Not So Quiet on the Local Front
Did the CDC overstep and use stimulus money to incent local communities to pass stiffer tobacco restrictions?
The mere mention opens up a debate about whether federal funds were necessary to ensure our nation’s economic recovery. But are these funds having a direct effect on retailers’ tobacco business on a local level?
Perhaps. 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 enlisted the Centers for Disease Control and Prevention(CDC) to allocate these funds through an initiative known as Communities Putting Prevention to Work (CPPW).
“Communities Putting Prevention to Work was a two-year funding project that began in 2010 to address obesity and tobacco,” says Karen Hunter, CDC senior press officer.
The National Organization of Tobacco Outlets (NATO) reports that the CDC granted $142.8 million in tobacco-related grants to 19 cities and counties in 2010 alone. The CPPW evolved into the Community Transformation Grant (CTG)—apiece of President Obama’s health-care legislation, the Affordable Care Act. Between CPPW and CTG, NATO estimates these dollars will fund an additional $315 million to $450 million in tobacco related grants from 2011 to 2015.
Put another way, these funds are incenting communities across the country to adopt further restrictions on the sale and merchandising of tobacco products.
“The grant funds have been used to propose a variety of different local ordinance restrictions,” says NATO’s executive director Thomas Briant, “including graphic health warning posters at registers, cigar package size restrictions, restriction son coupon redemption and a ban on the sale of certain flavored tobacco products.”
From a health perspective, one might approve the federal government’s incentive program as a vehicle of reducing healthcare costs. There’s one problem, though: The use of federal funds to enact tobacco regulations is against federal law.
Not surprisingly, the CDC and communities that have enacted regulations emphatically deny that CPPW funds were used to support such efforts. Yet trade organizations aren’t alone in questioning the use of CPPW dollars: The inspector general and U.S. House Energy and Commerce Committee have also expressed concerns.
Read on to learn how various local governments could be abusing this seemingly well-intentioned program, whether or not such efforts are truly reducing tobacco use and why it’s crucial for retailers to get involved in such hot-button issues.
‘He Said, She Said’ Debate
In 2012, NATO observed an increase in the number and type of tobacco-related ordinances being considered at the local level and began to monitor the situation.
Its conclusion? “The CPPW and CTG grant programs have resulted in more local units of governments considering tobacco-related ordinances as NATO monitored and responded to more than 50 local tobacco ordinances in 2012,” Briant says, and he expects the trend to continue.“The number of local ordinances that NATO will monitor in 2013 will exceed the more than 50 ordinances in 2012.”
Jim Calvin, president of the New York Association of Convenience Stores(NYACS), agrees with NATO’s assessment, calling out the cities of New York and Haverstraw, N.Y., specifically.“Here in New York, and presumably in other states, hyperactive anti-tobacco groups infused with federal stimulus dollars are hounding cities, villages and counties to force retailers to conceal tobacco products and reduce or eliminate tobacco signage,” he says of New York’s graphic health warning POS requirement and Haverstraw’s proposed tobacco display ban. (Both have failed to be enacted.)“Some elected bodies are acquiescing, either because they accept the propagandas gospel or because they just tire of the relentless badgering.”
Asked about these claims, the CDC flatly rejects any federal financial connection with Haverstraw or other local proposals. “There was no tobacco-related legislation enacted through CPPW funds,” says Hunter. “The CPPW grants were designed to support environmental changes that address obesity and tobacco use. However, CDC awardees were prohibited from using federal funds for lobbying activities and CPPW funds could not be used to enact legislation.”
There’s good reason for such denials: Use of Congressional funds in an attempt to enact tobacco regulations is illegal. U.S. Code Title 18, Section 1913 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 …”
But it’s not just retail organizations questioning whether certain CPPW and CTG grants were used to do just that. Government officials also are suspicious.
On June 29, 2012, the U.S. Inspector General issued an “Early Alert” letter to the CDC’s director, asserting that 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.”
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 was awarded a $10.4 million CPPW grant in 2010. 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 was also cited in an August 2012 letter sent by the U.S. 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 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.
“This use of federal funds in such a manner is illegal under federal law,” Briant says. “We will need to wait for the outcome of the investigation being pursued by the U.S. House Energy and Commerce Committee to learn how this improper use of federal funds will be corrected and future improper use of taxpayer dollars prevented.”