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DIPIETRO: The Daily Walk of Shame: "Unbiased" Health Insurance Industry Report 

This new Motley Fool series examines things that just aren't right in the world of finance and investing. Here's what's got us riled today. . . .

This all comes out despite a report released last week by the nonpartisan Congressional Budget Office (CBO) stating that the legislation in question would reduce the federal deficit by $81 million by 2019 and would probably extend coverage to about 29 million Americans who currently lack insurance.

Why you should be indignant: Where to begin? There are at least three very good reasons to be apprehensive of PwC's report.

* Because the report is commissioned by AHIP, a group that represents health policies from companies like Aetna (NYSE:AET), Aflac (NYSE:AFL), and Humana (NYSE:HUM), PwC should have been extra careful to dispel any apparent conflict of interests. However, instead of performing tremendous due diligence, PwC seemed to have produced a report with too many holes to poke through and too much room left to be guessing about the legitimacy of their work. . . .

Well, you can choose to believe PwC's report or you can choose not to. Before you reach any conclusion, consider this: In the early 1990's PwC performed similar studies for the tobacco industry, which included bigwigs like Phillip Morris International (NYSE:PM) (then part of Altria) and Reynolds American (NYSE:RAI). They provided supposedly hard data that showed how a new excise tax on tobacco would destroy hundreds of thousands of jobs.

The report was apparently so lopsided that another consulting firm, Arthur Andersen, reviewed PwC's work. They found "serious methodological problems and errors of omission (one-sided analyses likely to lead to misinterpretation) in both the PW Report and the [tobacco industry's Tobacco Institute] Estimates." Ultimately, the string of blunders made by PwC led Andersen to report that "these and other serious flaws in the Price Waterhouse Report and the Tobacco Institute Estimates build upon one another in a cumulative fashion to present grossly exaggerated and misleading estimates of job loss from an increase in the federal excise tax on tobacco products."

There are some eerie similarities here considering that one of the methods considered for funding health-care reform is a tax on some very expensive "Cadillac" health-care plans. Looks to me like another case of lobbyists hiring consulting groups to find data that supports their claims instead of performing a comprehensive, objective analysis.

This report has conflict of interest written all over it. Ill-timed. Factually debatable. Contrary to reports by the CBO. I'm not buying one word of it.

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• Govt denies involvement in missing tobacco article 

The government has denied any involvement in the striking off of a contentious sub-article on tobacco in the recently endorsed health law, deemed an effort to protect the country’s cigarette industry.

State Secretary Hatta Radjasa said Tuesday the law, passed by the House of Representatives last month, was already missing the sub-article when his office received it.

He said he had contacted the Health Ministry and the Justice and Human Rights Ministry to settle the problem, and that the State Secretariat now had a complete version of the law, including the missing sub-article, to be signed by the President.

“The House of Representatives’ secretariat is lying if it said it received the law without the sub-article from the State Secretariat. That’s not how we send bills to the House,” Hatta said at a press conference.

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Benson & Hedges manufacturer attacks Bill to ban tobacco displays 

Japan Tobacco International (JTI) has attacked the UK government for its plan to ban retailers from displaying tobacco.

In advance of the third reading of the UK Health Bill, in the House of Commons today (Monday 12 October 2009), Daniel Torras, JTI's UK managing director, said:

"The UK Government continues to demonstrate that it fails to recognise or listen to the evidence provided by key stakeholders that hiding cigarette packs from view in retail outlets will not achieve its goal of further reducing youth smoking. There is no credible evidence that tobacco display bans reduce youth smoking."

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• Phillip Morris Fights Display Ban 

Philip Morris International (PMI) has hit back at groups advocating a total ban on the display of tobacco products in retail stores via a new website.

The cigarette giant supports effective regulation but opposes a total ban on the display of tobacco products in stores.

"A number of countries are investigating a ban on display of tobacco products in retail stores," said PMI's director of regulatory communications, Morgan Rees.

"There is limited information in the public domain that describes experiences from countries that have banned display and so we felt that it would be useful to create a website that provides information on the effectiveness of the ban, as well as to describe its impact on adult smokers, retailers, tobacco manufacturers and enforcement agencies."

To date four countries - Australia, Canada, Iceland and Ireland - have prohibited the display of tobacco products at point of sale. . . .

Meanwhile, Donegal newsagent and National Federation of Retail Newsagents member, Maurice Timony, last week lodged a High Court challenge to contest the Irish Governments ban on tobacco display.

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Philip Morris International stellt neue Website vor: www.productdisplayban.com 

Philip Morris International (PMI) (NYSE:PM)(Paris:PM) gibt den Start von www.productdisplayban.com bekannt. Die Website wurde erstellt, um Fakten über die Folgen eines vollständigen Verbots der Darstellung von Tabakprodukten im Einzelhandel zur Verfügung zu stellen.

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Climate Cover-Up / The Crusade to Deny Global Warming  

"Climate Cover-Up documents one of the most disgusting stories ever hidden about corporate disinformation. What you'll discover in this book amounts to proof of an intergenerational crime." DAVID SUZUKI, Author of The Sacred Balance and Good News for a Change.

"This book explains how the propaganda generated by self-interest groups has purposely created confusion about climate change. It's an imperative read for a successful future." LEONARDO DICAPRIO, Actor and Producer . . .

Starting in the early 1990s, three large American industry groups set to work on strategies to cast doubt on the science of climate change. Even though the oil industry's own scientists had declared, as early as 1995, that human-induced climate change was undeniable, the American Petroleum Institute, the Western Fuels Association (a coal-fired electrical industry consortium) and a Philip Morris-sponsored anti-science group called TASSC all drafted and promoted campaigns of climate change disinformation.

The success of those plans is self-evident. . . .

Although all public relations professionals are bound by a duty to not knowingly mislead the public, some have executed comprehensive campaigns of misinformation on behalf of industry clients on issues ranging from tobacco and asbestos to seat belts.

Lately, these fringe players have turned their efforts to creating confusion about climate change.

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• VIDEO: Kevin Grandia: The Philip Morris Theory of Global Warming 

The tobacco companies were sued by the US government for this behavior and I suspect such a suit will be filed someday against the companies (i.e. ExxonMobil), the organizations (i.e. the Competitive Enterprise Institute) and the individuals (i.e. Steve Milloy) who perpetrated the attack on climate science.

All this leads to a shameless plug.

Jim Hoggan, co-founder of the DeSmogBlog Project, which I have managed for the last four years has written a book that chronicles the history of PR spindoctors working to confuse the realities of climate change (and tobacco). It's called Climate Cover Up: the crusade to deny global warming and it comes out in hard copy in the US on Oct. 20th. You can get it now on Amazon and Barnes and Noble if you can't wait.

People who have read the book tell me that they're angry. And its time for everyone to get angry about this and start holding people like Milloy accountable for what they've done.

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GRAVES: "Death Panels" and Big Cig  

This week's issue of Rolling Stone has an illuminating article, "The Lie Machine," by Tim Dickinson on anti-heath reform spin. Dickinson's article quotes internal corporate memos showing how Big Tobacco spun media stories about health care reform in 1994 and how its progeny are striking again.

Among other things, the RS article excerpts a memo by Philip Morris describing how the company worked "off-the-record" with a right-wing "think" tank, the Manhattan Institute (MI), to manufacture an "expose in The New Republic on what the Clinton plan means to you." That TNR article, "No Exit," was the tip of the spear against health care reform in 1994, and was part of Big Tobacco's strategy to place stories opposing the health care plan with "friendly contacts in the media."

It got the cover of TNR and the attention of George Will. It was then magnified by the right-wing echo chamber and these misleading claims were etched into the public's mind about the reforms. Years later the article was repudiated by TNR, but not before it launched the career of its author (or rather its co-author, given Big Tobacco's invisible hand), Betsy McCaughey. . . .

given how far her propaganda penetrated, it seems Betsy learned well the tools of her trade from the tobacco companies that funded and helped craft her "independent" research early in her career.

It makes you wonder who's paying Betsy's bills and helping with her "research" this time around. She's been at the Hudson Institute, another think tank funded by the right and big corporations . . .

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Controversy over law on tobacco control 

The issue of tobacco control has been discussed by the Georgian Parliament and Government since the end of 2005, when Parliament ratified the concept of introducing tobacco control systems in Georgia in line with World Health Organisation recommendations. By taking on this commitment the country also took on the responsibility to forbid the smoking of tobacco in public buildings and on public transport, forbidding tobacco advertising and sponsorship and other obligations. In December 2008 the law on tobacco control was indeed amended. Smoking was forbidden in public places, educational and medical institutions and on public transport and in bars and restaurants were forced to set aside separate areas for smokers and non-smokers.

The Georgian Government initially decided that these amendments would be introduced only in 2012. Although they did in fact come into force in September 2009, the Government still wants the delay them, opposes introducing penalties for law violations and so on.

The NGO Tobacco Control Alliance and its Chairman Giorgi Bakhturidze think that some government members are lobbying for tobacco interests and that's why they are demanding the delays in implementing the amendments.

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VIDEO: Carville hits reported Phillip Morris influence on McCaughey: "breathtaking proof" of "vast right-wing conspiracy"  

McCaughey has run this con before. During the debate over Clinton's health care overhaul in the early 1990s, McCaughey - then an academic at the right-wing Manhattan Institute - wrote an article for The New Republic called "No Exit," in which she claimed that Hillarycare would prevent even wealthy Americans from "going outside the system to purchase basic health coverage you think is better." Even though the bill plainly stated that "nothing in this Act" would prohibit consumers from purchasing additional care, McCaughey's claim was echoed endlessly in the press, with each repetition pounding a stake further into the heart of the reform effort.

McCaughey's lies were later debunked in a 1995 post-mortem in The Atlantic, and The New Republic recanted the piece in 2006. But what has not been reported until now is that McCaughey's writing was influenced by Philip Morris, the world's largest tobacco company, as part of a secret campaign to scuttle Clinton's health care reform. (The measure would have been funded by a huge increase in tobacco taxes.) In an internal company memo from March 1994, the tobacco giant detailed its strategy to derail Hillarycare through an alliance with conservative think tanks, front groups and media outlets. Integral to the company's strategy, the memo observed, was an effort to "work on the development of favorable pieces" with "friendly contacts in the media." The memo, prepared by a Philip Morris executive, mentions only one author by name:

"Worked off-the-record with Manhattan and writer Betsy McCaughey as part of the input to the three-part exposé in The New Republic on what the Clinton plan means to you. The first part detailed specifics of the plan."

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Manhattan Institute Statement: Betsy McCaughey Was Not Paid or Influenced 

"Below is a letter to the editor of Rolling Stone from Lawrence Mone, President, Manhattan Institute for Policy Research."

In his article "The Lie Machine" Tim Dickenson asserts that former Manhattan Institute scholar Betsy McCaughey's work was influenced by Phillip Morris. This conclusion is false. Betsy McCaughey wrote two articles for the Wall Street Journal on the Clinton Health Care plan and an additional article for the New Republic which was solicited by its publisher. At no time were her ideas influenced or controlled by anyone but the author herself.

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Editorial: GOP dilemma 

It's easy to see why Senate Republicans in Harrisburg are upset with worthy last-minute budget changes by House Democrats after the two sides had reached an accord.

House Democrats now want to replace two unpopular taxes with a tax on cigars and the extraction of natural gas. But Republican opposition suggests a link to campaign money from tobacco and energy companies. . . . House Democrats instead proposed to tax cigars and smokeless tobacco, two ideas with broad public support everywhere but in the Senate GOP. Could this be because the tobacco industry donated more than $415,000 to political candidates and their committees in Pennsylvania in 2008 - 81 percent of it to Republicans?

Lobbyists for tobacco giant Altria reportedly persuaded legislative leaders to tax cigarillos but not big cigars. Altria owns cigar-making plants in Limerick and King of Prussia.

That may help explain why Pennsylvania is the only state without a tax on smokeless tobacco, and one of only two (Florida is the other) without a tax on cigars.

It may also explain why when deals get cut in a smoke-filled room, fat cigars remain tax free.

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• DICKINSON: Echoes of Philip Morris and Hillarycare 

I touched on the Philip Morris campaign, briefly, in "The Lie Machine," but I've since uncovered a bumper crop of additional memos from the Legacy Tobacco Documents Library that offer a detailed picture of the cigarette maker's behind-the-scenes moves to defeat the Clinton health care reform in '94 -- and why the tobacco company was so motivated.

The costs of the Clinton health reform were to be covered, in part, by new tobacco taxes. As this memo from the company's Washington Relations Office reveals, Philip Morris' decided it would try beat back this threat by torpedoing health care reform altogether: . . .

• Third Party support is important. We provide assistance to Citizens for a Sound Economy, Center for Policy Analysis, Manhattan Institute and numerous other organizations. . . .

Citizens for a Sound Economy's effort bore a striking resemblance to the town-hall campaign waged this August by its offspring. This "Tobacco Strategy" memo describes CSE's program in full swing, replete with a mobilization of up-in-arms constituents at town halls . . .

Philip Morris tapped its own employees to play the part of concerned citizens . . .

Who were those allies? This March 22, 1994, "Tobacco Strategy Review" marked "confidential" lists Philip Morris' friends in the foxhole, including, notably, the Manhattan Institute, where one Betsy McCaughey was a fellow: . . .

To influence swing Democrats in the House, PM quietly paid CSE to gin up a "grassroots" anti-tax rebellion, as detailed in this memo . . .

• PM COMPANIES INC. AND RJR HAVE FORMED THE PM/RJR TOBACCO TASK FORCE TO COORDINATE ACTIONS ON… FET.

This “Task Force” was star-studded. Indeed, it was anchored by a former top George H.W. Bush consultant who would go on to found FoxNews:

• TASK FORCE MEMBERS INCLUDE:

…

Roger Ailes, public affairs strategist

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• SULLIVAN: Betsy McCaughey And Big Tobacco  

I certainly had no idea about any of this at the time. I take responsibility for publishing the piece, and feel that airing some of the internal fight over it would violate confidences. But at no point was I aware of a three-part series, claimed by the tobacco lobbyist. But I did not commission the piece as the Manhattan Institute notes.

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I certainly had no idea about any of this at the time. I take responsibility for publishing the piece, and feel that airing some of the internal fight over it would violate confidences.
Then-New Republic editor Andrew Sullivan, on publishing "No Exit," the 1994 Betsey McCaughey item on Clinton's Health Care plan.

• Tobacco giant makes its mark on D.C. smoking legislation 

The largest tobacco manufacturer in the United States is supporting a D.C. Council proposal that would limit the sale of some tobacco products and regulate where people can smoke.

Representatives from Altria Group Inc., owner of tobacco giant Philip Morris, testified at a council hearing Tuesday that they were backing a bill that contained a slew of provisions.

In fact, Altria lobbyist Mary Eva Candon drafted the majority of the legislation, at-large Councilman Phil Mendelson told The Examiner. And the day he introduced the bill, Mendelson received a $500 campaign contribution from Candon.

"That's the problem when you work with friends and they have suggestions," Mendelson said. "It all gets into the mix."

Among its 10 provisions, the bill would:

-- ban the sale of single cigars, except in tobacco shops;

-- set weight-based requirements for the number of cigars per package;

-- and require all tobacco products be sold from behind the counter.

But the head of the Cigar Association of America said Altria would benefit while those provisions would leave the rest of the cigar industry suffering.

Altria's Black and Mild are the nation's top-selling cigars and control almost a quarter of the market. Because they're sold in five-packs, CAA President Norman Sharp said the ban on single cigars would boost Black and Mild sales.

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