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STATE ACTIVITIES OF THE TOBACCO INSTITUTE REPORT AND CONSENSUS OF VIEWS STATE ACTIVITIES POLICY COMMITTEE August, 1983

C a CONTENTS c Page INTRODUCTION 1 A. PERSONNEL (1) Division Management 4 (2) State Activities Field Staff 7 B. OPERA TION S (3) Decision-Making and Implementation 11 (4) Clearances 15 (5) The Lobbyists 17 (6) Member Company Communications with Lobbyists 21 C. LOBBYING (7) State Program Communications 22 (8) Support Systems 24 (a) TAN 24 (b) Other Support Systems 25 (c) Activist Smokers Groups O 26 W ~ -? ~ (9) Public Relations 27 .:a .~, N

e n CCNTENTS (continued) D. CONTRIBUTIONS (10) Contributions 29 E. PLANNING (11) Mission Statement 30 (12) Issue Planning 32 (13) Issue Priorities 33 RECOMMENDATIONS BY CONSENSUS 34 OPEN QUESTIONSIFUTURE AGENDA ITEMS 38

, C C INTRODUCTION For ease of reference, the Tobacco Institute Executive Committee memorandum of April 11 is attached to this Introduction. It requests the State Activities Policy Committee to "... enlarge ... its work to include ... an in-depth, detailed and extensive evaluation" of the State Affairs Department of the Institute. This memorandum was the subject of an Executive Session preceding the SAPC meeting of May 13, where Martin Haley was requested to confer with the member companies and prepare a report of their views and recommendations. SAPC decided that it would then act to fulfill the charge of the Executive Committee and to make changes and improvements in State Affairs in time for the 1984 state legislative season. A general and preliminary draft report was reviewed by the Committee at its meeting of July 15. This document is the final report; it takes the place of the July 15 draft which may now be discarded. The writer has had comprehensive communication with the member companies and with a representative selection of lobbyists. He has viewed his role principally as that of a reporter and synthesizer of consensus. Much of this report is virtually verbatim from member company discussion and written material. Wherever the writer has interjected a personal comment, that observation is clearly denoted by the insertion of ( MH ).

0 n Each section concludes with statements of consensus or a possible question for a Committee agenda. All points of consensus and questions are tabulated at the conclusion of the report for ease of discussion. All member companies have made the overall observation that much has been accomplished. The members seek change and constant im- provement in an entirely positive sense, to meet the obviously in- creasing number of critical issues and a consistently accelerating volume of legislative and regulatory activity. 2

C \ Memorandum to the State Activities Policy Committee from The Tobacco Institute Executive Committee It is the desire of the Executive Committee that the SAPC enlarge or expand the scope of its work to include particularly an in-depth, detailed and extensive evaluation of the State Affairs Section of The Institute, seeking answers to such questions as: 1. Is the Section's mission well defined in detail -- and understood by all? Do we agree with the mission and is the Section organized to accomplish its mission? 2. Are we receiving value for the $8.3 million being spent in this area? 3. Are the Washington and Field staffs appropriate in number? Properly trained and compensated? 4. Should TAN be continued as is, or an altered form -- or not at all? in 5. Is our overall approach to State lobbying the correct one? This list is clearly not intended to be all-inclusive, but the questions naturally presume alternative proposals whenever answered negatively. The SAPC is, in fact, being asked: "Do we have the right people doing-the right thing at an appropriate cost? If not, what should we do?"

!V (1) DIVISION MANAGEMENT This subject arises indirectly from all questions raised by the Executive Committee in their memorandum, and is present in the minds of all company representatives, generally to a greater rather than lesser degree. To put it clearly, there has been a general loss of credibility in the Senior Vice President for the State Activities Division. He does not have the full confidence of any member company, in this position. Some companies feel more strongly about this than do others. But the difference in their views is one of degree rather than substance. No one advocates dismissing the incumbent from the TI. Some feel that he has a valulable contribution to make in other, non-administrative areas; some feel that he should have a different role to play; others express no precise opinion. It has been said that expectations were too high when he was recruited. To this, should be added (MH) that the role, scope, and challenge have all increased dramatically since he took over what was then simply an "anti-restrictive" defensive operation. Those who feel most strongly about the need for a change point out that there can be little realistic hope for a more effective organization 4

without such a change. They add that mission, form, money, and approach are subsidiary to the leadership and direction of the Division. The opinion has been expressed that almost all organizational and operational remedies could be applied by a division manager who recognizes administative responsibility and has enthusiasm for it. It has been urged that a successor executive be told by the members to be honest, clear, direct and decisive as opposed to being pleasant, innocuous and soothing. His mandate would be for complete candor with the member companies. He would be required to state a recommendation clearly, rather than being a diplomat, broker of consensus, and promoter of compromise who seeks to please all of his constituencies. Of the four Regional Vice Presidents, two received no negative comments and, from most quarters, praise, especially for their understanding of the principles of working successfully with lobbyists.* The record of a third was questioned by some and his style was viewed with un- certainty by others. The fourth was generally viewed as not measur- ing up to the position but feelings about him were not strongly negative. * For comments about how this works, please see Section 5(]viH ). 5

M 1/ Consensus: (1) The member companies generally desire a new senior manager for the State Activities Division. (Only one company feels that there is no potential successor within present Division personnel. ) (2) Questions about the role of the Regional Vice Presidents and their probably increasing importance lead toward at least informal evaluation of them in collaboration with the President of the TI. 6

41/ (2) STATE ACTIVITIES FIELD STAFF All agree that a Field Staff is essential, as a matter of common sense, to (1) act as an extension of headquarters for program coordination and implementation, (2) provide direct TI representation on occasions which require it, and (2) work in collaboration with - and for - state lobbyists. But from that agreement in principle, natural differences of view arise among member companies about the size, geographic coverage, and location of Field Staff. There is a range of member company views on this subject. Some examples: • Areas should be eliminated and replaced by, say, eight or so regions rather than the existing four regions and twenty-two area offices. • To determine whether staffs are appropriate in number (and properly trained and compensated), a performance review of all State Activities staff should be initiated, in preparation for a more specific answer to the question of "how many and where". • The number and location of field personnel 7