The next time someone with a name like "Tom Trouble" shows up at the door of the State Affairs Company, the owners will probably think twice before they hire him. His real name was Tom Wheeler, and at first he felt lucky to land the job. "I was not hired in a typical or conventional way," he recalls. "In the fall of 1995, I was working for a temp agency that assigned me to work with State Affairs for a couple of weeks. Apparently they liked my work, and they asked me to leave my telephone number because they were interested in using me in the future. In January of 1996, I got a call from Warren Miller asking if I would be interested in working on a 'project' for them. That's how I was hired. There was no interview process, and they never saw a copy of my resume. They based it solely on my previous work for them a few months earlier. Frankly, I was somewhat amazed. Everybody else who worked there had college degrees. Heck, I barely made it out of high school alive. The fact that they hired me was simply dumb luck. There is no other explanation for it."
"Tom Trouble" was his e-mail handle where he posted to mailing lists and news groups, discussing issues like pirate radio, zines, anarchism, and the environment. Until a few years previously, he had lived a fairly conventional, apolitical life. The son of a career Army family, he had worked in the military himself, starting as a clerk-typist and working his way up to an Intelligence Assistant for the US Army Intelligence and Security Command. "In 1989, I got a taste of some truly despicable characters and learned about some really nasty programs that the military was running in Central America," he recalls. "I got involved in anti-war activities and ended up walking out of my government job."
Although he lived in Washington, DC, Wheeler maintained a skeptical distance from the city's usual crowd of politicians, bureaucrats, lobbyists and other illuminati. He also edited his own "zine" called Out of Bounds, a sarcastic, humorous rag full of dissident, outcast views. On evenings and weekends, he performed with a rock band, named Dick Army in punning reference to the Senate Majority Leader whose name seemed inadvertently to characterize the Washington power crowd.
The underground music and publishing scene didn't pay much, of course. Temp work helped fill the gap, but Wheeler was relieved when State Affairs called with its offer of employment. The job they were offering would still be temporary, with no insurance, vacation or other benefits, but at least the pay was decent.
The State Affairs Company was a new public relations firm based in Reston, Virginia, just across the Potomac from Washington. It had only been in existence for two years and was relatively small, but it was well-connected. Prior to launching their own company, two of SAC's partners had been top executives at Burson-Marsteller and Hill & Knowlton, which were respectively the world's largest and second-largest PR firms. The "project" that SAC employee Warren Miller had mentioned involved setting up a nonprofit research group, called "Contributions Watch." Miller had been selected to be the group's executive director, and Wheeler was to be Miller's research assistant.
"We were researching campaign contributions by trial lawyers both at the state and federal level," Wheeler recalled. "State Affairs had managed to 'acquire' a master list of all the trial lawyers in the United States, from the American Trial Lawyers Association as well as other sources. My job was to create spreadsheets, putting in the names of all the lawyers organized by state. Then we would cross-reference that list against other data which they had collected on election campaign contributions in each state to see how much money each candidate was getting from trial lawyers. We had names of thousands of lawyers for many states. It was tedious, boring work. A few weeks after I came on board, I was told that the client who was paying for this research was Philip Morris, the tobacco company. That certainly explained why we were only researching trial lawyer donations. Philip Morris despises them. Trial lawyers are a pretty powerful interest group themselves. I didn't find it strange they would be engaging in such research. What initially piqued my interest was the fact that I was paid on the State Affairs payroll although I officially worked for Contributions Watch. All the research was coordinated with State Affairs, and we conducted all the research from the State Affairs offices. That's what first tipped me off that something was not quite right here."
Poking around the office, Wheeler found a document titled "Proposal for Consumer Research Project," which had been written before the founding of Contributions Watch. The proposal detailed a plan to attack what the State Affairs Company called the "hidden agenda" of environmental and consumer organizations such as Consumers Union, the publisher of Consumer Reports magazine.
"Oftentimes the consumerist agenda may be a hidden one which should be disclosed," the document stated. "Strategy: Working through think tank or university relationship, educate public through target media about inner workings, potential conflicts of interest and agenda of Consumers Union and its primary source of funding, Consumer Reports. ... There is a need to protect the public from hidden, undisclosed consumerist agendas." After compiling information on this "hidden agenda," the next stage of the plan would be to pass laws creating "reporting and disclosure requirements" forcing the "consumerists" to disclose their "hidden agenda." Working first at the state level, SAC planned to build up to a federal campaign: "Introduce a series of disclosure bills at the state level, building up grassroots pressures to stimulate Congressional hearings."
But the State Affairs Company had a very deliberately hidden agenda of its own. The "Proposal for Consumer Research" outlined strategies for SAC to use in disguising its identity as it went about collecting the information that it would use to attack others. Prior to the founding of Contributions Watch, SAC had created a front group called "University Research" under whose name it went around to state election offices, vacuuming up data on election campaign contributions. "Do all work as University Research," the proposal advised. When paying fees at state offices, "bring personal checks." To further obscure the chain of command, SAC's attorney advised that University Research should set up its own bank account: "You should not open the account using the Employer ID Number for the State Affairs Company since this would make it easier for a plaintiff to attempt to make the State Affairs Company liable for the liabilities of University Research, Inc."
SAC's strategy for investigating and attacking consumer and environmental groups was further outlined in a February 1995 SAC document titled "Advocacy Groups at the Plaintiff's Bar: The Abandonment of Membership." Apparently prepared for an overhead projector, the document summed up "The Situation: Ecocrats turning from soft path of conservation and enviro-grassroots organization go hard path of litigation and litigation journalism."
"Ecocrats" was SAC-talk for mainstream environmental groups with legal departments and the ability to sue corporations, and recoup their legal costs if successful--groups such as the Foundation on Economic Trends, the Natural Resources Defense Council, and the National Audubon Society. SAC's objective was to "make it increasingly difficult for plaintiff's lawyers to use environmental groups as a litigation, lobbying and media tool. Gain leverage. Drive wedge between ecocrats and grassroots organizations repelled by ties to wealthy plaintiff's lawyers. ... Introduce and back a variety of state reform bill[s] across the country that require disclosure of financial ties ... Underwrite legal research monograph that will document the financial and other ties of trial lawyers to environmental groups."
"The level of hypocrisy was truly stunning," Wheeler recalls. "Here was an organization that was publicly claiming to be interested in 'full disclosure' of the hidden funding sources for environmental and consumer groups, while at the same time they were diligently working to conceal the fact that they were entirely funded by corporations, and by the tobacco industry in particular. One internal document stated explicitly that it was a 'key principle' of the State Affairs Company to 'remain anonymous,' because linking it to Contributions Watch would begin the unraveling of its own secret agenda."
The State Affairs Company may have been sneaky, but it was not exactly brilliant. In its haste to get "Contributions Watch" up and running, it asked Wheeler to work overtime on evenings and weekends. "I had a key to the office, and there were times where I was the only person there for several hours. All the partners left their office doors open, and I had access to all the files, so I started poking around and finding out more about they were really up to." SAC's tasks including preparing a "monthly verbal report" and "document packages" for Philip Morris, providing information about the targeted consumer groups including "IRS form 990; audited financial statements; state charitable forms; . . . annual reports/annual meeting notices; review of on-line media, internet home pages and networks; federal and state bulk mail permits; publications; . . . state trial lawyer associations; . . . research on current and former boards of directors and executive staff; court awards and settlements documents."
Many of the documents around the office referred to Philip Morris simply by its initials. An early "Draft Business Plan" for Contributions Watch listed "research" for PM as its primary source of income in what it called a "proposal for advocacy groups project for PM." By March 1, 1996, according to a letter from SAC's David McCloud, "The State Affairs Company has provided the initial seed money for the organization." A more refined draft of the business plan, written in May 1996, sought to position Contributions Watch as "the leading authority on money and politics . . . monitoring special interest group activity in the states." It noted that a Philip Morris-funded "ongoing project of trial lawyer contributions in the states is slated to occupy most of CW's research time over the next six months." Part of the plan entailed creating an "Advocacy Research Section" within Contributions Watch, a sweeping effort to investigate legitimate consumer and environmental groups, developing and packaging information to be used against them. SAC's own hidden agenda was to attack the tobacco industry's political enemies by smearing groups like Consumers Union, the Center for Science in the Public Interest and a slew of Ralph Nader-founded organizations including Public Citizen, Trial Lawyers for Public Justice, the U.S. Public Interest Research Group, and the Center for the Study of Responsive Law. Other targets included the Environmental Defense Fund, the Sierra Club, Audubon Society, and Greenpeace.
Through the magical distorting lens of a public relations front group, SAC was proposing to portray these groups-genuine nonprofit organizations funded largely by contributions from the public at large-as nefarious "special interests."
A key element in this plan was the Pygmalion-like effort to develop Warren Miller into "an expert source and guide to investigative reporters, editors and opinion writers." Miller was in his 20s-an amiable, if not terribly astute, former employee of the U.S. Federal Elections Commission who had been hired by SAC to give Contributions Watch a veneer of independence and integrity. To help groom him for the task, SAC retained the services of Robert Witeck and Wesley Combs, PR specialists who worked directly with Miller to give him "counsel on his messages and presentation." Wheeler came across a letter in which Witeck had outlined the services they would offer in exchange for a retainer of $2,500 per month. In particular, he noted, "Contributions Watch and Warren Miller, in particular, need to develop a reliable and reachable circle of media contacts and continued recognition. As spokesman and advocate for Contributions Watch, over time Warren should become an expert source and guide to investigative reporters, editors and opinion writers." Witeck recommended specific publications to be targeted, including the National Journal, New Republic, Congressional Quarterly, Legal Times, and Washington Monthly. "I also recommend that we continue working one-on-one with Warren Miller," Witeck added, "to build his presentation skills and confidence in talking with the media and other influentials . . . to develop a stronger, public persona to serve as spokesperson for the organization."
"Warren was quite a nice, personable fellow, but he exhibited an extraordinary amount of naivete," Wheeler recalled. "I remember Warren reading a story in Mother Jones magazine one day and complaining that the story was 'biased.' He said they needed to be 'more objective, balanced.' I laughed at him and said there really is no such thing as objective, completely unbiased reporting. He thought I was nuts. It always amazed me that he could point out the bias in Mother Jones, but he couldn't find any in what he was doing at the behest of the SAC partners. He was a friendly, likable guy with a sense of humor-actually a fun guy to work for. He struck me as a typical suburbanite, well-to-do, twenty-something, white, college-boy liberal. But he was executive director of Contributions Watch in name only. State Affairs made all the decisions, and Warren had to get approval from the State Affairs flacks for everything, including hiring people. Warren actually wanted to institute a policy of revealing funding sources for all their studies but couldn't get State Affairs to go along with it. When I pointed out the hypocrisy about the notion of 'full disclosure' touted by Contributions Watch, he didn't respond. He obviously wasn't comfortable with it, but ultimately, he simply did everything he was told. He was rather well compensated, so I imagine he just closed his eyes to the blatant hypocrisy and collected his paycheck."
By the spring of 1996, Contributions Watch had put together its first "official report," an analysis of trial lawyer donations to federal election campaigns. "That's when I began to notice State Affairs begin to make serious efforts to get media exposure for the Contributions Watch research," Wheeler says. "They began coordinating with the media including the Wall Street Journal and the Weekly Standard to get this information in the national media. They were pretty successful. They managed to get a number of papers and wire services to run stories that depicted Contributions Watch as an 'independent watchdog group.' ... Right around the same time I came across a confidential memo from a tobacco industry attorney which showed to what extent State Affairs was coordinating and manipulating the media with the proposed roll-out of future Contributions Watch studies. They were also working closely with APCO & Associates, another huge PR lobby shop that worked for Philip Morris. That's when I realized how vast and deep this deception was. Everybody was in on it."
As Contributions Watch began its effort to place stories in the news media, it faced an obvious dilemma: How do you pose as an idealistic crusader for full disclosure while simultaneously hiding your special-interest agenda? To resolve this dilemma, legal advisor Henry Hart outlined a two-track media strategy-one approach for feeding stories to "unequivocal supporters," and another for dealing with reporters who asked serious questions.
In a May 17 letter to Miller, Hart noted that SAC partner Charles Francis "asked me to provide you with some suggested responses to public inquiries. ... To my knowledge, the only document which is currently a matter of public record concerning Contributions Watch is the Articles of Incorporation . . . Those articles do not reveal the name of the directors or officers or of any person other than myself." Hart gave Miller a script for deflecting reporters' questions, adding that "the above responses are directed at the situation where you cannot preclude the possibility that the person making the inquiry has interests hostile to Contributions Watch. I understand that if you receive an inquiry from an unequivocal supporter, you may choose to provide more detailed responses."
If asked about any ties between SAC and Contributions Watch, the script called for Miller to downplay the relationship by saying, "I worked for the Federal Elections Commission ... and then worked for a time at the SAC as a research wonk. Back last year, I approached the SAC with the idea of spinning me off as a non-profit organization. I'm happy to say that CW is now an independent organization with our own offices and own board of directors."
What Warren Miller was not supposed to mention was the fact that he was paid with Philip Morris money from SAC and was filing weekly "CW activities reports" to SAC partner David McCloud, his de facto boss.
"Contributions Watch was also claiming it had its own office," Wheeler says. "That was an outright lie. Contributions Watch was operated entirely out of the State Affairs offices in Reston. Contributions Watch had an 'official' office in another nearby town, but it was only staffed by a rent-a-secretary who forwarded phone calls to State Affairs."
In the summer of 1996, Contributions Watch rolled out a report titled "Best and Worst Campaign Disclosure Agencies," which evaluated how each state government handled campaign funding disclosure. In his June 17 report to McCloud, Miller wrote that the report "has been an unqualified success. It was carried on AP, The Hotline and at least twenty state newspapers. The Miami Herald editorialized on it Sunday. I am scheduled to give an interview with National Public Radio today."
The "Best and Worst" report was a major PR coup because it established Contributions Watch in the minds of many political reporters as a legitimate "non-profit citizen advocacy group" with no hidden agenda. "We continue to receive calls regarding [the study]," Miller stated in his June 24 report to McCloud, which also noted that he was feeding information to Wall Street Journal writer Glenn Simpson for an upcoming piece. "Please let me know if you need an invoice which details the hours spent on behalf of the Wall Street Journal article," Miller wrote.
The Wall Street Journal story ran on July 16. It described CW's second report, titled "Off the Radar Screen," as "the most comprehensive examination of trial-lawyer giving to date." As hoped, Simpson made no mention of Philip Morris or SAC, noting simply that the study was "funded by industry backers of tort reform."
Another reporter, Carolyn Lochhead of the San Francisco Chronicle, proved even more pliant. Miller spent all summer spoonfeeding her material for a cover story that appeared in the September 23 issue of Bill Kristol's far-right The Weekly Standard. Lochhead proved to be such an "unequivocal supporter" that the State Affairs Company worked with her directly, yet her article never mentioned SAC's role in feeding her the story, or the tobacco money behind the whole SAC/CW operation.
"The report made the ridiculous claim that Contributions Watch seeks to publicize cases 'when a single special interest gives an enormous amount of money while remaining largely invisible,'" Wheeler recalled. "When I read that line, I laughed so hard my stomach hurt. Of course, it didn't mention the fact that the study itself was entirely and invisibly funded by Philip Morris. I suppose the Orwellian irony was completely lost on them."
On August 9, SAC's John Davis drafted a memo outlining the achievements to date of Contributions Watch. The memo was sent to two other Philip Morris PR firms, along with one of its attorneys and the head of the Philip Morris Corporate Communications office in New York. Four days later, Neal Cohen of the APCO & Associates PR firm responded with a memo outlining a strategy for further packaging and releasing the data to the news media.
"In considering uses of the current Contribution Watch data," Cohen wrote, "our primary goals have been to do the following: Get the data out in the public domain quickly and with credibility prior to the elections. Utilize existing entities to ensure that the data has 'legs' beyond its initial release. Influence the debate about and understanding of the trial bar's role in the political process."
To achieve these goals, Cohen recommended "that CW release a state-by-state abstract of its information, either through a press release or through a press conference after Labor Day. CW should provide the information with minimum of interpretation or commentary." In addition, he recommended using the American Tort Reform Association (ATRA), a separate PR front group run by APCO, to put the Contributions Watch information on the internet. Cohen recommended a "roll-out of CW information by state." In Alabama, for example, Contribution Watch would hold a press conference with Alabama Voters Against Lawsuit Abuse, a local ATRA affiliate, thus "providing for a second-day story. . . . In-state follow up by local activists including: letters to the editor; opinion columns; distribution of materials to key elected officials."
SAC agreed in general with Cohen's strategy, but worried that coordinating its activities publicly with tort reform groups would undermine its facade of independence. Miller expressed similar concerns in his August 15th activities report to McCloud. "CW is at a critical point right now," he wrote. "With the success of our 'Best and Worst' study we have begun to establish ourselves in this field. . . . However, when the trial lawyer stories currently in the pipeline are released, CW will become extremely vulnerable to attacks that we are nothing more than an arm of the tort-reform industry."
As Miller and McCloud well knew, of course, Contributions Watch was an arm of the tort-reform industry, its work almost completely bankrolled by Philip Morris. On September 13 David McCloud sent Keith Teel at the Philip Morris law firm of Covington & Burling "our two most recent studies as well as our invoice number 231 covering services conducted on behalf of Covington & Burling for the period August 1, 1996, through August 31, 1996." The one-month bill totaled $65,547.86.
In Texas, meanwhile, one of the reasons for these expenditures was getting ready to go to trial. On September 19, 1996, the widow of the original Marlboro Man filed a lawsuit in Texas charging that her husband died from using the product that made him a household word.
Actor David McLean had been hired in the early 1960s to portray the "Marlboro Man" in television and print ads. He was obligated to smoke Marlboros as he posed for television and print ads, smoking up to five packs per take in order to get the right look. Afterwards, Philip Morris continued to send him gift boxes of cigarettes. In 1985, McLean developed emphysema, followed by lung cancer in 1993. Following unsuccessful attempts at chemotherapy and other treatments, he died on October 12, 1995, making him in fact the second Marlboro Man to die of lung cancer. Another actor, Wayne McLaren, had preceded him in death three years earlier.
"Even the 'Marlboro Man' was not immune from the effects of cigarette smoking," said Don Howarth of the Howarth & Smith law firm, which was representing McLean's widow in the lawsuit against Philip Morris. "Mr. McLean's widow and son hope by this action to strike a blow for the countless others whose lives have been ravaged through the tobacco industry's aggressive campaign of fraud and deceit."
As of 1996, no one who sued the tobacco industry for destroying their health had ever succeeded in collecting a dollar in damages. Philip Morris was seeing annual profits of $100 billion, and during the second quarter of 1996, profits were up 18% over the previous year, a financial "blockbuster" according to CEO Geoffrey Bible. But the buzzards were circling. The trial lawyers had formed an alliance with state governments to push forward a coordinated, better-funded legal action than the industry had faced previously. An internal SAC document noted that tobacco companies "have faced an explosion of litigation from 1993 to 1994. 'Tobacco makers spent $600 million on legal fees in 1990, and the annual figure has climbed since then.' . . . As a barrage of class action lawsuits hit cigarette manufacturers, . . . PM's strategy is to challenge all efforts to regulate smoking through the courts."
In order to maintain its profitability in this hostile environment, Philip Morris was spending staggering sums on lobbying and public relations. According to an SAC report from 1995, PM "contributed $50 million to tax-exempt organizations through the nation during 1992 and is the largest contributor to the arts. . . . PM also sponsored the 54th annual Convention of the National Newspapers Publishers Association" and "helps fund The American Civil Liberties Union-they gave $100,000 in 1991 and 1992."
Among groups that reported political lobbying in the first half of 1996, Philip Morris led the pack at $11.3 million, almost six times the amount reported by the Association of Trial Lawyers of America. Consumer organizations and membership-funded citizen groups spent almost nothing by comparison. With the exception of the right-wing Christian Coalition, which spent $5.9 million, virtually every big-spending lobbyist represented a corporation or wealthy financial interest-the American Medical Association, the U.S. Chamber of Commerce, General Motors, General Electric, the Chemical Manufacturers' Association and AT&T. By comparison, the nation's largest membership organization, the American Association of Retired Persons, spent only $3 million.
"An interesting insight into Philip Morris's efforts comes from Victor Crawford," observed one internal SAC report. Crawford was a former lobbyist for the Tobacco Institute who, after developing lung cancer, had turned on his former employers with a vengeance. The SAC report quoted him as saying, "If you ever want to see a bunch of cowboys work, watch Philip Morris. They are tough. I mean they shoot from the hip. ... It's a take-no-prisoners fight. You're talking about $100 billion a year in gross profits . . . And man, anything goes." In California alone, the SAC report noted with no apparent sense of shame or embarrassment, Philip Morris had spent about $16 million in an effort to pass Proposition 188, a pro-tobacco initiative disguised as a smoking restrictions law. About a million of that had been channeled through the National Smokers Alliance, a phony "grassroots" front group set up by by the Burson-Marsteller PR firm with an initial contribution of $7 million from Philip Morris.
In addition to tobacco, Philip Morris was a major player in the food industry. Its agenda therefore included not just fighting against tobacco lawsuits, but also defending its agribusiness assets from attacks on its other products. PM subsidiary Kraft, for example, manufactured cheese using cows injected with genetically-engineered recombinant bovine growth hormone. Oscar Mayer, another PM division, was sensitive to nutritional criticisms of its fatty meats. These interests explain why the State Affairs Company was targeting Consumers Union, the Center for Science in the Public Interest, and Ralph Nader.
"I began to make copies of all the documents I could get my hands on," Wheeler recalls. "I also came across documents and plans to go after public interest groups, consumer groups, health advocates and environmental groups. Apparently, they had some big plans for the future."
As the State Affairs Company broadened its interests beyond tobacco, it saw an opportunity to extend its client list beyond Philip Morris. Its plan was to offer Contributions Watch as a "public interest" front group that other companies could also use at will to attack citizen groups. SAC actively courted new clients, offering access to CW's mountains of data on consumer organizations in exchange for a yearly "subscription" fee of $10,000. A "target subscription list" identified the companies and trade associations that SAC viewed as potential clients: Monsanto, Texaco, WR Grace, Exxon, General Motors, Ford Motor Company, Proctor & Gamble, BlueCross/BlueShield of New Jersey, Shell Oil, Mobil Oil, the Chemical Manufacturers Association, the US Chamber of Commerce.
On September 13, for example, SAC's Chuck Francis wrote to Susan Scholle Connor, the General Counsel of BlueCross/BlueShield insurance of New Jersey. Blue Cross affiliates in many states were in the process of converting themselves from "nonprofit" to "for-profit" companies, and Consumers Union was fighting their profiteering attempt to transfer millions of dollars that they had received as nonprofits into the coffers of the new for-profit entities. In his letter, Francis offered the services that SAC and Contributions Watch could offer in the battle against Consumers Union and other public interest groups: "Aggressively monitor the activities of consumer advocacy groups; . . . review public filings of such groups in New Jersey . . . to determine linkages, organization, sources of funding etc.; collect . . . copies of materials distributed by these groups; . . . monitor grassroots organizing sessions and follow their activities; . . . We are prepared to do the above program for a minimum charge of $10,000 per month."
On August 21, Francis wrote to Mark Brooks, attorney for the Honda corporation, which manufactures vehicles that Consumer Reports had criticized as dangerously unstable. "For the past several weeks we have been working closely with The Wall Street Journal on the major story we discussed," Francis wrote. "We have extensive research on Consumers Union. I think it would be extremely valuable for us to coordinate our efforts. . . . I hope we may meet or talk as soon as possible about the possibility of State Affairs Company becoming a part of your team on this project."
Francis used the Wall Street Journal article again in an August 27 pitch to Duncan MacDonald, General Counsel for Citicorp Credit Card Division. Francis even invoked the name of Oklahoma City bomber Timothy McVeigh as he bragged outrageously about the upcoming media blast that SAC had secretly conspired to detonate: "PS: . . . You will enjoy a major column targeting Consumers Union to appear soon on the Wall Street Journal editorial page. Quoting Tim McVeigh, 'something big is going to happen.' "
The big bang occurred on September 19 when Wall Street Journal deputy features editor Max Boot aired a long attack on Consumers Union titled "Guardian of the Lawyers' Honey Pot." The article reads like it was written by Chuck Francis, and internal documents including the SAC bill to Philip Morris indicate it may as well have been. In preparation for the article, Boot had visited the officers of Consumer Reports and interviewed the staff of Consumers Union, who noticed that his line of questioning had seemed scripted.
Ironically, while Boot was preparing his attack on the integrity of Consumers Union, the Columbia Journalism Review ran a cover story by Trudy Lieberman, the senior investigative editor at Consumer Reports. She specifically mentioned Max Boot, and wrote that "Unlike the [Wall Street Journal's] meticulously researched in-depth news column . . . the editorial page rarely offers balance, is often unfair, and is riddled with . . . distortion and outright falsehoods of every kin and stripe."
Wall Street Journal editor Robert L. Bartley responded to Lieberman's piece by simply repeating the Philip Morris/SAC party line: "The editors of the Columbia Journalism Review ... haven't noticed that the consumer movement ... [is] among other things a handmaiden to the tort liability bar."
"By this time, I had decided that Contributions Watch needed a little help with the issue of 'full disclosure,'" recalls Tom Wheeler. "It was the kind of help that I was only too happy to provide. The information I had been collecting told a very interesting story-too interesting to just keep to myself. The evidence regarding the Contributions Watch deception and cover-up of its real intent was simply devastating. Why let them get away with this?"
A few years previously, Wheeler had been fascinated with a book titled Sabotage in the American Workplace, a collection of anecdotes about actions taken by disgruntled workers against their employers. The book defined sabotage in broad terms to encompass acts as mundane as using the phone for personal calls, stealing supplies, taking long lunches, or using the office copier for personal use. In his toils as a temp worker, Wheeler had seen this sort of sabotage occurring everywhere. Now he was about to take things a step further, becoming the ultimate saboteur: a company whistleblower.
It wasn't a step to be taken lightly, however, as Wheeler realized when he learned more about the owners of the State Affairs Company. Two of them, David McCloud and Robert L. "Bobby" Watson, had previously served as aides to former governor and current senator Chuck Robb of Virginia. McCloud was a big chubby guy with thinning gray hair and a rather aloof personality compared to Watson, a short, jovial type with red hair and a beard who loved to crack jokes and do impressions around the office. Wheeler had never seen anything threatening in their demeanor, but as he researched their backgrounds over the internet he realized that he had seen their names before, as part of an ongoing scandal involving Robb that had been front page news for months in the Virginia press.
"What amazed me was that I had been aware of all the hoopla surrounding the Robb scandal at the time it happened," Wheeler recalled, "but I never realized I was working for a couple of the prime players in the fiasco until I began looking into their backgrounds in August of 1996, about eight months into my Contributions Watch assignment. Boy, was I surprised to learn that all this time I had been working next to a couple of actual convicted criminals. Ah, the joys of temping!"
A handsome ex-marine with a clean-cut image, conservative Democrat views and a reputation as a political reformer, Robb was considered a potential candidate someday for the U.S. presidency until his party-hearty personal life began to surface. Stories began circulating about his weekends at Virginia Beach, where numerous witnesses had seen him carousing at wild parties attended by drug dealers, cocaine users, prostitutes and businessmen with organized crime connections. Worse yet, from the point of view of his staff, the Republicans had gotten wind of his activities and hired Billy Franklin, a private investigator, to dig up dirt. Bobby Watson had gone out himself to check out the stories and brought back leads indicating that Robb had attended more than 100 parties and engaged in sex with at least a dozen women, including underage girls, hookers and married women. One woman was a former Miss Virginia and was threatening to blow the story sky-high.
Robb's staff fought off the stories at first with countercharges against Republicans. In a final effort at damage control, McCloud and Watson attempted to argue that the stories were being engineered by Doug Wilder, Robb's main rival in the Virginia Democratic Party. In a move that would quickly backfire, they attempted to prove their point by releasing a transcript of a cellular phone conversation in which Wilder joked about Robb's political troubles. This raised an obvious question: How did Robb's team happen to possess an illegal tape recording of Wilder's phone call?
In fact, Robb's staff had committed several acts of questionable legality against people who stood in the way of their boss. On one occasion, which was tape-recorded, McCloud threatened to have the IRS harass Billy Franklin if he continued his investigations into Robb's affairs. A separate investigation revealed that the Robb for Senate Committee had secretly purchased Franklin's private phone records for $2,375, disguising the transaction by billing it as a "legal fee" for "research services." Tai Collins, the former Miss Virginia, said she had received several death threats designed to keep her from going public with her stories about Robb. As the scandal unraveled, McCloud and Watson found themselves facing serious criminal charges for their role in the coverup, which they avoided by copping guilty pleas to lesser charges. Robb himself narrowly escaped a grand jury indictment thanks to political string-pulling by the Bush administration and a well-connected attorney at Covington & Burling, the same law firm that would later help McCloud and Philip Morris set up "Contributions Watch."
As Tom Wheeler went about copying embarrassing internal documents at State Affairs, it was reasonable to wonder how his employers would react if they caught him in the act. Were they actually capable of physical violence? On a more mundane level, he was using his girlfriend's computer to assemble the spreadsheets, and SAC had arranged to rent it temporarily during the duration of his employment. If things turned vicious, how would he get the computer back?
By mid-September, Wheeler had amassed hundreds of pages of internal company documents-a stack that stood several inches thick. He took them to Kinko's, ran off two copies, and stuck them in the mail. One copy went to Ken Silverstein, the editor of Counterpunch, a radical muckraking newsletter that specializes in exposing corruption in Washington. The other copy came to our office in Madison, Wisconsin, where we edit a publication called PR Watch. From that moment on, of course, "Tom Trouble's" future with the State Affairs Company was destined to be quite limited.
By coincidence, reporter Ruth Marcus of the Washington Post had also recently become interested in finding out more about Contributions Watch. She had read Carolyn Lochhead's spoonfed piece in the Weekly Standard and wondered who was really behind the new organization. She called Warren Miller, who fended off her questions using the scripted answers prepared by legal advisor Henry Hart. She called Weekly Standard editor William Kristol to see if he knew who was funding Contributions Watch. Kristol replied that it was a "fair point" to ask who was funding its work, but added, "If it's accurate, I don't think it matters."
Knowingly or not, even Kristol's reply parroted one of the Hart's scripted responses. If asked about Contributions Watch's funding, the script advised answering, "Do you have some question about the accuracy of our numbers? That is the important thing. The numbers speak for themselves."
Frustrated in her attempts to get answers, Marcus placed a call to our office. PR Watch is one of the few available international information centers for journalists, citizens and academics investigating the hidden manipulations of the public relations industry. "What can you tell me about Contributions Watch?" she asked.
"You'd be surprised," John replied sweetly. By a pleasant coincidence, Wheeler's ream of documents had just arrived in the mail.
Serendipity is essential to discovery, and this was a rare gem of serendipity. Often when reporters call, we have to turn them away empty-handed, but this was a case where we had the goods hot in our hands. When whistleblowers like Tom Wheeler contact our office, we usually tell them up front that there isn't much chance of attracting major media interest in their story. With the Washington Post calling, however, the story was destined to become more than an obscure report in Counterpunch or PR Watch. Soon, ABC-TV's top investigative reporters would be calling as well.
Two weeks passed between the day that Ruth Marcus called our office and the day that the story broke in the Post. That much time was needed because Tom Wheeler was still under contract with the State Affairs Company. His girlfriend's computer remained in their office, and he wanted to make sure that he could get it back out. And the partners were starting to get nervous as they received inquiring phone calls from Ken Silverstein and Ruth Marcus.
"I remember when Ken Silverstein called, a few days before the story broke," Wheeler recalls. "The receptionist took a message and passed it on to the partners. David McCloud got pretty spooked. Later that afternoon, I overheard him warning folks that 'this guy is bad news.' He had one of the workers start researching CounterPunch on the internet. One of the things they dug up was a website that mentioned my old zine, Out of Bounds. It quoted Out of Bounds describing CounterPunch as 'the best political newsletter in the country.' Once they found that bit of information, I figured I was busted, but none of the partners in the firm knew that I was the editor of Out of Bounds. The only person who knew was Warren Miller. The morning after Silverstein called, Warren and the partners had a big meeting, and I found it very interesting that Warren never once brought up my Out of Bounds connection. In fact, he actually called me at home later that day to tell me a bit about the meeting and to mention the information he had seen about me on the internet. I'm surprised that it didn't raise huge red flags for him. I got the impression from our phone conversation that he was still pretty clueless as to what was transpiring. To this day, I still wonder why Warren never told the partners about the connection between Out of Bounds and CounterPunch. I don't think he fully realized what was going on until Ruth Marcus finally talked to all the partners on the Friday before the story broke, when she called to verify all the documents she had in her possession. I wonder if Warren even mentioned the Out of Bounds connection after the Ruth Marcus call. I wouldn't be surprised if the partners figured that I was the traitor in their midst before Warren ever fully realized what happened. And he was supposed to be the head of a 'political watchdog organization.' I would have loved to see their faces once they figured it out. I bet they don't hire temps anymore."
The fall of Contributions Watch was even more rapid than its ascent. A few months earlier, Warren Miller had arranged a meeting with Ellen Miller (no relation), who headed the Center for Responsive Politics, one of the most respected-and genuinely independent-sources for nonpartisan information about election funding and campaigns. The purpose of the meeting was to discuss ideas for ways the two groups might work together. Once she learned that Philip Morris was bankrolling Contributions Watch, she was aghast. "It's a shocking development to portray an organization as non-partisan, non-profit, and operating in the public interest while having a very specific private interest in mind," she said. "It's one of the most outrageous things you can do! I think this will shut them down. There is no legitimacy to this group. No one would believe anything they produced. It would have absolutely no validity. No one would believe their numbers."
In the days after the scandal broke, the partners at the State Affairs Company talked vaguely about taking legal action against Tom Wheeler for "stealing documents." Wheeler, who lacked money to afford an attorney, looked anxiously into the possibility of getting someone to represent him on a pro bono basis. In the end, however, the threat proved empty. A lawsuit would have dragged more documents into the public arena, and neither SAC nor its clients wanted to go that route.
Contributions Watch still exists as a research arm of the State Affairs Company, but it no longer enjoys the credibility that it once claimed. No one is touting its studies as "independent," and reporters no longer describe it as a "consumer watchdog group." A couple of months after the expose in the Washington Post, the State Affairs Company decided to voluntarily rescind the "non-profit" status of Contributions Watch, because they "would rather pay taxes than justify an exemption as a nonprofit organization." The internal documents made public by Tom Wheeler suggested that they may have been in violation of laws that govern nonprofits.
After a brief 15 minutes of fame, Wheeler's life is neither dramatically better nor worse for having been a whistleblower. He successfully retrieved his girlfriend's computer, went back to work for another temp agency, and occasionally feels a twinge of nostalgia when he walks past a copier machine.
Stauber and Rampton publish PR Watch, a quarterly newsletter of "Public Interest Reporting on the PR/Public Affairs Industry." Visit their website at: www.prwatch.org
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Updated: 5/16/2001