Tobacco Documents Online

January 14, 1983 TO: Messrs. Judge, Ave, Stevens FRDM: J.R. Cherry State Activities Policy Committee Januarv 7R 1983 Meetin4 A Committee meeting was held in Washington on January 7 and there were present: Shep Pollack (Chairman), Gene Ainsworth, gnie Pepples, 1C.V. Dey, Stan Scott. Sam Chilcote, Jack Ke11y, Bill O'Flaherty, Bill Kloepfer, Martin Ryan Haley, Stan Temko and the writer. I . 2OMMITT`EE FtTNCT ION There was a discussion of the function of the Committee whic h articulated no departure from our earlier understanding. It was suggested and agreed that the bi-monthly schedule of meetings for 1983 would be adhered to except in cases where the business of the Committee is so light as to warrant only a telephone conference call or where the volume of business might require additional meetings. It was agreed'that the Committee is one of policy not opera- tions and, therefore, should conserve its time by considering policy only and delegating detail and operational matters (and the attendant reviews with and approvals for the Institute staff) to the appropriate subordinates at each of the respective companies (being: Bewley of RJR, Scott of PM, Wells of BM, an unnamed of L&M and yours truly of Lorillard). Shep Pollack ex- o. pressed the view that in State affairs the Committee must give ~ direction to the Institute and not vice versa, and suggested a 0~ continuing consciousness that the TI should have no life of its ~ own, but remain the public affairs instrument of the Member Companies. ~. ~ There seemed to be a call to press both the Institute staff and the Committee for more in the way of results. An idea with which no one disagreed.

C Messrs. Judge, Ave. Stevens January 14, 1983 II. STATE ACTIVITIES DIVISION Having made a call for results, the Chairman promptly suggested that the first substantive agenda item, a progress report on the implementation of the ORC/TAN study, be postponed until the March Ah meeting of the Committee because of inadequate time to deliberate and prepare a report for the Phoenix meeting of the Executive Committee. Ernie Pepples was designated to relay to the Executive Committee in Phoenix the thought that required study of the subject and a worthy report could not be had in time for Phoenix, and that the report will be submitted to the Executive Committee at its April meeting. This postponement was endorsed by all members of the Committee except the writer, but I must admit that the delay is not alto- gether unreasonable since this State Affairs Committee meeting had itself been continued from its original November 19, 1982 date because of pricing activity in the Industry. In order to accelerate matters, I am suggesting to Shep Pollack that the In- stitute staff prepare and forward to the Committee members before the March 1lfineeting a report on progress and prospects in connection with the ORC/TAN study. III. ISSUE MANAGEMENT (a) Excise Tax Sam Chilcote advised that within the Institute there is to be formed a permanent Tax Issue Task Force which is to spend con- siderable time and effort coordinating intelligence gathering on any Congressional initiative to increase the Federal excise tax, and to immediately oppose such initiatives by employing not only our Washington, D.C. resources but also our State resources. This last relates to resuming a program which involves our State lobbyists visiting key members of the Senate and House of Repre- senbatives. On the State tax level, a program is to be initiated which will include immediately attempting to seize opportunities for positivew action on our part, such as initiatives for tax reduction legis- . lation and the acceleration of tax sunset provisions. N] Uai 2.

C Messrs. Jtiidge, Ave, Stevens January 14, 1983 It was the general feeling of the Committee that absent efforts on our part to at least attempt programs which will discourage the introduction of cigarette tax measures, the existing financial pressures in the various states will almost inevitably cause us to be burdened with very damaging tax legislation. in this connection the very familiar coalition-idea was again brought forward for discussion. Sam Chilcote and Jack Kelly ex- pressed the view that there are so many industries which are faced with State tax problems, which problems no one of those industries can completely control by itself, that an anti-tax coalition would seem quite natural and might, indeed, have some measure of success. Specifically, a Nelson-Padberg proposal for the State of California would involve the systematic identi- fication of similarly beleaguered California industries and an attempt to form common and effective cause with them. The con- sensus of the Committee was that, being members of the least popular and most victimized industry, the cigarette companies stand to lose the least and gain the most from such a coalition, if one can be constructed.' There was agreement also that the cigarette manufacturing industry is best served if it can get other industries or a group of industries to be its stalking horse and catspaw. In short, our aim of discouraging regressive taxes might be more easily attained if we have others fronting for us. There was no assurance on anyone's part that this could be achieved, but it was unanimous that we had nothing to lose in authorizing a Nelson-Padberg pilot project in California. The general outline of a similar pilot program for the State of Michigan was also authorized. Although there will be near term problems in California, Michigan and elsewhere, those problems, as usual, will have to be dealt with by our State lobbyists and TAN organization. There can be no reasonable expectation that the Nelson-Padberg program for California or that being formed-up for Michigan will have any near term results. These are and will have to be investment efforts for the long term. There was some brief discussion of the Los Alamos Smoking/No Smoking Referendum and Jack Kelly expressed high optimism with ~ respect to prospects there. Happily for Jack, his optimism was M I altogether justified. ~ ~ bJ1 . ~. 3.

Messrs. Judge, Ave, Stevens January 14, 1983 -- - ;~ - --,--_~~------ - - - - - . . IV, 1982 ELECTIONS (a) Martin Ryan Haley held forth at length concerning trends which have been devined by him statistically from the 1982 election results at both the Federal and State level. It is, according to Mart3.n, the year of the incumbentl very little turnover having been experienced at any level of government. This is held by Haley to mean that incumbents are very much in touch with the feelings of their respective constituencies, but what all of this means to us was not made clear. More interesting was his advice that propositions for consti- tutional amendments which would provide for referenda were on the ballot in 16 states, and failed to pass in all 16. Further, in actual referenda issue votes, social issues where proposed were defeated while initiatives of the good government variety succeeded. . Voter turnout was approximately 40% which constituted the first increase in voter turnout in more than a decade, and there were two interesting results at the State level: there was only a 1.9% overall increase for the Democratss and, reapportionment had hardly any effect at all on the outcome of things. In short, not much happened in November. (b) Pursuant to 1982 authorization by the Committee, cash contri- butions were made by the TI to a total of 452 candidates for re- election at the State level and to 32 legislators in the States of New Jersey and Louisiana where there were no 1982 elections. Of those candidates receiving contributions, 397 were successful.' A brief discussion of this contribution program revealed one etupifying piece of information. Instead of giving the contri- bution checks to our State lobbyists so that they might in turn give the checks personally to the cad8ddate (as is usual in such matters, if you want any bang for your buck) the checks were simply placed in envelopes in Washington, D.C. and mailed directly to the candidates. The predictable resulteds nationwide mystification and confusion on the part of the favored candidates, most of whom hadn't the vaguest idea why this tobacco industry manna was being imposed upon them. Unfortunately, Jack Kelly attempted to defend this bizarre method of check dispatching and therefore incurred not only the vocal wrath of the Committee but that of his boss, Sam Chilcote, who described Jack's approach as in- excusable on any *-basis. p3S'75959

C Messrs. Judge, Ave, Stevens January ]4, 1983 V. THE SELF-EXTINGUISHING CIE'ARETTE ISSUE Bill Kloepfer gave a brief description of the progress of his national program to find common cause with City firefighting officers. We are to have a written report on this from Bill shcrtly, but suffice it to say that this program to divert attention from cigarettes and toward a practical national pro- graTn of fire prevention based upon the enforcement of existing codes and the introduction of good sense, has had very sifjnifi- cant and heartening progress under Bill's guidance. . JRC/wrh JRC Attachment 5.