Tobacco Documents Online

NEWSBRIEFS New York Times May 18,1994, p. A22 MEDICARE'S BIG CIGARETTE BURN Smoking, as its adhei ents like to point out, is a private choice. But it is also a choice with public consequences. Just how extraordinary those conse- quences are is evident in a report issued this week by Joseph A. Califano Jr., head of Columbia Univer- sity's Center on Addiction and Substance Abuse. Out of $87 billion spent by Medicare for inpa- uc:nt hospital care this year, at least $20 billion is due to substance abuse. Drug abuse accounts for 3 percent; alcohol abuse, 17 percent; and smoking a whopping 80 percent. Those put in the hospital by cigarettes are, for the most part, suffering from lung cancer, coronary artery disease and chronic pulmonary obstruction disease. Because women who were heavy smokers - targets of the "You've come a long way, baby" school of smart sell - are just beginning to enter the covered group of people 65 or older, Mr. Califano figures the share of Medicare costs attributable to cigarettes can only increase. That share might eventually be outweighed by a rise in the number who quit smoking. Even so, Mr. Califano says, substance abuse will cost Medicare $1 trillion for hospital care over the next 20 years - and smoking will be responsible for most of it. Cigarettes are beginning to burn a big hole in the elderly's medical safety net. To mend it, Amer- ica had better start putting out the fire. Greensboro News & Record May 18,1994, p. A6 TOBACCO FIRMS ACCUSED OF TRYING TO INTIMIDATE WASHINGTON - A congress- man accused the tobacco industry Tuesday of intimidation in his in- vestigation into whether the indus- try conspired against Americans' health. "The tobacco industry may not like it, but theirs days of secrets ... are over," said Rep. Henry Wax- man, D-Calif. "The tobacco indus- try is engaging in a pattern of trying to intimidate people ... which will not be permitted to keep us from doing our work." He said he will resist Brown & Williamson Tobacco Corp. at- tempts to examine the confidential records of his congressional inves- tigation and expects its chief exec- utive to testify before Congress on Friday. Vol. 24. No. 6, June 3. 1994 rrEwsBtiEEFs At issue are internal documents showing Brown & Williamson exec- utives knew 30 years ago that smoking was dangerous and nico- tine was addictive and that they shelved a safer cigarette. Among the documents, given to the news media, is a July 1963 memo from company attorney Ad- dison YeamaL that says: "We are, then, in the business of selling nico- tine, an addictive drug." He added cigarettes ease stress and prevent weight gain but also "cause or predispose" smokers to lung cancer and other diseases. But the first surgeon general's report on smoking, issued six months later, couldn't prove ciga- rettes cause any of those problems. Brown & Williamson contends the documents were stolen by a disgruntled former employee who is trying to sabotage the Louisville, Ky., company and have been taken out of context. Chief executive Thomas Sandefur postponed con- gressional testimony about the doc- uments Tuesday, saying he couldn't respond to something that Waxman won't let him read. ' The company went on the offen- sive. Tuesday, it subpoenaed Wax- man, chairman of the House En- ergy and Commerce Committee's health subcommittee, fellow smok- ing opponent Rep. Ron Wyden, D- Ore., and several reporters who possess copies of the documents, seeking to examine them. And company attorneys wrote a former federal official that the doc- uments he was asked to discuss before Waxman's subcommittee on Tuesday are under a court gag order. The former adviser, Joseph Cali- fano, testified Tuesday the govern- ment would have cracked down on smoking 30 years ago had it known what Brown & Williamson knew. He said former President Carter and former Surgeon General Julius Richmond told him that they agree with his assessment. But the Johnson and Carter ad- ministrations each concluded they didn't have enough hard evidence about the dangers of smoking, Cali- fano said. "If we had known in 1964 what we know now, we could have turned our best minds and energy then to arresting this killer," Cali- fano said. "Now, 30 years and 9 million deaths later, we must move aggressively to stop the carnage." ~~1;

NEWSBRIEFS . Wall Street Journal May 19,1994 , p. 131 A CRAFTY LAWYER TURNS UP THE HEAT ON TOBACCO An army of lawyers, led by a flamboy- ant New Orleans attorney named Wendell H. Gauthier, is taking on the ~ tobacco industry in the most lavishly financed assault to date. Fifty law firms have promised an initial investment of $100;000 each to finance a class action on be- half of all people ad- dicted to cigarettes; the first payment of 525;000 is due by the end of May. More than 100 lawyer3 are working part time on the suit, and the group is preparing to buy a $1 million office - building in New Or- leans to serve as a document deposi- tary and headquar- Wendell H. Gauthfer ters for the case. Mr. Gauthier filed the putative.class action at the end of March in Louisiana federal court. A bantamweight man with a mischievous glint In his eye, Mr. Gauthier describes his lawsuft's.strategy as, "You addicted me. You knew it was addicting, and now you say it'sy my fault." Earlier suits unsuccessfully charged that the in- dustry had failed to warn smokers about health risks and sold a defective product. Mr. Gauthier also plans to argue that tobacco companies have targeted teen- agers, who are incapable of making a free gnd informed choice. The tobacco class action was filed just days after congressional hearings, on whether the tobacco industry is intention- ally maintaining nicotine at addictive levels in cigarettes. Testimony..and re- cently disclosedanternal.docdments from Brown & WIDiamson Tobacco Corp. sUg- gest that tobacco executives have long known and suppressed information that nicotine is addictive. That information is expected to test the industry's traditional legal defense that smokers know the health risks of smoking and are free to quit anytime. Tobacco companies have yet to pay a cent in damages for a smoking suit. Mr...Gauthier and his frequent co-coun- sel, Stanley M. Chesley of Cincinnati, who has been dubbed the "Master of Disaster" for his victories in big personal injury cases, are moving directly to the tobacco suit after helping negotiate the recent $4 billion settlement on behalf of women who claimed injuries from silicone-gel breast implants. The names of the other lawyers in the suit read like a "Who's Who" of the national plaintiff's bar. They include Mel- vin M. Belli of San Francisco; John P. Coale of Washington D.C., who is also representing victims of the recent train crash in North Carolina; Ronald L. Motley of Charleston, S.C., a leading asbestos law- yer; and Mark P. Robinson .ir. of Mission Viejo, Cal., who was co-coun-l in the 1979 Ford Pinto suit. Mr. Gauthier, 51 years old, views each new class action as a business start-up, and he functions much like a chief execu- tive, dividing tasks among difierent law firms. At a recent planning meeting for the tobacco case, he assigned one lawyer to work on the search for a headquarters for the legal team and cut short discussion approving stationery for the suit. He spent more time exploring security issues for the 2.5 million documents that are expected to be disclosed in discovery. An influential voice in New Orleans, Mr. Gauthier is a confidant of Edwin Edwards, the governor of Louisiana. He is also part owner of the New Orleans Saints football team and the head of a group of investors in a new casino project. He negotiates the narrow streets of the French Quarter in a Rolls-Royce while talking on his car phone. Local residents approach him on the street and call him by his first name; restaurateurs won't take his money. Beneath the good old boy demeanor is a killer- instinct, say experienced adversar- ies. Mr. Gauthier is "very aggressive and will do a lot more and go a lot further than most lawyers will." says William P. Kar- daras, a New York defense attorney who opposed Mr. Gauthier and a group of lawyers in the case stemming from the 1986 San Juan DuPont Plaza Hotel fire, which was settled for $235 million. "What- ever it takes to win, within the system, they will do," says Mr. Kardaras. "Whether you call that fair or unfair, I won't characterize." Mr. Gauthier is known for using uncon ventional tactics to keep people off guard. He greeted a reporter with an elaborate prank: Wearing a monkey mask and bran dishing a fake gun, he posed as an unstable whistle-blower peddling incriminating to- bacco industry documents while hidden cameras recorded the whole inadent. An- other time, he called a partner in the middle of the night and said, "The presi- dent of R.J. Reynolds has just confessed everything, get on it" and hung up. "You tend to discount him as just a clown. It throws you off your game," says Gary L. Bostwick, a defense attorney in the San Juan Hotel fire case. Mr. Gauthier once slipped Mr. Bostwick a pair of plastic handcuffs before a deposition, suggesting that Mr. Bostwick or his client would soon be needing them. Mr. Kardaras's advice to the cigarette companies: "Get the best defense lawyers they can and stay awake. They are very formidable adversaries." In the tobacco industry's lawyers, Mr. Gauthier will meet formidable opponents. So far, the tobacco industry has been able to outspend and outlast the small law firms that have pursued smoking liability cases. One experienced tobacco litigator, Marc Z. Edell, largely dropped his tobacco cases in 1992, pleading financial hardship after having spent 51.2 million in out-of-pocket expenses over 10 years. Tobacco company lawyers tied up one of Mr. Edell's expert witnesses in depositions for 22 days on one case. "To paraphrase Gen. Patton, the way we won these cases was not by spending all of (RJR's ) money, but by making the other son of a bitch spend all of his," an attorney , for RJR Nabisco Holdings Corp. wrote in a memo. "So far, the tobacco industry has had to fight only one victim at a time," says William S. Lerach, a San Dieg6 lawyer pursuing a separate class-action suit on behalf of people who have paid for nicotine patches to overcome their addiction to smoking. The tobacco giants "have been able to grind up every one of the individuai victims into a fine powder and get rid of them." The narrow focus on addiction is "go- ing to be more palatable to a jury," than previous tobacco cases, says Gregory Ma- zares, president of Litigation Sciences Inc., a firm that specializes in predicting how jurors will respond. Tobacco company lawyers say they will continue to prevail. "Jurors believe that people can quit smoking," says Chuck ivEWSSRIErs , I Vol. 24, No. 6, June 3, 1994 `4

NEWSBRIEFS Wall, associate general counsel for Philip Morris Cos. Mr. Wall doesn't believe the courts will certify the new cases as class actions because each smoker's case is different. "I don't think this is a new day," he says. Mr. Gauthier dismisses the tobacco companies' arsenal with characteristic bravura: "They're not going to outman us. They're not going to outfund us. And they're not going to outlast us." Wall Street Journal May 19, 1994 , p. B9 PHILIP MORRIS AGREES TO $250,000 IN FREE-CIGARETTE CASE NEW YORi: - Philip Morris Cob- agreed to pay New York State S250.000 tc• settie a dispute over tne company's distr:- bution of free sampies of Marlooro ciga- rettes. The announcement marks the first en- forcement action filed for violating Nev: York's ban on free distribution of ciga- rettes. Attorney General G. Oliver Koppel said. The ban was enacted in 1992. PPhilip Morris mailed out free samples of five packs of Marlboro cigarettes to more than 44.000 New Yorkers last sum- mer. state officials said. Philip Morris, in reaching the settlement, denied that its mailings violated the law. Public and political pressure against the tobacco industry "has made Philip Morris desperate for new customers" said Joseph Cherner, president of SmokeFree Educational Services Inc., a health advo- cacy group. The company "made a big mistake in underestimating New York state." The state's action was prompted by a complaint from a Massapequa Park, N.Y., resident whose husband received five free packages of Marlboro cigarettes in the mail just after he celebrated his one-year anniversary of having quit smoking after 38 years. Philip Morris said the cigarettes were sent only to respondents who completed a consumer survey. The respondents were at least 21 years old and had stated that they were smokers and that they were willing to receive cigarettes in the mail. The company said that it "admits no wrongdo- ing" and that it hasn't violated any law or regulation. Greensboro News & Record 19-May-1994, p. A3 AIRLINE-CABIN AIR CALLED UNFIT WASHINGTON - The smoke hhs cleared from airline cabins, but Congress is still hearing a litany of complaints of bad air quality from passengers and flight attendants. * "It's clear that people believe that the air quality is bad ... and getting worse," said Rep. James L. Oberstar, D-Minn.," chairman of the House Transportation aviation sub- committee.. While the recent ban on smoking on domestic airline flights has im= proved things, the airlines have switched from using pure outside air to a mixture of outside air and recirculated cabin air, Oberstar said. The process saves money. but has raised health concerns, Rep. Jerrold Nadler, D-N.I-., cautioned against putting too much faith in tests that show airline cabin air meets safety standards. "In the real world, on real planes with real passengers, the air qual- ity is substandard," Nadler said. "There is currently no legal stan- dard for how much fresh air a traveler is entitled Xo breathe.", . The subcommittee also ~consid= ered the government's effalrts to get certain cottntries to drop require- ments that insecticide be sprayed in airliner cabins while passenuers are aboard and to get foreign air- lines to ban smoking on lon f*- distance flights. But general cabin air quality was the prime focus of Wednesda5•',; hearing. "Currently, flight attendants and passengers on many flights are not provided adequate amounts of fresh air and, thus, may be exposed to unacceptable amounts of bac- teria, viruses and other potential health risks," Dee Maki, president of the Association of Flight Atten- dants, told the subcommittee. Because fresh air is mixed with recirculated air, cabin air is ex- changed only every seven or morr minutes, she saicl. 13efm• • 1990. tresh air was changed in rnhin • every three minutes. Greensboro News & Record May 21, 1994, p. G2 SCHOOL AIMS TO EXTINGUISH SMOKING Even though teenage smoking has reached a new high in the nation, Northeast Guilford High students and teachers are working to lower the statistics. The county's new student hand- book includes several new rules, including one that forbids students from using or possessing any to- bacco products on school property. If any student is caught violating the rule, he or she faces three days of out-of-school suspension. There are also school activities and clubs designed to discourage students from smoking in bath- rooms and littering on school premises. "It's really irritating to go into the bathroom and almost choke to death," says junior Latanya Graves. "You go into it smelling like perfume and go out smelling like smoke." The student council has posted various signs to warn students not to smoke in the bathrooms and has proposed putting up smoke detec- tors. "Human nature says, 'Smoke won't affect me,' " says history teacher Mary Yoder. "People don't realize the damage that smoking does, especially when you start at such a young age. "As far as smoke detectors go, they should install a sprinkler sys- tem (to douse students' cigarettes) too." Freshman President D'Jella Gray says, "If they say they're go- ing to put up smoke detectors, they need to do it instead of just saying they're going to." NEWSBRIEFs Vol. 24. No. 6, June 3. 1994 ~ ~; 2 8

Wall Street Journal May 20,1994, p. 131 CIGARETTES RIDING ON HARLEY'S APPEAL i APAN'S MOTORCYCLE fans can now smoke what they ride: Carolina Cigarette's Harley-Da- vidson cigarettes are catching on, according to importer PBI Interna- tional. The biker cigarettes, which come in white packages emblazoned with the Harley motif and are licensed by the motorcycle maker, are "popular because the name of Harley-David- son includes American taste and American spirit," says PBI account manager Reiko Kobayashi. "This is an American authentic." Americans, though. might be somewhat per- plexed by the slogan "Have you, Harley." Featured on television, in magazines and on subway walls, the spots show a rugged young stuntman perched atop a motorcycle. "We know the words might sound a little strange," chuckles a spokes- man at the cigarette maker's ad agency. But he adds that grammar wasn't a priority: "We wanted to use the name, which is very famous in Japan," to its best advantage. He offers this translation: "We are say- ing that if you smoke this, you can do anything." Anyway, he notes, garbled Eng- lish is nothing new in the Japanese ad world, where foreign words are picked up more for impact than for comprehension. Philip Morris K.K., for example, has used the same tactic in selling its Lark brand cigarettes with the puzzling but popular "Speak Lark'• campaign. Ms. Kobayashi adds that Japan's smokers are sucking up the brand: PBI started offering the Harley-Da- vidson brand on a limited basis last May and sells about 1 0 million ciga- rettes monthly. It hopes to triple that and is aiming for a 2% share of Japan's growing imported-cigarette market by the end of the 1994 fiscal year in March, Ms. Kobayashi says. Japan's tobacco market, of which foreign brands hold a more than 1717c share. was about 3.782 trillion yen in the 1993 fiscal year. Vol. 24. No. 6, June 3, 1994 NEWSBRIEFS Wall Street Journal May 20,1994, p. B2 SECOND-HAND SMOKE R.J. Reynolds Tobacco Co., a unit of RJR. Nabisco Holdings Corp., plans to run newspaper ads Monday arguing that sec- ond-hand smoke is not a significant health risk. The ad, according to the company, "is designed to provide the public with impor- tant facts to bring some balance to the debate surrounding second-hand smoke." Last week, a broad smoking ban in public buildings was approved by a Congres- sional subcommittee. R.J. Reynolds says the smoking ban is "simply not supported with science." Greensboro News & Record 20-May-1994 , p. A2 SMOKING GOES UP AMONG ADULTS AGES 18 TO 24 WASHINGTON - Fed- eral officials expressed fear on Thursday that the nation's long decline in smoking may be over. New figures show the steady decline since 1966 has halted, while smoking among young people has increased for the fnst time in a decade. The data, issued Thurs- day in the government's Morbidity and Mortality Weekly Report, show "a leveling-off in adult smoking in the United States for two years in a row, and that gives us reason for serious concern," said Dr. Michael Eriksen, director of the Federal Project on Smoking and Health at the Centers for Disease Control in Atlanta. "Another number that gives us cause for concern is what is hap- pening among young people, ages 18 to 24," he said. "Their smoking had been declin- ing every year since 1983, but for the first time their smoking went up, and went up by a lot." The percentage of young adults who smoke increased to 24.4 percent in 1992, the latest year for which 5g- ures - are available, from 22.9 percent in 1991. Smoking among teenag-- ers has remained virtually unchanged over the past decade, at about 19 per= cent. - John F. Banzhaf III, di- rector of the anti-smoking group Action on Smoking and Health, said he was "worried about the latest figures, but not sur- prised." "We may have gotten down to the hard core of smokers," Banzhaf said. - "Others who. smoked but were not addicted, or had mild addic- tions, • may all have quit by now.• And the only people left are those who are addicted so heavily that it will take much more than educa- tion to allow them to quit." One of the chief reasons cited by Erikson for the change in trend is advertising: Manufactures spent a record $4.6 billion on advertising and promotion in 1991, the latest figures. Thursday's data came from the annual National Health Inter- view Survey. rrEwss)2EErs C. 2~ .

NEWSBRIEFS New York Times May 20, 1994 , p. D17 CALIFORNIA ASSIGNS ANTI-TOBACCO ADS The California Department of Health Services has awarded its anu- smoktna account to Asher/Gould o: Los Angeles. The high-profile ac- count, with billings estimated at $23 million for two vears. was handled by Livingston & Company of Los Ange- les for the last two years. Bruce Silverman, president and chief creative officer of Asher/Gould, confirmed a ren_ ort of the appoint- ment this week in Adweek. He said his agency was awarded the account after a two-month review that also included the team of Stein Robaire Helm of Los Angeles and Paul Keye, an ad executive who had worked on the account for the last four years at agencies including Livingston. A campaign by Asher/Gould is ex- pected to begin in the fall. The previ- ous campaigns, with their frank at- tacks on cigarettes, have been cred- ited with helping Californians to quit smoking at rates far higher than those in the rest of the country. New York Times May 20,1994 , p. A16 COMPANY SPENT $1 MILLION TO PUT CIGARETTES IN MOVIES, MEMOS SHOW Au unusual glimpse into the busi- ness of both Hollywood and tobacco companies has been afforded by in- ternt.l memorandums from the Brown & Williamson Tobacco Corpo- ration. They show that the company spent a million dollars over a four- year period to put images of its ciga- rettes into the movies. The approach is called "product placement." It is legal and widely usc•d by businesses promoting all kind.; of products, but the scale and form of Brown & Williamson's efforts - the Hollywood figures accepted payment in the form of expensive gifts - is unusual for the practice. The internal documents that have come to light are audits the company conducted to see if it was getting its money's worth in placing images of cigarette packs and billboards in movies. It concluded it was not. The million dollars in placements, a company spokesman, Thomas Fitz- gerald, said today, "was a total fail- ure." The way the placement procedure worked, according to the documents, was that Brown & Williamson asked an intermediary in Hollywood to seek out directors and producers to ar- range for placement of cigarette packages and billboards in films, and in some cases to show actors smok- ing. The producers then would desig- nate who was to receive the money or gifts. In one deal, Associated Film Pro- motions, a firm now out of business, arranged with Sylvester Stallone for Brown & Williamson cigarettes to appear in a significant way in five of his feature films, and to "incorporate personal usage for all films other than the character of Rocky Balboa in Rocky IV, where other leads will have product usage," possibly at ringside. The price tag for the five films was. $500,000. The films and th..i. , _ oposed titles at the time, 1983, were: "Rhine- stone Cowboy," "Godfather III," "Rambo," "50/50" and "Rocky IV." The money was for the most part delivered in the form of expensive gifts. For example, $24,200 in "jew- elry" was listed in the audit as given to Sylvester Stallone. A watch for Mr. Stallone was listed at $7,290. An auto- mobile for Mr. Stallone came to $97,000. An American saddlebred horse for Mr. Stallone was $80,000. Cash payments of $2,000 and $8,000 were made to the property master and the producer on one of the Stal- lone films, according to the audit. Among the listing of payments was $25,000 for charity, to go to the Autis- tic Children's Foundation. The audit noted that deals had been made for 22 films between 1979 and 1983, with the Stallone deal by far the largest. In addition, advertising in movie theaters was listed at $300,000. If all the payments were made as noted in the audits, about $1.3 million would have been spent. Among the larger payments was $100,000 for the film "Harry and Son," including $50,000 in air travel and a$42;307 car for Paul Newman. About $20,00) was reportedly paid out for the James Bond film "Never Say Never Again," starring Sean Connery. "Jewelry for Sean Con- nery" was listed at $7,170. Other films and the amount spent for placement in them included, "The Tempest," $70,000; "Shaker Run," $5,000; "Blue Skies Again," $7.500; "Smokey and the Bandit II1," $10,000; "Tank," $25,000; "Where the Buys Are," $100,000; "Killing Ground," which on release was called "Sudden Impact," $50,000. The tobacco company's auditors reported that there were no written agreements about placement with movie companies or producers, and that the placements they got were sometimes disappointingly •fleet. in "Never Say Never Again," for exam- ple, the auditors said a pack of Super Kool Lights appeared on screen for one or two seconds but it was not possible to read the word Kool. Circumventing a Ban? Although product placement is a legal and common practice, smoking opponents like Alan Blum of Baylor University have argued that its use in films shown on television is a way of circumventing the 1969 law banning the advertising of cigarettes on tele- vision. But the Federal Trade Com- mission has never attempted to pros- ecute companies for the appearances. Brennan Dawson, an official of the Tobacco Institute, the industry's trade organization in Washington, said all the major companies had agreed since 1990 not to place their products in movies. 7 homas Fitzgerald, a spokesman for the Brown & Williamson company said the practice of placing ads in movies "was a total failure in our view" and was stopped about 10 years ago. "Obviously, it is something we tried but it just didn't work for us." he said. "It didn't seem an effective way of spending our money." Ellen Merlae, a spokeswoman for Philip Morris U.S.A., a domestic sub- sidiary of the f'hilip Morris C'otnpa- nies, said that Philip Morris U.S.A. has never paid for product placement in movies. But another subsidiary, Philip Morris International, has paid for placements in movies made out- side the United States, she said. Since many of the films shown in the United States are made in other countries, placements were se en in American theaters up to about three years ago. she said. when the practice w:u- stopped in international work as well. Films that included cigarette placements from the international subsidiary of Philip Morris were "Su- perman II" and a James Bond Film called "License to Kill." How many other companies kept up placements through their international corporate partners after the domestic tobacco companies agreed to stop making movie placements is unknown. But critics say that the continued widespread appearance of cigarette billboards and identifiable images of brands in movies and on television make them suspect that some deals continue to be made. NEWSBRIEFS Vol. 24, No. 6, June 3, 1994

NEWSBRIEFS ' Wall Street Journal 23-May-1994, p. B5 R.J. REYNOLDS FIGHTS BACK IN CAMPAIGN Amid growing antitobacco sentimen: and a series of damaging congressiona; hearings, tobacco executives decide it iS time to fight back. Under consideration: Project Truth, a massive advertising cam- paign. Project Truth is ultimately rejected as too controversial, as is a proposed slogan, "Being alive today is a risky business." "We hardly give (smokers) any com- fort telling them that," a Brown & Williamson execu- tive wrote in a memo dismissing the suggestion. That was in 1970. ` na Anwecuuw~~auv _ ir -ms uiNnxuwxue~w~~~wr ~r • Twenty-four years later, the tobacco industry is more threatened than ever and is taking forceful action to try to sway public opinion. Today.BTR Nabisco Hold- higs' R.J. Reynolds Tobacco unit is begin- ning a multimillion-dollar advertising campaign, with full-page newspaper ads, designed to provide its viewpoint in the debate on smoking. Philip Morris has also sporadically been using advertisements to present its side this year. . The embattled industry is fighting back in less visible ways as well. With a highly restrictive smoking ban under consider- ation in New York City, Philip Morris has raised with city officials the prospect of moving.its Park Avenue headquarters out of the city. "There really has been no threat, but we tried tomakeclear to the mayor's office that it is important that, since we have our world headquarters in New York, the climate remains favorable for all of our businesses," says Craig L Fuller, senior vice president. Philip Morris. °If it be- comes unfavorable, we might consider what our options might be in terms of more favorable -locations. That sentiment has been expressed by our representatives." Crisis management experts say. that such tactics are a sign of the industry's increasing isolation. "The people who buy newspaper ads are folks that have ex- hausted . all other means of getting their story across," says James Hasl, president of the Delahaye Group, a crisis-consulting firm. "If all else fails, take out an ad." • With public opinion already so nega- Vol, 24, No. 6, June 3, 1994 tive, image consultants say the tobacco companies have little to lose in fightir.~7 back. Still, the advertisements are ex- pected to do little to sway F,:Luc opinion. "The public does not necessarily want to hear from the companies," says Rober: Dilenschneider, chairman of the Dilensch- neider Group, a New York public relations firm. "They want to hear from people they know and trust. There must be someone in Hollywood who smokes." During congressional hearings •last month, R.J. Reynolds discovered that its chief executive officer, James W. John- ston, had considerable marquee value of his own. By denouncing congressmen as neo-Prohibitionists, Mr. Johnston was widely considered to be the most effective tobacco executive at the hearings. (He received thousands of letters after his appearance, several inquiring about his marital status.) In its advertising campaign, R.J. Rey- nolds plans to follow up on the themes of individual freedom that Mr. Johnston in- voked so effectively in his testimony. The first advertisement runs today in the New York Times, The Wall Street Journal, USA Today and publications that law- makers read such as the Washington Post, National Journal and Roll Call. The first ad tackles the subject of secondhand smoke. "Very little" is how much secondhand smoke ronsmokers are exposed to, the advertisement says. The ad is based on a research paper written by a toxicologist, Larry C. Hol- comb, who said that about half of the funding for the study, which was published in the journal Environment International, came from the Tobacco institute. The ad asserts: "In a month, a non- smoker living with a smoker would, on average, be exposed to secondhand smoke equivalent to smoking approximately 1'M cigarettes. ... What we are saying is that there are always two sides to every argu- ment." The ad, which features an attrac- tive middle-aged woman smoking. stresses "accommodation" and has a moderate tone. The tagline of the ad: "Together, we can work it out." Other ads are expected to address smoking bans, taxes and the rights of business owners. "We want to get a more reasoned debate than exists today," says Mr. Johnston. "What we are trying to do NEWSBRIEFs is give people a much fuller picture of what is going on." Individual freedom has long been a favorite industry theme. When asked if the company would be legally permitted to air simiiar advertising on television, Mr. Johnston swelled up and said, "If this is America. we can." Not according to at least one network. "We do not accept advertising on contro- versial issues," says a spokesman for ABC. "To talk about smoking in the con- text of a political debate would not be accepted for advertising on ABC." Although cigarette ads have been pro- hibited on television since 1971, Philip Morris undertook in 1989 a $60 million TV ad campaign for a nationwide tour of the Bill of Rights. Although there were pro- tests and a congressional hearing to deter- mine if the company was trying to circum- vent the ban, the ad, which didn't mention cigarettes or smoking, was permitted to run. In fact, the Reynolds executives seem to be itching for their ads to be attacked, so they can fight back on the free speech high ground. Newspapers can reject ads if they do not feel there is a factual basis for the claims made, but so far, none has refused to run the Reynolds ad so far. "If the ad is rejected, that puts a different spin on what we'll talk about" at a planned news conference today to announce the PR blitz, says a Reynolds executive. Regardless of its impact in Washing- ton and with the public, the ad campaign will provide encouragement and comfort to tobacco industry supporters and em- ployees, says a marketing executive. "It says, 'We are not .running away and hiding,' " says Bill Southard, president of Earle Palmer Brown, an advertising and public relations agency. "They are doing this to show that they are going to battle this thing to the end."

NEWSBRJIEFS Winston-Salem Journal 23-May-1994, p. A9 RJR AD CAMPAIGN R.J. Reynolds Tobacco Co. has a ntes- sage forthe world: There should be rea- sonable accommodations for both smok- ers and nonsmokers - not regulations that effectively ban the use of cigarettes. The company, which faces incrc.~asing attacks by anti-smoking groups, wIll be- gin a media campaign today to get its side .of the smoking debate before the public. The first newspaper advertisements, which were scheduled to appear this morning, challenge an assertion by the Environmental Yrotection Agency and health groups that secondhand cigarette smoke is dangerous to nonsmokers. The EPA released a report in January 1993 that said secondhand smoke kills about 3,000 nonsmoking Americans a year and causes hundreds of thousands of cases of respiratory illnesses in chfl- dren. Reynolds'lbbacco's ads say that: Nor.- smokers living with smokers are exposed on average to secondhand smoke equiva- lent to smoking about 1.5 cigarettes a month; nonsmoking waiters working full rtime in a restaurant that allows smoking are exposed on average to the equivalent of about two cigarettes a month; and nonsmokers sharing an office with a smoker would inhale .the equivalent mnoke of about.1.25 cigarettes. The calcaila- .tions are based on various published reports, including researclt by tobacco-company scien- tists and by outsiders. . Four:more advertisements"are being pre- pared, incIuding one that disputes charges that tobacco companies add. nicotine to cigarettes to cause addiction in- smokers. David FLshel, a senior vice president for public relations at Reynolds Tobacco, said that the content of the ads will vary as smoking issues arise.."It is an evolving thing," he said. No+ads will appear on television or radio because they might violate cigarette marketing restricbions; F5she1 said. Reynolds Tobaccoa will also send teams of company scientists and spokesmen on a 26- c[ty tour during. the next several weeks to discuss the company's perspective on a range of smoking issues and on what the govern- ment's regulatory role should be.` ~~~•Thomas C. Griscom, Reynolds Tobacco's ezeautive vice presidentfor external relations, said that few people realize the scope of pro- posed rules by the U.S. Occupational Safety Vol. 24, No. 6, June 3. 1994 and Health Administration for indoor-air quali- ty or details of a bill introduced by tobacco critic U.S. Rep. Henry A. Waxman of Califor- nia. . Griscom said that the proposals could force people to stop smoking in their own homes when anyone. such as a plumber or house- keeper, works there. Truck drivers might not be able to smoke in their cabs because the vehicles could be considered a workplace, he said. Businesses might be required to set aside rooms exclusively for smoking. "No work can be done in the room where people smoke," Griscom said. Reynolds Tobacco said that this goes be- yond the appropriate role of government regu- lation and would turn the federal government into a "national nanny." Griscom said, "I think it is a very chilling thing." The company says that the EPA report on secondhand smoking is flawed. Christopher R. E. Coggins, the principal research and development '- toxicologist for Reynolds Tobacco, said that the EPA study did no original research. Instead, it combined the results of other studies. The study also "cher- ry-picked" data and ignored other research that showed little evidence of harm from sec- ondhand smoke. Reynolds Tobacco, Philip Morris Cos. Inc. and several allies sued the EPA last June, asking a federal court in Greensboro to force the agency to withdraw the study on these grounds. The EPA has said it stands by its research. But Coggins said that a report by the Con- gressional Research Service. issued May 11 comes to many of;the same conclusions as Reynolds Tobacco. "It is not just us saying it," Coggins said. Griscom said that Reynolds Tobacco ex- pects health groups will respond strongly to the tobacco company's campaign. He said that the company welcomes it. "We want to encourage discussion," he said. NEwsBRIEFs

NEWSBRIEFS SECONDHAND SMOKE: HOW MUCH ARE NON-SMOKERS EXPOSED TO? With all the discussion today about second- hand smoke, you may be interested in how much you are exposed to. The answer, in our opinion, is very little. Expressing exposure to secondhand smoke in terms of cigarette equivalents is one way to gain a perspective. For example: I) In a~' month., a non-smoker living with a not necessarily. relevant to an assessment of the potential risk from secondhand smoke. In our opinion, secondhand smoke is not the same as the smoke a smoker inhales. What we are saying is that there are always two sides to every argument. Both sides need to be heard and evaluated in order to make an informed decision. We believe that the solution to most smoking imoker wouid,.on average, be exposed to second- , issues: can' be found in accommodation. There are .~+... . I W.. hand smoke equivalent• t6 smoking approximately ways for smokers and non-smokers to co-exist 1112 cigarettes! ~ 2) In a month, a non-smoking waiter ~,. : works eight hours a: day; five days a week . peacefully. And• we encourage discussion that will who "`help solve the issues without resorting to Govern- in a•''ment intervention. Clearly common sense should ~ restaurant would, on the -average, bexposed to secondhand smoke equivaient to smoking about 2 cigarettes' 3) In a month in a modern office where smok- ing was permitted, a non-smoker sharing an office with a smoker would, on•average, be exposed to the equivalent of smoking about 1114 cigarettesO tell everyone not to expose very young children to high levels of secondhand smoke. As it relates to smokers, in our opinion smoking is a risk factor for certain diseases. At R.J.Reynolds we believe the choice to smoke should be made only by adults. This opinion is brought to you in the inter- There are many ways to calculate cigarette , ests of an informed debate by the R.J.Reynolds equivalents, and no method •exactly predicts the "Tobacco Company. For further information please .. :, ~:., • rprecise amount of .secondhand s v~~moke a non- .,: ca17 l=8b0 366-8441. « af ;. , gsmoker is exposed ~~ 'Also, cigarette. t calcfi~ons are ?F ~ / TOGETHER, WE CAN WORK IT OUT NEWSBRIIEFS Vol. 24, No. 6, June 3. 1994

NEWSBRIEFS RESPONSE FROM 800 NUMBER ACCOMPANYING RJR AD Maura Ellis Remarks for Second-hand Smoke News Conference National Press Club -- Monday, May 23, 1994 Good morning. I'm glad all of you could be here. My name is Maura Ellis. I'm director of external communications for RJ. Reynolds Tobacco Company. With me is Dr. Chris Coggins, a toxicologist with our company. This morning we would like to begin a process that is long overdue. We want to bring some balance to the debate surrounding second-hand smoke and other issues concerning cigarettes. And we'd like to establish an open dialogue where members of the media and the public can better understand both sides of the issue. During the past couple of years there have been a lot of misconceptions about second-hand smoke - including claims that exposure to second-hand smoke is more dangerous than active smoking. But, as Dr. Coggins will detail in just a minute, studies show that second hand smoke is highly diluted - and, on average, people are exposed to very small quantities of second-hand smoke. THE ANTI-SMOKING INDUSTRY WANTS TO BRING BACK PROHIBTTION We believe these facts are important - and that it is important for the public to be fuIly acquainted with both sides of the issue - so people can make informed decisions about second-hand smoke. We also believe it's time to understand that various efforts to totally ban smoking in public places, including workplaces, are part of a broader effort to prohibit smoking in the United States. As Reynolds Tobacco's chairman told Congress last month ... the real issue is this: "Should cigarettes be outlawed?" Let's make no mistake about it. The goal of the anti-smoking industry is to bring back prohibition. When confronted, they will tell you they don't want prohibition. But their actions belie those claims. If you don't believe that's the case, just look at how extreme some of these efforts are - like trying to prohibit people from smoking outdoors, in public parks, in their cars or even their own homes. And consider this - alcohol prohibition started witr the anti-alcohol movement claiming that their goal was simply "temperance." THE EPA REPORT IS BASED ON FAULTY SCIENTIFIC ANALYSIS As you'll hear from Dr. Coggins ... the current efforts to prohibit smoking are based on a faulty analysis of the science by the EPA. And they fly in the face of what most Americans say they want. Surveys consistently show that Americans overwhelmingly oppose prohibition - especially when it's imposed by the government. They favor designated smoking areas - rather than total smoking bans. They believe that common courtesy and accommodation are the best solution. For example, a recent GaIlup/CNN/USA Today poll indicated that: • 86 percent of Americans believe that smoking should be legal; • 61 percent of Americans oppose smoking bans in restaurants; • 67 percent oppose workplace smoking bans; • and 78 percent oppose bans in hotels and motels. 0 rtEwsBIiIEFS Vol. 24, No. 6, June 3. 1994 ~~A ~1 4 F

NEWSBRIEFS Americans say they prefer peaceful coexistence - not government mandate - and not prohibition. In virtually every case, attempts to ban smoking are being driven by the EPA's risk assessment on second-hand smoke. As Dr. Coggins will point out, that report -- and its designation of second-hand smoke as a Group A carcinogen - has many weaknesses. In fact, just a week-and-a-half ago, the Congressional Research Service told Congress that the EPA's report suffered from serious flaws. In that testimony, and in a report submitted to Congress in March, the Congressional Research Service characterized the epidemiological evidence the EPA relied on as, quote, "weak" and "uncertain." ACCOMMODATION IS TBE ANSWER I would like to make Reynolds Tobacco's position very clear. We're not saying that smokers should be free to light up any time at any place, without considering other people. But we do believe that the 45 million American adults who choose to smoke should be, and can be, afforded reasonable accommodations. And we share the public's overwhelming opposition to government-imposed prohibition. There are common-sense ways to work out problems without turning 45 million Americans into outlaws and social outcasts. Now, I'd like to turn the microphone over to Dr. Coggins. After that, there'll be time for us to answer your questions. NONSMOKERS ARE TYPICALLY EXPOSED TO VERY SMALL AMOUNTS OF SECOND-HAND SMOKE We understand that some people find second-hand smoke annoying. No two ways about it. But we also know that most Americans prefer common courtesy and common sense - not government mandate - to solve any problems that might arise. We believe it is very important that the American public understand both sides of this issue - so that they can make informed choices. To that end, we're launching a public information campaign that opens the debate on a number of issues. Our first effort appeared this morning in a mmtber of majur dailies. I'm sure that many of you saw it. As this ad points out, nonsmokers are typically exposed to very small quantities of second- hand smoke. Let me give you a few examples. On average: • A nonsmoker living with someone who smokes at home would be exposed to the second- hand smoke equivalent of smoking about one-and-one-half cigarettes a month. • A nonsmoking waiter might be exposed to the equivalent of 2 cigarettes a month. • And a nonsmoker sharing a modern office with a smoker might be exposed to the equivalent of just one-and-one-quarter cigarettes a month. We believe this ad - and a series of others that will appear in national publications in coming weeks - will bring balance, and additional perspective, to this and other important issues facing the American public. these ads are designed to start a productive dialogue ... that will help the public understand that there are two sides to almost every issue - including this one. And people can't make informed decisions without information from both sides. Dr. Coggins and I would be happy to answer questions. NE WSBRIEFs Vol. 24. No. 6, June 3. 1994