Buying Influence: New FTC Regulations Could Reveal Who's Funding "Independent" Think Tanks

This morning Roxana Tiron at The Hill reported about Citizens Against Government Waste's (CAGW) campaign against a second engine for the F-35 Joint Strike Fighter engine, questioning whether Pratt & Whitney — the company supplying the Pentagon the first engine — is funding the campaign. Tiron's not the first reporter to question this campaign — Bloomberg's Tony Capaccio and Rachel Layne, among others, questioned whether Pratt & Whitney was funding the campaign in August. And in both cases, neither Pratt & Whitney nor CAGW will confirm who is funding the estimated $2 million campaign — Pratt & Whitney said they're not funding the ads, but they won't admit to or deny funding CAGW in general — and as a tax-exempt organization, they don't have to.

Maybe.

Recently the Federal Trade Commission (FTC) revised their Guides Concerning the Use of Endorsements and Testimonials in Advertising, requiring bloggers that make an endorsement to "disclose material connections between the advertiser and endorsers." And when the FTC enforces the policy, according to the regulations, the company may be liable:

Advertisers are subject to liability for false or unsubstantiated statements made through endorsements, or for failing to disclose material connections between themselves and their endorsers [see § 255.5]. Endorsers also may be liable for statements made in the course of their endorsements.

There have been many protests to these regulations in the blogosphere, largely coming from the perspective of bloggers who think it's irrelevant that publishers supply them with books that they sometimes endorse or review favorably. But what's far more interesting, from POGO's perspective, is how these regulations might be used to reveal the financial relationships between industry and different thinks tanks — and hold contractors that don't disclose these relationships accountable for misleading the public.

As Tiron points out, the appearance of a relationship between Pratt & Whitney and CAGW is not unprecedented: Jack Abramoff got CAGW and other groups to publish articles for his clients, then directed funding to the groups, and the St. Petersburg Times discovered that CAGW received money "to lobby on behalf of Mexican avocado growers and from the tobacco industry while urging the federal government not to regulate tobacco and to drop a lawsuit against the industry." But these new regulations could help clarify the relationship between new blogger Loren Thompson (who we've wondered about before), among many others advocating policy — environmental bloggers that receive money from oil, gas, or mining industries, doctors or scientists that receive money from pharmaceutical or medical device companies.

Groups or advocates that receive money from the industries can obviously put forward independent opinions —but the public has a right to know about those potential financial conflicts of interest. And the new FTC regulations may be able to tell us more than whether that erudite blogger really likes Middlemarch.

-- Mandy Smithberger

Comments

[Paul]

Mr. Thompson, since you're taking questions. When did you guys stop taking tobacco money? Just asking because I noticed that Bonner Cohen was doing tobacco advocacy when he worked with you at the Lexington Institute.

Also, are you guys still taking Exxon Mobil money for your climate change advocacy? Just wondering, since you're answering questions and all.

[Loren Thompson]

I keep telling you guys, all you have to do is ask me! Here's the bottom line on my support for the F-35 alternate engine:

I decided two years ago that the Bush Administration was right about the alternate engine being a waste of money. So I started writing that. As a result, Rolls Royce cut off funding to my think tank and Pratt & Whitney came on board. The amounts of funding lost and gained were roughly the same -- and not large in either case.

Oddly enough, people who agree with what I'm saying are more likely to give our organization money than people who disagree. If you ever find me writing anything about the engines that is inaccurate, though, just let me know and I'll fix it.

-- Loren T.