After stinging criticism from media watchdogs, cable news network CNN says in the future it will mention the fact that one of its contributors, Alex Castellanos, works for a firm that buys ad time for AHIP, the organization currently running a massive ad campaign against health care reform.

But the network "did not explain why it had not done so in the past," notes the New York Times. The network had generally described Castellanos as a Republican strategist. AHIP's ads are running on CNN.

The controversy erupted on Wednesday when media watchdog MediaMatters reported it had obtained evidence that the company Castellanos works for, National Media, is the ad buyer for AHIP, short for America's Health Insurance Plans, an umbrella group of insurers who are working to prevent health care reform from passing Congress.

MediaMatters wrote:

According to the detailed ad buy information obtained by Media Matters, Castellanos is responsible for placing, beginning October 11, more than $1 million of AHIP advertising in five states. Castellanos last appeared on CNN September 30; during a debate with Rep. Alan Grayson (D-FL) on The Situation Room, Castellanos defended Republican health care proposals.

If Castellanos returns to CNN's airwaves to discuss health care, it shouldn't be as a Republican strategist and CNN contributor, but as what he is - an industry spokesman.

On Thursday, blogger Greg Sargent at The Plum Line pointed out that Castellanos "is best known for producing the racially-charged 'Hands' ad" for the 1990 North Carolina Senate campaign, when incumbent Jesse Helms was trailing his Democratic challenger.

The ad featured a pair of hands crumpling up a letter as the narrator stated, "You needed that job, but they had to give it to a minority."

Helms won the election, and some observers say the ad helped push Helms over the top.

CNN is now defending itself against claims the network has blurred the line between news and advertising -- long considered a cardinal sin among journalists.

“Alex Castellanos has not been on CNN since AHIP began its recent advertising campaign, this week, which is when CNN learned of Alex’s relationship with AHIP,” the Times quoted CNN as stating. “When Alex Castellanos returns from his vacation and next appears on CNN, we will clearly disclose to our viewers relevant information including his firm’s relationship with AHIP.”

As CNN itself reported, the health care industry has spent $263 million this year on ad campaigns relating to health care reform. According to blogger Jim White's calculations at FireDogLake, that amount of money would be enough to purchase individual health care plans for 55,000 uninsured individuals.

AHIP was also the organization behind this week's health care study that asserted premiums would rise 40 percent over four years if the health care plan being debated in the Senate were to pass. As a talking point against health care reform, that study is widely seen as having backfired. Democrats on the Hill say it only proves the need for a public health care option.

"It’s unclear how much dust this will kick up," Sargent wrote of the Castellanos controversy Thursday. "As black eyes go, it’s nowhere near as bad as AHIP’s 'study' on the reform proposals — but it does provide Dems with a convenient attack line linking the industry and the Republican Party."