Karen Minnis and Big Tobacco

By Patrick Hicks of Portland, Oregon who says he "used to be a Republican until I couldn't stand it anymore."

Repeat after me:

Minnis helped give the axe
To a dime-a-pack cigarette tax.
Isn't it funny
When they donate big money,
It's the cigarette lobby she backs.

The cigarette manufacturers are very big campaign contributors in Oregon. They don't contribute money because they are passionate about Oregon politics. They do it to influence votes. They do it to gain favor from legislators, and their goal is to sell more cigarettes. What better way to do that than with a price cut? In the 2005 Legislative session, House Speaker Karen Minnis led the Republican controlled House of Representatives to make Oregon the first and only state to reduce cigarette taxes.

In the 2004 election cycle R J Reynolds and Phillip Morris USA combined to make $43,100 in campaign contributions to 22 candidates for seats in the Oregon House of Representatives and $18,700 in contributions to 11 candidates for the Oregon Senate. 20 of the 22 house candidates receiving these contributions were Republicans and 2 were Democrats. In the Senate races, 7 candidates were Republicans and 4 were Democrats. The Republican Party is the party of 'Big Tobacco' by a margin of 27 to 6.

In 2006, the trend continues with tobacco company contributions of $1,000 to a single Democrat and $30,500 to 17 Republican candidates currently running for house seats. In the senate, 3 Republican candidates combined received a total of $4,500 in contributions and 2 Democrats received a combined total of $2,000. The margin is 20 Republicans receiving tobacco company contributions to 3 Democrats.

In 2004, the Minnis campaign received contributions from the tobacco lobby that totaled $11,000, making her portion over 25% of their total contributions for house races, and almost 6 times the next highest amount received by any house candidate. The next highest contribution was a total of $1,850, to Republican House Majority Leader Wayne Scott, and the same amount went to Democrat Betsy Johnson.

In the 2006 race, the Minnis campaign received $6,500 from cigarette manufacturers for the Spring primary election and the Wayne Scott campaign received $5,000. The next highest amount was $2,000 to two other Republican candidates. This time Minnis received over 20% of the total tobacco lobby contributions to house races.

Two PAC's also figure into the equation. 'The Speakers' PAC' and 'Majority 2006'. (Majority 2004 was renamed Majority 2006 after the 2004 elections, making the search a little tricky.) Karen Minnis is the Director of The Speaker's PAC, and is a former director of Majority 2004. Wayne Scott is the current director of Majority 2006. They can direct money at their discretion, and they have a lot of money to spend.

In 2004, the tobacco companies contributed $22,000 to Majority 2004 and $15,000 to The Speakers' PAC. In 2006 the amount is $41,000 to The Speaker's PAC and $40,000 to Majority 2006. If these amounts are added to the individual campaign contributions it becomes clear that the tobacco lobby is one of the significant players in Oregon politics. There can be no question that Minnis knows who her friends are.

Majority 2006 and the Speakers' PAC exist to help elect Republican candidates. But with PACs supporting candidates with the PAC money controlled solely by the house leaders, these leaders can stack the deck and exert tremendous control over the rank and file representatives. It's kind of like Texas politics, Oregon style.

A review of campaign finance documents filed with the Secretary of State shows how closely these PACs are linked. The Speakers' PAC, Majority 2006 and the Minnis campaign committee, 'Friends of Karen Minnis' all have the same address and all have the same treasurer, Donna Butler. The payrolls are mixed, the consultants are the same, some money appears to go back and forth between the PAC's and sometimes the candidates they support are the same, such as Andy Olson.

Olson won his first term in 2004 as a house Republican representing portions of Benton and Linn counties. Olson owes much of his victory in that election to campaign contributions of $25,000 from The Speakers' PAC, $26,575 from Majority 2004, and a contribution of $7,000 directly from the Wayne Scott campaign committee coffers. Where do you think his loyalty lies? There are several other legislators who also owe much of their political lives to these two PACs, and consequently they also owe loyalty to the PAC directors.

Andy Olson was appointed to the 2005 House Revenue Committee as one of 5 Republicans comprising the majority on the nine-member committee. Because the Oregon Constitution specifies that revenue proposals must originate in the House of Representatives, this is the committee where taxes originate. Three of the other four Republicans on the committee were recipients of campaign contributions from tobacco companies in 2004. They were Vicki Berger, Brian Boquist and Sal Esquivel. The other Republican comprising the majority is the Revenue Committee Chairman, R. Tom Butler, appointed by Minnis. No Democrats on the committee received tobacco company donations.

This committee let die HB 2940 which effectively cut Oregon's tobacco tax by 10 cents per pack, making Oregon the only state to ever reduce tobacco taxes. Minnis should have been out front, using the bully pulpit of the Speakers office to jawbone and lead her party to allow this bill to be debated on the floor of the House of Representatives. She did not. The cigarette lobby is cheering.

By letting HB 2940 die in committee, the Oregon cigarette tax dropped from $1.28 per pack to $1.18. Based on the almost 193 million cigarette tax stamps sold by the state in 2005 (every pack has one on it), that comes to well over $19 million dollars in reduced revenues. This money was targeted for, "health benefits to children presumed eligible for the Oregon Heath Plan but not enrolled, prevention and prenatal care for uninsured women, health benefit coverage for uninsured persons with chronic or acute health needs, and for emergency grants to continue operations of school-based health centers, federally qualified health centers and rural health clinics."

While there are plenty of dots to connect between the cigarette lobby money and the demise of HB 2940, the fact is that the dots can't be connected and there can be no conclusion of wrong-doing. It's all a just a big coincidence. However, there can be the conclusion there was wrong-headed thinking. The American political system relies on corporate campaign contributions to legislators to a large extent, and the result is sometimes demagnification of the moral compass.

This 19 million in lost revenue could have freed up money in the budget for better school funding. Minnis led the fight for lower school funding to balance the budget at the close of the last legislative session. Is there really a choice to make between cheaper cigarettes or art and music teachers in elementary schools? In addition, one of the proven ways to reduce the incidence of smoking is to increase the price of a pack. How many kids started smoking after this tax cut? How many of them will become addicted and eventually wind up on the Oregon Health Plan with smoking related illnesses? The 19 million dollars in lost revenue is only the start.

If you want to know who are the friends of Karen Minnis, look at the campaign contributions. Prominent among her friends are big tobacco companies. It makes one wonder about Speaker Minnis and her priorities, and whether or not these priorities reflect Oregon values.

Comments

  • Sally (unverified)
    (Show?)

    What is so "progressive" about taxing the lower strata of society for government and services that benefit the public at large? A little too cloaked, a little too convenient, and a little too self-righteous. The public should pay the taxes for the government it wants and not keep taxing the same unpopular minority (to add insult to injury: in the name of their and the public good).

    Now if you ask me, that's a progressive view.

  • (Show?)
    Posted by: Sally | Oct 31, 2006 3:52:16 PM

    What crap. Tobacco is a huge finical impact on health care costs and delivery. Want to avoid cigarette taxes which help offset the cost of cigarette smoking on public healthcare costs, then stop smoking.

  • Fairness is the Issue (unverified)
    (Show?)

    I don't know what sort of world Sally lives in where only the lower strata of society smoke. Obviously you are not a smoker, ie have no dog in this fight, or are a smoker that doesn't want to pay more taxes, coupled with a very low self-concept. Either way, being a smoker myself...I must register a level of offense to her statement.

    Sally, what is progressive about the idea is the issue of tax FAIRNESS. Any step to create more fairness in our tax system is progress, ie. "progressive"

    Smokers make the decision to smoke, in full awareness of the possible health complications down the road, that in fact increase health care costs to the state. People should pay for what they use. That is fair...That is progress...and that is progressive.

  • MCT (unverified)
    (Show?)

    Let's be really fair and tax all coffee drinks, and bar drinks. Lets tax owners of gas guzzling, high emmission cars.

    Let's tax every individual gambling game played in the state, every scratch ticket. Let's start taxing foods we deem to be unhealthy, too much fat, too much white flour, genetically altered. We can tax fat people, they must cost The State a lot of money. People who talk on cell phones while driving put the public at risk. Let's tax 'em. Let's tax the toxic chemicals that my neighbors spray on me and mine in the name of perfect landscaping. Let's tax all the goods we buy that are made in China...taking away jobs from Americans.

    There are a lot of things that aren't good for us that can cause a burden to The State. Let's tax and regulate it all.

    This site is getting way to elite for the likes of me. All this talk about segments of the population "burdening The State" is sounding a little sickle and hammerish.

    Anyone read Arianna Huffington's post today? She seems to have a grasp of the urgency of the Dem's last week of campaigning. Defining the nuances of what is and isn't Progressive can come after we win.....but then again, let's not.

  • Ross Williams (unverified)
    (Show?)

    MCT -

    The money from reducing the tax didn't go into the pockets of smokers, it went into the bottom line of the tobacco companies in increased prices or sales. So the question of how much to tax tobacco is really not the issue. The fact is that the reason the tax was lowered wasn't because it was unfair to people who smoke. It was lowered because the tobacco companies were losing business. They invested some bucks in Karen Minnis and Karen paid them off with legislation that more than recouped that investment.

    As for other "sin taxes", no one calls it a tax, but its hard to see how what the state makes on the lottery isn't a tax, and a very steep tax at that, on lottery tickets. Same with video poker and other officially approved gambling. And the liquor in bar drinks is taxed. Owners of gas guzzling cars pay more in gas tax for each mile they drive. We do tax things based on their social value.

    People who talk on cell phones while driving put the public at risk. Let's tax 'em.

    Better yet, arrest them and take away their drivers licenses. They are clearly reckless and endangering the community.

  • Tom Civiletti (unverified)
    (Show?)

    Intersting how so many posts on BlueOregon highlight the need for Fair Elections Measures 46 & 47.

    Big tobacco helps Minnis buy elections. Minnis returns the favor. Ditto on the drug companies. Ditto on the "public" utilities. Ditto on the beer and wine distributors. Ditto on the insurance companies.

    But Dems and their funders would rather protect their own rather pathetic money streams than do something to structurally improve the system, enhance democracy and, if they'd get off their fat asses, increase their own ability to communicate effectively.

  • Peter Noordijk (unverified)
    (Show?)

    Hey Mr. Civiletti. Have your read the Measures 46 & 47. As best I can tell what they will do is get challenged in court. THe provisions restricting individuals- which are in pretty clear violation of US Supreme Court Rulings will get stripped- but it will take a supermajority of the legislature to fix the rest. So what will we have. Caps on Unions (remember them, the ones who organize and give a coordinated voice to workers) and other advocacy groups, but relatively unrestricted potential for contributions by wealthy individuals, like um, tobacco execs. Once the legislature is faced with trying to re-level the playing field after 46 & 47 have handed wealthy republicans this windfall, they don't even need a majority in either house to block changes, they can just sit back and count the money.

    We can have finance reform, but let's do it thoughtfully, and not shoot ourselves in the foot in the process.

  • Tom Civiletti (unverified)
    (Show?)

    Peter,

    Yes, I've read the Fair Elections Measures 46 & 47 several times. Your comments repeat the talking points of the anti-Fair Elections campaign, which are full of unsupported predictions and misunderstandings of what is in the measures. Fair Elections was written to allow unions to fundraise effectively using small donor committees. The biggest change Fair Elections will bring about is removing ALL corporate contributions from candidate and independent campaigns. There's lots more info at FairElections, should you want to understand the dishonesty of Fair Elections opponents.

  • MCT (unverified)
    (Show?)

    Ross, respectfully...my post was semi-facetious, and meant to be satirical.

    Still, I would prefer to have the good Lord tax me for my sins....not the government. I am absolutely sure the government will NOT care for me if I become ill from my sins, no matter how much tax I pay on them. Where does that idea come from? Like millions of Americans, I am self-employed with a fluctuating income. Does anyone else recall a time when they said "small business is the backbone of America"? At 55 my health insurance premiums have become utterly cost prohibitive, though I am obscenely healthy. I kept it up for as long as I could but for 2 years I've been flying without a net. My government has no assistance for me, on any level, no matter what tribulations befall me, sin-induced or otherwise.

    Regardless of which lobby paid which politician for special interest legislation, those who are sinning, and paying sin tax, will see no benefits from those taxes. It's really just guilt tax pressed upon us by those who feel morally and socially superior. Is that what you mean by '..taxing things based on social value'?

  • George Karnezis (unverified)
    (Show?)

    Thanks for this fine column. I only wish the Brading campaign had foregrounded this information and used it to the hilt instead of getting mired in events that occured years ago in the Menace camp and swatting her with the same brush used against Foley. Surely Minnis's image as Florence Nightingale protecting the kids from porn and nursing us all back to better health would be called into question by these favors to the cancer companies. Incidentally, there will always be those who regard such taxes as hurting the poor; the're the same folks who don't recognize that you can have a sales tax which nails those who feel the need to drive Hummers and own yachts, but allows those who are ill and often eat peanut butter sandwiches (instead of out at Nostrana) to escape from being taxed on their food or drugs. These same folks probably believe that if we had a sales tax all those tourists would avoid Oregon. Sooner or later things may change to shake Oregonians out of their sanctimonious progressive complacency.

  • (Show?)

    <blcokquote>All this talk about segments of the population "burdening The State" is sounding a little sickle and hammerish.

    Do you honestly believe that shit?

    I know that it was posted on Halloween, but do you honestly think the contrived bullshit commie boogeyman going BOO is at all a legitimate argument or critique?

  • Ross Williams (unverified)
    (Show?)

    Ross, respectfully...my post was semi-facetious, and meant to be satirical.

    You know, I understood that. Which is why I pointed out that it there was nothing facetious about your examples. They were mostly just things that in fact are happening.

    <h2>As for the anti-government diatribe, I suspect you get more services from government than you are willing to acknowledge. The reason health insurance is so expensive is largely administrative costs. There are a whole lot of people, from insurance agents to medical billing companies, that get a slice of the health care dollar. And part of each slice gets invested in politicians to block government action to make the health care system function efficiently.</h2>
guest column

connect with blueoregon