Citizens Watchdog Group Took Money from Alcohol, Tobacco Industries

Citizens Against Government Waste (CAGW), a membership organization that describes its mission as aiming to "eliminate waste, mismanagement, and inefficiency in the federal government," quietly took large donations from big corporate interests to indirectly lobby on their behalf.

St. Petersburg Times reported April 2 that the tobacco industry, for example, donated more than $245,000 to CAGW, a vocal critic of government regulation of tobacco. The donation was part of an industry campaign to enlist allies as pressure on tobacco and smoking grew in the late 1980s.

"Ultimately, we're talking about a "movement,' a national effort to change the way people think about government's -- and big business' -- role in their lives," wrote Tim Hyde, then R.J. Reynolds' senior director of public issues. The industry also was counting on groups like the American Civil Liberties Union to object to restrictions on tobacco advertising as violations of free speech.

Echoing the tobacco companies' standard arguments, CAGW wrote to members of the U.S. Senate to oppose the 1998 nationwide tobacco settlement, arguing that the plan was too expensive and amounted to a tax on poor smokers.

"We have always welcomed contributions to support the issues we support," said CAGW president Tom Schatz. "Many of them have to do with fighting higher taxes and more regulations."

In a companion article, the St. Pete Times reported that CAGW also had taken money from alcohol company Diageo North America; the group has lobbied Congress against government regulation of flavored malt beverages. CAGW also took money from Mexican avocado growers to support imports of the fruit.

CAGW is well known for its campaign against government "pork," and has enjoyed a good reputation as a citizen watchdog group. But that was prior to the revelation of the group's monetary relationships with corporate interests.

"They are nothing but a voice of industry," said Matt Myers, president of the Campaign for Tobacco-Free Kids.

CAGW's annual Pig Book, which compiles examples of government waste, is the group's best-known product. CAGW claims the book is based on unbiased research, and its work has been praised by Sen. John McCain (R-Ariz.) and others.

But the Pig Book also has been called into question because of CAGW's funding sources. Last year, the group cited federal grants to YMCAs for its "Fiscal Unfitness Awards" in the book; it turns out that CAGW received at least $5,000 in donations from the International Health, Racquet and Sportsclub Association, a longtime critic of government funding of YMCAs -- competitors for many of its members. "The Ys are there because they qualify as pork. Period," said Schatz.

CAGW refused to disclose its full contributor list to a St. Pete Times reporter. John Stauber, executive director of the Center for Media & Democracy, called CAGW a front group for its donors.

"The basic idea is to put your words in the mouth of somebody the public is going to trust," said Stauber. "If they were upfront about the fact that they are hired guns for the tobacco industry or big powerful corporations like Philip Morris, people would really be skeptical of what they are doing and what they have to say."