Money and Democracy

Published — March 17, 2016

Tobacco giant gave $250,000 to group representing black-owned newspapers

In this Friday, July 17, 2015 photo, Camel and Newport cigarettes, both Reynolds American brands, are on display at a Smoker Friendly shop in Pittsburgh. Gene J. Puskar/AP

Reynolds American also reveals donations to ‘dark money’ nonprofits


After National Newspaper Publishers Association President Benjamin Chavis Jr. visited Reynolds American’s headquarters in Winston-Salem, N.C., he left impressed — and with hopes of big money from the tobacco giant.

Ultimately, Reynolds American last year gave $250,000 to the organization, which from its Washington, D.C., headquarters represents the interests of more than 200 African-American-owned community newspapers across the nation.

The donation — listed in a new Reynolds American corporate governance document reviewed by the Center for Public Integrity — represented the largest contribution Reynolds American made in 2015 to nearly three-dozen nonprofit organizations, many of which are politically active and typically keep their funders secret.

Other small, but notable Reynolds Americans’ contributions in 2015 helped Americans for Prosperity, a “social welfare” nonprofit connected to billionaire industrialists Charles and David Koch, and Americans for Tax Reform, led by anti-tax advocate Grover Norquist.

During the 2014 midterms, Americans for Prosperity spent more than $2.35 million advocating against mostly Democratic U.S. Senate and U.S. House candidates, according to the Center for Responsive Politics. During the 2012 election, it spent more than $33.5 million in a bid to deny President Barack Obama re-election.

More than a dozen Michigan-based nonprofits also received modest contributions from Reynolds American, whose operating companies manufacture such cigarette brands as Newport, Pall Mall and Camel, and of late, non-tobacco products including Vuse e-cigarettes.

Reynolds American’s second-largest nonprofit contribution — $240,000 — went to the Center for Regulatory Effectiveness, which describes itself as a “regulatory watchdog” that ensures regulators “comply with the ‘good government’ laws which regulate the regulators.”

Most recently, the organization has been supporting a bill, to be sponsored by Sen. Mike Lee, R-Utah, that calls for a separate budget specifically for federal regulations.

A representative of the group could not be reached for comment.

The Log Cabin Republicans, a nonprofit that represents gay conservatives, received $25,000 from Reynolds American in 2015.

In declining to comment, the group’s president, Gregory T. Angelo, said the “Log Cabin Republicans’ policy is not to discuss finances nor donors.”

Reynolds American spokeswoman Jane Seccombe declined to comment on the company’s 2015 contributions to nonprofits, but previously told the Center for Public Integrity that it began disclosing contributions made to politically active nonprofits at the behest of an unnamed shareholder.

Seccombe this week pointed to a statement asserting the company and its subsidiaries “participate in the political and public policy process in a manner consistent with the law and the interests of their businesses.”

The statement also notes that Reynolds American “may not necessarily agree with all of the positions taken by each candidate or organization to which they contribute.” But before making a contribution, the company determines that a contribution aligns with its published Vision and Beliefs and Transforming Tobacco statements, “or is otherwise in the interests of the company.”

Reynolds American is rare in that most large companies, regardless of their industry, volunteer little information about their political activities beyond what’s required by law.

The U.S. Chamber of Commerce, of which many such companies are members, has for years hectored them to keep their corporate mouths shut, warning that such disclosures give fuel to anti-business activists itching to “silence the business community’s voice.”

Bruce Freed, president of the Center for Political Accountability, which publishes an annual index on corporate political disclosure, hailed political transparency policies.

While not perfect, “Reynolds American is a leader, and the company should be praised,” he said.

Chavis of the National Newspaper Publishers Association, which last week conducted three-day gathering in Washington, D.C., that featured various elected and government officials, said he actively courted Reynolds American’s support given its long-standing advertising relationship with many member newspapers. He said he never considered rejecting Reynolds American’s $250,000 contribution when it arrived.

One major factor, he said: “We saw a lot of diversity among their executives.” Reynolds American, Chavis also noted, has diversified into non-tobacco products, invests in community development and has actively worked to curb smoking among youth.

“The contribution helps us sustain our organization and fulfill our mission, and we’re very grateful for the support,” Chavis said, noting that companies such as General Motors and Ford Motor Co. also make large contributions to his association.

A 2011 study published in the Journal of Health Communications concluded that newspapers with primarily black readerships are more financially dependent on tobacco-related advertisements than newspapers with general readerships. Many black Americans, therefore, are exposed to significant amounts of advertising for products proven to cause cancer and a host of other health problems.

“Given the current advertising environment, public health initiatives are needed to counter … messages that target vulnerable populations,” the study stated.

“The tobacco industry has a long history of targeting African-American media and audiences,” Elisia Cohen, a study co-author and chairwoman of the University of Kentucky’s Department of Communications, told the Center for Public Integrity on Wednesday.

Among Reynolds Americans other 2015 disclosures is a $7,750 contribution to Americans for Tax Reform, although that figure appears to only represent a fraction of what the company gave the nonprofit.

That’s because Reynolds American says it only discloses the portion of contributions top nonprofit recipients can’t deduct from their taxes — generally, expenses nonprofits uses for direct political advocacy or government lobbying.

Such is the case for the North Carolina Chamber of Commerce, which received $66,395 in “non-deductible” dollars from Reynolds American last year. The group counts 35,000 members among its ranks and considers job creation the “core” of its issue advocacy.

For its part, the Renew North Carolina Foundation, which says its mission is “to educate and advocate about policy issues that are critical to the future of North Carolina and its citizens,” received $25,000 in “non-deductible” Reynolds American cash last year.

The Renew North Carolina Foundation has previously run advertisements promoting the agenda of Gov. Pat McCrory, a Republican. Renew North Carolina Foundation reported raising about $313,000 in 2014, according to its most recent tax return filed with the Internal Revenue Service.

For nonprofits that use 75 percent or more of its Reynolds American money for political purposes, Reynolds American simply notes the size of its full contribution.

Among these kinds of contributions in 2015: $10,000 to the Washington Vape Association, which advocated against a bill in the Washington State Legislature aimed at taxing or further regulating e-cigarettes and certain tobacco products. Another is Americans for Prosperity, which received $4,000, according to Reynolds American’s disclosure.

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