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-O5. 23. 95 Y]5: 49 PM *LF PAYNE DC PDz PIA (P"V ~ ~ TO: I,F FR: TODD RB: CHRONOLOGY OF FDA-TOBACCO EVENTS DT: MAY 23,1995 LF: w9 V THE FOLLOWING IS A BREAKDOWN OP THE FDA-TOBACCO SITUATION AS I REMEMSERIT. I HAVE ATTEIvB?'TED, AS BEST POSSIBLE, TO ORGANIZB TSE EVENTS IN A CHRONOLOGICAL ORDER. LET MR KNOW IF YOU DISAGREE WITH ANY ITEMS IN THE TD'IE LINE. JANUARY 19 -- SOUTHERN DEMOCRATIC MEMBER MEETWG WITkI LEON PANETX'A IN CHARLIE ROSE'S OFFICE. DISCUSSION OF TOBACCO ISSUES AFFECTING SOUTHERN MEMBERS WITH EIvIPHASIS ON FDA, OSHA, EPA, A'NI7 EXCISE TAXES. AFTER IT BECAME APPARENT THAT THE FDA/KESSLER STI"[7ATION WAS THE GREATEST PROBLEM FACING TOBACCO STATE MEMBERS, IT WAS DECIDED THAT VOLUNTARY ACTION BY THE TOBACCO COMPANIES ON YOUTH ACCESS ISSUES MAYBE THE BEST WAY TO STOP KESSLER FROM ATTEMPTING TO REGULATE TOBACCO PRODUCTS. PANETTA SAID THAT IF THE INDUSTRY CAME FORTH WII'H A VOLUNTARY PROPOSAL AIMSD AT REDUCING YOUTH ACCESS, THE ADMINISTRATION WOULD REMOVE KESSLER/FDA FROM THE RADAR PANE'Z'TA INFOR2viED MSMBERS THAT, AT THAT TIME, KESSLER COULD NOT ACT WITHOUT PANETTA'S OFFICE KNOWING ABOtPd' IT. PANETfA STRESSED THE NEED TO KEEP THIS MEETING AND TIiE COMMENTS WITHIN AS QUIET AS POSSIBLE. BH SAII) THAT IF THE MEETING OR DISCUSSIONS REACHED THE PRESS, THE "NEGOTIATIONS"

0 5. 2 3. S 5 05 = 49 F'M * L F P AYN fi D G Pv3 WOULD BE OFF AND THE WHITE HOUSE WOULD DENY KNOWING ABOUT THEM. HE ALSO PELT THAT IT WAS IMPORTANT TO MOVE FAIRLY QUICKLY ON THIS ISSUE. ALSO, PANETTA TOLD YOU EXCISE TAX INCREASES WOULD ONLY COME UP IN A PRESIDENTIALLY DRAFTED HEALTH CARE REPORM PROPOSAL IF REVENUE WAS NEEDED. AFTER THE MEETING, ROSE TALKED WITH TOM BLILEY ABOUT PANETTA'S COMMENTS. BLILEY CAME TO YOU WITH TH8 PURPOSE OF KEEPING YOU INVOLYED IN THE DISCUSSIONS WITH THE WHITE HOUSE. LATE JANUARY -- MEETING WITH PANETTA, BLILEY, AND YOU IN COMMERCE COMMITTEE ROOM TO DISCUSS THE POSSIBILITY OF IN.DUSTRY PUTT7NG TOGETHER A PROPOSAL TO SUBMIT TO THE WFIITE HOUSE. JANUARY 31 OR FEBRARY 1-- BLILEY, AFTER TAL.KiNG WITH YOU, DECII7BD'J'O CALL A MEETING OF TOBACCO COMPANY LEADERS AT THE TOBACCO INSTITUTE TO DISCUSS THE POSSIBILITY OP INDUSTRY PUTITNG A PROPOSAL TOCrETHER. FEBRUARY 3-- MBETItVG WITH BLILEY, J.D., TODD, AND TOBACCO INDUSTRY LEADERS AT TOBACCO INSTITUTE. DISCUSSIONS CENTERED ON IF COMPANIES WANTED TO PUT TOGETHER A PROPOSAL FOR YOU AND BLILEY TO TAKE TO THB ADMINISTRATION. AFTER SOME DISCUSSION, ALONG WiTIi YOUR AND BLILL' 'S COMMITMENT TO WORK BETWEEN THE INDUSTRY AND TH$ WHI'I'E HOUSE, TH.L COMPAN3ES TOLD YOU THEY WOULD HAVE A PROPOSAL TO US WITHIN THE NEXT TEN DAYS. FEBRUARY 13 OR 14 - TOBACCO INDUSTRY PRESENT YOU, ROSE, AND BLII J;Y (SEPARATELY ) COPIES OF THE INDUSTRY PROPOSAi.. SHORTLY TIIEREAFTER, CHARLIE WIIITLEY, TOMMY PAYNE, DAVID NICOLI, AND JEI'F SCIi[.AGENHAUP MEET WITH YOU AND ME TO DISCUSS THE DETAILS OP THE PROPOSAL AND PREPARE YOU FOR A POSSIBLE MEETING W1I'H LEON PAN.ETTA.

• O5. 23. 95 05 = 49 PM ~KLP PAYNE DC PD4 LATE FESRUARY -- MEETING WITH BLILEY, J21., AND TODD IN COMMERCE COMMITTEE CONFERENCE ROOM TO DISCUSS THE PROPOSAL. YOU AND BLILEY MAKE THE DECISION TO CONTACT PANETTA AND ASK FOR A MBETING WTIH HFM. MARCH 6-- MEEi'ING WTPH PANETTA, PAT GRIFFIN, F.L37..ABETH FOLEY, BLILEY, ROSE, J.D., KIITH PiTTS, AND TODD IN YOUR OFFICE TO DISCUSS TOBACCO INDUSTRY PROPOSAL. YOU, BLILEY, AND ROSE WALKED PANETTA TkIROUGH THE PROPOSAL AND ANSWERED QUESTIONS FROM PANETTA AND GRII+PII4. PANETTA ASKED HOw THE AMOUNT OF MONEY ($50 MIl,.LION OVER A FIVE YEAR PERIOD) WAS SET: YOU RESPONDED THAT IT WAS MODELED APTER MILLER BEER'S 1)ON'T DRIVE AND DRIVE" CAMPAIGN. GRIFFIN ASKED WHY ADVBRTISII+IG (PARTICULARLY "JOE CAMEL") WAS NOT MENTIONED, BLII.EY MENTIONED THE FTC STUDY FROM 1994. SEVERAL OTII'ER QUESTIONS ABOUT THE PROPOSAL WERE ASKED, TOWARDS THE END OF THE MEETING, YOU ASKED PANETTA ABOUT TTiE QUID PRO QUO IN"I'AIS PROPOSAL. PANETTA INDICATED THAT IIE DID NOT WANT TO DISCUSS A QUID PRO QUO AT THIS TIME BECAUSE HE HAD NOT STUDIED THE PROPOSAL. ALSO, PANETTA ASKED THAT GRIFFIN AND I70LEY GIVE THEIR COPIES OF THE PROPOSAL BACK TO YOU. HE INDICATED HE FELT IT WAS VERY IMPORTANT TO KEEP THIS PROPOSAL AND THIS MEETING VERY QUIET BECAUSE MEDIA LEAKS WOULD CANCEL ANY FURTI3ER DISCUSSIONS. MARCH 15 - MEI3'!'TNG WITH PANETTA AND IZOSE TN ROSE' S OFFICE. PANETTA INDICATED HE THOUGHT THE PROPOSAL WAS LEGITIMATE AND SAID HE wANTf:D TO REACH SOME RESOLUTION WITH THE MEMBERS AND TIiE INDUSTRY. PANETTA TOLD YOU AND ROSE THAT Vt'HITE HOUSE GENERAL COUNSEL ABNER M1KVA'VVOULD BE ASSUMING THE IEADP.RSHIP ROLE IN DISCUSSIONS WITH YOU AND ROSE. HE ALSO FELT YOU AND ROSE SHOULD MEET WITH MIKVA. MARCH 17 - PHONE CONVERSATION JUDGE MIKVA REGARDING TCiE

•O 5. 2 3. 9 5 O 5 : 49 t' M .k L F P A'YN E D C PROPOSAL AND YOUR UPCOMING MEETING WITH HIM. POS MARCH 22 -- MEETING WTPH ROSE, MIKVA, CIiRISTOPIIER CERF, AND TOBACCO INDUSTRY LEADERS AT ROSE'S OFFICE TO DISCUSS PROPOSAL. MIKVA SAID IIE WOULD LIKE TO ItEACH CLOSURE ON THIS ISSUE SOMETIME WITHIN THE NEXT 60 DAYS. HBINDICATED HE WANTED TO WORK WITH BOTH SIDES AND "MAKB WIINNERS OUT OF EVERYONE". HE ALSO MENTIONED THAT, AT SOME TIME IN THE FUTUItE, IT MAY BE BENEFICIAL hOR TM INDUSTRY AND KESSLER TO COME TOGETHER TO DISCUSS YOUTH ACCESS ISSUES. APFJL 4-- YOU TALKED WITH PAT ABOUT THE QUID PRO QUO WPI'Ii TI3E PROPOSAL. PAT INDICATED THAT HE PELT THAT I'ROM TIM INDUSTRY "WISH LIST', THE 1USTICB DEPARTMENT SECTION WAS NOT "DOAHIE". 13E INDICATED THAT THE WFIITE ROUSE STILL WANTED TO REACH CLOSURE AND YOU COULD TALK ABOUT THE QUID PRO QUO LATER DURINQ APRII.-EASTER RECESS - YOU MADE SEVERAL CALLS 'I'O MIKVA REGARDING STATUS CHECK. MIKVA INDICATBD THAT IIE IiAT) SPOKEN WITH THE ANTI TOBACCO GROUPS AND SAID THAT YOU, I3E, AND ROSE SHOULD GET TOGETHER ONCE'TIiE CONGRESS RECONVENED IN MAY. YOU ALSO DISCUSSED'CIiB GOVERNOR CIiILESlJANET RENO LBTTBR WITH MIICVA. MAY 9--MMTING WITH MIKVA AND ROSE IN ROSE'S OPFTCE TO DISCUSS MIKVA'S CONVERSATIONS WIT`H ThTE ANTI-TOBACCO OROtJi'S. DURING TIiE MEETING, MIKVA BASICALLY DISCOUNTED TIiE TOBACCO INDUSTRY PROPOSAL AND OFFERED A COUNTER PROPOSAL. THE COUNTER PROPOSAL INCLUDED SIX PIECES. THEY WERE: 1. BAN SALE OF TOBACCO PRODUCTS FROM VENDING MACHINES; 2. RAYSE TkZE MIIVYMUM AGE TO USE TOBA,CCO PRODUCTS F'ROM 18 TO 21. 3. SALE OF TOBACCO PRODUCTS WOULD BE MADE BY LICENSED AGENTS; N 0 V 00

• Y]5. 23. 95 0 5 ' 4, B PS4 ~L F P AYN E D C P06 4. ONLY ADVERTISING FOP, TOBACCO PRODUCTS WOULD BE IN TEXT OR PRiNT,'70MBSTONE-STYLE"; 5. ET.Ilti1INATE ALL PRODUCT SPECIFIC SPONSORSHIP OF SPORTING, CULTURAL, OR PUBLIC EVENTS AND; 6. TOBACCO 1N'DUSTRY WOULD PROVIDE ADDITIONAI, FUNDING POR YOUTH ACCESS PROGItAM. MIIS.VA INDICATED THAT IF THE T[3DUSTRY VsFERE TO ACCEPT THE COUNTER PROPOSAL, THE WIifI`E HOUSE WOULD STOP KESSLER AND THE FDA FROM A'I'IF.MI'TING TO REGULATE TOBACCO PRODUCTS. HOWEVER. MIKVA WAS NOT SPECIFIC IN DETAILING JUST HOW TFIE WIiITE IIOUSE WOULD STOP KESSLER FROM ACTING. TIB3 QUID PRO QUO DID NOT COME UP IN THE MEETINO. MIIC,VA INDICATED THAT YOU AND ROSE SHOULD TAKE THE COUNTER PROPOSAL BACK TO THE INDUSTRY TO SEE IF IT WAS ACCEPTABLE MIKVA, FOR REASONS UNKNOWN, FMT TIiAT IT WAS BEST TO MOVE FAIRLY QUICKLY ON THE COUNTER PROPOSAL. BE ASKED THAT YOU AND ROSE GET BACK IN TOUCH WTiH HIM WTPHIlV TkIE NEXT TEN DAYS TO TWO WEEKS. AGAIN, HE MENTIONED PUTTING KESSLER AND THE COMPANIBS TOGETfMR FOR A MEETING. AFTER THE MIKVA MEETING, YOU AND ROSE MET WITH AND DESCRIBED TRE COUNTER PROPOSAL TO NICOLI, GREG SCOTT, BOB MAPLES, ROBIN TALLON, AND TODD. YOU INDICATED TO THE GROUP THAT THERE WAS A SENSE OF URGENCY IN MIKVA AND YOU PSLT THAT KESSLER MAY BE PREPARING TO ACT ON TOBACCO. AFrER THIS MEETING, SEVERAL NEWSPAPER ARTICT.ES DOCUMENTING KESSLEWS SPEECH AT COLUMBIA LAW SCHOOL INDICATED THAT KESSLER MAY BE GETTING CLOSER TO ACTING ON TOBACCO PRODUCTS, POSSIBLY WITHIlV THE MONTIL MAY 8- 10-- YOU MET WITH TOBACCO INDUSTRY REPRESENTATIVES TO DISCUSS THEIR THOUGHTS IN REGARD TO THE COUNTER PROPOSAI,. UNANIMOUSLY, THEY ALL INDICATED TO YOU THAT THE COUNTER PROPOSAL WAS TOTALLY UNACCEPTABLE. IN PACT, THERE WAS DISCUSSION ABOUT SEVERAL PIECES OF THE COUNTER PROPOSAL BEING ANTITRUST RISKS.

P07 C 0 5. 23. 95 D5=49 YA/i m L F P AYN 8 P ALL INDUSTRY REPRESENTATIVES EXPRESSED THBIR SUPPORT FOR YOU TO CONTACT PANBTTA TO DISCUSS THE COUNTER PROPOSAL. YOU AGREED TO DO SO, AND MADE SEVERAL ATTEMPTS TO GET IN TOUCH WITId PANETTA. ALSO, THE TOBACCO INDUSTRY REPRESENTATIVES ASI{ED IF YOU WANTFD'I'HEM TO CALL ON SOME OF THEIR FRIENDS (GOVERNOR HUNT, DON POWLER, RY'C.) AND ASK THEM TO CALL ON THE WHI'I'e HOUSE ABOUT',KE,SSLER. YOU TOLD TH81VI YOU'1'1ioUGHT THAT WOULD BE HELPFUL AS LONG AS THE PHONE CALLS WERE ABOUT KESSLER AND HIS IMPACT ON TOBACCO POLITICS AND NOT THE PROPOS,AL. MAY 11(TH[rRSDAY) -- YOU TALKED WITH PANETTA BY TELEPHONE. CONVERSATION C$NTERED AROUND THE HISTORY, THUS F,AR, OP THE PROPOSAL AND THE IMPORTANCE OF IT TO SOUTHERN DEMOCRATS. YOU TOLD PANETTA THAT THE IlVI7USTRY AND MIKVA'S COUNTER PROPOSAL WERE MILES APART AND YOU DIDN'T'THIIdK THERE WAS A POSSIBILITY OP BRINGING Tfffivi TOGETHER YOU ALSO TOLD PAAtETTA TIiAT THE COUNTER PROPOSAL WAS NOT SOMETHING THE SOUTHERN DEMOCRATS COULD ACCEPT ETl'HER. - LATSR IN THE CONVERSATION, YOU TOLD PANETTA THAT YOU AND ROSE WERE INTE'RESTED IN TALKING WITH PRESIDENT CLINTON ABOUT TIM PROPOSAL AND REMOVING THE FDA FROM TOBACCO POLITICS. PANETTA ASKED THAT YOU NOT REQUEST A MEETING WITH CLINTON AT THIS TIME. BE ALSO SAID THAT HE WOULD TALK WFTIi MIKVA ANI) GET BACK IN TOUCH WITH YOU ON MAY 12 (FRIDAY). YOU AGREED TO WATT FOR THE RETURN PHONE CALL. PAN$TTA HAD NOT CALLED YOU BACI{ AS OF TUESDAY, MAY 23. MAY 18 ('THURSDAY) - PHONE CONVERSATION WITH PAT GRIFFIN 0 ~ CENTERING ON WHY PANETTA HAD NOT GOTTEN BACK iN TOUCH WITH ~ YOU. THERE WERE ALSO DISCUSSIONS ABOUT THE "NEGOT?ATIONS" FROM JANUARY TO MAY. PAT SAID THAT THE WHITE HOUSE STILL 3 w co ~ WANTED TO WORK WITH YOU AND ROSE TO REACH A SUCCESSFUL s.~ ~ CLOSURE REGARDING TEH.' TOBACCO/FDA SITUA,TION, PAT SAII7 THAT HE WOULD RELAY THE CONVERSATION TO PANETTA AND SOWONE WOULD GET BACK IN TOUCH WTTH YOU ON MAY 19 (FRIDAY) OR 713A3'' 22 (MONDAY).

0~9 G3dd9,g101 ~6 : 49 P M fi L F P AY N 8 D C POB AS OF'TtJESDAY MORNING, MAY 23, NO ONE HAD CALLED YOU F1ZOM TFE WHPM HOUSE RE[3ARbING'TIiIS STIT,TATION.