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How Big Oil and Big Tobacco Created the Tea Party

One of today’s biggest political forces was born in a business conference room.

U.S. News & World Report contributor Jeff Nesbit was there when representatives of the world’s largest private oil company and the planet’s largest public tobacco company joined forces to create a new national political grassroots movement – an “Allied Forces” of sorts to seize control of one of the United States’ two major political parties. “I understood what I was witnessing because I’ve worked in senior public-affairs positions at two federal science agencies and a GOP White House,” Nesbit explains. The goal of the alliance, he adds, “has been relentlessly carried out step by step ever since, largely unnoticed by the American public.”

The following was adapted from Nesbit’s latest book, “Poison Tea: How Big Oil and Big Tobacco Invented the Tea Party and Captured the GOP.”

One of my first assignments as a consultant in early 1993—as President Bill Clinton planned his first budget submission to Congress— was to join the Citizens for a Sound Economy (CSE) leadership on a New York fund-raising trip to meet with a huge corporate partner with vast experience in building real political muscle who could help CSE reach beyond Koch oil money for their new grassroots efforts. We visited Philip Morris.

As we walked into the tobacco giant’s imposing headquarters in New York, I considered whether I should tell CSE about my relentless efforts over the past three years to convince the FDA to declare jurisdiction over the tobacco industry. Philip Morris knew what I’d been up to with Commissioner David Kessler (my former boss) at the FDA. Philip Morris’s senior government affairs officials knew we’d come quite close to getting the leadership at the Department of Health and Human Services— including Secretary Louis Sullivan— interested.

But there wasn’t time. We headed to one of their main conference rooms. We were met by several of Philip Morris’s state-based government affairs experts, all of whom had significant experience in building coalitions with an eye toward blocking regulations they didn’t like at the state level. The concept that CSE put on the conference table, which was quickly taken up by the Philip Morris staff, was a bit shocking to me. They proposed an unholy alliance— Philip Morris money commingled with Koch money to create anti-tax front groups in a handful of states that would battle any tax that moved. It would make no difference what kind of tax— the front groups could battle cigarette excise taxes in the Northeast and refined-oil fees at the coasts. Any tax, for any purpose, was bad— and these front groups would tackle them all, with Philip Morris and the Kochs behind them.

It made good business sense— and good political sense as well. You could relabel just about anything as a tax, and heaven knows the American public hates taxes. This, at its core, was the beginning of the American Tea Party revolt against the power of the government to pay for its programs.

They could recruit average citizens from a variety of ideological groups to their cause. They would work side by side with corporate-directed workers and employees, providing real boots on the ground when enough activists weren’t readily available. And no one would be the wiser—or even care— that these “grassroots” anti-tax groups would be jointly created and funded by the largest private oil company and the largest cigarette company in the world.

What didn’t become public until nearly twenty years later was that these themes of a Tea Party anti-tax, anti-regulation, and anti-government revolt were then developed almost simultaneously by two of the largest tobacco companies— Philip Morris and R.J. Reynolds— under the guise of political and business coalitions to fight excise taxes of all sorts, including cigarette taxes.

In successive phases in the 1990s, with the Kochs’ CSE as its core mobilization network partner, Philip Morris and RJR helped create state- based anti-tax and anti-regulation propaganda campaigns such as Get Government Off Our Back, Enough is Enough, and the Coalition Against Regressive Taxation. Before that first deal in early 1993 was wrapped up, however, more senior Philip Morris officials joined the meeting. One of them knew me and my efforts to convince the FDA to regulate the tobacco industry. He stopped the meeting and ushered us out of the room. I was never invited back into these discussions, and I knew that it was only a matter of time before my consulting contract with CSE would end.

But I still had time to watch one more episode in the beginning of the transformation of CSE from an unknown hybrid advocacy think tank carrying out Charles Koch’s wishes in Washington to, years later, the much more well-known Americans for Prosperity.

When President Clinton’s first budget was submitted to Congress, it contained a novel idea to tax carbon emissions— a BTU tax that Vice President Al Gore and others had been proposing as a method to start combating global climate change.

When Clinton’s budget arrived in Congress, Rich Fink walked into the American Petroleum Institute with a check in hand for several million dollars. That funding, he told API’s leadership, was available if they’d match it and allow CSE to take on just the BTU issue in Clinton’s budget. API said yes, and the single- minded campaign to target the BTU tax began in earnest.

CSE created the content of the relentless attack ads in media in key states, all with an eye toward demonizing the BTU tax. In the end, they only had to flip a single senator— Democratic moderate David Boren, who represented the swing vote on the Senate Finance Committee. CSE took out one full- page ad after another in Oklahoma’s daily newspapers to hang the BTU tax around Boren’s neck. It worked. Boren capitulated quickly, the BTU tax was pulled from Clinton’s first bud get, and CSE and the Kochs had their first significant victory on the new political playing fi ld they had created for themselves with help and guidance from Philip Morris and the American Petroleum Institute.

Today, the “BTU tax” legend has grown to near-epic proportions among Democratic political operatives and leaders, who have essentially forgotten what actually happened (or never truly knew in the first place).

The truth here is simple. Rich Fink and Charles Koch detested the concept of a BTU tax and donated considerable sums to make it toxic for anyone who came near it. In so doing, they forged a partnership and created the framework for successful action in a political realm for the first time in their lives.

But the other truth— unknown for many years—is that their alliance with the tobacco industry is what truly made the emerging Koch political empire a force to be reckoned with and firmly planted the seeds of what has become the modern Tea Party movement, which will select the Republican nominee for president in 2016.

Adapted from “Poison Tea: How Big Oil and Big Tobacco Invented the Tea Party and Captured the GOP,” copyright © 2016 by Jeff Nesbit. First hardcover edition published April 5, 2016, by St. Martin’s Press. All rights reserved.

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