners.

The Colorado ASSIST Alliance published its own newsletter using ASSIST funds. In the March 1992 inaugural issue, it reported that the American Cancer Society had contacted 120 individuals "concerned with tobacco control across the state ... with a reminder to urge their Representatives to achieve legislative passage of House Bill 1239--Pat Sullivan's measure to add an additional 25 cents tax on the purchase of a pack of cigarettes ... We urge everyone to let your representatives know your feelings about this measure."

In the fifth issue (July 1993), ACS-Colorado's Madelyn Parker praised the political activism of ASSIST participants in an article entitled "PICs Take on Policy Advocacy:" "Though carefully nourished personal interaction at the state and local levels, ASSIST alliance members who recently attended orientations in the process of policy makers about health and safety issues related to tobacco."

The same issue carried another article by the Fair Share for Health Committee's Arnold Levinson. Headlined "To Get Rid of Tobacco, TAX IT!," it described how a "coalition of organizations has now been formed to increase Colorado's tax on cigarettes ... and other tobacco products. Leading the effort is a broad coalition of health organizations, including the largest voluntary health agencies--the American Lung Association, the American Cancer Society, and the American Heart Association." The article noted that more information about the initiative was available from the FSFHC's Amanda O'Neill.

Colorado ASSIST's "Annual Action Plan" (AAP), submitted to the National Cancer Institute in August 1993, explicitly stated that politics was the organization's central focus. Under the heading "Year One Objectives," Colorado ASSIST announced that "By October 1994, a state bill will be introduced in the Legislature to license tobacco sales, and active support for the measure will come from businesses, labor, medical professionals, educators, youth and the religious community ... By October 1994, policy advocacy will be provided to PIC representatives."

Arnold Levinson also made numerous presentations to PIC representatives throughout the state, financed with ASSIST funds. The minutes of a meeting of the Larimer County PIC, held June 9, 1993, note that Levinson "gave a presentation on the campaign his organization [FSFHC] is heading to place a cigarette sales tax initiative on the 1994 election ballot ... [FSFHC] is asking for our help in collecting signatures on petitions." According to travel expense reports that Levinson submitted to the Colorado Department of Health for reimbursement, similar appearances were made in June to PICs in Boulder and Pueblo.

GASP of Colorado

One anti-smoking group which received ASSIST funds, GASP (Group to Alleviate Smoking Pollution) of Colorado, offers insight into how federal money was used to promote the tax initiative. As one of the oldest and most energetic anti-smoking organizations in the state, GASP's newsletter, The Nonsmokers' Voice, relentlessly promoted the initiative. One issue contained the following articles:

• "Cigarette Tax Efforts Underway, GASP of Colorado is teamig up with other pro-health groups to put on the ballot an initiative to increase Colorado's cigarette tax ... under the name Fair Share For Health Committee."
• "President's Challenge to Our Members: One Completed Petition Per Member. I would like to ask each ablebodied GASP member to help complete at least one petition."
• "Contributions Needed. Initiatives take much time to organize ... [We] will contribute some money and inkind support ... Pitch in now with your contribution."
• "Annual Meeting to Focus on Cigarette Tax Efforts. Candace Pierce-Lavin, the coordinator of the successful Massachusetts cigarette tax campaign, will be GASP's special guest at our annual meeting ... this fall."

Two Questions

Despite the efforts of ASSIST-funded organizations, the Colorado tobacco tax initiative was defeated by voters on November 8, 1994. The story of the political campaign for Colorado's Amendment 1 raises two serious questions:

• Is it proper for the National Institutes of Health and its divisions, including the National Cancer Institute--whose mission is to research the causes of and to find cures for disease--to divert millions of dollars to advocacy group politics?
• Is it proper for health charities such as the American Cancer Society, American Heart Association, and American Lung Association to increasingly embrace politics while abandoning their traditional mission of providing assistance to disease victims? Obviously, when health charities use funds for political activities, fewer resources are available for helping disease victims.

(A version of this article with endnotes is available from the Capital Research Center. Please contact Daniel T. Oliver, Editor, Alternatives in Philanthropy.)

-- Table 1 --

Membership of the Fair Share for Health Committee

Source: See text. Notes: Member of Colorado ASSIST as of September 1991: †group added to the ASSIST coalition shortly after September 1991; §member of the board of directors of the Coalition for a Tobacco-Free Colorado; ‡organization "affiliated with" the Coalition for a Tobacco- Free Colorado

-- Table 2 --

Colorado ASSIST Contractors, 1993-1994

Source: Colorado Department of Health ASSIST contractors

Capital Research Center is a non partisan education and research organization classified by the IRS as a 501 (c)(3) public charity.

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Terrence Scanlon, Publisher
D.T. Oliver, Editor

Reprinted with permission from the author - Dr. James T. Bennett