Tobacco Documents Online

Smooth Characters / 6 8 5 earIy "Nineties to try to revitalize its operations, was just too small a factor, with only a few percentage points of the market, to be influential. Increasingly, Philip Morris was running the show. ... The company's lobbying operations, almost certainly far larger than the To- bacco Institute's, were directed out of Washingto~ although itsNew York executives were constantly involved and retained the last word. Mastermind- hag the nationwide program was a small team of lawyers at Arnold & Por- ter headed by Jack Quinn and a tightly supervised satellite group at APCO Associates, a subsidiary providing business and political counsel but no legal services to clients, under Neal Cohen. The hush-hush Quinn-Cohen joint appa- ratus, devoted to monitoring Philip Morris's nationwide lobbying, was be- lieved to be costing the company several million dollars in fees a year by the early "Nineties, exclusive of the expenses to fun PM's own Washington lobby- ing office, a low-visibility layout on G Street. The battle was being waged in so many places that Philip Morris pressed its own workforce, an army now num- bering some 160,000, into service as its eyes and ears in the field. But the weapons were placed in the hands of outside paid lobbyists who prowled every state capital to block or blunt anfismoking measures. Details of this ongoing campaign were of course not made public, but its scope, methods, and cost could be inferred from documents anonymously de- liv,~,'*.d to Alan Blum's DOC headquarters in Dallas and dealing with Philip ! ;s I989 lobbying efforts in its Southwest region. That year in Missouri, fo, .^ample, PM spent $134,000 on campaign gifts to legislators and state po- liticai parties and $85,000 on its two leading lobbyists. For this investment the lobbying team succeeded in killing a proposed rise in the state cigarette tax and new restrictions on smoking, but it could not pry a proposed smokers' rights bill out of committee. PM's chief agent in Arizona, due to receive a fee of $53,000 in 1990, was commended for "a great job with his first session as our lobbyist. He is best friends with the Speaker and use[d] personal clout to kill our cigarette tax." The $13,000 spent on a gala reception for Arizona legisla- tors at the opening ses.sion seemed, a sound, inv. estment since.they later defeated p.roposed new public smoking restrictions, a ban on cigarette vending ma- chines, and an enlargement of the health warning on cigarette billboards. In Louisiana, where the company's top lobbyist was down for a $77,000 fee the following year, the report noted approvingly, "We are members of all the groups. Particularly helpful is the Association of Business and Industry, which fronted the products [tort reform] stuff." The PM group there was credited with keen tactical acumen for knowing when to back off after it decided not to push for designated smoking and nonsmoking areas in government buildings "because all legislation that would adversely affect smokers had been killed." The regional report card gave high marks, too, to the Oklahoma lobbying team, because it had both blocked a tax increase and manhged to have smoking

ASHES TO ASHES / 686 areas designated in all state buildings "and seems to be able to hold [the legis- lature's] leadership to coming out in the press against a cigarette tax every time the Govemor brings it up, which is often." These efforts were minuscule when compared with the Philip Morris pro° gram in Tex.as,.where it spent $441,000 in 1989 on lobbyists and consultants, aside from such off-the-books outlays as $10,000 for a "legislative buck hunt" and a similar amount on a dance honoring the African-American community in Dallas. By a quaint parliamentary maneuver adopted at the beginning of every term, no more than 11 votes in the 31-member Texas Senate were needed to block the call-up of any given piece of legislation for a vote by the upper chamber of the legislature, which was more liberal than the 150- member, strongly pro-business House and dominated by the influence of the consumer-oriented, litigiously disposed Texas Trial Lawyers Association. Thus, PM's chief lobbyist (proposed 1990 salary: $63,000) and his team "will always concentrate on the Senate," the company field report noted, "but there are things we can do in the House that will be of major benefit to us. We will continue to cater to the Speaker and his pet projects, as well as to the five or six committee chairs that hay6 [helped] and will help us .... " To win political influence with lawmakers, PAC contributions to their cam- paigns were only the most visible ploys, according to one former APCO em- ployee, "because there were so many other ways to approach the policymakers in a given state." Among these were entertainment, consulting fees, honoraria for speeches, and gifts to charities designated by the targeted lawmakers and other officials. A classic example of this last device was the Philip Morris phil- anthropic program in Wisconsin, where during the decade following U.S. Sen- ator Robert Kasten's 1981 arrival in Washington, the company spread around .5,000 charitable gifts worth $6 million. The fact that Kasten, who received more in campaign gifts from PM than any other senator, came from Milwau- kee, headquarters of the company's Miller Brewing operations, was probably not a coincidence. The key to purchasing influence at the state level was personal friendships. PM lobb~;ists and their Washington and New York overseers spent endless hours trying to identify the closest past and current associates of the power wielders in each capital "and how to get them on the APCO payroll," said the former operative, a lawyer on lease to the lobbying conlxollers. When neces- sary, these key contacts would be lured away from their previous positions, but if they were already private practitioners of the law or public relations, they would typically be put on retainer for a year at a time, even when the vital con- tact work might involve setting up only a single meeting. The process at its most painstaking and costly unfolded in Texas in the course of a six-year effort, from 1987 through 1993, when Philip Morris lob-

Smooth Characters / 6 8 7 byists engineered "tort reform" in the nation's second most populous state. To corral the right influence-peddlers, according to the APCO dropout who was on hand during part of this grueling effort, the company's.Washington opera- tives were heard to remark repeatedly, "We'll pay whatever's necessary." He added, "They never balked if the bill came to $20,000 instead of $10,000 to hire a strategic friend, and some went for more than that." During the Texas tort reform battle, as many as fifty "consultants" a year were enlisted to pro- mote the legislation, which was simultaneously advanced by an ad hoc front group dubbed the Texas Civil Justice League (TCJL), the nation's largest tort reform coalition, consisting at its peak of more than one hundred trade and professional organizations, chambers of commerce, and health-care providers. Their purpose was to revise the state's allegedly permissive personal injury claim code, which sometimes allowed plaintiffs to win huge damage awards from runaway, antibusiness juriesman injustice said to have cost the state some 80,000 jobs and $8 billion in corporate revenues because companies had either left Texas for that reason or declined to come to it. The TCJL's tort reform measure was put forward in 1987, the same year in which such bills were bustled through the California and New Jersey legislatures on the eve of their adjournments, providing in essence that products that could not be made safe ought not to be the manufacturers' responsibility after purchase by fore- warned customers. Consumer advocates assailed the "tort reform" proposal as a lobbyist-driven outrage, and the contest was joined. According to one knowledgeable Democratic member of the Texas House of Representatives, the TCJL "employed dozens of the highest paid, most ef- fective lobbyists in the state" to push the tort revision effort, freely spending millions over the course of the-project since under Texas law, it was not a lobby but a trade group and, as such, was not required to disclose where its funds came from, only approximately how much each lobbyist spent. The sys- tem all but invited abuse, and in the case of the TCJL, according to one of its foes, "served as nothing more-than a method for laundering the lobbying money paid by the pharmaceutical, insurance, .and tobacco industries, among others." Though claiming to be a broad-based coalition, the TCJL "was Philip Morris's show," said the ex-APCO man who witnessed its activities. The in- dustry leader's name was never mentioned in the press as the prime mover in the tort law drive. The TCJL effort achieved partial success during the 1987 legislative ses- sion: claimants held to be 50 percent or more responsible could not be awarded damages, and claims were capped at $2.00,000 or four times actual losses like hospital costs and lost wages, whichever was higher. But those limitations fell well short of a satisfying victory, and so the drive was renewed in 1989 under chief lobbyist Jack Gullahorn, a Dan Quayle look-alike anda disarmingly

ASHES TO ASHES / 688 smooth member of one of the most powerful law firms in Texas--Akin, Gump, Strauss, Hauer & Feld. Gullahorn had eighteen other clients beside the TCJL that he lobbied for at that time, including Texaco, several banks, the fire- works and billboard industries, and the Gulf Coast Conservation Association, and was so well connected around Austin, the state capital, that in the days be- fore mobile phones were commonplace, a pay telephone booth just outside the Texas House chamber was set aside largely for his personal use and deco- rated with flowers, family photos, and a deer head in humorous tribute to his influence. Gullahorn's key connection in the tort revision drive was Dallas attorney Dan Matheson, who during Republican Governor Bill Clements's first term (1978-82) headed the State's Washington office for federal relations. Clements, a somewhat laconic figure who some felt was more at home with his country club set than in the governor's office, lost his first bid for reelection, but won a second term in 1986. Matheson, though considered close to Clements, did not serve in his second administration, and during the regular 1989 session Gullahorn turned to him to lead the tort law revision effort. The TCJL lobbyists had failed to win strong support from the executive branch by the time Clements agreed to place the tort issue on the agenda for a special leg- islative session. In an August 4, 1989, memo marked "Highly Confidential" and addressed to Arnold & Porter's Quinn and Cohen in Washington and Philip Morris attorney David Zelkowitz at corporate headquarters in New York, Gullahorn oudined the proposed strategy, which began: 1. Educating the Governor and his staff. A. Choose a primary peer spokesman. Ed Vetter [chairman of the Texas Commerce Department] is the preferred choice. Dan [Matheson] would outline the best strategy for educating Ed and requesting that he lead the delegation to the Governor and explain the economic importance of the issue. Should Vetter decline, we would have identified an alternate leader.- After that, the memo proposed, the primary spokesman would head a team from business groups who would further educate the governor on the short- comings of the present law, after which a third contact group, drawn from the governor's friends and confidants, would personally call upon Clements to press the issue. Despite such elaborate planning, pro-consumer legislators blocked passage of the TCJL-backed bill: By the time the legislature reconvened in 1991, a new governor presided over Texas---moderat.e Democrat Ann Richards--and her lieutenant governor, Bob Bullock, who presided over the state Senate, had

Smooth Character~ / 6 8 9 once headed the Texas attorney general's consumer and antitrust division. Prospects for tort revision seemed bleak, and indeed got nowhere that term. But Gullahorn persevered. He added new groups to his coalition, got learned articles published seeming to authenticate the grim effect on Texas business of plump awards by juries to product liability claimants, and helped install as head of the TCJL the former chief deputy to Lieutenant Governor Bullock when he had served as state comptroller in the late 1970s. Bullock's parliamentarian, moreover, was the father of an RJR lobbyist, one of twenty- eight who were helping push the TCJL cause (including six for Philip Morris) by the time the legislature convened to consider what Ralph Nader had tagged "the 1993 Wrongdoers' Protection Bill." By then Bullock was not only aboard Gullahorn's wagon but pushing hard to turn tort revision into law--an ef- fort bolstered immeasurably by the defeat in the 1992 election of three pro- consumer members of the Senate, destroying the thin protective margin that had denied victory to the TCJL forces for four years. Fearing they would be overwhelmed and denied virtually all causes of product liability claims, the trial lawyers' association succumbed tO the Bullock-brokered deal that re- moved tobacco, liquor, and firearms from the list of actionable products. The victory probably cost the cigarette companies $5 to $10 million. '~l'his is the biggest gift any legislature has ever given the tobacco industry," declared DOC's Alan Blum, who went on to blast Bullock for having accepted campaign funds from the industry and proceeded to do its bidding. Bullock's spokeswoman replied that the $7,500 he had taken in tobacco PAC money in 1990 was peanuts compared to what others accepted, "and it would be incor- rect to conclude that it bought anything. Bob Bullock has always considered himself a consumer advocate." Such efforts as the Texas triumph served to safeguard tobacco companies' treasuries against raids by claimants but did not help smokers escape a spread- ing web of restriction.s by state and local authoritiez. The earlier wave of clean indoor air acts inevitably prompted a demand for more sweeping laws to create smoke-free environments. States on the cutting edge of social legislation, like California, New York, Washington, and Maryland, were banning or rigidly confining smoking almost everywhere people congregated, and many other states were moving in that direction. By 1995, according to Common Cause magazine, more than 600 local jurisdictions had joined in a patchwork quilt of antismoking restrictions across America. Some 100 communities hid banned the sale of cigarettes by vending machines. Columbus, Ohio, a conservative, midsize city, barred smoking in its stores, theaters, and bowling alleys, while New York City implemented perhaps the most stringent smoking control law of any U.S. metropolis, banning the practice in most public places except small restaurants, offices occupied by three or fewer people, and set-aside zones that met fixed high-ventilation levels. By then more than three-quarters of all

ASHES TO ASHES / 690 American corporations with 750 or more employees had either banned smok- ing outfight or sharply limited it, even if state laws did not call for such mea- sures, and more than half of smaller businesses had done the same. III• ALTHOUGH the belief in secondhand smoke as a serious health menace had become the most potent contributor to the nation's deepening war on cigarettes, just how real a peril it was had not been definitively determined. The three authoritative reports in 1986~by the U.S. Surgeon General, the Na- tional Academy of Sciences, and the congressional Office of Technology Assessment--had all agreed that further serious research was needed before a true appraisal of the ETS risk could emerge. Smoking control advocates, though, their patience exhausted from decades of evasion and denial by the to- bacco industry about the health risks of direct smoking, would not wait for definitive evidence on ETS. The fact remained, however, that it was proving difficult to develop epi- demiological data on ETS drawn from real-life conditions. How ~heavy a dose of toxic substances smokers themselves directly ingested had long been readily calculable, but no one had been able to figure out practicable ways to deter- mine--except theoretically---dilution rates of ETS and how to classify just who was or wasn't exposed to it at least to some degree in a society where it was next to impossible to avoid the stuff. It was also questionable science, however tempting, to extrapolate risk ratios at low exposures from the effects observed at higher exposures. As a 1994 study for the Congressional Research Service noted, '°l'he existence of an exposure threshold for disease onset below which many passive smokers fall is not implausible. Many organisms have the capacity to cleanse themselves of some level of contaminants"~which was why public-health policymakers usually did not insist that every unit of air or water pollution .be scrubbed from the environment. By the late 'Eighties, the population studies on ETS remained few, involved a low number of subjects (usually fifty or fewer), and revealed relatively weak links to c.ancer--they consistently showed a 20 to 30 percent heightened risk for exposed nonsmokers, compared to the risk for those reporting no expo- sure from spouses or at their workplaces; an increased risk of 100 to 200 percent was generally regarded as significant evidence of causation by epi- demiologists. Few antismoking advocates candidly noted the disproportionate bases of the risks being claimed. Only one or two nonsmokers per thousand died of lung cancer, while fifty to one hundred smokers per thousand suc- cumbed to it; by stressing the risk of ETS exposure, the smoking control movement was effectively trivializing the risk from direct smoking, which was

Smooth Characters / 6 9 1 thirty to forty times greater. It was an incendiary, effective, but questionable tactic for those on the side of the angels. What the antismoking camp most needed was a finding by the Environmen- tal Protection Agency that ETS qualified as what the EPA termed a Group A carcinogen, meaning that it was found to cause at least 1 death per 11313,000, the measure by which asbestos, radon, and a dozen other substances were branded human killers and thus subject to government regulation. By such a finding, ETS would be elevated to an official public menace, given the all but universal exposure to it by the American public, and it would hardly matter how rela- tively slight the risk from it might be for any healthy individual; in the process, the industry's chief defense--that ETS had not been shown to be a legitimate health risk but was, for some, a source of annoyance, readily mitigated by courtesy on both sides---would be destroyed. Thus, as the EPA in the late 1980s undertook a formal risk assessment of ETS, the tobacco industry was much vexed at the prospect. If the agency pro- nounced secondhand smoke carcinogenic to man, the Labor Department's Oc- cupational Safety and Health Administration (OSHA) would be standing by to issue smoking regulations, which the EPA was not empowered to do, for the proprietors and managers of the nation's businesses. To strengthen its hand, the tobacco industry decided to encourage research on ETS rather than just ~tand by helplessly---and, it would be charged, negligently--while unsympa- tic government investigators carried on the quest. If the companies had un- .,~rtaken the research in their own laboratories, had arrived at unfavorable findings, and then had suppressed them, they would have risked charges of fraudulently deceiving the public. If, on the other hand, their own findings ex- onerated ETS as a serious health peril, they would surely have been disparaged as the work of predisposed scientists. Their decision, therefore, implemented in 1988, was to establish the Center for Indoor Air Research (CIAR), in the du- bious tradition of the Council for Tobacco Research, overseen by an advisory board of scientists from leading universities who made grants to investigators unaffiliated with the industry. Maddeningly, as Philip Morris house counsel Steven Parrish e6mmented,"'[W]e get criticized for trying to buy off scientists, even though the grants are given with no strings attached." But CIAR did not function beyond the industry' s close surveillance, as one top Philip Morris sci- entist conceded, having served on the industry's "oversight committee" for ~ which he characterized as "a creature of the industry." CIAR's agenda was heavily laden with projects contending that many other factors besides ETS, such as faulty ventilation systems and a rogues' gallery of other contaminants less visible and aromatic than smoke, caused the real prob- lem with indoor air. But CIAR also sponsored studies of authentic value by reputable investigators, such as the American Health Foundation report "De- termination of Nicotine Metabolites by Immunochemical Methods," a step to-

ASHES TO ASHES / 692 ward measuring ETS dosages. The industry, though, also crossed to the shady side of the street by contributing millions of dollars, according to reports by NBC News and The New York Times, to a Fairfax County, Virginia-based pri- vate company called Healthy Buildings International, which ostensibly con- ducted objective indoor air pollution tests and reported the~ir findings to owners or tenants. A number of whistle-blowers once employed by the company charged .that the data gathered during its inspections, which almost never faulted ETS as a major pollutant, were routinely doctored to reduce the mea- sured level of ambient smoke and that its representatives, coached by tobacco industry personnel, made frequent public appearances during which they downplayed ETS as a serious health threat. Asked about these disclosures, the Tobacco Institute admitted that it had given funds to Healthy Buildings, which it called "a fine firm." In gearing up for its ETS evaluation, the EPA enlisted a sixteen-member panel of experts, including six who had received industry grants, to counsel its scientific advisory board. They gave every sign of approaching the task judi- ciously. The agency was then aspiring to Cabinet-level status and thus was ea- ger to be viewed not as a bunch of antibusiness, power-hungry bureaucrats but as prudent guardians of the public interest, in touch with everyday realities. One result was that over the ensuing four years of the Bush presidency, EPA allowed itself to be pressured and interfered with by tobacco industry lawyers and officials in what Michael Pertschuk, gum of the smoking control move- ment, called "a classic failure of bureaucratic nerve." But the delays and hesi- tations in issuing the EPA risk assessment on ETS were at least partly due to the seriousness of the tobacco industry's objections to the evaluation process. At first the EPA took pai.'ns to be warily cordial when the tobacco industry lawyers approached them and offered help in the ETS risk assessment. That the agency feared the industry's wolfish intent, though, was made clear when a high official wrote to the tobacco lawyers in February of 1988, "... We are neither seeking the advice of the tobacco industry nor opening a formal line of communication." Yet a month later, EPA sent industry lawyers the draft of a handbook the agency/Was drawing up for employers and institutional ad}ninis- trators entitled "Understanding Indoor Air Polhition"--a curious procedure in view of the agency's own concurrent risk assessment of ETS; why not wait for the completion of the latter before undertaking the former? The industry lawyers' reply to the invitation to review the handbook gave EPA officials a clearer understanding of what they were in for. Many of the as- sertions in the draft of the booklet were unfounded, the tobacco people said, and the suggestion that eliminating ETS will "get rid of relevant pollutants is simply wrong." On the contrary, a large number of studies "show that poor ventilation is by far the most important cause of indoor air pollution," the in- dustry spokesman added, and the 1986 Surgeon General's report had not con-

Smooth Characters / 6 9 3 cluded that ETS was "a leading cause of lung cancer in nonsmokers," as the EPA booklet said, and because of all the foregoing inaccuracies, it "seriously misrepresents the consensus of the scientific community." Later in the year, Tobacco Institute lawyers took further issue with the draft of an EPA "fact sheet"on ETS, part of the agency's series on indoor pollutants. They claimed to be particularly upset by the assertion, "'plainly without justification," that "ETS contributes 80 to 90 percent of the pollution present" in buildings where smoking was permitted, and pointed out that the Surgeon General had deter- mined that no previously healthy person was likely to develop chronic lung disease on the basis of "involuntary smoke exposure in adult life." The war of words escalated the following spring, when the TI enlisted Vir- ginia's U.S. Senator John Warner, who wrote EPA to ask why the handbook was being written by Robert Rosner, director of the Smoking Policy Institute in Seattle, whom Warner called "'an outspoken and vehement antismoking ad- vocate," and why both the handbook and the fact sheet were being written be- fore the risk assessment had been completed, implying a prejudicial mind-set on the part of the agency. An assistant administrator, William G. Rosenberg, replied to the senator that Rosner was familiar with the subject and that his writings would be closely edited but that "whether or not there are health ef- fects associated with ETS is no longer in question." Just how serious those e"" "s were, however, was precisely the question being investigated. ~sure on the agency grew and the exchanges became more pointed by n'aa-1989, when the Tobacco Institute's attorney, John Rupp of Covington & Burling, told Rosenberg that the TI had received "numerous calls from smok- ers around the country" who had lost their jobs, been shunted to undesirable locations, or been denied the opportunity to compete for a job because the per- son in charge of their office "had decided that ETS has been proven to be a health hazard." While it was true that the TI had been-allowed to comment on the handbook and fact sheet drafts, "at no time has there been an opportunity for a scientific discussion of fundamental issues regarding ETS," Rupp wrote, adding, "All opposing data and views are simply ignpred. We cannot under- stand how such an approach can be justified." The price the industry was now paying for all the years it had acted to confuse the public through its disinfor- mation efforts was revealed by Rosenberg's response: "Frankly, the tobacco industry's argument.., would be more credible if it were not so similar to the tobacco industry's position on direct smoking, despite the estimated 50,000 studies linldng smoking with disease in humans." But the two situations were not comparable..Public impressions to the con- trary, no investigator had produced evidence remotely approaching in strengtti and consistency findings like those incriminating direct smoking by Wynder, Hammond and Horn, Doll and Hill, and Auerbach. The-industry coiald thus retain the hope that a large-scale study might fail to show a correlation be-

ASHES TO ASHES / 694 tween lung cancer occurrence and exposure to ETS among nonsmokers. Such results, however, might not find their way into scientific journals because of a phenomenon known as "publication bias"; studies that produced negative re-. suits or did not report a statistically significant relationship were generally as- signed a low priority among submissions. But in the spring of 1990, a Philip Morris scientist, Thomas J. Borelli, who bore the suggestive title of "manager of scientific issues," was scouring about for unpublished studies on ETS and, while consulting the University Micro- films International Dissertation Information Service, struck gold. Not only did he find a doctoral dissertation done at Yale by Luis Varella, a Mexican post- doctoral physician, but the study was larger, than any U.S. investigation yet re- ported in the scientific press. And the results were cause for joy within the tobacco industry. As Borelli noted, after making 300 copies of the dissertation and sending it to the EPA, ACS, HHS, and concerned scientists around the na- tion, "Varella looked at 439 lung cancer cases in nonsmokers"--implying that he had been the primary and original investigator, since no other names were cited--and found "no statistically significant increased risk of lung cancer in nonsmokers exposed to tobacco smoke in the workplace or in social situa- tions." Nor had Varella found any elevate.d risk among nonsmokers due to spousal smoking, which was the key measure of dosage in the Hirayama and other studies that had reported an elevated risk of, on average, about 30 percent above that for unexposed nonsmokers. The size of Varella's sampling and the Yale imprimatur gave his findings special cachet, and in mid-June, Philip Morris's John Nelson, vice president for corporate affairs, crowed in a letter published in The New York Times that Varella's study was the most prominent recent addition of evidence to the body of work on ETS in which "no study of exposure to tobacco smoke in the workplace or public places has demonstrated a scientifically significant risk to nonsmokers" and that eighteen of twenty-three studies that dealt with the ef- fects of spousal smoking had failed to report such a risk. It followed, to Nel- son's way of thinking, that the nonsmoking majority ought to willingly accommodate smokers' needs by. providing them with ample designated areas or i~roperly ventilated public places to carry away ETS. The full story about Varella's dissertation, which Borelli did not disclose, possibly because it did not alter the validity of its conclusions, was that it was derived entirely from data gathered during 1981-85 under an NCI grant to in- vestigators headed by Dwight T. Janerich, director of epidemiology for New York State before transferring in 1986 to Yale Medical School. There Varella approached him about the possibility of using his group's raw data for his own doctoral thesis. Since it was not unusual for students to work on part of large existing data sets, Janerich and the rest Of Varella's advisory committee ap- proved the arrangement. Varella finished his work in 1987; when it was judged tc