Federal Tobacco Program Under Fire

Did the CDC use stimulus funds to incent communities to adopt restrictive tobacco laws?

Mitch Morrison, Vice President & Retail Executive Platform Director, Winsight

[Editor's Note: This is Part 1 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 2.]

ATLANTA -- Stimulus.

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 the 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 Association 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)--a piece 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, restrictions on 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 for reducing health-care 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 U.S. Inspector General's Office and U.S. House Energy and Commerce Committee have also expressed concerns.

'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 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 point-of-sale (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 propaganda as 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 adamant denials: 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 …"

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.

In Part 2 of this special report, read what the U.S. Inspector General's Office has to say.

Mitch Morrison Winsight CSP By Mitch Morrison, Vice President & Retail Executive Platform Director, Winsight
View More Articles By Mitch Morrison