CDC's Controversial Tobacco Spending

Government bodies question whether funds improperly fueled local tobacco restrictions

Published in CSP Daily News

By  Melissa Vonder Haar, Tobacco Editor

[Editor's Note: This is Part 2 of a two-part Special CSP Investigative Report on whether the CDC incented local communities to adopt restrictive tobacco measures. Click here to read Part 1.]

ATLANTA -- The U.S. Inspector General's office didn't like what it saw.

So, on June 29, 2012, it issued an "Early Alert" letter to Thomas Frieden, director of the Centers for Disease Control and Prevention (CDC). At issue was whether the CDC was illegally using federal funds tied to wellness programs to encourage local communities to adopt a bevy of tobacco restrictions.

The American Recovery and Reinvestment Act of 2009 allotted $650 million to carry out clinical and community-based prevention and wellness strategies. The U.S. Department of Health and Human Services tabbed the CDC to allocate these funds through an initiative known as the Communities Putting Prevention to Work (CPPW), a two-year project that evolved into the Community Transformation Grant.

The Inspector General's Office said quarterly grant reports filed by cities and organizations "may reflect inappropriate lobbying activities using CPPW grant funds."

The letter proceeded to state that CDC-provided information "appear to authorize, or even encourage grantees to use grant funds for impermissible lobbying. Furthermore, grantee activity reports posted online make troubling assertions that, on their face, raise the possibility that … anti-lobbying provisions were violated." 

The Inspector General Office's allegation is a serious one. Use of congressional funds in an attempt to enact tobacco regulations is illegal.

Under United States Code Title 18, Section 1913, federal law states that "no part of the money appropriated by any enactment of Congress shall ... be used directly or indirectly to pay ... to influence in any manner a member of Congress, a jurisdiction, or an official of any government, to favor, adopt, or oppose, by vote or otherwise, any legislation, law, ratification, policy, or appropriation …"

Specific Allegations

As an example of stimulus funds potentially going toward lobbying efforts, the inspector general pointed to a graphic-warning-sign ordinance proposed by the Philadelphia Board of Health, which on March 19, 2010, was awarded a $10.4 million CPPW grant. The Philadelphia CPPW Recovery Act Summary reported that the grant would be used in part to "explore new regulations that affect the size, number and placement of tobacco ads in stores and that mandate in-store ads that discourage tobacco use at the point of purchase."

In other words, the CDC's own documents acknowledge that CPPW funds were granted to a community intending to use the money for legislative purposes.

Philadelphia would later draw the attention of another federal arm. In August 2012, the city was cited in a letter by the House Energy and Commerce Committee to the U.S. Department of Health and Human Services on potential violations of CPPW funds.

The letter cited several cases in which CPPW recipients might have used grant dollars toward enacting legislation (including the Philadelphia Department of Public Health's attempt to raise the cigarette excise tax rate). As such, the House Energy and Commerce Committee has requested documentation on all CPPW grants to determine if federal grant funds were improperly used for lobbying local and state government officials. 

A CDC official told CSP Daily News that the body, authorized to protect health and promote the public's well-being, committed no wrongs and flatly rejected allegations of inappropriately seeking to incent communities to pass restrictive tobacco legislation.

The investigation, however, remains ongoing.

A Question of Effectiveness

While doubts circulate concerning the proper distribution of CPPW funds, another fundamental question has surfaced: Are CPPW funds being used to improve public health?

"We have serious concerns about the integrity and effectiveness of spending in the program," the U.S. House Energy and Commerce Committee's letter says. "The Committee supports the need for preventative initiatives designed to improve health outcomes and reduce chronic disease.

"However, the lack of attention by HHS officials to grant management may have had the effect of diverting billions in federal funds from initiatives that actually improve public health."

Take the Philadelphia Board of Health's decision to pursue a graphic-health-warning sign ordinance. Regardless of whether the inspector general finds that the CPPW aided the organization's lobbying efforts or if the funds came from elsewhere, the board of health chose to move forward with the ordinance despite the fact that a nearly identical proposal was found unconstitutional in New York.  

The National Association of Tobacco Outlets (NATO) not only wrote a letter to the Philadelphia Board of Health about the issue, but NATO president Andrew Kerstein also provided testimony to the same effect Sept. 8, 2011.

"It is NATO's position that taxpayer dollars are being misused and wasted when a local board of health considers an ordinance that federal law, federal court decisions and U.S. Constitutional protections would strike down," he said. "Government officials have a fiduciary duty to citizens to spend taxpayer dollars prudently, but to consider and adopt an ordinance that clearly violates federal law and is unconstitutional on its face is a breach of that very duty."

Of course, many cities and counties looking to pass tobacco regulations do consult past rulings and scientific research. Such was the case when Providence, R.I., passed ordinances to ban flavored tobacco products and tobacco product coupons. (Peter Asen, director of the city's Healthy Communities Office, says CPPW grants were not used to help pass these regulations.)

"Studies have shown that 17-year-old smokers are three times more likely to use flavored tobacco products than are smokers 25 and older," says Asen, referring to a Nicotine Tobacco Research study published in 2008. "Other research has shown that young smokers are particularly price sensitive, which is why we also believe the pricing ordinance will reduce youth consumption. Our hope is that our youth use rates will decline as a result."

Research might support flavor and coupon bans; however, the Constitution may not, at least concerning coupons. Because coupons are considered a form of advertising, the First Amendment could provide some protection for the use of coupons, which is part of the basis of an appeal filed by NATO, the Cigar Association of America Inc. and several manufacturers.

Despite legal questions concerning the Providence ordinances, the city of Haverhill, Mass., opted to move forward with a similar coupon ban last summer.

In response to the influx of local tobacco ordinances (both those suspected of using stimulus funds and those who are not), NATO has launched the NATO Local Project to monitor such activity.

"It is very important for retailers to become involved on these issues because prohibitions on the sale of flavored products, or minimum cigar package sizes, or a ban on redeeming tobacco product coupons will all result in lower sales of legal tobacco products," says NATO's executive director, Thomas Briant. "This, in turn, can put a retailer's profitability and employee jobs security at risk."

Click here to read Part 1 of this report.

Keywords: 
cigarettes