Abstract
This 1993 Philip Morris (PM) document offers a thorough description of the strategies Philip Morris (PM) uses to achieve its powerful influence over legislators in the U.S. According to the document, PM has analyzed every part of a legislator's world and misses no opportunity to exert influence, even to the point of influencing legislators through their spouses:
"...We also make sure that we know the legislator's -- and his or her spouse's -- favorite philanthropies and try to support them."
PM provides legislators with trips to "promotional and cultural events" in nice places. One passage in the document cites a trip given a group of American legislators to Brussels, Belgium:
"We make sure legislators are aware of, and invited to, promotional and cultural events funded by Philip Morris. {CITE ALEC 1992 TRIP TO BRUSSELS AS AN EXAMPLE}"
The author also mentions several times PM's strategy of keeping itself out of the media by using third parties to "carry its baggage":
"...we try to keep Philip Morris out of the media on issues like taxation, smoking bans and marketing restrictions. Instead, we try to provide the media with statements in support of our positions from third party sources, which carry more credibility than our company and have no apparent vested interest..."
and
"...we create coalitions of third party sources to help carry our baggage on issues. For example, on excise taxes, we work with state and local CARTS, the acronym for Committee Against Regressive Taxation...restaurant owners on smoking bans...retailers on the minimum age issue...and influential groups like the Association of National Advertisers on marketing restrictions."
PM's strategy of eliminating discussion of health and safety issues by altering the focus of the issues at hand is also outlined very frankly:
"...Finally, we try to change the focus on the issues. Cigarette tax become[s] an issue of fairness and effective tax policy. Cigarette marketing is an issue of freedom of commercial speech. Environmental tobacco smoke becomes an issue of accommodation. Cigarette-related fires become an issue of prudent fire safety programs. And so on."
The long-term failure of American legislatures to enact meaningful tobacco control in the face of recognition of the epidemic of tobacco-induced disease is testimony to the effectiveness of PM's efforts to control the machinations of government in its favor.
Fields
- Notes
This document was first posted on Doc-Alert on 6 December 2000.
- Quotes
I want to start by stating without qualification that Philip Morris U.S.A. cannot grow without a strong, well-organized and well-thought-out legislative program. We need that legislative program to prevent excise tax increases, marketing restrictions and smoking bans from making our products unaffordable, unpromotable and unacceptable. I will give you an overview of our legislative program from the grass tops, which is political jargon for decision makers at every level: state, regional and local government... ....Our job in government affairs is to build credible relationships with the people who decide which legislative proposals become law and which don't. We have to maintain access to them, to understand their problems and to help them find solutions that will benefit them and not penalize our consumers... In pursuit of this goal, we work to prevent legislation that obstructs the channel from us to our consumers...and we promote legislation that advances the interests of our company.... .....[L]et's move on to how we work at the grasstops. Let's look at the tools we use to sell our point of view to the people who make the laws that affect our products... II. Our Grasstops Strategy and How We Implement It [SLIDE OF SIMPLIFIED MODEL OF A LEGISLATOR'S WORLD]. ....We call this the Influence Wheel because it illustrates the factors that influence a legislator's political actions and decisions... [POINTING TO IDEOLOGY AND BELIEFS] For example, the legislator probably has strong ideas on certain issues, like taxes or over-regulation of business. [POINTING TO MEDIA] Like most politicians, his opinions on an issue are probably influenced by the media. [POINTING TO SPECIAL CONSTITUENTS] Every politician wants to form alliances with individuals or groups that can strengthen his hold on office and advance his agenda. [POINTING TO DIRECT CONTACT] A legislator is never too busy to talk about things like political contributions, fundraising for a coming election campaign and programs to benefit his district. [POINTING TO AVOCATIONAL ACTIVITIES AND PET CAUSES AND CHARITIES] Politicians like to be associated with good works and seen at sports and cultural events. [POINTING TO VOTERS] These are the people who decide whether or not a legislator stays in office, so he certainly pays attention to what they have to say. Every one of these influences on a politicians decision offers PM USA's Corporate Affairs Department an opportunity to convey a message on behalf of an issue. Let's take a closer look at how we apply our resources to the elements of that influence wheel.... When [for example] an excise tax proposal emerges in a particular state, we've already done our homework. We know who the key legislators are and their positions on the issue...{SLIDE: AVOCATIONAL ACTIVITY} We make sure legislators are aware of, and invited to, promotional and cultural events funded by Philip Morris. {CITE ALEC 1992 TRIP TO BRUSSELS AS AN EXAMPLE} {SLIDE: PET CAUSES AND CHARITIES} We also make sure that we know the legislator's -- and his or her spouses -- favorite philanthropies and try to support them. {SLIDE: DIRECT CONTACT} I said before that there are many opportunities to meet a state legislator face to face. Here are some of them... {SLIDE: SPECIAL CONSTITUENTS] Tobacco isn't the only industry threatened by excise taxes...so we strengthen our position by forming alliances on issues with third parties... {SLIDE: VOTERS} Influencing the legislator means keeping voters informed of issues like taxes by sending communications like these to legislators' home districts. {MENTION CONSTANTLY GROWING CONSUMER DATA BASES THROUGH CONSUMER AFFAIRS, MARKETING...} {SLIDE: MEDIA} Legislators are sensitive to media. Therefore, we have to get our point of view into print as often as possible. We try to have a third party, like an authority on taxes, write articles in our behalf... {SLIDE: POLITICAL ACTIONS} Depending on the situation, we will use these spokes of the influence wheel selectively or all at once.... ....Now that I've told you what we do and how we do it, let me give you a basic idea of the basic strategies that make the influence wheel go around... {SLIDE: BASIC POLITICAL STRATEGY} First, the nature of our issues demands that our focus be on all 50 states....Our RD's retail lobbyists, pollsters, public relations firms and other professionals who know the local issues and have contacts among the operative people in government and the media to help us... Second, we try to keep Philip Morris out of the media on issues like taxation, smoking bans and marketing restrictions. Instead, we try to provide the media with statements in support of our positions from third party sources, which carry more credibility than our company and have no apparent vested interest... Third, we create coalitions of third party sources to help carry our baggage on issues. For example, on excise taxes, we work with state and local CARTS, the acronym for Committee Against Regressive Taxation...restaurant owners on smoking bans...retailers on the minimum age issue...and influential groups like the Association of National Advertisers on marketing restrictions. Finally, we try to change the focus on the issues. Cigarette tax become[s] an issue of fairness and effective tax policy. Cigarette marketing is an issue of freedom of commercial speech. Environmental tobacco smoke becomes an issue of accommodation. Cigarette-related fires become an issue of prudent fire safety programs. And so on. {PAUSE} ....The last issue I want to discuss is restrictions on the use of products by our consumers. The more restrictions imposed on public and workplace smoking, the fewer opportunities our consumers have to use our products--and buy new ones. This is indeed a problem. I mentioned earlier that the Environmental Protection Agency recently declared ETS a class a carcinogen, meaning that it ranks with WHAT AND WHAT as a cause of cancer. That this decree has been widely denounced as "junk" science based on flawed data has not had much effect. The word is out, and anti-tobacco people in the states are using the EPA declaration to call for even more public smoking bans... Part of our response to the ETS issue is to shift it from a health matter to a social one by acknowledging that some people find tobacco smoke annoying. We recommend -- again through third parties like restaurant owners and hospitality organizations--accommodation of smokers and non-smokers as an alternative to total smoking bans. Other counter tactics include supporting dissemination of studies showing how badly smoking bans have hurt business in other localities...and we propose counter-legislation proposing separate sections for smokers and non-smokers.... Our goal is to replace no-smoking signs with our accommodation logo.... ......Agreement by a legislator to lower a proposed tax increase by just a few cents can mean millions of dollars in sales in a particular state... To accomplish our objectives -- to persuade legislators to listen to us and act favorably on our position -- we have to practice what became known in the 1992 election as retail politics. We have to [treat] the legislator as we would a customer and sell our point of view to help him make a decision that solves his problems without penalizing our consumers-- or us.
- Company
- Philip Morris
- Author
- Walls, Tina A. (PM St. Gov. Affairs VP, c.1996)
Vice President of State Government Affairs for Philip Morris circa 1996
- Recipient
- Presumed recipients, employees of Philip Morris (including international employees)
RegionUnited States
Named OrganizationPhilip Morris U.S.A. (See Philip Morris Incorporated)See Philip Morris Incorporated
WRO, Washington Relations Office (PM)
*EPA ( use United States Environmental Protection Agency)
American Civil Liberties Union
American Legislative Exchange Council (Entitiy through which PM launders favors and donations)
Named PersonLattanzio, Theodore A. (Director, Worldwide Regulatory Affairs PM 1994)USA. Member of PM Ventilation Task Force.
Merlo, Ellen (PM Corp. Affairs VP)Marketing Services prior to 1986. Understood use of nicotine addiction in selling PM products.
Operation/ProjectGrasstops Government Relations (Methods employed in legislative influence)The cohort of methods PM uses to influence legislators.
TypePresentation
Subjectlegislation
legislator
Political Influence (How the industry develops and applies political influence)
Front groups
taxation
smoking restriction
advertising
fire safe cigarette
Document Images
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Grasstops government relations/TWalls/3/30/93/ 30
minutes
I. Introduction
(SLIDE: PM CREST)
I want to start by stating without qualification that
Philip Morris U.S.A. cannot grow without a strong, well-
organized and well-thought-out legislative program. We need
that legislative program to prevent excise tax increases,
marketing restrictions and smoking bans from making our
products unaffordable, unpromotable and unacceptable.
I will give you an overview of our legislative program
from the grass tops, which is political jargon for decision
makers at every level state, regional and local government.
As Director of Government Affairs for the Western half
of the U.S., I, along with my six regional government affairs
directors, cover 26 states, presenting PM USA's positions on
tobacco issues to these decision makers. My colleague Ted
Latanzio is responsible for 6 regional government affairs
directors in the 24 states in the eastern portion of the U.S.
Along with the rest of our Corporate Affairs Department,
we support the Washington Relations Office on federal issues.
Our job in government affairs is to build credible
relationships with the people who decide which legislative
proposals become law and which don't. We have to maintain
access to them, to understand their problems and to help them
find solutions that will benefit them and not penalize our
consumers.
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In the pursuit of this goal, we work to prevent
legislation that obstructs the channel from us to our
consumers...
And we promote legislation that advances the interests
of our company, its customers and consumers.
Before I get specific about how we go about this
critical process, let me set the stage by describing our
organization structure and mission, the legislative climate
for the U.S. cigarette business and the primary issues we
address at the state and local levels.
(SLIDE OF ORGANIZATION)
The PM USA Corporate Affairs Department is headed by our
Vice President, Corporate Affairs, Ellen Merlo. Reporting to
her are directors of public affairs, media affairs, editorial
services and government affairs.
Reporting to me and my colleague Ted Latanzio are 12
regional government affairs directors, better known as RD's.
They are charged with establishing direct relationships with
elected officials, like governors, mayors and legislators.
They also arrange meetings between governors and legislators
and members of PM USA senior management.
The RD's are the core of our legislative program, and
I'll describe their activities in greater detail shortly. But
I first want to give you a quick overview of the legislative
climate for our industry in this country.
(SLIDE OF REGULATION CONTINUUM)
Cigarettes are probably America's most regulated
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product. As you can see from this chart, some government
agency, some law intrudes on our business from the time
tobacco seeds are planted until a consumer buys a pack of
cigarettes.
As crowded as it is, that chart only begins to describe
today's legislative and regulatory climate for cigarettes.
With the help of the federal government and the media,
the anti-tobacco movement in the U.S. has amassed great
political power over the past ten years. The pressure for
higher excise taxes, smoking bans and marketing restrictions
keeps-building.
This year, that pressure intensified with the
Environmental Protection Agency classifying enviromental
tobacco smoke as a carcinogen and the Clinton administration
proposing to increase federal excise taxes on cigarettes from
24 cents to $2 per pack to fund health care reform.
Even though these are federal issues they have a fallout
in the states and other localities. The EPA's ETS decree
prompted a rash of public and workplace smoking restrictions.
The $2 tax increase proposal has set off a panic in the
states to raise their cigarette excise taxes before the
federal government can claim all the consumer tax dollars.
(PAUSE)
With that bit of background, let's move on to how we
work at the grasstops. Let's look at the tools we use to
sell our point of view to the people whho make the laws that
affect our products and our consumers.
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In most cases, what I'm going to talk about is
translatable in some way to your own countries and regions.
The specifics may be American, but human nature -- and that's
what we concentrate on mainly -- is universal.
11. Our grasstops strategy and how we implement it.
(SLIDE OF SIMPLIFIED MODEL OF A LEGISLATOR'S WORLD)
We call this chart the Influence Wheel because it
illustrates the factors that influence a legislator's
political actions and decisions.
(POINTING TO IDEOLOGY AND BELIEFS) For example, the
legislator probably has strong ideas on certain issues, like
taxes or over-regulation of business.
(POINTING TO MEDIA) Like most politicians, his opinions
on an issue are probably influenced by the media.
(POINTING TO SPECIAL CONSTITUENTS) Every politician
wants to form alliances with individuals or groups that can
strengthen his hold on office and advance his agenda.
(POINTING TO DIRECT CONTACT) A legislator is never too
busy to talk about things like political contributions,
fundraising for a coming election campaign and programs to
benefit his district.
(POINTING TO AVOCATIONAL ACTIVITIES AND PET CAUSES AND
CHARITIES) Politicians like to be associated with good works
and seen at sports and cultural events.
(POINTING TO VOTERS) These are the people who decide
whether or not a legislator stays in office, so he certainly
pays attention to what they have to say.
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Every one of these influences on a politician's
decisions offers PM USA's Corporate Affairs Department an
opportunity to convey a message on behalf of an issue.
Let's take a closer look at how we apply our resources
to the elements of that influence wheel. We'll use the
excise tax issue to illustrate the process, but it's
adaptable to any issue.
(TINA: IF YOU WANT, ONE OF THE PARTNERS IN EXCELLENCE
VIDEOS WOULD WORK WELL HERE AS A MEANS OF ADDRESSING ALL THE
INTERESTS OF LEGISLATORS, WHILE TELLING THEM THAT THERE IS
MORE TO PM IN THEIR STATE THAN CIGARETTES. TAPES RUN ABOUT 7
MINUTES.)
(START BUILD. TINA: PLEASE ADD EXAMPLES, WHERE
POSSIBLE, FROM YOUR OWN EXPERIENCE.)
(SLIDE: IDEOLOGY)
When an excise tax proposal emerges in a particular
state, we've already done our homework. We know who the key
legislators are and their positions on the issue.
(SLIDE: AVOCATIONAL ACTIVITY)
We make sure legislators are aware of, and invited to,
promotional and cultural events funded by Philip Morris.
(CITE ALEC 1992 TRIP T0 BRUSSELS AS AN EXAMPLE?)
(SLIDE: PET CAUSES AND CHARITIES)
We also make sure that we know the legislator's -- and
his-or her spouse's -- favorite philanthropies and try to
support them.
(SLIDE: DIRECT CONTACT)
5
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I said before that there are many opportunities to meet
a state legislator face to face. Here are some of them.
(SLIDE: SPECIAL CONSTITUENTS)
Tobacco isn't the only industry threatened by excise
taxes, and cigarette companies aren't the only ones in the
tobacco industry who'd feel the economic impact of higher
taxes. So we stengthen our position by forming alliances on
issues with third parties. (MENTION CART MEETING IN
WASHINGTON EARLIER THIS MONTH THAT RECEIVED SO MUCH
MEDIA COVERAGE AS ONE EXAMPLE?)-
(SLIDE: VOTERS)
Influencing the legislator means keeping voters informed
of issues like taxes by sending communications like these to
legislators' home districts. (MENTION CONSTANTLY GROWING
CONSUMER DATA BASES THROUGH CONSUMER AFFAIRS,
MARKETING?)
(SLIDE: MEDIA)
Legislators are sensitive to media. Therefore, we have
to get our point of view into print as often as possible. We
try to have a third party, like an authority on taxes, write
articles in our behalf.
(SLIDE: POLITICAL ACTIONS)
Depending on the situation, we will use these spokes of
the influence wheel selectively or all at once. (EXAMPLE?)
I want to mention one very important thing here: The RD
is, to use a popular term, the person on the ground. He or
she is empowered to make the decision on our course of
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action. RD's are also in constant touch with Ellen, Ted and
me via telephone and powerbook computer so that we're
unanimous on our course of action. (EXAMPLE?)
The action taken by the legislature -- by the grasstops
people we want to influence -- is the bottom line of our
effort. A bill can be passed as proposed, passed in a form
more acceptable to us, defeated in a floor vote, tabled until
the next legislative session or passed and then vetoed by the
governor.
(PAUSE)
Now that I've told you what we do and how we do it, let
me give you a basic idea of the basic strategies that make
the influence wheel go around.
(SLIDE: BASIC POLITICAL STRATEGY)
Fir , the nature of our issues demands that our focus
be on all 50 states. At the same time; all politics is
local. Our RD's retain lobbyists, pollsters, public
relations firms and other professionals who know the local
issues and have contacts among the operative people in
government and the media to help us. (EXAMPLE?)
Second, we try to keep Philip Morris out of the media on
issues like taxation, smoking bans and marketing
restrictions. Instead, we try to provide the media with
statements in support of our positions from third party
sources, which carry more credibility than our company and
have no apparent vested interest. (EXAMPLE?)
Thir , we create coalitions of third party sources to
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8
help carry our baggage on our issues. For example, on excise
taxes, we work with state and local CARTs, the acronym for
Committee Against Regressive Taxation...restaurant owners on
smoking bans...retailers on the minimum age issue...and
influential groups like the Association of National
Advertisers on marketing restrictions.
Finally, we try to change the focus on the issues.
Cigarette tax become an issue of fairness and effective tax
policy. Cigarette marketing is an issue of freedom of
commercial speech. Environmental tobacco smoke becomes an
issue of accommodation. Cigarette-related fires become an
issue of prudent fire safety programs. And so on.
(PAUSE)
For the next few minutes, I'd like to get more specific
about the way we deal with some of our issues in the field at
the grasstops and explore some their subtleties.
(SLIDE: TAX ROLLBACK STATES)
It is not sufficient just to block excise tax increases.
Our mission also calls for us to to roll them back, which we
have been able to do in these states.
Our most potent argument for rollbacks is cross-border
shopping, when consumers buy cigarettes and other taxed items
in states that charge lower taxes. This position hits home
with lawmakers, especially those representing border
districts, who see losses of sales, tax revenues and jobs as
shoppers cross state lines to save money.
I'm going to show you a video that stated the cross-
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9
border case dramatically -- and effectively -- in Ohio.
Please pay particular attention to how merchants, consumers
and politicians -- in other words, third parties -- state our
positions for us.
(SHOW BOBCAT VIDEO, ABOUT 8 MINUTES)
(SLIDE: YOUTH INITIATIVES)
Sales to minors is a very thorny issue to us for several
reasons. First, we really don't want kids under 18 to smoke.
And second, the youth issue has a ripple effect on marketing.
it's responsible for a lengthening list of state and local
sampling bans and restrictions and a growing number of
restrictions on coupon offers and free-standing pack and
carton displays. Anti's are also seizing on the youth issue
to push for laws requiring retailers to be licensed to sell
cigarettes.
Our youth initiative programs range from suing companies
that illegally use our trademarks on children's products to
campaigns at retail to educate the seller and inform the
buyer of cigarettes that it is illegal for minors to purchase
them. We also direct advertising campaigns to parents and
offer parental involvement programs.
(TINA: ANY EXAMPLES OF HOW WE BROUGHT THE YOUTH
ISSUE TO LEGISLATORS?)
(SLIDE: DEFENDING ADVERTISING)
Proposals for advertising and marketing bans are a
favorite among anti-tobacco legislators. Our top-line
response, which we communicate to friendly legislators and
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the public as well as the anti's, is the United States
Constitution's guarantee of free speech, including commercial
speech, under the First Amendment of the Constitution.
Our third party allies on this issue include the
American Civil Liberties Union, a liberal advocacy group that
is particularly active and expert in defense of free speech,
and local and national associations representing advertisers,
advertising agencies and the media.
(TINA: MENTION LIBERTAD IN HERE? I'M NOT SURE OF
PMUSA'S INVOLVEMENT. OTHER EXAMPLES?)
(SLIDE: NO SMOKING SYMBOL)
The last issue I want to discuss is restrictions on the
use of products by our consumers. The more restrictions on
imposed on public and workplace smoking, the fewer
opportunities our consumers have to use our products -- and
buy new ones. This is indeed a problem.
(SLIDE: ETS SILVER BULLET)
I mentioned earlier that the Environmental Protection
Agency recently declared ETS a class a carcinogen, meaning
that it ranks with WHAT AND WHAT as a cause of cancer. That
this decree has been widely denounced as "junk" science based
on flawed data has not had much effect. The word is out, and
anti-tobacco people in the states are using the EPA
declaration to call for even more public smoking bans -- even
in outdoor locations like sports stadiums.
(TINA: EXAMPLES OF HOW WE'RE BRINGING OUR SIDE OF
ETS ISSUE TO LEGISLATORS?)
