Following the money: The Fraser Institute’s tobacco papers

| October 14, 2009

When the Fraser Institute celebrated its 30th anniversary in 2004, media coverage was ebullient. The Province was typical when it proclaimed in an editorial “we're all 'right wing' now” and ended by congratulating the institute for “daring to dissent. May it do so for another 30 years.”

This piece was reprinted in the Ottawa Citizen and the Windsor Star. National Post columnist Lorne Gunter reported that “the Fraser Institute is so highly regarded that not only was the room chock block [sic] full of prominent provincial and national conservative politicians, organizers, consultants, academics and volunteers, it was also full of financiers of conservative parties and causes.”

As my new book, Not A Conspiracy Theory, points out, no one in the media asked the obvious question: Where does the Fraser Institute get its money? Who are these financiers of conservative parties and causes? Gunter didn't mention any names.

In reporting on the anniversary gala and on the Fraser Institute’s prolific output of studies on global warming, health care and other issues, Gunter and members of the corporate media ignored lesson number one from their journalism school days: follow the money. Who stands to benefit from their tax-deductible contributions to Fraser Institute activities? If EnCana or Imperial Oil say global warming is a hoax, they will be regarded sceptically. But if a seemingly arm’s-length, independent think-tank -- covertly financed by EnCana and Imperial Oil  -- the same thing, it is more likely to be believed. Shouldn’t news readers and viewers know the details of who is behind the message?

After 30 years in the business of turning people against governments that redistribute wealth and provide social programs, and against regulations that protect workers, consumers, human health and the environment, the institute had burned through $100 million. Some deep pockets must have been bankrolling the institute. But who? And why?

It’s now five years later and the Fraser is coming up to another big celebration, its 35th anniversary, which will be held in the same Calgary venue, the Hyatt Regency’s Imperial Ballroom. If you can’t make the Calgary event, there is also one in Vancouver a week earlier. The honorary chair for this event is none other than B.C.’s premier, Gordon Campbell.

Will the media do a better job of reporting the institute’s financial affairs this time?

If anything, the Fraser’s reach today is greater. In 2004, its budget was $6.9 million and it had a full-time staff of 45. By 2008, the budget had doubled to $13.9 million and the staff complement had risen to 77 full-time positions in offices in Vancouver, Calgary, Toronto and Montreal. In the past five years alone, the Fraser spent more than $50 million. The question needs to be asked again. Who’s putting that much money into Fraser Institute programs? What do they get for it?

It isn't easy to answer this question unless former executive director Michael Walker or some other institute official divulges the information, and they’re not talking. The Income Tax Act does not require individual or corporate contributors to tax-exempt societies to be made public. The Fraser hasn’t released a list of corporate backers since the 1980s and even then didn’t reveal the amount of their contributions.

A rare glimpse of the role of corporate funding in shaping Fraser Institute programs was obtained as a result of the 1998 Master Settlement Agreement between 46 U.S. state attorneys general and the major tobacco companies. A condition of the agreement was that tobacco companies had to make public, and post on a dedicated website, all documents used in the discovery phase of legal actions brought by the states against the tobacco industry for Medicaid costs associated with smoking-related diseases. More than 50 million pages of documents were made public.

They include a series of letters written in 2000 by Sherry Stein, the Fraser Institute’s chief fundraiser, and Michael Walker to the British American Tobacco Co., the world’s second-largest tobacco company and owner of Imperial Tobacco, which then controlled 70 per cent of the Canadian market.

The letters reveal that the Fraser had set up a social affairs centre to promote free-market solutions to social policy problems like poverty, drug use, smoking and gun control. Tobacco company Rothman’s International was providing $50,000 a year for this work and Philip Morris, “generous support,” according to one letter.

With this and other funding, in 1999 the Fraser published a book by two tobacco industry consultants, Passive Smoke: The EPA’s Betrayal Of Science And Policy, and held two day-long conferences in Ottawa. This package of initiatives was timed to coincide with the looming prospect of a spate of bylaws being enacted by municipalities across the country, and by the federal government, to regulate smoking in public places.

A bylaw had just come into effect in Victoria, B.C., to ban smoking in all indoor public places. The book argued that these bylaws were ill-considered because the link between second-hand smoke and lung cancer had not been proven. It attacked the 1993 decision of the U.S. Environmental Protection Agency that declared second-hand smoke to be a carcinogen. The book was followed by the two conferences, which worked in tandem, the first attacking the need for regulation and the second attacking regulation of smoking. Neither the book nor the conferences mentioned the tobacco industry funding.

At the end of 1999, Rothman’s was bought by British American Tobacco (BAT), and the Fraser lost this funding source. It commenced a year-long campaign to replace, and add to, the money. Writing to BAT’s chairman Martin Broughton, Sherry Stein asked him to take over Rothman’s funding commitment and consider a new initiative for a risk and regulation centre. She asked for $50,000 a year for each of the two centres. BAT funding for this new centre would help the Fraser “provide the factual information that will seriously counter the risk activists and their misleading and misguided propaganda,” Stein wrote.

Later in the year, Michael Walker reiterated these requests in his pitch to BAT’s international scientific affairs manager, Adrian Payne. Walker focused on the new Centre for Studies in Risk and Regulation. He railed against the “agitators for a ‘zero-risk’ society [who] have become increasingly successful in advancing their cause, often basing their case on exaggerated junk science scares.”

The targets of these nasty agitators were environmental quality, second-hand smoke, pesticides and genetically modified foods. With BAT financial assistance, the Fraser Institute would set the record straight. BAT would not be alone in supporting the new centre, Walker reassured Payne.

The institute, Walker wrote, had already: “met with a number of your colleagues in the industry to discuss this proposal and all are on side and have implied that they will support the Centre with comparable contributions. The companies they represent are Imperial Tobacco Company Ltd., JTI Macdonald Corp., and Rothman’s Benson & Hedges Inc. We have begun discussions as well with Philip Morris International Inc., and Brown and Williamson Tobacco in the U.S. Others we will approach for support are in the food, biotechnology, and chemical industries.”

Stein then presented three proposals for BAT’s support. It could contribute: $30,000 for the launch of the centre, featuring guest speaker John Stossel, a well-known television personality and anti-regulation zealot; $42,000 to distribute an anti-regulation book called Safe Enough?; and/or $48,000 for a project that would show regulation was too costly to be effective.

The letters from Stein and Walker don’t indicate which, if any, of these projects BAT did support, but the projects all took place. And the Centre for Studies in Risk and Regulation was established that year. The letters also don’t indicate that Brian Levitt, the CEO of Imasco, BAT’s Canadian subsidiary, was a Fraser Institute trustee during this time.

Unfortunately, more recent documents are not available to reveal the links between the Fraser Institute and other industries, such as oil and gas, pharmaceuticals, food, chemicals and private health care. But a partial understanding of corporate backing can be gained by examining the think-tank’s board, since members are most likely invited to join because of their financial contributions.

The Fraser Institute board currently has seven members from the Calgary oil patch, including vice-chair Gwyn Morgan, former CEO of EnCana Corp. And consider that both the 30th and 35th anniversaries were held in Calgary even though the Fraser Institute is based in Vancouver.

What could the Fraser Institute do to support oil industry profits? Manufacturing doubt about the reality of climate change, for one thing. If climate change isn’t occurring, then oil companies don’t need to change the way they do business and can continue to reap their record profits.

Beginning in 1997, the year the Kyoto Accord was signed, the Fraser became the primary Canadian channel for global-warming denial (It was joined by the National Post a year later.) Its role was to repackage for Canadian consumption material written mostly by industry-sponsored American deniers. Later it developed and promoted Canada’s own hardy band of naysayers, publishing their papers and books and hosting them as speakers.

And the institute is still at it today, hosting talks in October 2009 by two prominent British deniers who were influential in Margaret Thatcher’s government in the 1980s. Lord Monckton claims climate change “is not only a non-problem but also a dangerous distraction from the real threats to humankind.” And Lord Lawson (admission cost, $500) argues the United Nations Intergovernmental Panel on Climate Change is a “politically correct pressure group whose ... report presents an unfounded alarmist account of man-made greenhouse gas emissions...”

Don’t expect a hard-hitting critique of Lord Lawson’s tirade in the CanWest papers, since the Vancouver Sun is a sponsor of his talk. And expect more ebullience in the reporting of the 35th anniversary gala in November -- the Calgary Herald is a sponsor, as it was for the 30th anniversary celebration.

Why does the Fraser Institute continue to spread an alarm that many people have rejected? Because it has the money to so. The tobacco papers demonstrate that Fraser Institute programs are driven by funding.

As Richard Littlemore of DeSmogBlog noted, “the world is struggling to come up with relevant policy options for Copenhagen in December,” but the oil industry still seems to have ample money for these lecture tours that create doubt and confusion.

Unfortunately, it’s still working. A March, 2009 Ipsos Reid poll found that nearly one-half (45 per cent) of Canadians agree that “serious action on climate change should wait until the recession is behind us.”

The oil patch executives who bankroll the Fraser, and the 1200 libertarians and conservatives who will pay a tax-deductible $295 or $500 for a VIP ticket for the Calgary gala anniversary, ($350 and $500 in Vancouver) will have much reason to continue to celebrate success.

But that won’t change until journalists start following the money. And that won’t happen until their readers demand that they do.




Donald Gutstein is an adjunct professor in the School of Communication at Simon Fraser University, where he specializes in media analysis, documentary research and propaganda studies. His most recent book, Not A Conspiracy Theory: How Business Propaganda Hijacks Democracy, is being published this month by Key Porter Books.

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