Tobacco Documents Online

..- sCC MEMORANDUM , t TO: Messrs. C.H. Judge R. Ave A.J. Stevens FROM: J.R. Cherry Re: March 4, 1983 State Activities Policy Committee Meeting Shep Pollack, Stan Scott, Gene Ainsworth, Ernie Pepples, Ken WeLls, K.V. Dey, Martin Ryan Haley, Bill Kloepfer, Bill O'Flaherty, Jack Kelly, Sam Chilcote, John Rupp and the writer were present. The meeting agenda is attached, but it is fair to say that most of the meeting time was spent on Section A (State Activities Division) and particularly on Parts L and 2 thereof which deal with the implementation,of the ORC recommendations for TAN and the related staff recommenda- tions for 1983. Exhibit 1, which is attached, charts the implementa- tion of the ORC recommendations, and the discussion first 'turned to a determination of TAN's enrollment objective. Presently TAN has an enrollment of approximately ~J 80,000 volunteers and it is initially proposed by the staff that from this group there be cuLled some 500 or 600 volunteers er s abe_, which volunteers are nown to be esponsive to TAN Action Requests and effective partici- pants in TAN activities. This would have the laudable effect of diminishing to some extent TAN expenses and enabling the TAN professional staff to concentrate their work and limit it to TAN participants from whom they may expect productive response. The balance of the TAN enroll- ment would not be completely dropped, but would receive only quite limited attention inithe form perhaps of several mailings annualily /~ ~ ~ ,be%ve ~~S_T~ ~/~/ S ~Gfr~ w D ~ ~7~ C ~ ~ e G od C S T SU ~`/Y~~TV~,~y s X 7d714i~'ew ~~1~ ~~ ~~~~,,~~,~/ .

Messrs. C.H. Judge J.R. Ave A.J. Stevens March 10, 1983 It would seem that having the TAN staff continue to address and having the member-companies continue to think in terms of a group of 80,000 is not only expensive in monetary terms but also expensive because it is a wasteful dilution of staff effort and it lends a damaging illusion of grassroots strength~which is in fact non-existent. Some members of the Committee (I believe reluctant to part with the illusion of massive power in~the field) expressed little definitive thought on this proposal, but nevertheless it was decided that by means of a questionnaire and a program of computer cross-referencing, there will be an attempt to establish subgroups within the TAN membership at various levels of interest and respon- siveness, and suitable degrees of staff attention for each such group will be recommended to the Committee for ap- proval. The discussion then moved to TAN in the tobacco states. Lorillard'has completed its recruiting and orga- nization in those states for members of the Sales Force and will complete the same for salaried plant employees upon the completion of Company labor negotiations. It was quite startling to be advised that, not only is Lorillard the only company to~have~thus emb~rked upo_n an in reg a_ part completed itsorganization in the tobacco states,~bu--that tfi7e-o£Fidr ma"nu!facturers -seem: notyet"fo"'have-mm-de a well defined decision as to whether, when and in what fashion they will begin to proceed'in that direction. It is clear that RJR and PM will not make their salaried plant employ- ees part of the regular TAN membership. Rather, they will mobilize this group in~their respective plants if and when they determine it appropriate. There seemed to be some halting consensus that each man- ufacturer would soon begin to organize its sales force in the tobacco states. The Committee was then advised by the staff that there is now in test in~California a new means to measure the effect -2-

Messrs. C.H. Judge J.R. Ave A.J. Stevens March 10, 1983 of TAN mobilizations on the TAN members and on elected officials. This involves the use of computer generated letters to activate the volunteers, which letters attach a postcard addressed to the Institute on which the volunteer may indicate what action, if any, was taken pursuant to the request. The test seems a worthy one, however, it has not been completed and when its results are available they could be of limited value. This is because PM continues to be jealous of the names of its TAN volun- teers and wishes to continue the practice of activating its people itself and without any help from the TAN orga- nization. It is apparent that PM is not to be budged on this subiect There then was proposed by Jack Kelly and approved in principle by the Committee a proposal to identify in each troublesome state a group of volunteers which may be activated in emergency situations without prior permission from the member companies. It is understood that occasionally legislative events require a speed of mobilization which will not permit the luxury of our usual approval process. The Committee agreed that if Kelly will identify the states, the volunteers, the range of activity that may be requested of the volunteers and the circumstances under which these volunteers might be activated', the Committee will seriously consider authorizing these emergency measures. The writer then raised the subject of the strength of our alliances in the various states with the State whole- sale trade associations, andasked whether the recent unhappy experience with the Arkansas group (in which prominent Members of that association were promoting a cigarette tax that the Tobacco Institute was attempting to defeat) and last year's unhappy experience with the Iowa association were unique, or whether it is in order to have a general review of our relations with State associations. To this time, we have assumed the closest cooperation politically between~such association(s) and the

f -t Messrs. C.H. Judge J. R. Ave A.J. Stevens March 10, 1983 Tobacco Institute. Jack Kelly stated with clarity that Arkansas and Iowa are unique, will be rectified and that no general review is therefore necessary. His assertion was not challenged by either Sam Chilcote or Bill 0`Flaherty.* There were then a series of staff recommendations and related Committee approvals concerning TAN details, none of which merit recitation here. ------------------------------------------------------ *Tiny Weintraub's recent visit here would seem to give us another view of things, and it is difficult to determine which view should be accepted. Tiny advises that T.I. is ignoring distributor associations generally, and that the most recent and damaging example of this is the exclusion of New York wholesalers from either participation in or consultation concerning,the current public relations program in opposition to a New York cigarette tax increase. The curious aspects of this are: (a) That the program~in its present form~is almost entirely the brainchild of Bill O'Flaherty, Tiny's patron (and according to Tiny, the only T.I. man possessing the neces- sary sensitivity to relations with the wholesalers); (b) Tiny (and Malcolm Fleischer) has been present at each meeting at which the program was considered, and uttered no murmur of objection or suggestion for modification what- soever; (c) when the program was addressed by the State Activities Policy Committee at this March 4, 1983 meeting, the Committee suggested the sponsorship of the program should ostensibly be that of the New York distributors, but it was deterred in this by Bill O'Flaherty. Bill indicated that the distribution industry is in such a state of disintegration'in New York that it would be very difficult for Tiny Weintraub to rally that group in~1983 as he had in 1976, and that the Tobacco Industry generally would be better served by Tobacco Institute sponsorship.

March 10, 1983 The subject themturned to the full array of New York State legislation and our planne6responses thereto. First considered and approved was the public relations plan to aid iniour defense against a further cigarette tax increase in New York. Thi.s involves the formation of a Committee of prominent former law enforcement officers to make public the unhappy connection among,high taxes, bootlegging and organized crime, and to urge a moratorium on further tax increases and indeed, possible consideration of tax rollbacks in order to cure the difficulties at hand.** Although this public reliations initiative was unani- mously approved'by the Committee, it was realized by, each Committee member and by the TII staff that the idea is not novel, inspired:or ideal. Hewever, it was also realized by all present that the idea is the best liever at handifor a pressing problem, and that it is a lever which just could succeed in staving off what will otherwise be a sure increase in the cigarette tax in New York. The other very pressing legislative matter in New York is the self-extinguishing bilil introducediby Grannis which has 108 co-sponsors in the Assembliy and 30 co-sponsors (of the 60 Members): in the Senate. The question had ari~sen whether we could succeed in our opposition to this Bill without a hearing and the testimony of a scientific witness (it always having been assumed that Alex Spears would be that witness). ~^--------------------------------------------------- **At the time of this writing, the committee has been formed, is composed of Sanford Garelik, Walter LaPrade and Michael La Perch whose resumes are attached. The Committee ils due to have its opening press conference this Tuesday, March 15th and it is the intention of Howard Rubenstein, who is shepherding this project for us, to move the Commit- tee tee on promptly to editoriali meetings and talk shows. • l/ ~e SS-~~.~ L/ eS , /v r ~ J I _ _ .-.P ~ -:1 - o 5d'Oov e ~ ~ ~ ~ ~ ~ > ~i •~c.7".

Messrs. C.H. Judge J.R. Ave A.J. Stevens March 10, 1983 There is a split in the opinion of our New York State lobbyists as to the necessity for such a heari~ng; the junior lobbyist believing it to be an absolute necessity, while the senior man has a contrary opinson. Upon the advice of both Sam Chilcote and Jack Kelly, the Committee decided that the weight of opinion and related consid- erations militates against calling for a hearing on this bill. The two other cigarette bills which have been in- troduced in the New York State Assembly are an ingredients bill and the usual clean air bill. Neither is expected to survive in the Legislature. The minutes of this meeting, (which are to be issued shortly) are supposed to be submitted to the Executive Committee and to serve as the State Committee's report on TAN's implementation of the ORC recommendations. JRC/wrh JRC Attachment -6- r='