IEA: History of Close Ties with the Tobacco Industry

• Related to the TobaccoTactics page on the Institute of Economic Affairs

History of Being Funded by the Tobacco Industry

Documents from the tobacco industry archives show that the Institute of Economic Affairs (IEA) was funded by British American Tobacco from 1963.¹² In the 1970s, the IEA was being paid UK£2,500 annually by BAT, which increased to UK£5,000 annually in 1980. The money was routed to the IEA via the Charities Aid Foundation.³

In 1985, the IEA’s Lord Harris (who later became chairman of Forest)⁴ wrote to BAT asking it “to join our top subscribers at £10,000 per annum, (BP, Shell, ICI, Beecham and McAlpine)”.⁵ In response to this request, BAT “proposed that in 1986 overall support of the Institute of Economic Affairs should be placed on a regular basis at a rate of [UK]£10,000 p.a”.⁶ The recommendation that year to the Board was for BAT to “subscribe [UK]£9,000 to the Institute of Economic Affairs, which, together with the Eagle Star subscription of [UK]£1,000 brings the overall Group support to [UK]£10,000”.⁷

In 1987, the IEA received UK£10,000 from BAT⁸ and then requested further financial assistance towards acquiring the freehold of 2 Lord North Street. BAT proposed donating a further UK£2,500 for four years (totalling UK£10,000).⁹

In requesting assistance from BAT, the IEA thanked the company for being “among our strongest supporters over the years”, who were “entitled to share the tributes paid to our success”.¹⁰

In 1990, BAT’s Board Minutes revealed that the IEA received UK£9,000 that year from the company.¹¹ It received the same amount – UK£9,000 – the following year,¹² although this was reduced by 50 percent on the departure of the IEA’s Director General, Graham Mather.¹³ Sheehy was a supporter of Mather. By 1998, BAT’s annual subscription to the IEA was down to UK£6,000.¹⁴ But by 1999, the figure was increased again to UK£7,500. ¹⁵

The Tobacco Industry’s Preferred Think Tank

Tobacco industry documents reveal that Philip Morris identified the Health and Welfare Unit of the Institute of Economic Affairs as one of the UK based think tanks that could host an event or conference on “ETS Science / Junk Science” in the mid-1970s. Other think tanks on the list included:

• Adam Smith Institute
• Atlas Economic Research Foundation, which Philip Morris identified as having a “US contact”
• Centre for Policy Studies (CPS), with “US ties” to Philip Morris¹⁶

Another Philip Morris document from August 1994 described how the IEA “may be particularly useful for PM”.¹⁷ A year later, in May 1995, Philip Morris identified the IEA as one of seven think tanks and groups to assist in “policy outreach”. The groups would “pro-actively relay our positions” and “relay ideas and establish an echo chamber for PM messages/responses addressing major issues facing the company”.¹⁸

In 1996, a document from BAT‘s Consumer and Regulatory Affairs Committee for its activities for the following year identified how, under the topic of “Issues-based projects to focus regulators and opinion-leaders on a more appropriate agenda”, BAT could “support initiatives by AGORA and Institute of Economic Affairs to promote a balanced perspective on public issues among opinion leaders”.¹⁹

In 1998, John Blundell, the then-director of the IEA, wrote to the Tobacco Institute, an industry-funded lobbying group, asking for an appointment during a visit to the U.S. Blundell wrote:

“The IEA provides rigorous analysis of vital economic and social issues to opinion leaders worldwide. It plays a central role in the international debate overtrade, regulation, labour markets, the environment, health care and education. The IEA offers a tremendous strategic advantage to the Tobacco Institute in today’s global environment … I believe you will find our work has a significant impact on US and international policy and merits your attention.”²⁰

History of Defending the Tobacco Industry

Rejecting the Advertising Ban

In 1997, the IEA’s Roger Bate wrote an article in The Wall Street Journal Europe arguing that there was “mounting evidence” that cigarette advertising bans do not reduce smoking. Rather, argued Bate, they reduced jobs and limited the development of potentially “safer” tobacco products. Bate concluded that “for the moment tobacco advertising legislation may be politically expedient, but it does not reduce smoking”. ²¹

A month later, Bate penned another article in the same paper, entitled “The Marlboro man can’t make you smoke”.²²

The following year, Bate wrote an article for the Financial Times that argued: “The European Union should scrap plans to ban tobacco advertising because such a move, far from reducing smoking, would lead to an increase in the activity”.²³

In 1999, the IEA published a study by Professor Hugh High of the University of Cape Town, defending tobacco advertising. The study argued that: “Banning advertising of tobacco would not curb smoking”.²⁴ High also argued against tobacco advertising in The Wall Street Journal Europe.²⁵

Rejecting the Framework Convention on Tobacco Control

In 2000, Roger Bate wrote to the Financial Times arguing that the Framework Convention on Tobacco Control (FCTC), should be “rejected”, because:

“the restrictions proposed on smoking are substantial: guaranteed protection from passive smoking, tax to make up at least two-thirds of the pack price (a massive price rise for smokers in developing countries), a ban on vending machines, removal of tobacco from retail price indices, WHO approval of all chemicals in tobacco products, bans on all forms of advertising and sport sponsorship, bans on sales of cigarettes in packs under 20, no mention of ‘light’ or ‘mild’ to describe products, tobacco packaging to include at least 50 per cent coverage with anti-tobacco pictures and warnings, international legal compensation for ‘victims’ of tobacco . . . and the list goes on.”²⁶

Working With BAT Against GATT

In 1999, BAT became worried about negotiations at the World Trade Organisation pertaining to the General Agreement on Tariffs and Trade (GATT). One document noted that:

“The attempt by environmental campaigners, both in government and outside, to green the GATT has worrying implications for trade. Factions within the EU and the USA have promoted the notion that individual countries should be able to restrict imports of goods made with technologies deemed to be environmentally damaging … Fred Smith, Julian Morris, Ray Evans, Roger Bate and Francois-Xavier Perroud met in early May to discuss how to challenge the green agenda, and especially how to present our arguments to developing countries. We aim to combat this green agenda (probably via papers, op-eds, meetings with LDC Trade officials, conferences and speaker tours) and will meet in Washington DC on 23rd /24th June 1999 to devise our overall strategy and tactics for the coming years. Those to attend include:

* Jonathan Adler, Competitive Enterprise Institute (CEI), USA

* Roger Bate, IEA, UK

* Ray Evans, Western Mining, Australia

* Jack Kemp, USA

* Karen Kerrigan, Small Business Survival Committee, USA

* Deepak Lal, UCLA/UCL, UK

* Noel Malcolm, UK

* Julian Morris, IEA, UK

* Grover Norquist, Americans for Tax Reform, USA

* Alan Oxley, APEC Study Centre, Australia

* Francois-Xavier Perroud, Nestle, Switzerland

* Jeremy Rabkin, Cornell University, USA

* Austin Ruse, Catholic Family and Human Rights, USA

* Parth Shah, Center for Civil Society, India

* Jim Sheehan, CEI, USA

* Fran Smith, Consumer Alert, USA

* Fred Smith, CEI, USA

* Alan Tonelson, US Business and Industry Council, USA”²⁷

The document continued:

“An agenda for this meeting will be written over the next week or so and circulated to key participants. What should it include?

* Topics for Op-eds/Papers

* Establishment of an International NGO – the Global Organisation for Development – GOD

* Lobbying of politicians in developing countries

* Speaker tours to LDCs

* Conferences – where, London, Washington, New Delhi, Cape Town? What keynote speakers, conference organisers and public affairs allies

* Funding -Individuals, Corporations, Foundations”²⁷

Attacking the WHO

In 2002, it was revealed that the writer and philosopher Roger Scruton, who wrote a pamphlet by the IEA attacking the World Health Organisation in 2000 for its campaign against tobacco, was on the payroll of Japan Tobacco International (JTI).²⁸²⁹

Scruton was forced to admit that he should have “declared an interest”. He was subsequently sacked as a columnist by the Financial Times. He told the British Medical Journal: “Our firm had a consultancy with Japan Tobacco Industries at that time. I was asked independently to do this write the pamphlet. I did not want to mix it up with the consultancy, but looking back I should have declared an interest”.²⁹

A leaked email revealed that Scruton, who was receiving a monthly retainer fee of UK£4500, had asked for a UK£1000 per month pay rise to place more pro-tobacco articles in prestigious newspapers and international magazines. He declared the amount to be “good value for money in a business largely conducted by shysters and sharks”.²⁹

TobaccoTactics Resources

• IEA: Working with RJ Reynolds, BAT and Philip Morris on Environmental Risk
• Institute of Economic Affairs
• Third Party Techniques
• Think Tanks