CancerScam: Diversion of Federal Cancer Funds to Politicsby James T. Bennett, Thomas DiLorenzo
For decades, the American Cancer Society (ACS) explicitly forbade acceptance or use of taxpayers' funds from government at any level. However, as public support for programs began to diminish and revenue growth leveled off, the ACS reversed this policy. It now actively seeks taxpayers' funds. In this sense it reflects a model of how America's major
For decades, the American Cancer Society (ACS) explicitly forbade acceptance or use of taxpayers' funds from government at any level. However, as public support for programs began to diminish and revenue growth leveled off, the ACS reversed this policy. It now actively seeks taxpayers' funds. In this sense it reflects a model of how America's major health charities are abandoning their traditional goodwill purposes and becoming political organizations. As donors become disenchanted, the charities view the taxpayer as an alternative, and far more reliable, source of funds and devote their political activity to raising taxes and earmarking the increased revenues for themselves. Health charities subsequently lose their independence as the distinction between government and private charities becomes blurred.
CancerScam investigates Project ASSIST, the joint undertaking between the American Cancer Society and the National Cancer Institute (NCI). CancerScam details the charities' collaborative efforts to divert millions of dollars in federal cancer fundsunder the guise of improving the public health through reducing smokingto build political coalitions. Bennett and DiLorenzo suggest that the antitobacco campaign is a smokescreen for raising taxes on tobacco and earmarking the increased revenues for the financial benefit of ACS and its allied charities. CancerScam reveals how concern about the AIDS lobby's success in obtaining scarce research funds motivated the NCI to build political coalitions at the grass-roots level which could lobby for federal funding of cancer research. Bennett and DiLorenzo believe that public support of the ACS will be undermined when its emphasis on politics becomes better known and its reputation erodes as it is perceived as little more than an extension of government, subject to bureaucratic regulation and loss of independence.
CancerScam is the follow-up to Bennett and DiLorenzo's Unhealthy Charities: Hazardous to Your Health and Wealth. It is a brave effort that brilliantly shows how government bureaucrats steal funds intended for the highest public purposes and use them for narrow political advancement. As such it will be of interest to those interested in public policy and political science, nonprofit executives, and policymakers.
- Transaction Publishers
- Publication date:
Read an Excerpt
CancerScam: Troubling Questions
"Every human being has his or her vices.... If government is to take cognizance of any of these vices, and punish them as crimes, then, to be consistent, it must take cognizance of all, and punish all impartially. The consequence would be, that everybody would be in prison for his or her vices."
--Lysander Spooner, Vices Are Not Crimes
"Dangers to a society may be mortal without being immediate. One such danger is the prevailing social vision of our time--and the dogmatism with which the ideas, assumptions, and attitudes behind that vision are held."
--Thomas Sowell, The Vision of the Anointed
In early December 1993 the Federal Trade Commission was considering whether to issue a complaint against R.J. Reynolds Tobacco Co. over its Joe Camel advertising campaign. As might be expected, antismoking activists in Washington were seeking ways to influence the governmental decision in their favor. Assistance in generating political pressure was provided by a specialized electronic bulletin board. One day that month bulletin-board operators posted a "morning briefing" alerting a network of activists around the country about the pending decision. The posting instructed activists to write the three FTC commissioners who had not yet voted on the matter to urge them "to take action against this campaign."
Hundreds of messages like this have been posted in recent years. Designed to disseminate information and instructions for antitobacco efforts, the bulletin board helps to coordinate political activity throughout the country, from federal agencies and Congress, down through the state and local governments. Written by professional lobbyists, its briefings cover the gamut of activist activity such as signing petitions, issuing news releases, holding press conferences, and writing state legislators, U.S. congressmen, newspaper editors, regulators, and Attorneys General and so on.
It may not be surprising to find activists using rather sophisticated forms of communication. But this electronic bulletin board is not a privately funded endeavor; it is a project of the National Cancer Institute (NCI), an arm of the federal government's National Institutes of Health.
The NCI's involvement in partisan politics does not stop at electronic communication. This book examines how the NCI has diverted over $100 million in recent years from cancer research to lobbying and political activities. It actually funds the training of political activists and the development in a number of states of grassroots advocacy coalitions, which then lobby for state legislative initiatives against smoking. Its partner in this diversion is the American Cancer Society (ACS), the nation's largest and best-known health research charity. With ample assistance from the other major health charities and smaller antismoking groups that stand to benefit from the funding, the NCI has managed to keep much of this activity hidden from taxpayers.
The questions raised by these activities go beyond smoking laws, however. As will become clear in later chapters, the government's chief purpose in these endeavors is to construct a tax-supported network of advocacy groups, which will be able to agitate for their causes long after the initial federal funding ends. In short, the federal government not only is attempting to influence political decisions at the state and local level, but is making sure such influence continues, all with taxpayer money--money Congress appropriated for cancer research.
The political use of cancer research funds presents problems on a number of levels. A basic problem involves the politicization of federal science. The most obvious issue in this regard is that federal funds going towards political campaigns undercut the credibility of the agency's scientific work. And allowing political pressures to influence scientific decisions is a recipe for mistaken, if not disastrous, policies.
Questions regarding "political science" certainly are not new to the federal government. Recent controversy over the quality of scientific work at the Environmental Protection Agency (EPA), to give one well-publicized example, reveals concern from within the agency itself that casts serious doubt on the quality of science EPA uses to justify its programs. An EPA-appointed expert panel noted in 1992 that many agency personnel perceived that EPA science was "adjusted to fit policy," and, indeed, that scientists played a minor role inside the agency, which tends to be dominated by lawyers and other nonscientists.
Clearly, regulatory policies based on faulty science can have an expensive and potentially dangerous impact on citizens. Consider, for instance, that the asbestos policy promoted by the EPA has cost Americans billions of dollars as they've been compelled to tear this insulation material from schools, public buildings, and their homes, only to learn later that the removal of this potential carcinogen actually increased health risks. It would have been better just to leave it alone. Similar policy backfires have been recorded for pesticide regulation, pollution controls, and radon.
As Joseph Martino persuasively argues in Science Funding: Politics and Porkbarrel, beginning in the early 1980s "Congress has extended porkbarrel politics to a new domain: science." Much of the scientific community has become upset over the politicization of science, for obvious reasons. Frank Press, president of the National Academy of Sciences, warned that if porkbarrel funding of science--using political favors rather than scientific merit to determine which projects get funded--continued, it would undermine "the evaluation and review system that has been responsible for the great strength of American science.... It is in the long-term interest of a strong American science to ... resist special-interest political favoritism."
The National Science Board determined that porkbarrel science had diverted science funding "from other scientific activities that had been selected on the basis of merit"; the director of MIT's Nuclear Reactor Laboratory has complained that other, similar laboratories had begun "using political clout to obtain large amounts of funding, contrary to the recommendations of well-qualified, peer-review panels"; and the National Association of State Universities and Land Grant Colleges, as well as the American Association of Universities, have protested porkbarrel science funding.
These were the initial reactions of university scientists and administrators to the politicization of science funding. But they will inevitably change their minds, for as Martino astutely observes: "No matter how strongly a university president believes in peer review and the allocation of research money on merit alone, he can't afford to be a saint while other universities are lined up at the federal trough. The board of trustees will replace him if he doesn't get a `fair share' of the loot."
The year 1985 was a watershed with regard to the politicization of health and disease research. That year legislation sponsored by Congressman Henry Waxman (D-Calif.) was passed (over a presidential veto) that gave Congress explicit controls over science funding by the National Institutes of Health (which includes the NCI). "Waxman's bill had the support of a large number of specialized private health organizations, including the American Cancer Society" and "the American Lung Association." Once this politicization of NIH funding was begun, it began to snowball as myriad special interest groups began lobbying for specially funded "institutes" and programs to fund their own pet programs, leading some critics to label the NIH funding process as the "disease-of-the-month club." There is now even an Institute of Obesity and Weight Management, introduced in 1988 because of the political clout of the Congressional Black Caucus. Comedian Dick Gregory is influential with the Caucus and obesity is his cause celebre.
Perhaps the most notorious example of the politicization of NCI is the "cancer scare" of the 1970s, as described by the investigative journalist Edith Efron in her 1984 book, The Apocalyptics. Efron documented widespread media coverage of an alleged "cancer epidemic," but when she interviewed the nation's top cancer researchers she found that there was no epidemic at all; in fact, after adjusting for age and smoking--the two biggest risk factors associated with cancer--she found that cancer rates had in fact been declining for years.
The phony cancer epidemic, Efron concluded, was the result of an ideological campaign devoted to blaming cancer on capitalism. "Some of these ideologues held high positions in government agencies such as the National Cancer Institute" and "the claims of a cancer epidemic allegedly caused by industry were simply part of an ideological crusade funded with public money." Interestingly, Efron sent her manuscript to twenty of the world's generally acknowledged experts in cancer research for review. While they all agreed that there was not a cancer "epidemic," only four of them agreed to let their names be used in connection with it, so fearful were they of antagonizing the "cancer establishment" at NCI, the ACS, and elsewhere, which controls the cancer research funding purse strings.
The NCI has no direct regulatory function. Nevertheless, its research and policy pronouncements influence other agencies at the federal and state level as well as the public at large.
A more insidious and alarming problem with NCI's political activity concerns issues of accountability. Who is responsible for such spending decisions? And how are these people held accountable by the taxpayer? As will be seen upon closer examination, funds have been diverted towards political activity in a manner that makes it difficult to pinpoint the responsible parties. Taken to a broader level, how are taxpayers--and their representatives in Congress--to trust the actions of government agencies when such activity takes place? Obviously, a government unaccountable to its citizens has implications that go well beyond concerns that someone may be deprived of the choice to smoke.
Finally, these activities raise important questions concerning the propriety and legality of tax-funded politics--the use of tax revenues by special interest groups to promote one side of a political issue. Such misappropriation of tax dollars has long been recognized as inappropriate. Doing so essentially forces taxpayers to contribute to political causes with which they disagree--a fundamental offense against individual liberty (and constitutional principles). And it degrades democracy, for it is an attempt by government to manipulate and manufacture the will of the people.
Congress has repeatedly prohibited the use of federal funds for political activities and has made it a criminal offense for federal officials to spend appropriated funds to encourage grass-roots lobbying: "No part of the money appropriated by any enactment of Congress shall, in the absence of express authorization by Congress, be used directly or indirectly to pay for any personal service, advertisement, telegram, telephone, letter, printed or written matter, or other device, intended or designed to influence in any manner a member of Congress, to favor or oppose, by vote or otherwise, any legislation or appropriation by Congress, whether before or after the introduction of any bill or resolution proposing such legislation or appropriation."
In addition, many appropriation bills typically contain riders that also ban the use of tax dollars for partisan politics. The U.S. Supreme Court has ruled that a person cannot be required "to contribute to the support of an ideological cause he may oppose." Despite such legal prohibitions, tax-funded politics, as we shall see, runs rampant at NCI.
Beyond the illegality and impropriety of tax-funded politics lies a more fundamental constitutional issue with regard to the role of government in society. Tax-funding of partisan politics--for whatever cause--erodes our system of government, as is evident from some of the comments made by James Madison in The Federalist Papers, the philosophical justification for the U.S. Constitution.
As Madison wrote in Federalist no. 10, the purpose of the Constitution was to constrain special interest politics, or what he called "the violence of faction." "Among the numerous advantages promised by a well-constructed union," he wrote, "none deserves to be more accurately developed than its tendency to break and control the violence of faction." Governments throughout history that failed to do this introduced "instability, injustice and confusion into public life" which are "the mortal diseases under which popular governments have everywhere perished." Indeed, the very reason for composing The Federalist Papers, in Madison's mind, was "to secure the public good and private rights against the danger of ... faction." This, said Madison, "is then the great object to which our inquires are directed."
Tax-funded politics by the NCI--or any other government agency--is part of an ongoing process in which our government has not only failed to restrain "the violence of faction," but actively subsidizes it with taxpayers' dollars. Because government cannot finance every special interest group on all sides of every issue, it must necessarily choose sides (usually the side that increases the size, scope, and power of government). In doing so it is encouraging the increasing distrust of government and, as Madison explained, "a widespread sense of injustice."
Whenever government enters a political debate on one side it has the power and resources to drown out all opposing voices. Government funding of "information" may sound innocuous but, as we discuss in later chapters, it can also have the insidious effect of stifling legitimate political debate. Tax-funded politics is a poison injected into the very heart of Constitutional government.
This is also a study of bureaucratic empire building of the sort described in the literature on public choice theory. That theory--for which James M. Buchanan was awarded the Nobel Prize in Economics in 1986--employs methodological individualism in its analysis of governmental and other "nonmarket" institutions. All individuals are said to act in their own best interest, as they see it. Politicians, bureaucrats, voters, and special-interest groups are all modeled as self-interested actors and their behavior will only be in "the public interest" as a matter of coincidence. Virtually all politics is special-interest politics, according to public choice theory. This body of thought is very similar to the thinking of the founding fathers, especially Madison and Jefferson. James Buchanan himself has often said that public choice theory is nothing more than the ideas of the founders expressed in the language of contemporary economic theory and methodology.
Public choice theory holds that since all people behave in their own self-interest, differences in behavior of decision makers in the private and public sectors is primarily determined by the different kinds of incentives they face in their respective roles. Thus, "bad" governmental decisions are not necessarily the result of their being made by "bad" people; they are more likely than not just responding to a rather perverse set of incentives. For example, virtually every government agency goes on a spending binge at the end of every fiscal year. The spending may not be necessary to achieve the agency's objectives, but it nevertheless takes place because, if it didn't, the agency head knows that he or she will have a more difficult time procuring the same budget (or a larger one) next year. And the agency head's motives may be purely public spirited: he or she may sincerely want to promote "the public interest" as he or she sees it, and it takes money to do that. One important implication of this kind of analysis is that simply replacing one set of political decision makers with another may not make much of a difference unless the underlying incentive structure is improved.
The economic theory of bureaucracy--as developed by public choice economists--holds that since government bureaucrats cannot always use their positions to enrich themselves directly, they will seek to enhance their positions by other, more indirect means such as accumulating power, budgetary resources, perquisites, and staff. They are inclined to enhance their own power, perquisites, and budgets, which is not necessarily socially optimal. This study is, among other things, a study of bureaucratic incentives with regard to federal cancer funding and their social implications. Giving millions of taxpayers' dollars to "nonprofit" organizations which use the money to engage in lobbying campaigns is a way in which NCI bureaucrats can expand their "mission" and their budgets. In this case the lobbying is not done directly by NCI--that would seem too self-serving and it is illegal. Instead, it is done by nonprofit organizations like the American Cancer Society, American Lung Association, and American Heart Association--organizations which most Americans apparently believe (incorrectly) are not political but charitable organizations.
These troubling issues also reflect on the credibility and accountability of the independent groups--the American Cancer Society and other major charitable organizations--assisting in the diversion of funds to political activities. Indeed, readers concerned about their charitable donations may find little solace in the complicitous activities described below. Not only are charitable groups receiving federal funds to help orchestrate political campaigns, they are positioning themselves to benefit from state-level tax funding in the future. When independent charitable organizations begin to depend on tax dollars for funding, their claim to independence becomes questionable, as do claims that the public's charitable contributions are going towards charitable programs.
The politicization of charity has important implications for society in general. Traditionally, the main rationale given for tax-exempt, nonprofit organizations is that they can provide certain types of goods or services that are either not provided at all or are not provided in adequate supply by for-profit businesses, and are also not the appropriate domain for governmental activity. This is why the nonprofit sector is often referred to as the "Third Sector"--in addition to the for-profit and governmental sectors.
The politicization of charity will fundamentally transform the very nature of charity, and this transformation may well be for the worse. For example, fifty years ago the type of nonprofit organization that likely came to the minds of most Americans when the subject was raised was an entity like the American Red Cross. But today, because of the massive politicization (and taxpayer funding) of the nonprofit sector, the "typical" nonprofit organization is more like the Sierra Club or the Children's Defense Fund, which are primarily political pressure groups that lobby to expand government's role in environmental regulation and welfare spending, respectively. Corporations and unions have also established nonprofit trade associations that are almost exclusively devoted to lobbying.
Because more than half of all the funding of American nonprofit organizations reportedly comes from government, we have witnessed a massive politicization of charity with many organizations that used to be devoted to genuinely charitable works becoming essentially appendages of the government and paid promoters of an expanded welfare state and regulatory bureaucracy. Indeed, the federal government is responsible for helping create (and fund) thousands of nonprofit organizations that have for decades been the vehicles for administering welfare state programs (the federal government does very little itself with regard to the actual administration of these programs). According to political scientist Jack L. Walker, Jr., "the American national government is an important sponsor of many interest groups .... Its overall impact on the [interest] group system, through tax incentives, contracts, and grants, is enormous."
The implications of this change in focus on the part of America's nonprofit organizations can be profound. Namely, now that welfare state programs are universally declared--by members of both major political parties, among others--as having largely failed, we are left with a large collection of nonprofit organizations that have for years served as tax-funded advocates for that failed system. The system may have failed to alleviate poverty and many other social ills, but it has always succeeded in providing jobs and incomes to the army of nonprofit sector employees who administer the government's programs.
Now that the system has failed the society is left without as many genuinely charitable organizations as it might have had that could have "picked up the slack" with regard to myriad social problems. Also, the hundreds of tax-funded nonprofit organizations provide powerful political opposition to reform proposals that would fundamentally alter the status quo from which they have benefited financially for so many years. A key example of this phenomenon would be the (literally) thousands of nonprofit organizations that participated in a "march on Washington" in 1996, organized by the Children's Defense Fund, to protest the fact that the Republican Congress and a Democratic president had agreed on a welfare reform bill that did not simply increase the amount of money spent on welfare--the main objective of the marchers.
As is also discussed in this book, the diversion of federal cancer dollars for political advocacy is an example of governmental subsidization of what public choice theorists call "rent seeking." So-called rent seeking (one of the clumsiest phrases in all of economics) has to do with the use of resources (time, effort, money) to lobby the government for income transfers through direct appropriations or through some changes in laws or regulations that will indirectly benefit the rent seekers. Corporations and unions lobbying for protectionism are a good example, the end result of which is a redistribution of income from consumers to the owners, managers, and workers of the industries involved in successful rent seeking. The "winners" in the game of rent seeking are not necessarily socially meritorious--they just happen to have been politically effective.
The reason that economists are concerned with the general phenomenon of an expansion of rent-seeking behavior is that such behavior entails a substantial "opportunity cost." Namely, the more time, effort, and money that is devoted to attempts to redistribute income through the aegis of the state, then by definition, the less time, effort, and money is spent on more productive activities such as expanding the output of goods and services produced (and incomes earned) or improving the quality of goods and services produced. As society becomes more and more politicized, rent seeking becomes more pervasive at the expense of a more slowly growing private sector economy.
The diversion of federal cancer funds to politics is an especially egregious example of rent seeking because it is government-subsidized rent seeking. Special interest groups are paid by the government to lobby and proselytize on behalf of policies that will benefit them personally as well as the funding agency itself (which may benefit in the form of an expanded budget and power). It is one thing to lobby for government subsidies on one's own nickel, but as Thomas Jefferson once said, it is "sinful and tyrannical" to do it with someone else's (i.e., the taxpayers') money.
Can Politics "Cure" Disease?
The activities explored in the following chapters stem not from some rogue factions within these various organizations, but are the result of a broader mindset prevailing within the public health establishment, which includes the federal health agencies, as well as the major charitable organizations and organized medicine. This establishment has undergone a political transformation in the past thirty years that has essentially cleared the way for increased governmental intervention into our daily lives.
Until about the mid 1960s, "public health" professionals tended to be concerned with such issues as controlling infectious diseases, assuring safe drinking water and sanitary living conditions, and abating public nuisances. But when Medicare and Medicaid socialized large segments of the health care industry, the focus changed to controlling personal habits, ostensibly because risky or unhealthy behavior could affect the public treasury. Smoking, drinking, overeating, and lack of exercise were no longer viewed as mere personal habits, but as unacceptable social behavior. Diseases linked to these behaviors caused "fiscal externalities"--they caused others to pay higher taxes for Medicare and Medicaid--and therefore should be officially discouraged, or so the new reasoning went.
Government intervention in health care once meant keeping statistics, requiring vaccinations and imposing quarantines, inspecting restaurants, and so on. But today it means something fundamentally different; it means raising taxes on liquor and tobacco, restricting cigarette and alcohol advertising, banning smoking in the workplace, or forcing people to use seat belts in their cars and to wear helmets while riding their bicycles. Traditionally, public health intervention aimed at protecting people from external threats; now the goal is to protect individuals from themselves by forcing them into politically correct patterns of behavior.
Controlling disease by controlling behavior associated with it--smoking, drinking, or being a couch potato, for example--might at first seem reasonable and desirable. But as journalist Jacob Sullum has observed: "treating behavior as if it were a communicable disease is problematic. First of all, behavior cannot be transmitted to other people against their will. Second, people do not choose to be sick, but they choose to engage in risky behavior. The choice implies that the behavior, unlike a viral or bacterial infection, has value. It also implies that attempts to control the behavior will be resisted." Witness the history of alcohol prohibition in the 1920s and today's failed war on drugs.
Keeping Proper Focus
This last, somewhat philosophical discussion will serve as a helpful backdrop to the activities we will examine. Although presenting the evidence for the diversion of funds is relatively straightforward, explaining how this came about is rather complicated. A threshold difficulty is not only that we are dealing with organizations with good public images, but that the political initiatives examined mostly involve smoking. The prevailing point of view is that those advocating the prohibition of smoking are on the side of the angels.
It is precisely this high moral posture, however, that makes the antismoking initiatives so threatening to both individual liberty and sound public policy; it leads to an "ends justifies the means" mindset that, as we shall see, is destroying the credibility and the accountability of the federal government and its private accomplices in these endeavors. Along these lines, our focus will be plain: charitable donations may not be going where donors think they are going. And, more important to the point of our inquiry, your tax dollars are not going where you think they are going either.
The chapters that follow can be grouped roughly into three sections. The first, comprising chapters 2 and 3, examines how political pressures have increasingly shaped public health spending, to a degree that policies are being driven less by science and more by political initiatives. Chapter 2, for example, shows how the "Big Three" health charities--the American Cancer Society, American Lung Association, and American Heart Association--attracted to the financial benefits of this new political atmosphere, have evolved more and more into political organizations. Skirting, if not crossing, traditional legal boundaries, the charities have been increasing their political advocacy and appealing to the mindset driving federal health spending. The political imperatives of this mindset have essentially blurred the line between the independent work of the charities and that of the government. It is in this context that the charities, under the guise of public health, have become enmeshed in antitobacco political initiatives.
Chapter 3 discusses the political mindset of the antitobacco crusade evident in federal antismoking initiatives. More specifically, it examines the faulty and controversial assumptions that reflect the underlying political biases of these programs. Participation in such programs not only enhances the health charities' roles in the antitobacco movement, it also promises significant amounts of federal funding. In return, federal health authorities have ready access to trusted private organizations that can provide the public face for what ultimately are government programs.
This symbiotic relationship is a central element of the tax-funded political activities introduced and discussed in chapters 4, 5, and 6, forming roughly the second section of our inquiry. Here we basically lay out the political mechanisms behind the diversion of tax funds to politics. Chapter 4 is a case study of how hundreds of millions of tax dollars were captured by the charities and antitobacco activists who helped enact a new tobacco tax in California in 1988. This established the prototype for how activists can raise and then gain control of tax dollars, ostensibly to be spent on public health education. As the California experience reveals, once the tax was passed, revenues were earmarked for political activism--coalition building, lobbying, advertising, and grassroots organizing. The new tax also created a gigantic political pork barrel for the activists, who were able to spend taxpayers' dollars on a variety of highl
Meet the Author
James T. Bennett is professor of economics at George Mason University and a prolific author. In addition to numerous articles in academic journals, he has authored many books, eleven of which have been published by Transaction, including Subsidizing Culture, Mandate Madness, and Corporate Welfare.
Thomas J. DiLorenzo is professor of economics at the Sellinger School of Business and Management at Loyola College in Baltimore. He has co-authored many books and is widely published in academic journals as well as the popular press, including the Wall Street Journal and USA Today.
Most Helpful Customer Reviews
See all customer reviews