Tobacco Companies Adjusting Strategies to Remain Prominent Political Players

Health advocacy groups have toiled during the last decade to force the tobacco industry to quit politics. And they’ve gotten close — close, but no cigar.

After weathering legal wranglings and widespread health concerns, tobacco companies have attempted to transform their image in the eyes of Americans. Once seen as corporate giants who could use their money for political favors, the biggest tobacco companies now often approach politics more discreetly.

Campaign contributions, which once totaled more than $10 million in a single election cycle, added up to a mere $3.2 million during the 2010 election cycle. And federal-level lobbying expenditures in 2010 represented less than a quarter of what they were a dozen years before, in 1998, the Center for Responsive Politics’ research indicates.

The industry, which includes employees and political action committees associated with tobacco companies, has taken to channeling money through harder-to-track organizations connected to candidates. These include leadership PACs, which members of Congress may sponsor, and 527 groups, which are barred from donating to candidates but may campaign and advertise on their behalf.

As contributions to candidates and committees declined by more than $6 million between the 2002 and 2010 election cycles, contributions to leadership PACs remained fairly consistent, totaling more than $600,000 each year, the Center’s research indicates. During the 2010 cycle, the industry gave more than $740,000 to leadership PACs — nearly a quarter of the amount it gave to all candidates and committees. 

The industry has also been generous to 527 committees. During the 2010 election cycle, the tobacco industry gave about $5.4 million to such organizations, according to the Center’s research, while its contribution to candidates and other political committees totaled $3.2 million.

And in the wake of last year’s Citizens United v. Federal Elections Commission ruling, which made it legal for corporations to make unlimited independent expenditures to support or oppose political candidates, critics of the industry believe it will become even harder to track the tobacco companies’ political involvement.

Tobacco companies, like corporations in general, may now contribute unlimited amounts of money to non-profit organizations that in turn may advertise for or against political candidates without revealing their source donors.

“One thing the tobacco industry has done is stay out of the public view and disguise its efforts in politics,” Stanton Glantz, professor of medicine at the University of California-San Francisco and director of the Center for Tobacco Research and Control told OpenSecrets Blog. “With the rise of this undisclosed money, it is hard to know what they’re doing.”

Danny McGoldrick, vice president of research for the Campaign for Tobacco-Free Kids, told OpenSecrets Blog that tobacco companies’ campaign contributions to candidates and federal lobbying expenditures may have declined, but they are dispatching their resources to other places.

“They are always looking for creative ways to exert their influence,” McGoldrick said. “The Citizens United decision opened avenues for many groups. You can expect them to take any opportunity they can to influence the legislative process.”

Two of the largest tobacco companies in the country, Altria Group and Lorillard Tobacco, declined to comment on their political involvement. Dosal Tobacco declined to comment on the company’s campaign contributions and others such as Reynolds American, Cigar Association of America and Commonwealth Brands did not return OpenSecrets Blog’s messages.

The tobacco industry’s political influence also has geographic significance, as some of the top tobacco producing and manufacturing states including, North Carolina, Virginia, Florida, Pennsylvania and Ohio, are considered swing states as the 2012 election cycle revs up.

Many of the top recipients of donations from the tobacco industry have been congressmen from these states and the leadership PACs sponsored by the congressmen.

The two highest ranking leaders in the House of Representatives — Speaker John Boehner (R-Ohio) and Majority Leader Eric Cantor (R-Va.) — are among top tobacco industry recipients. During the 2010 election cycle, Boehner received nearly $50,000 from people and PACs associated with the tobacco industry and Cantor received $27,850. The two lawmakers’ leadership PACs together received more than $158,000 from the industry.

Boehner, a smoker himself, reportedly called the regulation of the tobacco industry by the Food and Drug Administration, which was approved in 2009, a “boneheaded idea” and voted against it, while Cantor voted in favor of the bill. One of the largest contributors to Cantor’s campaign was Virginia-based tobacco company Altria Group, which was one of the only tobacco companies that favored the regulation.

Although the leader of Republican Party has close ties to tobacco companies, a spokesman for Boehner, Michael Steel, told OpenSecrets Blog in an email that “Rep. Boehner makes public policy decisions based on what he believes is best for his constituents and the American people.”

The offices of both Cantor and Sen. Richard Burr (R-N.C.), who received the most in contributions from tobacco interests during the 2010 election cycle, did not return repeated phone calls and emails.

Although it’s clear that tobacco interests usually support members the Republican Party, they also donate to Democrats. And by funding leadership PACs of Democrats instead of their campaigns, they have been able to make it seem like they are maintaining their Republican leanings.

During the 2010 election cycle, the industry contributed only $4,700 to the campaign of Rep. Mark Warner (D-Va.), but it gave $54,500 to his leadership PAC — near the top among all leadership PACs in terms of money received from the tobacco industry.

“The tobacco industry has a very strong Republican bias, but they give the Democrats enough to keep them shut and keep it from becoming a campaign issue,” Glantz said. “They go with who’s in power, but they are nicer to the Republicans when they are in power than the Democrats.”

Besides campaign contributions, many congressmen have other personal interests in the success of tobacco companies. About 23 members of Congress hold assets in three of the biggest tobacco companies, the Center’s research of 2009 financial disclosure reports indicates.

Rep. F. James Sensenbrenner, Jr. (R-Wis.) holds between $100,001 to $250,000 in Altria Group stock. Most members of Congress who have investments in Altria are Republicans, but Democrats such as Kay Hagan (N.C.) and Carolyn McCarthy (N.Y.) each reported tobacco company assets valued at more than $2,000. Federal lawmakers will release their 2010 disclosure reports later this month.

And the industry’s political influence is far from restricted to the federal level.

With more regulation and tax hikes proposed on the state level in recent years, tobacco companies have been directing their lobbying resources to the states, McGoldrick told OpenSecrets Blog.  Their state lobbying expenditures have been rising as federal lobbying efforts are now a fraction of what they were in the late 1990s.

“They are all over the place,” McGoldrick said. “They are (at state capitols) in good numbers and frequently.”

A lawyer representing the small Florida-based tobacco company, Dosal Tobacco, told OpenSecrets Blog he has seen the bigger tobacco companies change their focus from the federal to the state level to lobby against a tax hike.

“We have seen an increase — in Florida at least — in lobbying by the major tobacco companies,” said Mike Huey, government counsel for Dosal.

The companies might be increasing their presence at state legislatures, but many of the federal lobbyists hired by the tobacco industry are Washington insiders. About 78 percent of the lobbyists worked for the federal government prior to becoming lobbyists, according to the Center’s research.

And one of the biggest battles facing the industry today remains on the federal level.

The Food and Drug Administration, now responsible for regulating the tobacco industry, is debating a ban on menthol cigarettes, which make up about 90 percent of sales for the third-largest tobacco company, Lorillard.

The industry is ramping up its lobbying efforts in response. In the first quarter of 2011 alone, Lorillard spent $900,000 — nearly half of its lobbying expenditures during the 2010 — in what may foreshadow a broader lobbying expenditure uptick throughout the year.

Center for Responsive Politics Senior Researcher Doug Weber contributed to this report.