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  1. Published September 11, 2013 Global trade negotiations in Washington this week will determine how cigarette companies will be able to market their products in developing nations—and potentially, overturn smoking restrictions around the world. As cigarette smoking has fallen in the United States and Europe thanks to public health laws and liability lawsuits, global tobacco companies have increasingly turned to developing markets to expand their business. Now they’re trying to make sure the largest trade agreement since the World Trade Organization gives them the tools they need to stop those countries from adopting the laws that cost them customers in wealthier nations. “It is very important for people to understand that the industry is using trade law as a new weapon, and [the Trans-Pacific Partnership] provides an opportunity to put a stop to that,” Susan Liss, the executive director of the Campaign for Tobacco Free Kids, says. Like everyone else, cigarette companies turn to emerging markets Smoking rates are plunging in the US—from 25% of the population in 1990 to 19% today—and similar drops are happening in the United Kingdom, Australia and Canada. Today, of the world’s growing population of 1.3 billion smokers, 80% reside in low or middle-income economies. Tobacco companies naturally want to make sure they can protect and expand their businesses in those markets, especially among women, who have much lower smoking rates than women in wealthier countries. Until the late 1990s, the US government was keen to help American tobacco companies accomplish this end, threatening trade fights with Japan, Thailand, Taiwan and South Korea unless they opened their borders to US cigarettes and their sophisticated marketing campaigns. A government study found that in the year after US companies entered South Korean markets, smoking among teenagers surged, especially among young women, where the share of smokers increased from 1.6% to 8.7% in just one year. Public health and development organizations decry the expansion of smoking in these countries, fearful not just about the death rate—the World Health Organization estimates that one billion people will die from smoking this century—but also the secondary costs. Those include money spent by the malnourished and poor on cigarettes rather than staples, agricultural labor diverted to inefficient tobacco farming rather than food or other enterprise, and the costs of health care for the myriad ailments associated with cigarette smoking and second-hand smoke. The face of these fears is a chain-smoking Indonesian toddler: http://www.huffingtonpost.com/2013/09/10/cigarette-free-trade_n_3899825.html
  2. Published May 16, 2013 Chris Bostic Deputy Director for Policy I wonder if Philip Morris International (PMI) researchers have studied the ‘length of public memory.’ If so, the resulting answer seems to be ‘about 15 years.’ That’s how long it has been since the Tobacco Institute closed its doors, after 40 years of obfuscating the science on tobacco addiction, disease and death. A key aspect of industry strategy to forestall meaningful regulation has always been to question the causal link between tobacco and disease. PMI has just launched phase two of its sbv IMPROVER project (the title is short for “systems biology verification of industrial methodology for process verification in research”). The theme is “species translation challenge,” and PMI, in collaboration with technoogy giant IBM, will award three US$20,000 grants to scientists who can best poke holes in translating disease lab results in rodents to humans. In one online article very sympathetic to Philip Morris, the reporter states “not every smoker suffers all or any of those health effects, suggesting that a combination of environmental and genetic factors lead to disease.” This years project follows on the “diagnostic signature challenge,” in 2012 which gave a US$50,000 award for showing genetic markers for diseases linked to tobacco. The main purpose of IMPROVER seems clear – remuddy the waters on the causal link between tobacco and disease. But they actually get much more. By enticing young researchers to compete, PMI pushes back against the trend among major universities to not do business with big tobacco. These researchers are also a natural recruitment pool for the next generation of scientists who are untroubled by the ethics of working with big tobacco. By linking with IBM, working with universities, and comparing the effort to legitimate scientific endeavors such as DREAM, PMI gains legitimacy among the scientific community. Finally, IMPROVER is a rather brilliant example of corporate social responsibility marketing. Turning the purpose of the scheme on its head, PMI says its “number one objective is to do something about our dangerous products.” How can anyone argue with that? That’s not rhetorical – I invite responses on all the ways we can argue with that. On a side note, is the name IMPROVER a subtle nod and affront to MPOWER? This article originally appeared on Republic Report
  3. By Adrienne Jane Burke | April 30, 2013, 1:04 PM | Techonomy Exclusive It might be surprising to hear a tobacco giant described as a tech innovator. But Philip Morris researchers are pioneering new territory with a crowdsourced approach to checking the accuracy of life sciences data. In partnership with computational biologists at IBM’s Watson Research Center, Philip Morris’s so-called sbv IMPROVER project creates open challenges to encourage scientists to augment traditional peer reviews of research data. On Monday, Philip Morris launched its Species Translation Challenge, which will award three $20,000 prizes to teams whose results best define how well rodent tests can predict human outcomes. Similar competitions have emerged in the academic world, but sbv IMPROVER (short for “systems biology verification of industrial methodology for process verification in research” in case you were wondering) is the first that taps the crowd to verify industrial research. An initial challenge last year awarded $50,000 to two Wayne State University researchers who proved best at confirming genetic features that could be considered “diagnostic signatures” for particular diseases. Why is a cigarette manufacturer sponsoring such competitions? “Our number one objective is to do something about our dangerous products,” says Philip Morris scientific communications director, Hugh Browne. (The company is known for its periodic candor about such matters, even as it continues to dominate the industry.) From heart disease to cancer to emphysema, the potential consequences of smoking are well known. But not every smoker suffers all or any of those health effects, suggesting that a combination of environmental and genetic factors lead to disease. To understand precisely how smoking and chewing tobacco leads to complex interactions in a user’s biological systems, “Philip Morris is increasing its investments into systems biology,” Browne says. The company is looking at networks of genes, proteins, and biochemical reactions to identify the exact biological mechanisms perturbed by smoking. But such biological data is notoriously complex to analyze. The profession as yet lacks any standard methodology for verifying results, and traditional peer-review methods have “struggled with the volume and complexity of the data,” according to Philip Morris. IMPROVER breaks research workflows into components and asks the crowd to apply its own computational methods to verify results. IBM computational biologist Gustavo Stolovitsky says the project “provides an excellent platform on which to test and develop some of the most cutting-edge approaches to the analysis of high-throughput biological data.” The 2012 IMPROVER challenge asked participants to identify signs in a patient’s set of transcribed genetic material that could be relied on to diagnose any of four diseases associated with smoking: psoriasis, multiple sclerosis, chronic obstructive pulmonary disease, and lung cancer. Competitors looked at clinical data from patients—some of it licensed from third parties and provided by Philip Morris; some from the public domain. More than 50 teams worldwide competed in the challenge that the Wayne State researchers won. Says Ajay Royyuru, director of IBM’s Computational Biology Center in Yorktown Heights, NY: “There was a refreshing variety of competitors.” The most successful applied fundamental understanding of biology “rather than brute force machine learning,” or automated big-data analysis methods. “Some came at it from a mathematical modeling approach, others came from biology, and others combined those,” he continues. (The Wayne State team comprised a bioinformaticist and a perinatal researcher.) Royyuru adds that the challenges can provide young scientists without scientific publications under their belt with a way to get recognition, and computational biology startup companies with a way to showcase what they can do. A team of IBM computational biology experts scored entries, and a five-man outside panel reviewed the scores. While no single team identified the data perfectly, the leading methods, considered in the aggregate, performed exceptionally well, Royyuru says. The new challenge launched this Monday seeks to determine if gene expression pathways identified in rodents will predict the same in humans. Scientists typically rely on them to study the impact of products on consumers, even though it remains unclear how well rodent results translate to humans. Four sub-challenges ask participants to determine 1) if the way signaling pathways in one species react to a given stimulus really predicts similar response in another species, 2) which biological pathway functions and gene expression profiles are most parallel in rodents and humans, 3) how much that depends on the nature of the stimulus or data type collected, and 4) which computational methods are most effective for inferring responses between species. Competitors will get access to about 5,000 human and rat samples Philip Morris generated for the challenge, and will look at 57 stressors to a single cell line exposed at different time points. Browne suggests that the IMPROVER approaches for verifying results could be useful as well in the pharmaceutical, biotechnology, nutrition, and environmental safety industries. And Royyuru sees the project as a step toward creating “a verification methodology that will become routine industry practice.” Who knows how Philip Morris might utilize the outcomes? For better or worse, they may seek to create safer tobacco products.
  4. (Reuters) - A federal appeals court on Friday upheld a ruling banning tobacco company Philip Morris USA, a unit of Altria Group Inc, from making false or deceptive statements about cigarettes. The U.S. Court of Appeals for the District of Columbia upheld a 2009 injunction banning the company, which sells Marlboro and other cigarettes, from making misleading statements or implying health benefits. The court had previously upheld injunctions placed under the Racketeer Influenced and Corrupt Organizations Act, but the cigarette company brought a new challenge after Congress passed the Family Smoking Prevention and Tobacco Control Act in 2009. Philip Morris said the newest act, which increased restrictions on the actions of cigarette companies, made the injunctions redundant. But the company's history of non-compliance led the three-judge panel to agree with a lower court that there is no assumption Philip Morris will comply with the new law. This is the thirteenth year of litigation between Philip Morris and U.S. government. The case is United States of America et al. v. Philip Morris USA Inc. Number 11-5146.
  5. Published in CSP Daily News NEW YORK -- Philip Morris International, the largest tobacco company in the world recently announced yet another stream of revenue growth. With more regulation threats being imposed on tobacco companies and smokers, Philip Morris is looking to explore alternatives, according to a contributed column on Seeking Alpha. Governments globally have been attempting to regulate how and if cigarette companies can advertise. In addition, governments have hiked tax rates on cigarettes in an attempt to break people's addictions by robbing their wallets. Philip Morris has responded by beginning to seek revenue through electronic cigarettes, chewing tobacco and snuff. Though Philip Morris' smokeless effort is minimal right now compared to the tobacco industry, the company does have revenue coming from their joint venture with Swedish Match AB in 2009. The smokeless products from this joint venture are currently being marketed and sold in Russia and Canada. Revenues are expected to grow significantly too, as this is only the beginning of their marketing campaign, the column states. Philip Morris is also looking to follow in the footsteps of competitor British American Tobacco and begin marketing electronic cigarettes. Electronic cigarettes offer a somewhat healthier alternative to traditional cigarettes because when you smoke them, you inhale water vapor mixed with nicotine rather than harmful smoke. This is easier on your lungs, although the nicotine still has its normal effects. With consumers becoming more aware of the consequences of smoking, some have looked to electronic cigarettes as an alternative to help preserve their lung function. Long-term Philip Morris believes that electronic cigarettes will expand its revenue opportunities worldwide, the writer states. Philip Morris has the highest EPS growth rate among the tobacco sector for the next fiscal year; it's estimated to be 11.2%, ahead of Lorillard, Altria Group and Reynolds American. Its revenue growth for next year is also expected to triumph in its sector by growing by a projected 5.51%. Philip Morris yields 3.3% at its current price.
  6. What does it mean to “carve out” tobacco from a trade agreement? A “carve out” means an exclusion of tobacco products from the rules and benefits of the trade agreement. In effect, it gives complete protection for governments to regulate tobacco without fear of violating the trade agreement and being sued by the tobacco industry for doing so. Current trade agreements require drastic change Tobacco must be listed as an exception under all product references, removing its ability to benefit from free trade benefits between countries. This would not hurt any other products that benefit from the trade agreements because the exclusion would be product-specific. The Tobacco Industry has sued many countries because of current international trade laws Trade agreements allow the tobacco industry to drag governments before foreign trade tribunals and demand that anti-tobacco regulations be removed or weakened. Oftentimes, these cases are not about winning but are instead meant to impose the huge costs of litigation on governments, which governments must pay even if successful in their defense. What is the irreconcilable conflict between the tobacco industry and public health? Unlike other products that can become harmful when abused or overused, there is no “safe” use or amount of tobacco. The tobacco industry simply seeks to increase consumption of tobacco, while ASH and its public health allies seek a higher level of global health. There is no “happy medium” to be found between the tobacco industry and the public health community. What is the Trans-Pacific Partnership Agreement, and why does it matter? The Trans-Pacific Partnership Agreement (TPPA) is a free trade treaty currently being negotiated between the U.S. and eleven countries bordering the Pacific Ocean. It will become the largest regional trading bloc in the world once completed, ideally in 2013. Negotiations for The Trans-Atlantic Trade and Investment Agreement (TTIP) between the U.S. and the European Union began in July 2013. It will be even bigger than the TPPA. In both negotiations, the U.S. is pushing for the right of corporations, including Big Tobacco, to directly sue governments in foreign trade tribunals. This ability to directly sue a government is a “chill” tactic used by Big Tobacco to discourage governments from implementing tobacco control regulations so as to avoid the cost of defending themselves in court against the tobacco industry, who can afford to drag out the cases for a long time. Learn more about the threat and opportunity of the TPPA> Trans-Atlantic Trade and Investment Partnership (TTIP) In July 2013, negotiation started for a free trade agreement that will be even bigger than TPPA, the Trans-Atlantic Trade and Investment Partnership between the U.S. and the 28 countries of the European Union. Several European countries have made great strides in fighting the tobacco epidemic, and may want to protect their laws from corporate lawsuits. Learn more about TTIP> How many lives are at risk if tobacco continues to benefit from trade agreements? The WHO estimates that 1 billion people will die from tobacco this century unless drastic actions are taken. One of those critical actions to take is carving tobacco products out of trade agreements. It is impossible to predict how many lives hang in the balance of the trade debate, but it is certainly millions worldwide. http://ash.org
  7. Philip Morris International Inc. (PM), the largest publicly traded tobacco company, will spend as much as 500 million euros ($680 million) on a new factory in Italy as part of a drive to make products with lower health risks. The plant, near Bologna, will start producing tobacco products that are heated with a special device rather than burned at the end of 2015 or early 2016, the New York-based company said in a statement today. The factory will have capacity to produce as many as 30 billion units a year, equivalent to about 6 percent of the European Union’s cigarette sales, the company said. “This first factory investment is a milestone in our road map toward making these products available to adult smokers,” Chief Executive Officer Andre Calantzopoulos said in the statement. Nicotine Race In November, Philip Morris brought the launch date of the tobacco-heating product forward to 2015 from a previous forecast of 2016 or 2017. It will test it in a few cities in the second half of this year. Unlike e-cigarettes, the company’s new product will contain tobacco to appease smokers’ cravings for the taste of a conventional cigarette. The device looks like a hollowed-out fountain pen. The custom-built cigarette is inserted and the tobacco is heated to generate a smoking aerosol. The temperature is “significantly below” what’s generated by a traditional cigarette, PMI has said. PMI has spent more than a decade trying to develop lower-risk products and started eight clinical trials on them last year, the company said. Philip Morris already has a filter factory and a pilot plant in Bologna. The new facility will employ about 600 people. The company will also enter the e-cigarette market in the second half of this year. www.bloomberg.com
  8. tobaccoexplained.pdf Please click on the link to download/view the 78 page document.
  9. FRONTLINE tells the inside story of how two small-town Mississippi lawyers declared war on Big Tobacco and skillfully pursued a daring new litigation strategy that ultimately brought the industry to the negotiating table. For forty years tobacco companies had won every lawsuit brought against them and never paid out a dime. In 1997 that all changed. The industry agreed to a historic deal to pay $368 billion in health-related damages, tear down billboards and retire Joe Camel. This report recounts how it all started when Mississippi's Attorney General Mike Moore joined forces with his "Ole Miss" classmate attorney Dick Scruggs and sued tobacco companies on behalf of the state's taxpayers to recoup money spent on health care for smokers. Scruggs and Moore criss-crossed the country in a private jet hawking their battle strategy to other state attorneys general and eventually built an army of forty states. Moore and Scruggs had a number of secret weapons. They took charge of explosive tobacco industry internal documents that no one else would touch. And they protected two of the most important whistleblowers in the history of the tobacco wars: Jeffrey Wigand, the first high-level tobacco executive to turn against the companies; and Merrell Williams, a paralegal who secretly copied thousands of internal documents. And these Missippippi "boys" held another trump card. They offered a deal to Bennett LeBow, CEO of Liggett & Myers: break ranks with the industry and cooperate with the state attorneys general in return for financial stability. FRONTLINE tells how they also managed to get a back channel to President Clinton and Senate Majority Leader Trent Lott through political advisor Dick Morris. But Scrugg's and Moore's success was not limited to getting the industry to a national settlement. FRONTLINE details for the first time how their efforts triggered a massive criminal investigation of Big Tobacco that threatens to put some in jail for deceiving the American public. Partly because of this criminal investigation, strong forces in the public health community opposed settlement talks. FRONTLINE interviews Minnesota State Attorney General Hubert Humphrey III and former FDA Chairman David Kessler who balk at any "deal with the devil." As of May 1998, the Senate is poised to pass broad anti-smoking legislation which would cost the industry over $500 billion. The tobacco firms have denounced this new deal claiming it will bankrupt them. But Congress -- once a servant of the industry in large part because of tobacco's massive political clout and contributions -- has now turned against it. http://www.pbs.org/wgbh/pages/frontline/shows/settlement/
  10. In 1998, the Attorney General's Office reached a settlement with the major tobacco manufacturers that imposes major restrictions on the industry's advertising and marketing machine, curtails its ability to fight anti-tobacco legislation in our political arena, and provides states quick mechanisms to enforce the agreement. In addition, it provides states approximately $206 billion through the year 2025 - including $4.5 billion for Washington State - to help rectify the harm caused by tobacco. The tobacco settlement is the largest financial recovery in legal history. The Master Settlement Agreement The 1998 Tobacco Master Settlement Agreement (MSA) between tobacco companies and 46 U.S. states was the largest civil litigation settlement in U.S.history. Its central purpose was to reduce smoking, and particularly youth smoking in the U.S. In the Agreement: Each of the 46 states gave up their legal claims that the tobacco companies had been violating state antitrust and consumer protection laws. The tobacco companies agreed to pay the states billions of dollars in yearly installments to compensate them for taxpayer money that was spent on patients and family members with tobacco-related diseases. It Settled Lawsuits: The MSA resolved litigation brought by over 46 states in the mid-1990s against majorU.S.cigarette manufacturers: Philip Morris, R.J. Reynolds, Brown & Williamson, and Lorillard, plus the industry's trade associations and PR firms. It settled the state lawsuits that were trying to recover billions of dollars in costs associated with treating smoking-related illnesses. The Attorneys General of the 46 states signed the MSA with the four largestU.S.tobacco companies in 1998. It Created New Restrictions: New limits were created for the advertising, marketing and promotion of cigarettes. It prohibited tobacco advertising that targets people younger than 18. Cartoons in cigarette advertising were eliminated. Outdoor, billboard and public transit advertising of cigarettes were eliminated. Cigarette brand names could no longer be used on merchandise. Many tobacco company internal documents were made available to the public. It funded anti-tobacco education: The MSA called for the creation of a nonprofit organization, the Legacy Foundation, funded by the settling states. This foundation was charged with educating the nation about the social costs, addictive nature and negative health effects associated with tobacco consumptio In 2001, the Legacy Foundation launched “truth” campaign. The American Journal of Public Health publishes peer-reviewed research that finds that the Truth campaign, funded by the MSA, is linked conclusively to 22 percent of the overall decline in youth smoking rates in 2000–2002—translating to 300,000 fewer smokers in 2002. Since the MSA was signed in November 1998, about 40 other tobacco companies have signed onto the MSA and are also bound by its terms. Under the agreement, state attorneys general are responsible for enforcing the restrictions on cigarette marketing and advertising. http://www.atg.wa.gov/MSA.aspx
  11. 1950 American scientists Ernst L. Wyndner and Evarts A. Graham publish a report that 96.5 percent of lung-cancer patients are moderate to heavy smoker. 1952 Liggett publicizes a study by Arthur D. Little showing that smoking Chesterfields has no adverse effect on the throat. 1953 A landmark study by Ernst Wyndner shows that painting cigarette tar on the backs of mice creates tumors. 1954 Eva Cooper sues R.J. Reynolds Tobacco Co. for the death of her husband from lung cancer. Cooper loses the case. 1954 The Tobacco Industry Research Committee (later becomes Council on Tobacco Research) issues a "Frank Statement" to the public. It's a nationwide two-page ad that states cigarette makers don't believe their products are injurious to a person's health. 1963 Brown & Williamson general counsel Addison Yeaman notes in a memo, "Nicotine is addictive. We are, then, in the business of selling nicotine, an addictive drug." 1964 U.S. Surgeon General Luther Terry issues the first surgeon general report citing health risks associated with smoking. 1965 U.S. Congress passes the Federal Cigarette Labeling and Advertising Act, requiring a surgeon general's warning on cigarette packs. 1971 All broadcast advertising for cigarettes is banned. 1972 Philip Morris's Marlboro becomes the best-selling brand in the world. 1982 U.S. Surgeon General C. Everett Koop finds that secondhand smoke may cause lung cancer. 1983 Rose Cipollone, a smoker, sues the tobacco industry. She dies in 1984 and her family takes up the lawsuit. 1985 Melvin Belli, who in Louisiana in 1958 had argued the first tobacco liability case to reach a jury, filed a claim of $100 million on behalf of Mark Galbraith, a three-pack-a-day smoker who had died at sixty-nine, against R.J. Reynolds in Santa Barbara, CA. It was the first such action to go before a jury in fifteen years, but Belli lost, holding that neither causation nor addiction had been proven. 1986 In May, Nathan Horton, a fifty-year-old African American smoker, files suit in Holmes County, Miss., for $17 million in damages from American Tobacco, on the use of fertilizers and pesticides in growing tobacco products in excess of government approved limits. His attorney, Don Barrett, brings the suit before a jury in January 1988, but the judge declares a mistrial because of a hung jury. 1988 Michael Moore is elected Attorney General of Mississippi. 1988 Merrell Williams is hired by Wyatt, Tarrant and Combs in Louisville to analyze and sort Brown & Williamson internal documents. 1988 Jackie Thompson first gets sick from tobacco related illness. 1988 Judge Lee Sarokin rules that he has found evidence of tobacco industry conspiracy in the Cipollone case; Liggett is ordered to pay Cipollone $400,000 in compensatory damages. 1989 Jeffrey Wigand starts work for Brown & Williamson as Vice President of Scientific Research. 1990 Don Barrett, the Mississippi attorney representing smoker Nathan Horton, wins the case against the industry during a new trial in Oxford, Miss. His client is awarded no damages in the case.Smoking is banned on U.S. passenger flights of less than six hours' duration. 1992 The U.S. Supreme Court rules that the 1965 warning labels on cigarette packs does not shield companies from lawsuits. 1992 Wayne McLaren, who modeled as the "Marlboro Man," dies of lung cancer. 1992 Merrell Williams is laid off from law firm of Brown & Williamson. 1992 Matthew Fishbein and other US Attorneys from the Eastern District of New York open a federal probe into criminal wrongdoing by the tobacco industry, focusing on Judge Sarokin's opinion in the Haines case. Sarokin called the industry the "king of concealment." March 1993 See Below May 1993 Mike Lewis visits Jackie Thompson in the Memphis hospital and begins discussing a suit against the tobacco industry on her behalf. In the elevator after the visit, Mike Lewis comes up with the idea of suing the tobacco industry on behalf of the state to recover costs from treating smokers. Sept 1993 Jeffrey Wigand is sued for libel by Brown & Williamson for saying malicious things about the company president to another employee - they threatened suspended pay and health insurance.In the summer of 1993, the law firm Wyatt, Tarrant & Combs filed a civil suit accusing Merrell Williams of copying and removing confidential Brown & Williamson documents from the firm. The suit was filed after his lawyer had returned a box of these documents to the law firm. In a letter that accompanied the box, Williams' attorney alleged that Williams had suffered smoking related illnesses, a condition made worse by seeing the information in the documents, and he sought a settlement of Williams' claims. Nov 1993 Jeffrey Wigand and Brown & Williamson sign a confidentiality agreement. Feb 1994 FDA Commissioner David Kessler announces plans to consider regulation of tobacco as a drug, stating that tobacco manufacturers use nicotine to satisfy addiction. 2/28/94 ABC's "Day One" airs a report by producer Walt Bogdanich which claims that cigarette companies "spike" levels of nicotine. Mar 1994 A national class action suit is filed on behalf of smokers, known as the Castano suit, after Peter Castano, a former Louisiana attorney who died of lung cancer. 3/7/94 Second "Day One" Segment airs, listing secret additives in cigarettes. 3/24/94 Philip Morris announces lawsuit against ABC in the circuit court for the city of Richmond, VA. 3/25/94 FDA Commissioner Dr. David Kessler testifies about tobacco and nicotine in Congressional hearings. 4/14/94 Seven leading tobacco company executives testify during Waxman's Congressional hearings that they believe "Nicotine is not addictive." May 1994 Richard Scruggs hand carries Brown & Williamson internal documents to Waxman in Washington. 5/7/94 New York Times publishes Brown & Williamson internal documents, saying they were received by a government official. 5/12/94 Stan Glantz receives Brown & Williamson documents from "Mr. Butts." 5/18/94 Jeffrey Wigand (using the code name "Research") pays his first visit to Dr. Kessler's office at the FDA. 5/23/94 Mississippi Attorney General Michael Moore announces the filing of a lawsuit against the tobacco industry seeking to recoup the $940 million the state spent treating sick smokers. June 1994 Geoffrey Bible is named President and CEO of Philip Morris 6/21/94 Dr. David Kessler testifies in Congressional hearings about the investigation into whether tobacco and niotine should be regulated by the FDA. July 1994 Justice Dept opens criminal investigation into possible perjury by top tobacco company executives in their testimony before the Congress during the Waxman hearings. 8/17/94 Minnesota Attorney General Hubert Humphrey III files a Medicaid suit against the tobacco industry. 9/20/94 Attorney General of West Virginia files a Medicaid suit against the tobacco industry. 12/94 Florida Legislature passes a law making it much easier to sue the tobacco industry for Medicaid costs. The tobacco industry fights the passage of the law, but looses. 12/14/94 Congressman Marty Meehan sends an 111-page prosecution memo to the Justice Department, requesting that Attorney General Janet Reno open a formal criminal investigation against the tobacco industry and several of their law firms and industry organizations. 2/14/95 Brown & Williamson sues UCSF and Stanton Glantz demanding return of internal industry documents. 2/21/95 Attorney General Bob Butterworth of Florida files a Medicaid suit against the tobacco companies. 7/1/95 Stanton Glantz posts the Brown & Williamson documents on the Internet. 8/16/95 ABC agrees to settle their lawsuit with a prime-time apology and $15 million to cover Philip Morris legal fees. Separate $200,000 settlement with RJR. Oct 1995 Steven Goldstone is named CEO of RJR Nabisco Holdings Corp., after having served as President and General Counsel. 11/5/95 New York Times story appears on CBS pulling full Wigand story for fear of tortious interference lawsuit. 11/12/95 "60 Minutes" airs cut tobacco piece without the full Wigand Interview. Several days later the Westinghouse/CBS merger is approved by CBS shareholders. 11/21/95 Brown & Williamson lead lawyer, Gary Moresrow, announces that they are suing Wigand for theft, fraud and breach of contract. Judge in Kentucky issues restraining order on Wigand, stopping him from discussing confidential documents. 11/27/95 Kentucky judge clarifys restraining order, saying Wigand is bound by his confidentiality agreement not to testify in any case without first cooperating with the tobacco industry lawyers. 11/28/95 Mississippi judge rules that State Attorney's can question Wigand despite restraining order made by Judge in Kentucky. 11/29/95 Jeffrey Wigand is deposed in Pascagoula in state of Mississippi's Medicaid lawsuit against the Tobacco Industry. Dec 1995 Wigand is also questioned by US Justice Dept officials (Grand Jury Testimony) in the criminal investigation of the Tobacco Industry. 12/19/95 Massachusetts files a Medicaid suit against the tobacco industry. 1/26/96 Wall Street Journal runs piece including excerpts of Wigand's leaked deposition and places entire deposition on the Internet. 2/4/96 CBS runs full Wigand Interview. 3/96 The Liggett Group settles with five states and 67 law firms suing the industry - the first such agreement in 40 years of litigation. 3/96 Steven Goldstone, RJR Nabisco CEO says the industry would consider settlement. 3/13/96 Louisiana files a Medicaid suit against the tobacco industry. 3/28/96 Texas files a Medicaid suit against the tobacco industry. 4/11/96 New Jersey announces that they will file a Medicaid suit against the tobacco indsutry. Actually file suit on 9/10/96. 5/96 Federal appeals court dismisses the Castano national class-action lawsuit. Lawyers in the Castano group begin filing class-action lawsuits in individual states. 5/1/96 Maryland files a Medicaid suit against the tobacco industry. 6/5/96 Washington files a Medicaid suit against the tobacco industry. 7/18/96 Connecticut files a Medicaid suit against the tobacco industry. 8/96 A Jacksonville, FL, jury awards $750,000 to Grady Carter, who had sued Brown & Williamson. One juror says the released Brown & Williamson documents had an effect on the decision. Philip Morris's stock loses $12 billion in value within an hour. 8/20/96 Kansas files a Medicaid suit against the tobacco industry. 8/21/96 Michigan files a Medicaid suit against the tobacco industry. 8/22/96 Oklahoma files a Medicaid suit against the tobacco industry. 8/23/96 President Clinton announces that the FDA will regulate Nicotine as a drug. 9/10/96 New Jersey files a Medicaid suit against the tobacco industry. 9/30/96 Utah files a Medicaid suit against the tobacco industry. 10/96 B.A.T. Industries CEO Martin Broughton says a settlement of tobacco lawsuits would be "common sense." 10/17/96 Alabama files a Medicaid suit against the tobacco industry. 11/12/96 Illinois files a Medicaid suit against the tobacco industry. 11/27/96 Iowa files a Medicaid suit against the tobacco industry. 12/96 RJR hires North Carolina lawyer Phil Carlton to lobby the White House and try to meet with Mississippi Attorney General Michael Moore. 1/27/97 New York files a Medicaid suit against the tobacco industry. 1/31/97 Hawaii files a Medicaid suit against the tobacco industry. 2/97 Phil Carlton meets with White House deputy counsel Bruce Lindsey.The tobacco industry argues in U.S. district court in Greensboro, NC, that the FDA does not have the power to regulate tobacco. 2/5/97 Wisconsin files a Medicaid suit against the tobacco industry. 2/19/97 Indiana files a Medicaid suit against the tobacco industry. 3/97 The Mississippi Supreme Court rules that the state's lawsuit can proceed to trial.Liggett CEO Bennett LeBow settles with more than 20 states, and agrees to release internal industry documents. 3/18/97 Joe Rice, an attorney in Ron Motley's law firm, meets for the first time in Charlotte, NC, with tobacco company attorneys to discuss a settlement of all lawsuits facing the industry, the first time a major tobacco company representative sits across the table from an antitobacco attorney, apart from litigation. 3/31/97 Mike Moore, Dick Scruggs, Matt Myers, and John Coale meet with Phil Carlton. 4/3/97 Phillip Morris CEO Geoffrey Bible, RJR Nabisco's CEO Steven Goldstone, and their attorneys meet in Crystal City, VA, with state attorneys general to discuss a national settlement. 4/14/97 Alaska files a Medicaid suit against the tobacco industry. 4/22/97 Pennsylvania files a Medicaid suit against the tobacco industry. 4/25/97 U.S. District Judge William Osteen in Greensboro, NC, rules that the FDA has the authority to regulate nicotine as a drug. The tobacco industry immediately appeals the ruling. 5/5/97 RJR wins a lawsuit in Jacksonville, FL, filed by a smoker who died and blamed the cigarette maker for not adequately warning her of the dangers of smoking. 5/5/97 Montana files a Medicaid suit against the tobacco industry.Arkansas files a Medicaid suit against the tobacco industry. 5/8/97 Ohio files a Medicaid suit against the tobacco industry. 5/9/97 South Carolina files a Medicaid suit against the tobacco industry. 5/10/97 Missouri files a Medicaid suit against the tobacco industry. 5/21/97 Nevada files a Medicaid suit against the tobacco industry. 5/27/97 New Mexico files a Medicaid suit against the tobacco industry. 5/28/97 Scruggs and Moore meet with the leaders of the Public Health community in Chicago to discuss the potential deal. 5/29/97 Vermont files a Medicaid suit against the tobacco industry. 6/4/97 New Hampshire files a Medicaid suit against the tobacco industry. 6/5/97 Colorado files a Medicaid suit against the tobacco industry. 6/10/97 Oregon files a Medicaid suit against the tobacco industry. 6/97 Idaho files a Medicaid suit against the tobacco industry. 6/12/97 California files a Medicaid suit against the tobacco industry. 6/16/97 Puerto Rico files a Medicaid suit against the tobacco industry. 6/18/97 Maine files a Medicaid suit against the tobacco industry. 6/18/97 Rhode Island files a Medicaid suit against the tobacco industry. 6/20/97 The tobacco companies and state attorneys general announce a landmark $368.5 billion settlement agreement. July 1997 Congress includes a $50 billion tobacco-tax credit in a new tax bill. New taxes paid by smokers will save the industry billions of dollars by reducing the amount of money companies would owe according to the settlement. 7/15/97 The State of Mississippi settles its Medicaid case with the tobacco industry for $3.4 billion dollars. 8/25/97 Florida settles. Tobacco companies agree to pay $11.3 billion. 8/29/97 Georgia files a Medicaid suit against the tobacco industry. 9/11/97 Senate votes to repeal the $50 billion tax break for the tobacco industry that was slipped into the tax cut legislation just before it was passed in July. 9/17/97 Clinton announces his position on the upcoming tobacco legislation in Congress. 10/13/97 Tobacco companies settle first secondhand smoke class-action in the Florida Broin case brought by flight attendants. 10/17/97 Philadelphia Judge Clarence Newcomer throws out a massive Castano group suit, a national class-action lawsuit against the cigarette companies, weeks before they were set to go to trial. 12/4/97 Cong. Bliley subpoenaes documents from four tobacco companies that are part of the Minnesota Medicaid case. The documents are released to his office and to the public later that week. 12/10/97 Hearings in Congressional Judiciary Committee on Lawyers Fees in the national tobacco settlement. 1/7/98 Justice Department brings charges against the DNA Plant Technology Corporation for their cooperation in developing Y-1 Tobacco, with high levels of nicotine and illegally exporting seeds to Brazil. 1/15/98 Texas settles with the tobacco industry for a record $14.5 billion. 1/26/98 Minnesota trial starts. 1/29/98 Tobacco executives testify before Congress that nicotine is addictive under current definitions of the word and smoking may cause cancer. 2/25/98 Tobacco executives tell Congress they would never agree to modify their advertising and marketing practices unless the lawmakers gave the industry substantial protection against lawsuits. 4/1/98 Sen. John McCain (R-AZ) passes the McCain bill in the Senate Commerce Committee. The bill gives the FDA unrestricted control over nicotine and is much tougher than the June 20th agreement. It provides no liability protection for the industry, just a cap on potential yearly damages. 4/8/98 Steven Goldstone of RJR Nabisco announces that RJR is pulling support for a settlement and complains that the McCain bill will bankrupt his company. Within hours, the rest of the tobacco industry backs away from the global settlement.
  12. Steve Parrish is Senior Vice President, Corporate Affairs, of Philip Morris and representative for the tobacco industry in settlement negotiations. He is in favor of the national settlement and has argued that the tobacco industry will reform under the proposed regulatory framework contained in the deal. He was "at the table" during the settlement talks and was considered a rational and fair negotiator by the participants we interviewed. Previously, Parrish was General Counsel for Philip Morris and worked with Philip Morris International in Switzerland. Prior to joining Philip Morris, Parrish was a partner at the law firm of Shook, Hardy and Bacon in Kansas City, MS. He was the main tobacco industry attorney in the famous Cipollone case. Q. Mr. Parrish, why did the industry try to settle litigation with the Attorney's General? Parrish: Well, we had been thinking for some period of time about trying to come up with a way to resolve a number of the very contentious issues that were facing the industry. The Attorney's General lawsuits, the class actions, there was a lot of legislative and regulatory issues that were out there, and we were really trying to come to grips with was there a way that we could try to resolve as many of these issues as possible, and the Attorney's Generals cases were a part of that....because we just felt that we could continue the litigation, whether it was the class action cases, the Attorney General cases, and if we won the cases we would still be in litigation and we would still be fighting and we were really....analyzed the situation. We didn't want to keep fighting. We wanted to sit down with others, people that we had disagreed with quite strongly on a lot of issues and see if we could find some common ground and try to resolve some of the issues. Q. To those of us on the outside it seemed like a great sea change. You're a veteran of that litigation; you come from Shook, Hardy and Bacon before you were at Phillip Morris. Parrish: That's right, I was a trial lawyer before I came with Phillip-Morris. Q. Representing the tobacco industry. Parrish: I represented Phillip-Morris in a case in New Jersey back in 1988, that's right. Q. So that tobacco industry was known, if you will, for never giving up, for spending any amount of money to defend itself. What caused the sea change? Was there an event, or do you remember a conversation? Parrish: Well, I think it was really a lot of different things that came together at one point in time, which sort of led us to this almost historic opportunity we have. We had the individual cases, which we had always very successfully defended, we'd had a large measure of success defending the class actions lawsuits, we felt like we had a good chance to win the AG cases. We thought ultimately we would probably prevail in our FDA lawsuit. But it just seemed to us that even if we won, every one of those lawsuits, how would the situation be better? And we just felt like we owed it to our shareholders, to our employees and our business partners, retailers, wholesalers, and our consumers to see if there was a way to end the acrimony and try to find some common ground with the Attorneys General, people in the public health community, regulators and legislators. Q. You don't remember...there wasn't a meeting or someone came in with a memo or a proposal or a draft and said, "Hey, we've got to change the way we're doing business." Parrish: No, not at all. Actually, at Phillip Morris, for example, we had been talking about this issue for some time, and as it turned out the other companies had been doing the same thing. And I think in late 1996 there was a discussion among some of the CEOs about trying to sit down and see if we could fashion a way to work out some differences with some of those who had been our opponents in the past, find some common ground, and see if we could resolve some of the issues. Q. Was there a fear that you might lose a lawsuit? Parrish: Well, anytime you're involved in litigation you're always worried about whether you'll win or lose the case. But again, it was really more than just the being concerned about winning or losing an individual case, or a series of cases, because while the litigation was a very serious thing to us, there was more involved. It was very obvious to us that there was more involved. It was very obvious to us that people around the United States were very concerned about the issue of youth smoking. We talked to people, we did polling, and it was very obvious that people were concerned about that. We were concerned about it, so we thought "is there a way that we could address the 'youth smoking' issue?" The Attorneys General and others in their lawsuits had claimed that the youth smoking issue was central to their claims against the industry, and we thought that might provide an opportunity to address the youth smoking issue, as well some of the litigation issues. Q. Well, Mike Moore and Dick Scruggs and others who participated in the negotiations say to us they asked you or...Mike Moore said they asked you or Phil Carlton....that they be serious when they come to the negotiating table. And they all say that they were stunned, initially, when the industry said, "we'll give up our first amendment rights" or advertising rights. Somebody must have had a discussion about giving up that, after all the litigation and all the money, and all the argument against doing that. Parrish: Well, we certainly had talked about that before we sat down to begin the negotiations. And I think there were really two key events early on in the negotiations. One was when Jeff Bible, the Chairman of Phillip Morris, and Steve Goldstone, the Chairman of RJR and Nabisco, sat down with the Attorneys General, the class action lawyers and some people from the public health community, and indicated very firmly their good faith and the fact that they were willing to make fundamental changes in the way we do business, going forward. I think that was very sincerely communicated to those on the other side of the table and I think they were impressed by that. And then, very quickly, we moved to the issue of our advertising and marketing practices, and I think when we, early on, indicated a willingness to forgo things like the Marlboro Man and Joe Camel in our advertising to give up billboards all across the country, that they realized that we were there in good faith and we were serious and we really wanted to try to work something out. Q. Before I go back into the history here, I'm confused: are the Marlboro Man and Joe Camel still out there, or are you guys taking them out of the market place? Parrish: If the comprehensive resolution that we negotiated last June is enacted into law, then they will be gone. Q. Because it's not a good idea? Parrish: I'm sorry, I don't understand. Q. Well, you're willing to take them out of your advertising campaign because it's been alleged that it attracts kids and young people...it's not a good idea to have that out there attracting young people. Parrish: Well, if I understand your question correctly that is one of the differences of opinion, if you will, that we have had with others, to whether the Marlboro Man, for example, is what causes kids to smoke. We don't think it is, but we were willing to give up the Marlboro Man as part of a comprehensive resolution of all these issues that were facing us. So, certainly, if this comprehensive resolution is enacted into law you'll never see the Marlboro Man again in this country. Q. But if it isn't? Parrish: Well, if it isn't, then I think that all of the companies in the industry have indicated that they...while we will do everything we can to address the issue of youth smoking, that we are not going to give up our First Amendment rights to communicate with our adult consumers. And the Marlboro Man, for example, is one way to do that. We're perfectly willing to try to work to eliminate youth smoking and do everything we can...we can't do it all by ourselves, and that's why this comprehensive approach, which involves money for education campaigns for kids as well as restrictions on advertising practices of the industry, is a much better way to go in our view. Q. Okay, let me go back to a little history. When the Medicaid suit was first filed in Mississippi, and I assume you monitor litigation (related to Phillip Morris and the industry), what was your reaction? Parrish: Well, it was a new theory. It was something that we really hadn't seen in the courtroom before; there had been discussions about theories like that in the past, and any time you have a lawsuit filed against you you take it very seriously. This one in particular we took seriously for a couple of reasons: it was a new theory, and just because of the potential amount of damages that was being alleged in the case. Q. So you weren't like many of the other people we've interviewed who said when they first heard about it they thought "ah, it's a new theory and it's never going to go anywhere." Parrish: Well, we took it seriously. We did our legal research and thought that we would win the case, that the law, if you will, was on our side. But, again, anytime you have a major lawsuit filed against you, you have to take it seriously--you owe that to your shareholders. Q. At one point the governor of Mississippi went into the Supreme Court of Mississippi to try to get the whole suit and his Attorney General out of court, and you and your colleagues joined him in that suit. Once you lost that suit, did you really take it seriously then? Parrish: Well, that was certainly a set-back, but we were taking it seriously before then. We were preparing for trial and we were preparing for trial right up until the moment we settled the case. So we were disappointed with the court's ruling, but we were prepared for it, and we were prepared to go forward if that's what we needed to do. Q. So they were going forward in Pascagoula, these country lawyers in the shopping center in Pascagoula, but you took them seriously. They weren't just a bunch of hillbillies out there. Parrish: The lawyers in the state of Mississippi in that case are excellent trial lawyers. They have done very well for clients all over this country, and as I've come to know them through the negotiation process I have a tremendous amount of respect for their ability; they're excellent lawyers. Q. Were you guys home cooked in Mississippi? Parrish: Well, I don't know what you mean by "home cooked." The state of Mississippi has a court system which functions very well. I'm not sure I would say that we were "home cooked." Q. You're in Chancery Court, no jury, in Pascagoula and I think that the beauty of this comprehensive resolution was that despite our differences of opinion, the AGs, the private class action lawyers and the representatives from the public health community all had certain things that we could find common ground on. I think the Attorneys General, for example, realized that bankruptcy of the tobacco industry is not going to solve the youth smoking issue. It's not going to solve the public health issues that are trying to be addressed in this comprehhe law. I don't think that we thought we were going to be treated unfairly by the judge or anybody. Any place you try a case there's going to be a local lawyer. Q. Well, but in Mississippi there was another case where the plaintiff complained that your people came in and hired all the prominent citizens as jury consultants, put them in the audience, and he wound up losing the case. He felt he got reverse cooked, if you will. I was just wondering whether if because the Mississippi case, in a sense, you may have felt outmaneuvered. Parrish: No, I don't think we felt outmaneuvered. I think we thought at the end of the day if we had chosen to litigate that case all the way through the appellate process we ultimately would have prevailed, but at the end of the day we would have decided that it was in the best interest of our company and our shareholders and the industry to try to resolve that case as part of a comprehensive resolution of all the issues. And our firm belief was that to litigate these cases, one at a time, year after year after year, was not really going to be a satisfactory outcome for anybody; not for us, not for the citizens of Mississippi or the other states, and that there had to be a better way than 50 AG cases around the country. Q. Well, isn't there the threat that you may lose one, two, three of these multi-billion dollar judgments and have to go into bankruptcy? Parrish: Sure, that would be a terrible thing, and it would be not only terrible from the industry standpoint and all the hundreds of thousands of people around the country who depend on the industry for their livelihood, but I would submit it would be a bad thing for the public, because if you have a jackpot justice system where one, two, or three states get all the money, then what happens to the rest of the states? They get nothing, and that's why the comprehensive resolution that we negotiated with the Attorneys General, the class action lawyers and others, is a much better approach because it insures that the claims of all individuals and states will be satisfying. Q. Fear of bankruptcy would have been a logical motive, though, for you to settle. Parrish: Well, certainly, if this industry were to be bankrupt that would be, as I said, would be a terrible thing. Q. When your share...the stock you own in the company would be worthless. Parrish: It would not be worth much. And I think we owed it to our shareholders to try to resolve not only the AG cases, but all these other issues as well, and I think that the beauty of this comprehensive resolution was that despite our differences of opinion, the AGs, the private class action lawyers and the representatives from the public health community all had certain things that we could find common ground on. I think the Attorneys General, for example, realized that bankruptcy of the tobacco industry is not going to solve the youth smoking issue. It's not going to solve the public health issues that are trying to be addressed in this comprehensive resolution, because there will just be new manufacturers, whether they're foreign-based manufacturers or new manufacturing entities here in this country. There could very well be a black market. And I don't think anybody wants that. So we all said we all have the same concern here, so how can we fashion a resolution that addresses the very legitimate interests of everybody around the table. Q.You know, in interview after interview that we do, people continue to refer back to the Spring of 1994 when the CEOs all were sworn in and then said they didn't believe that nicotine was addictive. From hindsight now, how do you look at that hearing and the strategy of that hearing? Parrish: I think, in hindsight, that hearing in April of 1994 in front of Congressman Waxman's Subcommittee, was one of the seminal events over the last number of years as it relates to tobacco, and it was a very important hearing. Q. Was it a disaster for the industry? Parrish: I don't know if I would say it was a disaster, but it certainly focused a lot of attention on the smoking issue in this country. Q. Would you have done it differently today? Parrish: I don't know with 20-20 hindsight whether I would have or not. Not that I was the one who was making those decisions but I just don't know. Q. Maybe, could you clarify what the industry position is now between the 1994 testimony about nicotine addiction and risk factors related to health and recent testimony that there's some acknowledgment that you may have contributed to 100,000 deaths a year, and similar statements or confusing statements from my point of view. Parrish: I don't think you can say there's an "industry" position on those issues. I think what you have is different companies have different positions. The CEOs of the different companies have different views, as a personal matter. And I think you've seen that reflected in the recent congressional testimony, so I don't think you can say there is a industry position on those issues. Q. Do you believe that nicotine is addictive? Parrish: Do I personally? Under the definition that people apply today, I certainly do believe it is addictive. Q. You do... Parrish: I do! Q. Okay, so that's no longer a controversy? Parrish: Well, not as far as I'm concerned. And what we have said is, we've agreed as part of this comprehensive resolution to put bold new warnings on all packages of cigarettes, including the addiction warning. That's, again, one of the things that we agreed to do as part of this comprehensive resolution, to try to end the acrimony and focus on solutions to the issue, rather than this ceaseless, endless litigation and argument. Q. So, if I understand correctly, the industry is no longer, and you are no longer, taking positions that have been reflected to some extent in all these documents, that we cannot admit something, like that there is addiction connected to nicotine? Parrish: Well, I'm not sure what documents in particular you're referring to, but in a way it doesn't really matter. I think what the CEOs have said, their statements speak for themselves, and I think individual CEOs have different views from one another. There's not an "industry" position on addiction, for example. Q. Do you agree that you sell a "nicotine-delivery device?" Parrish: I'm not so sure I would characterize it as a "nicotine-delivery device," I'm not sure I know exactly what that means. I know that others have said that. I think the important question is: what is the public health policy going to be in this country going forward, and what role is the industry going to play in that policy. And as a part of the resolution that we've agreed to we're going to put a warning on the packs that says that cigarette smoking is addictive, that nicotine is addictive, and we as a company have agreed that we are not going to debate this issue endlessly, that we'll work with the public health community, not only on the nicotine addiction issue but the other public health issues, to try to forge common ground that will advance the public health goals or the public health community. Q. When Benett Lebow decided that he was going to break ranks, do you remember that, when you found about that? Parrish: I certainly do. Q. What was your reaction? Parrish: I went to the train station to get on the train to go to work, I picked up the Wall Street Journal, and read the article. And my first reaction was that I was surprised, and as I read the article I was even more surprised that it had been kept secret and broke in the Wall Street Journal that day. Those were my two immediate reactions. I was surprised that there had been a settlement with Mr. Lebow, and I was almost even more surprised that it hadn't leaked out. Q. "Surprised" sounds a little understated. You're a veteran of Shook, Hardy and Bacon, you guys used to brief executives on what their stance should be, legally and otherwise related to these issues. This was like the fall of the Berlin Wall in terms of the success of your organization. Parrish: It was a major event. I would say it was a major event...in the process that led us to June 20, 1997 that I think, as I said earlier, there were a number of things that came together. And certainly the Liggett settlement was a part of that. Q. Well, you've got a turncoat. You've got somebody breaking ranks! Parrish: Well, I'm not sure.... Q. I know you teach Sunday school, but you don't curse? Parrish: Well, I didn't curse that day...I quietly read my paper. I don't know to this day everything that motivated Mr. Lebow to enter into that settlement. But the fact of the matter is--it happened! I'm not sure I would characterize him as a "turncoat" or that he broke ranks. The fact of the matter is, it happened. And that was one of the things that led us to the June 20, 1997 agreement. Q. By the way, why did Phillip Morris pay his legal fees? Why did Phillip Morris pay the legal fees for Liggett? Parrish: As I understand it, Mr. Lebow was...Liggett was in some financial difficulty and was having trouble paying its legal fees and defending the smoking and health litigation, and they asked us if we would assist them in that and we did. Q. In order to keep a united front. Parrish: We thought it was important that defendants coordinate and cooperate in the defense of the cases, and to that end we did agree to help Mr. Lebow with his legal expenses. Q. Mr. Lebow told us that his attorney then met with your attorneys and other attorneys and one of them turned to him and said, "You just destroyed the most beautiful legal defense ever...the most successful legal defense in history." Parrish: I wasn't there. I don't know if that comment was made or not. Q. What was your reaction when you heard that President Clinton was going to give the FDA permission to promulgate their regulations? Parrish: I wasn't surprised about that because we had heard that that was something that was under consideration. I was disappointed. One of our main concerns with FDA regulation in the past has been that FDA would have the authority to ban the sale of tobacco to adults in this country. We obviously would be concerned about that. We are concerned about that. The FDA's council, in an argument in the 4th Circuit, recently said that under the laws that exist today, if the FDA regulates tobacco products as drugs or devices, it could ban the sale of tobacco to adults. So we were concerned about that. My company, Phillip Morris, had proposed a comprehensive federal legislative scheme to deal with the regulation of tobacco, to address the issue of youth smoking, and we were hopeful that that legislation could have passed as opposed to giving FDA jurisdiction under the Food, Drug, and Cosmetic Act. That didn't work out, so we had to think about another way to do it. Q. Well, you were pretty tough in those days about Commissioner Kessler and the "Trojan Horse for Prohibition", "a bureaucrat out of control", "an authoritarian," do you still feel the same way? Parrish: I think that today I would say that one of the lessons that I've learned (and I think one of the lessons that others on the other side have learned) is the best way to have a dialogue is in person, face-to-face, and not through the newspapers. And with 20-20 hindsight I would have loved to had more substantive discussions in those days with people in Congress, with people at the FDA, with people in the public health community; I think that's one of the things we've learned over the last year. It's that before you can really make progress you've got to sit down and have substantive talks one-on-one and not through the newspapers. Q. Again, a clarification, the original settlement on June 20th accepted limited FDA jurisdiction with a lot of controls over that. Am I correct to understand that the industry now accepts the idea of unfettered FDA jurisdiction? Parrish: No, we're still very much concerned about and opposed to giving FDA the authority to ban the sale of tobacco products to adults in this country. That is something that we are unalterably opposed to. Q. Isn't that a contradiction? I mean, the FDA and many of the documents that have come out say that nicotine is an addictive drug...the FDA will have total authority. As it has over every other addictive drug. Parrish: Well, again, I would say that if that means that FDA had the unbridled authority, the discretion to ban the sale of tobacco products to adults in this country, we are opposed to it. And I think that the overwhelming majority of Americans would be opposed to that, despite what they may think about smoking. Q. What about regulating how much nicotine and what additives go into the nicotine in tobacco? Parrish: Well, the agreement that we reached with the Attorneys General and others provides that the FDA would have authority over nicotine in the product. It does provide some measure of protection to the industry and to adults who want to continue to use the product. Q. I guess the critics would say that the federal courts already acknowledged the North Carolina FDA jurisdiction, why give that up? Why water down what they can do and can't do? Parrish: Well, I guess I would say to them and I have said this to them in those one-on-one discussions that we've had that if no one wants prohibition (and that's what they all say; everyone says "we don't want prohibition, it won't work"), and if that's the case then let's sit down and work out a reasonable regulatory regime for this product that doesn't run the risk of imposing prohibition on this country. It was a miserable failure with alcohol, and I think everybody agrees it would be a failure for tobacco products. So let's sit down and see if we can work that out. Q. You know, some people that participated in negotiations told us that your side came in wanting...saying we want it to be like the beer industry. Is the goal of this to change the image of the tobacco industry from being, if you will, worse than a cocaine cartel, to quote Mike Moore? Parrish: Well, I think that one of the things we'd like to see going forward is a recognition by all, including us, that tobacco products, cigarettes are a controversial product. I think that's always going to be the case; there are health risks associated with using the product. I think everybody knows that, everybody agrees with that. But if everybody agrees that tobacco use is going continue, at least for adults, let's figure out how we're going to regulate it, allow us to market it in responsible ways to adults under a regulatory regime that the American public is comfortable with. That, I think, is one of the goals that we have as a result of this negotiation process. Q. If the bankruptcy really didn't worry you, and it was just this onslaught of general litigation, was it the image that people involved in the industry had to live with that forced you to settle? Parrish: Sure, that was one of the concerns. As I say, it was a number of things. It was the financial threat from the litigation, it was the image that the companies had, it was the legislative and regulatory threats that we were facing, as well as the private and Attorney General litigation. So it was really all those things and I think it was a real sense on behalf of the industry because you have to realize that within the last few years there's really new leadership in the industry in this country, and as Jeff Bible from Phillip Morris said, when he became CEO he felt like he had a choice to make: am I going to rely....am I going to continue to fight about the past and defend the litigation, fight regulation and legislative initiatives, or am I going to look to the future and see if there's a way that I can fashion a compromise that will allow us to remain in business selling a legal product to adults while addressing some of the very legitimate concerns that some of our adversaries have. Q.You say that you don't believe that nicotine is an addictive drug. Does Philip Morris now say that? Parrish: Our company was asked by the Senate Judiciary Committee, I believe it was, last fall to state its position on that question, and we provided a rather lengthy response, but I think it's fair to summarize it as saying that we agree that under--at least certain definitions--nicotine is ad...or cigarette smoking is addictive. And we also said that we think it is more productive, rather than arguing about which is the appropriate definition and whether smoking falls under this definition or that definition, that we sit down and work toward a policy for regulating this product that's consistent with the goals of the public health community. And that's really Philip Morris's position. Q. Understood, but the reason why I'm asking these questions is that we're trying to figure out what the position is now because in the past, for instance, Philip Morris and the industry has maintained that you don't manipulate nicotine in order to get people to smoke. Is that position changed? Parrish: One of the problems (and this goes back to the definition issue), one of the problems we've always had is the term "manipulate" and exactly what that means; it's sort of a pejorative term. And what we think... Q. Engineered. Change. Move around. Use whatever words you want to use, but do you change the impact of nicotine or its quantity in your products in order to make sure that people want to smoke or continue to smoke? Parrish: We have a range of products on the market that go from 0.1 milligrams of nicotine, as measured by the government testing method, all the way up to in the...above 2.0 milligrams of nicotine. So clearly there is a wide range of products out there with a wide range of nicotine deliveries. So, again, I don't really see the purpose of continuing the debate over what does the word "manipulate" mean. Let's set about trying to fashion a comprehensive approach to the regulation of the product so that not only the FDA and the federal government, but the public health community and the public at large know what needs to be known about the product, and that's really what people have asked us for, and that's what we've tried in good faith to do. Q. I understand now that the public position, now, is that you don't dispute the issue of nicotine addiction, basically, that's what you're saying: you don't dispute that there's health damage created by your product. Parrish: Right. Q. Okay, how do we deal with the past in order to trust you in the present? Parrish: The agreement that we reached with the Attorneys General and the members of the public health community and the private class action lawyers provides for all industry information on the health risks of the product to be made available to the public at large: to the media, to plaintiff's lawyers, to members of the public. You put them in a document depository here in the Washington area and anybody who wants to look at it can go in and see it. In addition, the agreement provides for, on a continuing basis, additional documentation and information to be disposed to the Food and Drug Administration. Q. Let me give you an example of what I mean by "history," and you should know this because you were a member of....what was the "Committee of Council?" Parrish: The Committee of Council is made up of the general councils of the domestic tobacco companies in the United States who are members of the Tobacco Institute. Q. You've attended those meetings? Parrish: Sure, I used to be General Council of Philip Morris USA and I would attend those meetings. Q. You've chaired some of the meetings. Parrish: Sure. Q. We interviewed G. Robert Blakey, a law professor in Notre Dame who worked in the Florida and Texas cases on the RICO aspects of those cases. He describes the Committee of Council to us as almost a conspiracy of Consigliari from a Mafia family, getting together to make policy, policy designed to deceive the American people. Parrish: Could not disagree with that more. Don't know what else to say. Q. Did you in these meetings attempt to steer research in certain directions that would help the industry and obfuscate the scientific debate? Parrish: In the limited time that I attended those meetings, we got together to discuss common legal issues to the industry. We had updates on the litigation, we talked about bills that were being introduced in Congress and at the state level on things like excise taxes, and a variety of issues that the industry faced that were legal issues. Q. We talked with Gary Huber, you know Gary Huber. Parrish: I've met him, yes. Q. He's gone to your Sunday school class, apparently. He remembers going to Kansas, he told us, going to your class. Do you remember that? Parrish: I think he did go one time. That's right. Q: Gary Huber says that the Committee of Council was described to him by your mentor Mr. Hardy as an "organization set up basically to obfuscate the scientific debate." Parrish: Well, as far as I know, Dr. Huber has never been at any of the Committee of Council meetings. He certainly was never at any of the meetings that I attended. And I don't know what anybody has told Dr. Huber about the Committee of Council so I just, really, I don't know. Q. He says he had discussions back in the 70s with Mr. Hardy who came to Harvard to look at his research and Mr. Hardy told him that they also arrange it so that one member of the industry is never there so they can get out of an anti-trust argument that they're conspiring together. Parrish: Never heard that before so I don't....as I said, I wasn't part of those discussions and I've never heard that before. Q.In reading about your Shook, Hardy experience and your background, it sounds to me...is there another law firm in the country that has pharmacologists, toxicologists, psychiatrists, doctors full-time on staff like that? Parrish: Oh, I don't know, but I wouldn't be surprised. Shook, Hardy for example, in addition to representing tobacco companies, has a number of pharmaceutical clients. It's a big law firm, it may be the biggest in the state of Missouri's; I think they may have over 300 lawyers. They are involved in a lot of complex litigation. In my experience it wouldn't be unusual to either have on staff or have as consultants pharmacologists or people with expertise on issues like that. Q.We've been told stories about the "24th Floor," that there was a secret floor that had limited access, at Shook, Hardy, is that true? Parrish It wasn't when I was there. Whether it is since I left, I don't know. Q. By the way, Chairman Bible I believe testified the other day that he didn't know anything about the Committee of Counsel, hadn't heard of it before. Is that believable? Parrish: Well, you have to realized that Jeff Bible became chairman of Philip Morris, I believe, in 1995 and was never the head of Philip Morris USA. He's not a lawyer...that doesn't sound unusual to me. Q. That he wouldn't know his general counsels are meeting semi-regularly with everyone else in the industry? Parrish: Well, it wouldn't be his general counsel. Mr. Bible is chairman of the holding company. He has a general counsel who is general counsel of the holding company, so it wouldn't be Mr. Bible's general counsel who would be attending those meetings. Q. If you had to do it again, would you have issued the Frank Statement, you know, in the 1950s, the statement where the industry promises to do any research and reveal all of its results? Parrish: I was probably about three years old when the Frank Statement came out. Q. But you've got to live with the consequences. Parrish: And I've got to tell you that even by reading books and newspaper articles and talking to people who were involved, there is no way that I can construct in my mind what the situation was like at the time, what was going on in the minds of the people who were involved in making that decision. There's just no way I could make a judgment on that, even with the benefit of 20-20 hindsight. Q. Yeah, but you wind up at the Committee of Council, which is related to this CTR--the Council of Tobacco Research, right? Parrish: No. Q. The Committee Counsel has no relationship to the Council on Tobacco Research? Parrish: In my....the times that I attended meetings with the Committee of Counsel, no. Q. Did it have anything to do with scientific research projects? Parrish: I'm sure there were discussions of scientific research. Q. Special projects. Parrish: One of the key things that is a part of the smoking and health litigation is the science that people use to claim that cigarette smoking makes people sick. So I'm sure there was discussion about that. Q. Didn't the Committee of Counsel consider what were called "special projects," special scientific research projects that they wanted controlled by the attorney-client privilege? Parrish: I don't remember discussions like that at those meetings that I attended. Q. There are documents and letters, some written by Bill Shin, who is an associate of yours at Shook, Hardy. Parrish: He was one of my partners, that's right. Q. Which talk about that--special projects involving Gary Huber, for instance. Parrish: And I'm just not familiar with those documents. I'm sorry. Q. What was Dr. Huber's role, do you know? Parrish: As I understand it, he was a consultant to either the industry or to Shook, Hardy, I'm not sure which, or maybe both. I'm just not sure. Q. So if he says that he was an independent researcher who happened to get funds through various universities, some funds came from the tobacco, you would dispute that. Parrish: No, I think Dr. Huber obviously was an independent researcher, and maybe I'm wrong, but it was my impression that at least some points he had consulted with the industry, but maybe I'm wrong about that. I just don't know. I didn't really, as I said...I think I met Dr. Huber but didn't really work with him, so I wasn't, I'm not still familiar with his relationship. Q. You know, he says to us that he has discovered now, now that he has access to documents about himself that...he says that now that he has access to documents from inside the industry, that he was actually being funded in cases to find out things that the industry already knew were true. That he was duped. That this was all a sham. Parrish: I don't know how to respond to that. I haven't spoken to Dr. Huber about that. I don't know what documents he's referring to, I haven't seen those so I just don't know how to respond. I'm sorry. Q. Yeah, well, we may show you a document but...have you seen any documents that describe the Council on Tobacco Research as a front? Parrish: I may have. I know that claim has been made in the litigation. Q. No, I mean an industry document that describes the Council on Tobacco Research as a front, as a public relations front. It was set up by Hill and Knowlton. Parrish: Well, I know that that claim has been made in the litigation and I believe that the plaintiffs lawyers and others have tried to use industry documents in support of that claim and in that issue the Council for Tobacco Research was one that we talked about for a long time in our negotiations. And as part of the June 20th agreement, we've agreed to disband the Council for Tobacco Research. Q. I guess my question is, in order for us accept that the industry has changed and wants to change, will there be an admission that much of this...will there be an admission at the Council on Tobacco Research and other entities that were set up by the industry, were set up, basically, to obfuscate and hide documents and not have admit nicotine addiction or the health damage caused by the industry? Parrish: What there will be is a process by which those documents will be made available, not just to lawyers but to the public. Anybody who wants to look at those documents and draw whatever conclusion they want. Q. But a judge in Minnesota has already said that. He's going to release almost...apparently he's releasing 39,000, he may be on his way to releasing everything. Parrish: Fine, then those documents will be public and people, if that's the ruling of the courts, then people will be able to look at them. But the agreement that we've negotiated goes even further than that--there will be a public depository for millions of pages of documents for people to look at if they want to. And my point is that, let's make that stuff available. Let's comply with the terms of the agreement, make that stuff available, but let's not let that slow us down as we try to come up with a nation-wide policy on tobacco in this country--how the product is going to be manufactured, how it's going to be regulated, let's do something about the issue of youth smoking, and let's make these documents available as the June 20th agreement requires. Q. The industry opposes youth smoking. Parrish: That's right. Q. The industry did, on occasion, target youth, to sell tobacco products to youth, no? Parrish: Well, I have seen documents over the last few weeks and months, and without knowing the author of those documents or in the context under which those documents that are very troubling in that regard. Q. I think this is one of them... Parrish: What you have is, I believe, is sincere commitment in the industry not to target to kids. And it's not just a commitment. The agreement that we reached with the Attorneys General and the private lawyers provides for strict penalties on industry, on any company that targets kids or violates that agreement. Q. In reaction to these....allegations about youth smoking, in the past you have said "we don't care about youth smoking, we'll give up youth smoking, it's a very small part of our market anyway." Parrish: I believe that to be the case. Q. But isn't that where you lay the seeds for future smokers? Parrish: Well, I've heard people say that and I guess... Q. Well, every study that exists... Parrish: There are certainly a lot of studies that suggest that, and I guess all I can really say to you is that we are willing to abide by the rules of the June 20th agreement, we are willing to do everything we can as a company and as an industry to address the issue of youth smoking. We firmly believe that we cannot do it all ourselves, there's a role here for the government, there's a role for parents, educators, friends...we've all got to work together, and if that means youth smoking is eliminated that will be fine with us. If that means our business suffers over the long-term then we're prepared to accept that. http://www.pbs.org/wgbh/pages/frontline/shows/settlement/
  13. McCain [R-AZ] has proposed legislation that would require tobacco companies to pay $516 billion dollars over 25 years, increase the price of cigarettes by $1.10 per pack by 2003 and give the Federal Food and Drug Administration authority to regulate nicotine as a drug. The legislation has been repeatedly endorsed by President Clinton. Senator McCain was born in the Panama Canal Zone in 1936. He was elected to the United States Senate in 1986 and re-elected in 1992. He was the National Security Advisor to the Dole/Kemp presidential campaign and placed Senator Bob Dole's name in nomination for president at the 1996 Republican National Convention. McCain told FRONTLINE that the tobacco companies have not told the complete truth to the American people. He also believes they were trying to maximize their profits and there have been occasions when they targeted people that they shouldn't have. Nevertheless he believes that making a deal with the companies instead of bankrupting them is the best way to move forward. Q. What's your sense of this industry? McCain: My sense of the industry is that they're a group of business people who have been trying to maximize their profits. And there have been at least a number of occasions where they have targeted people that, ah, they shouldn't have. And that they have employed advertising tactics that have enticed young people into smoking. They denied that. I think that evidence has been revealed recently through documents that, ah, they have not told at least the complete truth to the American people. But could I add, I'm interested in the settlement now as opposed to punishing the, the people. The person who is in charge of the negotiations for the attorney's generals before our committee last week said, said, look, there are a lot of people that are still mad at them and want to get even. What we want is to get even by getting a settlement and preventing kids from smoking. And I think there was a lot to what he had to say. Q. We're collecting opinions of this industry. They've been called a rogue industry, the masters of deception. What are we dealing with here? McCain: I think we're dealing with an industry that, ah, tried to maximize it's profits. I think that they have deceived the American people in that they said they were not trying to target young people. And recent documents, ah, the revelations from recent documents have indicated that that's not the case. But I want to hasten to add that I, I sort of agree with Mike Moore, the attorney general from Mississippi, who said there's no point in staying mad at them. But the best way to get even is to prevent them from ever enticing young people to smoke again. And I think he's got a legitimate point. Q. You say that, but the people out there listening probably know that it's been a long time since the congress ever did anything related to this industry. An industry which is credited with killing over four hundred thousand people a year. McCain: I don't think there's any doubt that the influence of the tobacco industry here in congress was a compelling argument for campaign finance reform. And they did have significant influence. I would also argue that if it had not been for the agreement negotiated with the attorney's generals, then we probably would not be where we are in attempting, anyway, to reach some kind of over all settlement. Q. In other words if the attorneys general hadn't been able to, in a sense, bring them to their knees, congress wouldn't be able to deal with them? McCain: I would like to say otherwise. That congress would have dealt with this issue. But everything that I know from my sixteen years here indicates that if the attorneys generals had not forced this agreement, then we would not be at this stage as we are in congress. And that is seriously addressing the issue. Now, whether congress actually reaches a legislative result is, still remains to be seen. But I intend to work as hard as I can to achieve that result. Q. Could you give me an example of how powerful they were before June twentieth? McCain: Well, yeah, you know, I can't. Because, because I wasn't involved in their issues. And I, you know, I don't know better. But the fact that, I think the very fact that it took a action such as the AG's did and made, which was unprecedented...in order to motivate the congress, indicates that, ah, there was substantial influence on the part of the tobacco industry here in congress. Q. People that we've been talking to who criticize the June twentieth deal, say why can't congress simply enact these reforms in the industry? Why give them anything since they're guilty of deception? Guilty of making, helping our children smoke? McCain: Let me describe the conundrum here. We are not willing to make tobacco an illegal substance. If we were willing to do that as a nation, and all these people who criticize the agreement don't want to make it an illegal substance...if we were able to make it illegal, we wouldn't have a problem. We could restrict everything that they do. But since we're not willing to take the step, as a nation, to make it illegal then we have a problem with their first amendment rights. Which are to advertise their product. So, what we have to do, or try to do, is achieve some agreement with them that they would voluntarily restrict their advertising and engage in campaigns to stop children from smoking. In exchange for some benefit that they might receive. Now, I'm not sure exactly what that benefit should be. We're in the process of negotiating that, negotiating that out. But I can tell you this. We have had a testimony from constitutional lawyer after constitutional lawyer that says, hey, you can only go so far in restricting these people's rights to advertising their products. Because they're not manufacturing an illegal substance. So that, really, is the problem we're facing. And to say, give them no benefits, give them no protection, give them nothing...then risks going to court, them winning, and continuing to advertise their product which then entices children to smoke. So what we're trying to do is weave our way through this very difficult maze so we can achieve our goal. That is to stop kids from smoking. And do what it takes to get there. And if we don't keep our eye on that goal then we can easily be side tracked by a whole bunch of emotional aspects of this issue. Q. And the idea of not having children smoke is, in a sense, to cut off their supply of future customers? McCain: Or, to raise the price to the point where it's a disincentive to engage in programs, ah, ah, that, ah, would educate children not to smoke. Which would then provide penalties for people who sell cigarettes to minors. There's a whole laundry list of ways you can attack this issue. And we worked, let me point out...I've been working very closely with Dr. Koop, with Dr. Kessler, with these organizations that advocate, ah, tobacco free environment for kids...and with the attorney's generals. We've got to work with everybody to come up with what's a salable solution. Because look, whether I happen to like it or not, these people are the referees. And if we come up with a proposal that they attack, maybe not all of them but the majority of them attack...we're not going to get any legislative result here. We're not, we're just not going to get it. These people are watching very closely. They represent the interest that we have to satisfy. Q. When the June twentieth deal was announced, stock prices for the tobacco industry shot up. Somehow there's this irony. They can pay three hundred and sixty-eight billion dollars and then they're worth more? McCain: Well, let me just say, I don't care where the stock market goes. But it went up because it gave the, the tobacco companies some degree of certainty I'm told. Ah, more importantly than that, can we go to the American people and look them in the eye and say, look, I've done everything that I can to keep your kid from starting smoking. Three thousand kids a day start smoking. That's our object. The stock market goes up. The stock market goes down. Frankly, I, I'm not happy that they would make more profits. But that's not my primary goal. Q. What they want is some kind of partial immunity. Something which no other industry has ever gotten from congress. This industry which is known as the great deceiver, sound immoral. Sound like the bargain with the devil. McCain: Umm-hmm. If there is a way to stop kids from smoking without providing them with anything, I'm all for it. But I have to, to deal, to play with the hand that I'm dealt. The attorney's generals of America, forty of them I believe, tell me that the only way that they can make sure that we're doing everything we can to prevent kids from smoking is by granting them some kind of, of protection. Now I have to listen to these people. They're the top lawyers in America. I have to listen to them. Do I have to go along with it? Not necessarily. But at least I have to listen to their views. And that of others. But I'm not for giving any benefit to the tobacco companies. But my question to those who say, you shouldn't give them any benefit what so ever out of this, is, then why don't you support making tobacco illegal? Well the answer is obvious. Because the enormous dislocation it would cause to the millions, forty million Americans, who do still smoke. That's the answer. So they're not willing to do that. But at the same time they want the best of all worlds and that is not to make any kind of a, of a negotiated settlement with the tobacco companies. Well, it's very hard to have it both ways. Q. And the fears that we hear from critics is that every time the industry gets into congress, as they did thirty years ago, they will put loopholes in. They will figure out a way to out smart the American people again. McCain: Well, the thing that's different this time, in my view, is that these advocacy groups, the American Lung Association, the National Cancer Society, all of these other organizations...stop kids, kids free smoke, etc. They're there at the table. They're in constant consultation with us. They've testified at the hearings. They will be, to some degree anyway, the arbiters or the, the referees as to whether this is good for America or not. And they now, and do, and will play, a key role in whatever settlement we've, we reach. Q. Is the political problem here, who is going to offer up a concession to the industry first? The White House or the Senate or the House? McCain: Let me just say, the White House has been AWOL for a long time on this issue. When the settlement was announced, they said they would have legislative language within thirty days. Ninety days went by. They came up with five principles. They still refuse to give us exact language. But, and I, and I accept that. I don't like it. But I accept it. We are now working closely with the White House, with Erskine Bowles, with Bruce Reed, and we are working closely. We will move to get, forward, together with them. Hopefully. Because very frankly, the political reality is, if we disagree we're not going to get an agreement. And that's, ah, something that we, that I recognize. Q. Your colleagues, your fellow Republicans, the one's who haven't turned down tobacco money, what do they tell you? McCain: All of my colleagues want to develop a program that will stop kids from smoking. Whether they took tobacco money or not. And many of them have very different ideas. Senator Chafee and Senator Harkin have different idea. Senator Conrad has a different idea. Senator Jefferts has a different idea. That's fine. We need all of this input. And we need to build consensus. We need Republican, Democrat, and administration all working together if we're going to reach a resolution. And I have pledged to do that. Q. Some people believe that whatever the legislation is, you'll wind up with the government of the United States and the states making a lot of money. Money they've already spent in some cases in their budget allocations. The lawyers will make a lot of money. The tobacco industry will stay in business. It'll save them for the future. And the forty million, mostly working and poor, people who are addicted smokers will support all this. And nothing will change. McCain: Well, I think that the other options are, do nothing and let the status quo prevail. And then there'd just be a long many years of lawsuits, which the tobacco companies have a pretty good record of winning a lot of those. Or, doing something that is truly meaningful and important. But the important judgment will be made on one basis and one basis alone. Did the congress act to stop these three thousand kids from starting smoking every day? Did they or did they not? But this lawyers fee thing, I think it's obscene for somebody to make two billion dollars for anything. I don't care what it is. Ah, if they invented a cure for cancer I'm not sure they deserve two billion dollars. That's something that's going to be fought out for a long time. As far as the money's concerned, are we...yes, you're right. Everybody's has their hand out. Everybody's got their, ah, they want, ah, a piece of this action. But it seems to me that that division of money is a fight that should not detract us from our, ah, distract us from our major goal. And that's the problem of children smoking. Q. And then finally, there's the federal grand jury. Our understanding is that every Wednesday and Friday here, the Justice Department is bringing witnesses who no one notices because they're there for Monica Lewinsky...but, every Wednesday and Friday a federal grand jury hears criminal witnesses in the case that the Department of Justice is developing related to the tobacco industry. Could that derail this legislation? McCain: If the Justice Department determines that criminal activity has been engaged in by the tobacco companies, they should be prosecuted to the full extent of the law. But unless that case can bring about a cessation of children smoking, then we as a nation and a congress must move forward to try to address this terrible problem that afflicts America today. And that is, three thousand children beginning to smoke every single day. Q. You know, it comes back all the time in the discussions that we have with people is, here is this industry that is hugely profitable. That apparently, knew all these health risks existed, knew that their product was addictive despite what they said to congress, and what they want is to get off. They want to get of their in a sense, moral judgment and pay the piper. They want you to free them. McCain: Well, ah, I would just make two points. Ah, one, is our goal, in my view, is not so much to punish, ah, the tobacco companies which I would enjoy doing. But that's a secondary issue compared to trying to kid, keep kids from smoking. Second of all, ah, Mr. Mike Moore who was the prime negotiator in this tobacco settlement, testified before our committee. He said, there are people who want to get mad. He said, what we need to do is get even. And the way we get even is to keep them from enticing kids into smoking. I think there's a lot of validity to his statement. Q. But, Dr. Kessler, Dr. Koop, people we speak with say, how can you trust this industry? They will find a way to get new customers. If not here, overseas. They just want to survive. They know they're on the brink. And now they want congress to bail them out. McCain: I've had several meetings a short a time ago as last week with Dr. Koop and Dr. Kessler. Dr. Koop and Dr. Kessler, both, have said senator try to, to get this thing, this issue, taken care of. We support you in your efforts. We may not support you at the end of the day with what the congress comes up with. But we want you to try and settle this issue. And that's what I'm trying to do. And that's what I think, ah, a lot of my colleagues are trying to do. Q. Why you? I mean we thought Tom Bliley or someone or Waxman, or someone who had been involved in this issue for years, on one side or on the other, would have come into breech. And all of a sudden it's you. McCain: Well I think that the major reason it's going to be the Commerce Committee...and I want to emphasize it's bipartisan. Senator Hollings, Senator Brow, Senator Wyden, and Senator Ford and many others, as well as Dr. Frist and others, are working together...is because the majority of the oversight, the majority of the responsibility for this issue falls under the Commerce Committee. And so, that's...we decided, ah, under, ah, Senator Nicols leadership that it was too unwieldy to go through every committee. So they decided to move it through mine. It happens I think, more because I'm chairman of the committee than, ah, any particular talent or, or oratorical skills that I may possess. Q. Maybe it's your willing to take it on. McCain: Ah, well, as you know I have been known to take on issues that, ah, are not exactly non-controversial. So, it's a great challenge. And I'm not convinced that we can succeed. But I want to be able to say that we made every effort. Q. You don't have any predictions as to whether there'll be legislation this spring? McCain: No. Except that to say, I think there's an awareness here in congress, that the American people will not look favorably on us if we go home the beginning of next October, in time for the elections, not having done something about children smoking. Q. You were criticizing the White House and the lack of leadership. At the same time, people have pointed out to us that, that Bill Clinton is the first president to, in a sense, reject the tobacco industry and go against them. Could this be happening unless he was in the White House? McCain: I don't know. I would like to hope that any president, at this stage in the game, would recognize that after what the AG's did, you have to move forward. He was in office for nearly six years before their was any movement. But look, I was unhappy that the White House did not move, move forward with legislative language as they said that they would do. But look, I can't, I can't look back in anger. I can't hold a grudge. The point is that now they are committed to working with all of us in a bipartisan basis. And I accept them at their word. And I'm working with them now. And I work with them until we either succeed or fail. Q. Is this on a partisan basis, is the past alliance between the republican party and the tobacco industry, ah, a problem? McCain: Well, I would argue that that alliance also was amongst, ah, democrats from southern states. I would say that alliance was much more regional than it was, ah, party affiliated. As, ah, republicans picked up seats in the south obviously that switched. But twenty years ago the tobacco supporters were all democrats because of the make up of congress. But no I don't, I don't think so. I think that, ah, ah...and I'm pleased with what Congressman Bliley is doing. And I think that Senator Ford is very, has been very helpful. So, ah, I think we can, ah, and will, ah, put that aside. But, a seminal moment, which when the fifty billion dollar tax break that was put in last year was repealed in overwhelming numbers, that was very significant of the diminishing of the influence of the tobacco industry in congress. Q. Because? McCain: Because it was repealed. And it was repealed in a New York minute. Q. A New York Minute? When you heard about that, what was your reaction? When you heard, well there was deal June twentieth. And then all of a sudden there's this stealth amendment. McCain: I was surprised. I was just surprised that it was in there. And I wasn't surprised when there was a, a strong effort mounted, ah, to repeal it. And it was repealed and it was repealed rapidly. Q. Well you voted for it initially, right? I mean, it wasn't...it was in the bill or whatever. McCain: No. It was in the budget. And as you know, ah, none of us knew that it was in there. Except for a few people until after the bill was passed. It was an omnibus bill. Q. How do you slip in a fifty billion dollar tax break with no one noticing? McCain: The same way you slip in a pork barrel project for you state, ah, or district. Ah, you go in conference and it's in a huge bill. And by the time people dig it out, ah, the bill has been passed. I mean, it's a, it's a terrible way to do business. And it's one of the reasons why the American people are often cynical about the way we do business here. Q. No one noticed? McCain: Well, I'm sure that, that a few people did. But the overwhelming majority of us didn't know about it until after it was passed. Q. No one. And no one took credit for it? McCain: I understand that no one has taken credit for that. Which is a bit unusual around here. Q. Your colleagues aren't shy. McCain: Well, around here, ah, I'm reminded of Jack Kennedy's words after the Bay of Pigs where he said, victory has a thousand fathers and defeat is one poor lonely orphan. Q. What does congress have to say to the American people since it's taken so long for congress to do anything about this? McCain: Well I don't know exactly what they say. Ah, obviously we've gone through a change in American society. Ah, when I was a young pilot in the navy many years ago, all of us smoked. Ah, cigarettes were in the C rashionings that soldiers had. Cigarettes and smoking was a way of life in America. I'm fascinated by the fact that it, ah, almost every movie I see they're still smoking. Which does have an impact on young people, by the way. And criticism of Hollywood has been strangely absence, absent throughout this debate. But I think there's been a change in American society. There's an emphasis on wellness, on health. And the, a greater awareness of the evils of smoking. And finally it's culminated in this effort that, ah, I hope we will successfully, ah, conclude. And, ah, it has to do obviously with trying to keep kids from starting to smoke. Q. Why is it that the federal government, if congress didn't do anything, why is it that the federal government did so little for so long? There was no Justice Department lawsuit against the industry for deceptive advertising or anything other practices. McCain: I think the FDA did make some efforts in resent years, ah, concerning tobacco and the use of it. And they issued some pretty, very, effective rulings. But I think the reason why any administrations didn't act was the same reason congress didn't act. For most of this, ah, countries history smoking was a part of our life. And it's only been, I would say, perhaps in the last twenty years that there has been a real effort made to educate people about the evils of smoking. There's still, look, there's still spittoons in the floor of the senate. That show you how quickly we move forward. Q. There are a lot of countries where there are severe restrictions on tobacco advertising. Doesn't seem to make any difference if you smoke it. McCain: That's an interesting issue because Dr. Koop has said that we don't know exactly how you go about stopping kids from smoking. One aspect of it that he's confident of is you have to get them at a very, very early age. And, there's no doubt that it's a complex issue. But I'm convinced if we devote the money to research and to study and to finding out what it is that can prevent kids from smoking, that we can succeed. But yes, there's also evidence that raising the price of a pack of cigarettes has done two things. One, not decrease smoking so much. And also generated a black market. So these are all issues that we have to be very careful when we approach them. http://www.pbs.org/wgbh/pages/frontline/shows/settlement/
  14. Ron Motley is a nationally famous plaintiff's attorney. His career was launched after he successfully sued the asbestos industry and forced them into bankruptcy. He was contacted by Richard Scruggs when the tobacco litigation started and became an integral part of the trial team. His Charleston, South Carolina law firm has gathered the legal battle tools necessary to defeat the tobacco industry, including hundreds of thousands of documents, whistleblowers, and damaging depositions. If the national settlement does not succeed, Ron Motley will be trying the state Medicaid cases around the country. Q. Where did you grow up? Motley: In North Charleston, South Carolina. My dad owned an AMOCO gas station and I grew up at an AMOCO gas station, being a Washington Redskins fan, pumping gas, washing windows, changing tires and I kept the books from age six. Q. And we read that your mother smoked? Motley: She did. Q. Your father too? Motley: No. Well, I don't remember my father ever smoking anything other than an occasional pipe, which is not all that bad for you. But my mother smoked two to three packs of Winstons a day. Q. Did she die from it? Motley: She died of emphysema. Essentially emphysema causes the victim to suffocate slowly over time. It is a suffocating disease. Q. And you watched that? Motley: I did. Q. And is it true her addiction--that you were calling it an addiction? Motley: Well, I really hadn't focused back then on what was addictive and what wasn't. If she wasn't addicted to cigarettes, then there is no such thing as addiction. She actually would talk one of her sisters into sneaking her a cigarette. She would take the oxygen away from her and smoke a cigarette which was, you know, very dangerous because it could have exploded. It is deeply ingrained in my, in my mind. Well it is... To watch someone that you love very much die a slow miserable death, suffocating day by day, is a very unpleasant thing. And to know exactly what caused it. And then when you hear the denials of the cigarette companies that they had never caused the illness of death of a single American citizen, having sat there and watched my mother suffocating. Having the doctors tell me and describe for me exactly what caused it. How it caused it and what it was doing to her. It makes you very angry. At least it made me very angry. And when I get angry, I try to get even, if it is legitimate to do so. Q. All of this tobacco litigation, these losses, the trials, these various trials you had to get up for or prepare for, they are different then for you? It is not like any other case? Motley: That is correct. I have handled cases in the past, Dalkon Shield, breast implants, explosions, automobile, train collisions and things like that. So where I have a personal anecdotal experience, as I do here. Q. So this is not just for money, this is for revenge? Motley: Well, I think you might say that the Mississippi case was the first and that was for revenge. And then I got into it and it is really for public health. It is, well, what we have been able to accomplish is, I am very proud of from a public health perspective. But on a personal note, when I walked out of the Texas conference room on Friday, General Morales, the Attorney General of Texas said, "Your mother is smiling down on you now." And that was very touching, I thought, he knew that I had that personal anecdotal experience. Q. There are a lot of people in this with personal connections. Motley: It is very hard not to, 450,000 Americans die every year from cigarette caused diseases. There are very few people in America that haven't been touched by cigarette disease. Q. So in a way, the asbestos cases, those were like a warm up for you to this? Motley: Well it is, if you call having Mohammad Ali as a sparring partner. I guess you could call it a warm up. I had some personal experience with asbestos, too. At my dad's service station was the closest service station to the Charleston Naval Base. And a lot of people, a lot of my dad's friends died of asbestos cancer. I didn't know it at the time, of course, and reflecting back and I ended up represent--actually representing some of my father's best friends, whom I had met at the gas station. Q. So that was in a sense a prelude to all this tobacco stuff? Motley: Yes. It was... Q. How did you meet Dick Scruggs? Motley: I met Dickie in, oh I'd say sixteen years or so ago. He was a recent arrival to the asbestos litigation and we had a somewhat fractious, contentious meeting in Dallas, Texas about something that was going on. And Dickie was rather outspoken in his views and his position was different from mine. I don't even remember what the issue was then. But later, I had done some work for some of the other lawyers in Mississippi and he had a big case coming up and he came to Charleston. And we talked and he hired us and we sat side by side and tried a bunch of cases together. In Mississippi, very successfully. And he is a very talented lawyer and a dear friend. Q. Is he different than other lawyers? Motley: I have found very few cookie cut lawyers. Most of them are pretty much individualistic in characters. Dickie has a big heart and he is passionate about what he does and he is a very good lawyer and very able lawyer and I have enjoyed working with him. Q. What was your reaction... He called you up about the Medicaid suit, right? Motley: We started talking and we decided to join the cigarette companies and lung cancer cases where people were exposed to asbestos. And in the course of the trial, Dickie went off and tried a cigarette case with Don Barrett. When he came back he told me that Mike Lewis had come to him with this idea. So rather than calling me, we actually sat down in a courtroom with a jury sitting there, side by side and discussed the roots of what became the Medicaid suit. Right in the middle of both of us trying an asbestos case. He took a, what do you call it? A sabbatical, I guess, for a couple of weeks and came back and he was really ready to go then against the cigarette companies. Because as you know, they lost. Q. He lost that case and he is sitting in the courtroom. He turns to you and what does he start saying? Motley: Well, before he went we had talked about naming the cigarette companies and the asbestos companies in the same case. Then when he came back he said he had a better idea than that and he described for me that he and Mike Lewis had talked. And then he and Mike Lewis and Mike Moore had talked. And he assigned his best scholar in his firm and I did so, likewise, and they started working with Mike Lewis. And it took a long time to hone and fine tune the theories. We probably went through 25 or more different iterations or versions of what became the Mississippi Medicaid suit. Q. But you were, you were excited about this, right? Motley: Well, at first it was very clever, ingenious, we caught them off guard. I always like to do that. It was, it was challenging. It was unprecedented. And it was a good way to launch a war. Q. So does this represent sort of the Mount Everest for trial lawyers? Motley: Well, we saw the top of the mountain, but... And we decided we were going to climb the mountain but we hadn't reached the top 'til in the last six months. We started out at the bottom and we made it to the top and now we are on our way back down the other side. And it is exhilarating. Q. Did you test this theory at all, with mock juries or polls or how did you... Motley: Yes. We actually had engaged Dick Morris who, at the time was not celebrated as the President's personal pollster. He was a well known political consultant who did polling. And Dickie knew of him. And Mike knew of him, Moore. And we actually engaged him to do polling and on certain issues to refine exactly how we were going to approach this. We actually hired him originally to look at the situation of suing cigarette companies and asbestos companies together. And then we segued over, went into consulting with him on these Medicaid suits. Q. What was the scene like in the courtroom during the Wigand deposition? Motley: There was... bedlam best describes what was going on inside. There was a sense of anticipation, eagerness on the part of those representing the state. A feeling of foreboding. It was so heavy in the room you could actually see the gnashing of teeth and the grinding of palms against one another by the defense lawyers. They were very worried about it. For good reason. And, of course, right towards the end there was a moment were Dr. Wigand had second thoughts and I had gotten the word that he might not be coming. So we were all--heavy anticipation. And when he walked in the door amid all that hullabaloo in the media, it was a sense of relief on my part. And, I think, on his part too. But he was very nervous when he first took the witness stand. Q. What were the tobacco lawyers doing? Motley: Objecting. Raising hell. Trying to disrupt. At one point in time I actually told them why didn't they just go on ahead outside and I'd finish the deposition by myself with Dr. Wigand. Q. Had you ever seen anything like this before? Motley: Never. Never. I had never seen anything like this in a legal proceeding before. Never. Well, it was a deposition, it wasn't a court. It wasn't like a jury was walking in. It wasn't something like the OJ jury was about to return a verdict. It was a... I had not experienced that much media attention to what is essentially a pretrial proceeding. But there must have been 50 or 75 media out there. There was a lot of jostling for position. A lot of shouting by the media. Inside, the lawyers were... There was an intensity level. A lot of barking back and forth. A lot of paper shuffling. A lot of pacing. As I said, a lot of gnashing of teeth and things like that on their side. Well, once the deposition started... We didn't really get started for 20 minutes. There were 20 minutes of prefatory statements made by the lawyers. There must have been 50 lawyers in that room. Forty-five of whom represented the tobacco industry. And then there were 4 or 5 of us representing the State of Mississippi. So we were outnumbered, but they were outmanned. At one point they claimed that the use of a chemical that is in the rat poison family was a trade secret. And Dr. Wigand and I had a moment of levity there when I said, you know, they are trying to keep the fact that they use a cousin of rat poison a trade secret. So that was kind of humorous. Q. That is the cardomin, the flavoring? Motley: Yes. It is in the same family as rat poison and coumarin was banned as a food additive worldwide thirty years before. The cigarette companies continued to use it in cigarette smoke. It has since been taken out of virtually every product. Q. And these guys were claiming it was a trade secret? Motley: Yes, they wanted to keep it secret. They didn't want the doctor to testify that they put a cousin of rat poison in cigarette smoke. Q. Well you can understand that. Motley: No, I can't. I would think once it was brought to their attention, they would have taken it out. But they didn't. So in this legal proceeding they wanted to keep it secret. Of course, Dr. Wigand answered my question. Q. And essentially why was Dr. Wigand so important? Motley: He was and remains the highest level industry executive to break ranks and testify, prior to Bennett LeBow, who was the Chief Executive Officer of the Liggett, Liggett Meyers Cigarette Company. But Mr. LeBow didn't have the hands-on knowledge that Dr. Wigand had. What I mean by that is Dr. Wigand was the Chief Scientist. The Head of Research and Development for Brown and Williamson, so he had a lot of information of a technical and public health nature that was very important to us. He was involved in day-to-day decision making and he knew where all the skeletons were buried. Using additives. Using ammonia to spike the nicotine level. We have since seen documents that... Every thing Dr. Wigand testified about, has come to pass from the standpoint of being established without question by documents that we have obtained since then. The stories he told that the industry so vigorously protested and claimed he was not telling the truth about, we got documents to prove every one of those stories right. Every one of them. Q. So obviously the smear campaign to destroy him was designed to destroy him on a personal level because they couldn't do it on a scientific level. Motley: That's correct. The cigarette companies are masters at picking nits. If there is a nit-picking society somewhere, they have got to be original members of it. And they picked a few nits with a few things that he may recall. But substantively, on the merits, he is right on the money. So they were left with personal ad hominem attacks on him. And you know, it was a rough time. We have become friends and it was a very rough time for him. It is still a rough time for him on a personal level because a lot of things in his life unraveled. But he stood up and he stood tall and he is still there. Q. Give me an example of some of the other highlights that have gone on. I mean you have taken depositions of everybody from the CEOs to scientists. Motley: I guess one of the most remarkable things was Robert Preston Tish, Lawrence Tisch's brother and the former Postmaster General of the United States who was a leading executive with Lorillard. And who sat on some of the industry-wide councils. Who, also, as a private citizen was very proud of the role his family had played in the Holocaust Memorial. Yet he failed to remember and said that it wasn't a very remarkable incident when the American Cancer Society accused the American cigarette companies of creating the second Holocaust. And for this man, who is so proud of, and should be, of his community service to have completely overlooked 25 years earlier being accused of participating in the American version of the Holocaust because of the 400,000 deaths a year from cigarette smoking, was rather remarkable to me. That was shocking. Another incident was with Dr. Frank Colby. He as a senior scientist for R. J. Reynolds for 35 years and then was assigned to their law firms. When I asked Dr. Colby, who had insisted--and this was in 1997--that no American had ever died from smoking cigarettes. That was his position. I asked him if he had read the deposition of Jeffrey Bible that I had taken, who was the Chief Executive Officer of Phillip Morris, the big parent company. Who said 100,000 possibly die every year. And he looked me straight in the eye and he said, "Mr. Motley, I don't believe in that Bible or the Bible." And I said, "Are you an atheist." And he said, "Yes." It strikes me as rather remarkable that a company that has a scientist who is supposed to be in charge of scientific morality is an atheist. Q. Just that he is an atheist? Motley: Well he is an atheist and he is supposed to be in charge of morality and he says nobody has ever died. And he says they would continue selling cigarettes even if it was proven it caused cancer. I think that is fairly telling. To me, at least it is. For my humble Southern Baptist origin. Q. That even if they agreed with you that they--it kills people they would keep selling them. Motley: Oh, yes. Q. How could he say that? Motley: Well, he did. So did the Chief Executive Officer of Lorilard. He testified that if it were proved to him that cigarettes killed 150,000 Americans year in and year out from lung cancer. If it were proved to him, and he is a scientist as well as a Chief Executive Officer, Ph.D. scientist that he would continue to sell those products. Even if he knew his products killed 150,000 a year, from lung cancer. It was chilling, I think. Chilling. Q. This is A. W. Spears. Motley: Alex Spears, yes. He is the same company that put asbestos in the cigarette filters. Q. Let me take you back to Frank Colby. Didn't he have some interesting things to say about second hand smoke? Motley: He was asked about secondhand smoke, environmental tobacco smoke. And he said he didn't think that people should not be allowed to smoke in public places. And he said, "Why, people don't like to be around smokers, well they can walk out of the room." And the interviewer said, "Well, what about children. And he said, well children can walk." And he said, "But what about a woman holding a baby?" And he looked his eye right in the camera and he said, "Babies can crawl out the room, can't they?" And that shows the attitude of the cigarette companies. Q. Now these tapes and these depositions, these are things that you would be presenting in trial? Motley: Oh, yes. We embarked upon several avenues of what we call pretrial discovery or finding out what the other side has said or done. One of them was to try to harvest as many old videotapes of television interviews of the cigarette company executives. Their testimony in front of Congress, in front of other agencies and the records of all those 800 law suits that you mentioned earlier. We went back and we--actually [were] able to go back in one instance, for example, and show that Brown and Williamson had committed perjury in 1969 in an Alabama Federal Court case for a smoker who died of lung cancer. Now, of course, they denied that they committed perjury. But I think I had a pretty good case. We were going to be able to use that evidence in the RICO case. So we thought it was pretty strong evidence. Q. You were trying to prove that they are a racketeering enterprise, not just straight up fraud? Motley: Right. Racketeers. And you know they liken themselves in some of the documents to the Mafia. Q. What do you mean? Motley: Well, in some of the documents they would boast about, I believe it was a Wall Street Journal article or it may have been New York Times, that likened the cigarette companies to the Mafia and the Tobacco Institute spokesman was very proud of that. And he quoted that analogy to the Mafia three or four times in different meetings, over time. Q. To what end? What was his reason? Motley: Well I suppose he was proud of the fact that they could get away with as much as they could get away with. Q. And no one ever breaks ranks? Motley: That's right. Before Ben LeBow and Jeff Wigand, that was true. Q. Your relationship overall with Dick Scruggs, in asbestos cases initially and then even in these cases. It has been described as sort of... He is Mr. Outside. Outside the courtroom negotiating. And you are inside beating up your opponents. How does that work? Motley: Well Dickie and my partner, Joe Rice are both very good negotiators from different aspects of the situation. Dickie is more of a politician negotiator, conciliator and Joe is a detail man. Both Dickie and Joe and I have the same court experience. That is, I do the courtroom work and they do the negotiating and conciliation and all that. So, yes, mainly, my job is to try the law suit. Prepare it for trial. And their job is to try to find a way, a solution to the litigation problems. Although I'll say this, in the cigarette cases Dickie was heavily involved in discovery for a while until the negotiations heated up. And in the asbestos cases, Joe and I have tried many cases together in front of juries but in the last two or three years, it has become they are outside the courtroom and I am inside the courtroom. Q. Well, you are in a sense the War Department and they are the State Department. Motley: They are Eisenhower and I am Patton. Q. I don't see two guns. Motley: I checked them at the desk when I came in. You didn't see that sign? Q. They are Eisenhower and you are Patton. And are you comfortable with that? Motley: Oh yes. I am not a negotiator and they are very good at it. They are the best I've seen. And I am more of a warrior. Q. Did you want to hurt the tobacco industry? Motley: I suppose when we started this, that was a prime consideration. I have actually grown to admire, for example, Steven Goldstone, who is the CEO of RJR Nabisco who, when I questioned him told me that from that day forward... I don't know that they have done this and I will check. That in foreign countries they didn't require warning labels and didn't require telling pregnant women not to smoke, that his company would voluntarily do that. Unlike the other companies who only warn where the law requires it. I thought that was a forthright and public health spirited thing for him to say and do. Q. But Shook, Hardy & Bacon? Motley: I have no love lost for any of those guys. They were at the epicenter of the wrongdoing and actually were stage directors of it as well. Shook, Hardy & Bacon. Is a law firm in Kansas City, started representing cigarette companies in the fifties. Became the ringmasters of the three ring cover-up circus and still representing the industry. Indeed I go up against a Shook, Hardy & Bacon partner on February 9th in Indiana. A lung cancer case in a missionary who never smoked. Q. So what are a bunch of guys from Mississippi and South Carolina doing taking on the tobacco industry with all their legal talent? Motley: Well, we took on that kind of legal talent with asbestos. Maybe not as many. Maybe not as well-heeled, but we are used to... When you take on these big corporations, we are used to engaging in combat with the biggest law firms. But the cigarette companies had more lawyers, more money and they threw more lawyers with more money at you than any industry I have ever been involved with. Q. Some people say, it is all very nice you have been getting these settlements, but really how strong is your case? If you got to court, would you win? Have you won? Motley: Well, no, we haven't tried any Medicaid cases and I have only tried one cigarette case, we lost that one. It was for a smoker. I thought we were definitely going to win Mississippi. There wasn't any question in my mind we were going to win in Florida. There was some question in my mind about Texas but only because of where we were. We were in Texarkana, which has a strong anti-government history. A strong individual freedom, individual choice tradition. And although I think we would have won there, it would have been more difficult, which was why when the Judge agreed with our plan and let us try the racketeering, the RICO claim first, that made it more likely that we could win than previously thought. And you as me if we have a strong case? I have never seen a stronger case of corporate immorality. Aided and abetted by lawyers' unethical conduct and criminal conduct in any civil case I have ever been involved in. Q. But you say that, I am sure you say that you are confident about almost any case you go to trial with. Motley: Oh, I have been in court with some dogs before. An individual smoker case, suing the cigarette companies for damages is very, very difficult. Very difficult. The reason I say we were going to win is because we did polling. I am not talking about the early polling that we discussed an hour or so ago. I am talking about polling on the eve of trial. We did focus groups. We did mock trials. We did sampling. We did all kinds of things to test our theories, to see how solid they were to the average citizen. And as time went on, as there was more and more publicity about the wrongdoing of the cigarette companies, the audience was more receptive. It got to the point in Florida, for example, that we were running 80% in our favor. In Massachusetts, we represent the State of Massachusetts. We, in Cambridge, I think it is Middlesex County, we are running 85% in favor or our lawsuit. So there has been a sea change, if you will, in the public's attitude. Q. But in Mississippi, some people say you had a situation home cooked. You didn't have a jury. You had a former district attorney, one of the most popular people in town, Dick Scruggs. A local judge, all from Old Miss and rulings in your favor. Motley: Well, we had rulings in our favor but most of the defense lawyers were also from Ole Miss, so... And as far as the home cooking was concerned, I didn't get the impression that the defendants were particularly convinced that Judge Meyers was in some fashion in our pocket. As far as not having a jury, that is the law of Mississippi. If you bring a case for what we call equity, then you don't get a jury trial. You get a judge trial. Q. So you thought you might have some difficulty with Judge Meyers? Motley: No, I didn't... I thought that perhaps some of our counts in our complaint he may have had some problems with. But the evidence was so powerful that they had done wrong. And that is what equity is about, to correct wrongdoing, that I thought we had an overwhelmingly good chance of success. Q. So in a way, and this was true in most of the cases you have seen so far and the cases that you'd see in the future, if they were to go to trial. Motley: The state cases, I don't know exactly what kind of demographics we have, for example, in Montana. I do know we polled in Oklahoma and Kansas and Massachusetts and Michigan and other places, we have done polls. And we think that the public in those areas are very sensitive to issues of child pandering, by the cigarette industry. And we think that is their Achilles' heel. And I think from the recent publicity and just tumult that has occurred over RJ Reynolds having targeted kids that you see that they are very sensitive to that charge. They are very guilty of that charge and they are going to be punished for that, one way or the other? Q. Punished for it? Motley: Yes. Q. Well every time you are on the verge of punishing them in trial, there is a discussion of settlement. Motley: Yes. Well, you know, I can't speak to what motivates the cigarette companies to do some things, but they don't want any part of this parade of horribles being presented to the American public. Not just to six jurors or the twelve jurors. They don't want Ben LeBow's full testimony. They don't want Jeff Wigand's full testimony. They don't want Gary Huber's full testimony to be revealed to the public. Because what would be revealed would just absolutely shock the American people. Q. Beyond what is already known or suspected? Motley: I don't know what you might suspect. I do know that you don't know everything. The public doesn't know everything that we have learned in these cases because the industry has been successful in getting judges to gag, what I call gag orders. For example the deposition of Dr. Osdene remained under court order for almost nine months. Dr. Huber's deposition is still under court gag order. Dr. Colby's deposition, in part, is under court gag order. Dr. Wigand's deposition was leaked by someone, but it was under a gag order. So the public only knows part of what we know. And some of the documents that we have are under court gag order. So that the media, and therefore the public, have not seen them. And what they show is an absolutely unparalleled, unprecedented industry that had completely committed immoral, unethical and illegal conduct for 40 years. Q. And what is being discussed now, based on your description, it sounds like the tobacco industry is trying to grab victory from the jaws of defeat. Motley: Well, I don't know how anybody could describe what is on the table now as a victory for the cigarette companies. Laying aside the financial aspects of it, they have agreed to a fundamental change in the way they do business in America. It is unfortunate that one would describe conducting oneself in a legal, a legal, moral and ethical fashion would be a change. But the fact of the matter is, for forty years they conducted themselves immorally, amorally, unethically, illegally, sordidly. Almost like street drug dealers. And so for them to change the way they do business, it is a shame that that...to say I am going to do business legally, morally and ethically has to be a change, but that is what the reality is in 1998. So for anyone to say that that is not important, I think belittles what was accomplished. Q. People aren't saying it is not important, what they are saying is that the industry, by waving around hundreds of billions of dollars and all of a sudden agreeing to what you say they should have agreed to, is trying to stay in business... Motley: Of course. Q. ...is trying to avoid penalties. Motley: Well, I don't know how paying 10 billion, that is with a "b" dollars in punitive damages is avoiding penalties. But, yes, they want to stay in business and what is the alternative? Prohibition doesn't work. You have got 40 million Americans who are addicted to cigarette smoke. To nicotine. Where are they going to get it? You want to create a black market? You want to give gangsters riding around in Black cars with their trunk full of cigarettes from Canada instead of booze? That is what you would face. So what you have to do is, you can't ban cigarettes because people are addicted. So you have to regulate it. And you have to regulate it more stringently than any other industry and that is what the cigarette companies have agreed to have happen to them. Q. In exchange for immunity from medicaid type suits, class action suits, basically any suit involving the kind of clout, like yours, that brought them to heel? Motley: Well, I am not an advocate of immunity and I don't think what they proposed is a far cry from immunity. But what will probably happen will not be an immunity except, you are right, there can be no more class actions. But keep in mind there hasn't been a single class action against the cigarette companies that has gotten a victim a single penny. Not one penny has been gotten for victims in class actions. Nobody has ever gotten punitive damages before and people forget that there is tradeoffs. They have agreed to no longer contest that cigarette smoke causes lung cancer. Now they have been fighting that for fifty years so there is not just this cloak of immunity. There was a negotiation where they gave up some of their legal defenses and we agreed to recommend that some of the potential weapons available to a plaintiff be taken away. That weapon is punitive damages which has never been gotten before. And that other weapon is class actions, which has never achieved a single penny in a single victim's pocket. Q. But further Medicaid suits and further third party suits would be out. Motley: Why would there have to be a Medicaid suit because they are settling the Medicaid cases. From now, forever. They are not just paying for 25 years, they are paying forever. Q. But the critics say also, if we get rid of third party suits in general. I mean, for instance like the one in Indiana... Motley: Oh, no, no, no. Absolutely not. In fact, my firm... I guess I am the best example of why that is not true. We have taken on several dozen individual cases, since June the 20th, since the settlement was announced. And we intend to prosecute cases for individuals. There is a woman whose husband is a very well known environmental scientist, who quit smoking... just for example, in 1967 and died of lung cancer. We are taking her case. We have got five environmental tobacco smoke cases. We are taking cases. There is a law firm in Chicago that just boasted on national television that they have a thousand cases. So in forty years of litigation, you have got 800 cases, now here is one guy that has got a thousand cases. Q. And these cases will be able to go forward... Motley: Oh, absolutely. Q. ...no matter what the settlement. Motley: Absolutely, they will go forward. They will have no restrictions on their ability to collect money. They will have a restriction that they can't get punitive damages, but the industry is admitting that cigarettes cause disease. So I think that is a very good trade-off, myself. And I am the best evidence of that. We are taking cases. We are not afraid to take the cases. We are taking them. Q. You are going to make money off the tobacco industry... Motley: I am going to continue to be a thorn in their side, even though there is a settlement. Q. So when people say, the reason Ron Motley, the reason that Dickie Scruggs, the reason that Mike Moore have turned this into what you might want to call advocates for the tobacco industry's own settlement isn't because you are going to get all your legal fees? Motley: First of all, this is not the tobacco companies own settlement. This is the peoples' settlement because the people who negotiated were forty elected State Attorneys' General and seven Governors. As far as the fees business, yes we are going to make fees. We deserve to make fees. I don't apologize for that. But the making of the fees doesn't retard me from going forward with what I believe to be a good public health lawsuit. And that is, for certain discrete groups of smokers, and non-smokers particularly. Children whose asthma is caused to be worse because their parents smoke. Those kinds of cases my law firm is taking and we will prosecute those cases, whether or not there is a settlement. Q. Who is leading that criminal investigation? Do you know? Motley: I don't... My understanding is there it's three or four different ones going on. I haven't seen a whole lot of leadership until recently, so I don't know who is leading it. Q. But if you were Jeffrey Bible, Steven Goldstone, if you were scared of Ron Motley. You might be a little bit more scared of the Department of Justice. Motley: Any time you face bars, going behind bars, that certainly ups the ante. There is no comparison. The closest comparison between a civil case and criminal case is the RICO case. And that certainly... If someone's company were to be found guilty of RICO violations, racketeering violations, that would not look good to the stockholders. It wouldn't look good to the lending institutions. But none of that is as comparable as being found guilty of a felony. That is terrible. A corporation suffers public image-wise for decades after they are found guilty of a felony. It is a terrible thing to have happen to a corporation, not to mention the individuals in a corporation to go to jail. Q. And that could happen. Motley: Michael Milken to talk about that. Q. But it could happen here that the tobacco industry can't escape criminal prosecution. Would that disrupt all of these settlements and the whole deal? Motley: The settlement of the civil liability does not affect the criminal prosecutions, so while it is helpful from a pressure standpoint to the state Medicaid cases for this parallel criminal investigation to go on, we can survive without it. And the criminal investigations will survive without us and without the state Medicaid cases. http://www.pbs.org/wgbh/pages/frontline/shows/settlement/
  15. Plaintiff's attorney from Mississippi, head negotiator and top lawyer in the Medicaid cases; Scruggs and Michael Moore have been lead negotiators for the national settlement. After Moore suggested the idea of the Medicaid cases, Scruggs became Moore's partner and together they gathered all the elements necessary to bring Big Tobacco to the negotiating table. Scruggs also brought famous trial attorney Ron Motley into the team, so they would be ready to go to trial if necessary. Scruggs' brother-in-law is the Senate Majority Leader Trent Lott, who provided some of the key national connections. Scruggs' and Moore have been spending a great deal of time in Washington, DC convincing lawmakers to legislate the settlement into law. Scruggs first became successful in national class action suits against the asbestos industry. He brought that experience to bear on the tobacco industry, "making the stakes so high that neither side can afford to lose." He had the guts to protect two whistleblowers -- Jeff Wigand and Merrell Williams -- who no one else would touch. And he helped convince Bennett LeBow to defect from the tobacco industry's united front and turn state's evidence.Under normal contingency fee agreements, Scruggs would stand to make over $1 billion dollars on the tobacco cases. He defused this issue by agreeing to have his fees decided by a national panel of judges. FRONTLINE interviewed Scruggs several times in late 1997 and early 1998. Q. Did you ever think you would be sitting at a table and deciding that you were going to walk away from $250 billion dollars and what did that feel like? Scruggs: It wasn't that we were going to walk away from $250 billion. It was that the far-reaching health care reforms and tobacco control reforms that we had negotiated might be lost. I am still concerned that if Congress doesn't act that... [the] opportunity will be lost to reform the tobacco industry. The money was an important public health tool. It was important to reimburse the states for their health care expenditures and to create a pool of money to fund the enforcement actions of the FDA. Other than that, it was the regulatory mechanisms that we were trying to put into place. The restrictions on marketing of this product to children. To sort of, to try to reverse the trend in the proliferation of tobacco. Q. You want people to believe, people who are looking at you as a personal injury lawyer, a pirate in the courtrooms of America, that you really just care about the public health? The money didn't matter. Scruggs: The money mattered. It didn't matter as much as the public health. It is not often in life that you have a chance to make a mark on humanity. And we all got caught up in the opportunity that this presented to us. Q. You got into the asbestos litigation. What did you learn about the value of representing masses of people? Scruggs: It is a unique, it is unique type of law practice. On the one hand, you are not able to develop the unique lawyer/client relationship with your clients when you represent thousands of people. You can't spend the time you would like to spend with your client on an individual basis with each one of them. You have got to sort of organize the thing so that you can get them all to the doctor, get them all diagnosed, get them...the ones who have the disease. And you have to screen for exposures and that sort of thing. And then you have to get their cases filed and managed so it requires a great deal of organization to get that done properly. Q. But it raises the stakes, right, in terms of what you can go after. I mean you can actually show up at the defendant corporation's door, in this case, and say I don't want just a hundred thousand, I want ten million. Scruggs: It raises the stakes only if you have a judicial system that permits the aggregation or consolidation of a large number of cases at one time such that if they lose one case, they are losing, essentially, 4,000 cases. And the costs are prohibitive. You have raised the stakes to the point where they really can't afford to go to trial and lose. We were able to, to convince the judge in our county to, to consolidate some 7,000 cases. Pick a representative sample of those cases to go to trial. And let that verdict be binding on all the rest. Q. And that leads to a quote that I saw from you that says, "I like to get the stakes so high that neither side can afford to lose." Now what does that mean? Scruggs: That means that ordinarily in mass tort cases there is no way to, to try any individual case because the defendant has the advantage. He can beat you one at a time or, even if you beat them one at a time, you have not put them in mortal danger. When you raise the stakes through consolidations or bringing large numbers of claims together, you have... You have given them an incentive to settle what would not otherwise be present. And usually a good settlement is far superior to trench warfare, trial-by-trial litigation. Because then only a few clients get paid and the rest have to wait in line. Q. So, when you and Motley appear on the scene in the tobacco litigation, you are already veterans of the asbestos situation. Scruggs: The idea of the tobacco suit came up in the midst of the four month trial, asbestos trial in 1993. And we pretty much had that case in hand after about three months. We thought we were going to win it. We were mostly mopping up. The defendants were putting on their case and we were pretty much mopping up in the case. And I remember, one day in court when I mentioned to Motley that Mike Moore was interested in bringing a suit on behalf of the poor people of Mississippi, or the taxpayers of Mississippi, to collect, recover against the tobacco industry the cost to the state for treating poor people. I thought I was going to have to put a seat belt on Motley. He was about to blast off. He wanted to try the case right then. And we weren't even through with the asbestos trial. He was inspired, to say the least. And Motley is a quick study and the idea of doing something on that scale inspired him. I mean, he was, he needed sedation after I told him about it. Q. We think of Ole' Miss and, I mean I am old enough to remember the riots and what went on. And we don't think of Ole Miss as a bunch of lawyers who are going to get together, veterans of Ole Miss, and sue the pants off major industries in the United States. Is that just a Yankee stereotype? Scruggs: It may be. I don't know that there is anything unique about Ole Miss or about Mississippi in this particular area. It turned out to be a coincidence, I think, more than anything else, that we took advantage of. The coincidence being that Mike Moore was the Attorney General. He was our classmate and our friend. We had represented Mike in previous litigation against the asbestos industry, very successfully. The partnership had worked well. We had gotten involved in tobacco legislation. We had money in our pockets as a result of the asbestos litigation, so all of these...all of these elements, by chance, came together. And I think that almost simultaneously we realized the potential we had there. With a war chest, with legal talent, with an Attorney General, a state official who was willing to do it. Is enthusiastic about doing it. And some bright legal ideas about how to get it done. Q. And you did some thinking about what court to file it in, right? Scruggs: We did, we did. Q. With a judge who was another Ole Miss graduate? Scruggs: That's right. Not our classmate again. And not a judge that we knew very well or had any prior dealings with to speak of. But, in fact, we didn't know for sure what judge we would end up with in the case. We went through two judges before we ended up with the judge that actually tried the case. But the type of lawsuit that we filed, was dictated, really, by two things. We hired Dick Morris to do an in depth public opinion survey of Mississippians. Q. Dick Morris of recent Clinton fame? Scruggs: That is right, that is right. Q. And how did you get to him? Through Trent Lott, right? Scruggs: I had met Dick several years earlier through Trent. I think back in 1989. I asked Trent... I was representing the state, again Mike Moore, in a suit against the asbestos industry on behalf of the state. Q. So you needed him to do what? To poll? Scruggs: To poll the state. To poll public attitudes about asbestos companies. This is back in 1989 and Trent said, "Well look, Dick Morris is a guy who can do that for you, use him." So I called Dick, hired him, used him. And when we were anticipating the tobacco litigation, I did the same thing. Q. And what did his polling show? Scruggs: It showed that it would be very problematic to win the case. It identified the demographic groups who would be most like to be for us and against us. The poll results were fairly discouraging. Q. Why would you guys want to take on tobacco? I mean, at that point, you also knew that there was a lot of down sides to tobacco. They weren't the asbestos industry. They could wipe you out. Scruggs: This was an industry that had never been beaten. That had fortified itself for decades against litigation. Had prepared and covered every conceivable litigation angle. It was sort of like the challenge of climbing Mount Everest the first time. It had never been done. Uh, in theory you could do it. But nobody had ever done it. Q. So, you went into the trenches and thought about it, and schemed, and came up with this unique plan. Scruggs: Yeah, that's right. And we did it, I think initially, uh, just out of a professional, uh, inspiration to try to do something that had never been done before, to try to take on this industry that had literally defied the judicial system and the regulatory system for decades. And yet, was killing millions of people. Uh, you know, it was just a challenge that cried out for somebody to do it. Q. You got a lawsuit, but you know that you're going to have discovery problems, you always do with this industry. They'll fight you to the Supreme Court. Then comes Merrell Williams. Who was Merrell Williams? Scruggs: Merrell Williams was a former paralegal at a law firm in Kentucky that was hired by Brown & Williamson Tobacco Company to review all of its, uh, dirty linen, all of its documents. And Merrell Williams decided, uh, some time well prior to the time we knew about him, to photocopy and secrete away those documents, the ones that were explosive. And, uh, go about somehow making them public. Q. Well, he went through a number of machinations, but these documents as I understand it, were so hot that before you ever met Merrell Williams, a variety of people backed off. Scruggs: I'm just now learning about that. ... When he came to us, he initially came to Don Barrett, I spoke of him earlier. And, uh, asked for a meeting. We had a meeting with him, uh, in a restaurant in Jackson, Mississippi. The old time deli in Jackson, Mississippi. And Don and I and another lawyer that worked for Don named Cindy Langston met with Merrell. He looked like warmed over death. He looked unkempt. Not quite like he'd been sleeping under a bridge but close to it. He was obviously very ill, very nervous, had been drinking. Q. He thought you were an FBI agent apparently. Scruggs: He did. I guess because I have short hair and out of town, he asked me two or three times if I were with the FBI. And I reassured him that I was not. But he was very apprehensive. Q. He's nervous because he's got stolen documents. Scruggs: We knew about a little of his background from press clips at that time. But he never admitted at the time that he had any documents. He talked in circles. I think he was basically taking our measure to see if we were likely to be people who would back him up or people who would turn him in. Q. Now, eventually he does trust you. You. . . he says to you let's go to Orlando. Scruggs: That's right. After some discussions with him over the coming, over the following two or three months in early 1994, uh, he, uh, confided to me and to Don that he had indeed had documents that were very explosive. Q. In sum, when you looked through these documents, what was your reaction? Scruggs: I looked at Merrell, and I said, "These guys are toast." We've got them. And it turned out that that was one of the more explosive documents in the group. Q. Now, you've got a pile of stolen documents which Brown and Williamson knows are out there, right. Scruggs: No, I don't think they knew they were out there. Q. Well, they knew Merrell had something. Scruggs: But they were not sure that he had not turned over all the documents he had. He had been ordered by a court up there to turn them all back over to Brown & Williamson and they didn't know for sure whether he had or not at this time. Q. But you and Mike Moore, decide that the only way you can use the documents is to get them out there. Scruggs: No, actually, it was on our mind at the time to use the documents in litigation. After reading those documents that day, I think it was a Saturday. I called Mike Moore who's in Jackson. I said, you've got to see these documents. Flew up about night down, had a couple of other lawyers on the team including Don Barrett, uh, look at the documents as well. Uh, and it was pretty clear that these documents were clear evidence that the testimony that the CEOs of the industry had just given to Congress a month earlier. Q. That's where they go, we believe that nicotine is not addictive. Scruggs: Well, they all seven raise their right hands and swore that in their opinion nicotine was not addictive and swore to other things. That it was clear that they had either lied, deceived, or misled Congress in that testimony. And that these documents showed that. Our view then, was that these documents, evidenced a fraud. And that we should take them to the people who were investigating the tobacco industry. That is the very Congressmen who are asking those questions. The congressional subcommittee that was at the time chaired by Congressman Henry Waxman. So, about ten days later, we got an appointment with Congressman Waxman. And we. . . Mike Moore and I flew up there. And personally hand carried those documents to him. It was about that time, uh, that or shortly thereafter that the documents appeared in the press. Q. Stop for a second here. You walk into Congressman Waxman's office. This is his, in a sense, life work to get the tobacco industry. Scruggs: Right. Q. And you put on his desk 4,000 pages of files. Scruggs: Right. Two huge boxes. Q. And say to him, what? Scruggs: We have documents that would indicate that the testimony that was, given before your community last month was a lie. And we felt that you were the person who should have these documents. You're the congressional oversight committee. And we don't know what else to do with them. We're certainly not going to give them back to the industry without making them known to some agency of the Federal government or someone who is in a position to do something about this. Q. Did you tell him that they were basically stolen documents? Scruggs: Yes. I think that we didn't tell him so much that they were stolen documents but that we had received them through a whistle blower. I think that it was implied that they were stolen documents. Q. Well, you didn't have a subpoena, you didn't get them by subpoena. But they didn't give them to you. Scruggs: No, they didn't. I don't think we ever used the word that these are stolen documents. Q. You came by them through some fortuitous means. Scruggs: Sure, through whistle blower action, that we got these documents. And clearly, uh, we were not supposed to have them. And I think, uh, Congressman Waxman was a little ambivalent. Q. He didn't dive into the box. Scruggs: No, he didn't. Not, right in front of us, he didn't. Q. Did he step back? Scruggs: He did. It was almost as if it was radioactive. He wanted to embrace them, but at the same time, he was afraid of them. It was like, almost a physical reaction. But, after some initial discussion about the documents and our characterization of what they were and why we had. . . how we had come into possession of them. And why we were bringing to them. Then asked us to meet with his staff. And his staff then proceeded to go through them like a hungry lion. They were just. . . they were amazed at the documents. Q. Now, at the same time contemporaneously, a set of these documents we know wound up at the FDA. Scruggs: That's right. Q. And then shortly thereafter someone from the FDA apparently supplied them to The New York Times. Scruggs: You know, I never did know how The New York Times obtained them. But I would imagine that the genesis of all that was through Waxman's office. Q. According to Stan Glantz, then a Mr. Butts sends him a set of documents. Scruggs: That's right. Q. Are you Mr. Butts' father. Scruggs: No, I'm not. I'm not Mr. Butts. Nor is Mike Moore. I may be subject to a paternity suit. But I am not Mr. Butts. Did not, uh. . . The only agency that we gave those documents to were - were the Congress -- Congressman Waxman. Later we gave copies to the Justice Department. Q. And the FDA. Scruggs: And the FDA. Q. Why were these documents so important? Scruggs: Because they showed the depth of the tobacco industries research to the pharmacological effects of nicotine. They showed the elaborate system that the tobacco industry's lawyers had set up to shield these documents from public view, abusing the attorney client privilege. They showed that the tobacco industry itself considered nicotine to be an addictive drug and that they were in the business of selling nicotine an addictive drug through the very words of one of their principle scientists and attorneys back in 1963. Those sorts of revelations, uh, were especially important to the Food and Drug Administration because the tobacco industry had denied that nicotine was. . . that cigarettes were being sold for the nicotine content. They were claiming, of course, if you remember, that nicotine was just a component of taste. And that it was just simply something that went along with the cigarette. When in fact, these documents showed the depths to which they had researched the pharmacological effects of nicotine. Q. So, now you're at first what many people called hopeless lawsuit, had a documentary base. Scruggs: That's right. Now, the documents, you'll recall. We didn't file the lawsuit until about a month later. But at the time we got the documents. Q. And somehow through your delivering them to Washington, they go to Stan Glantz and they wind up on the Internet. Scruggs: That's right. That's right. Q. And eventually, they do become admissible. Scruggs: Well, we were not sorry to see that happen. Q. Now, fast forward a little over a year, and you wind up with a live witness to go with the documents. Who was the witness, and why was he so important? Scruggs: The witness was, Dr. Jeffrey Wigand who was the vice president in charge of research and development for the same company for Brown & Williamson Tobacco Company. Uh, we had searched in vain for about a year or more, even longer than that because we first met Jeff Wigand, I think, in October 1996, 1995. Q. 1995. Scruggs: Prior to that the litigation had been going on for a year and a half at that time. And we had been researching it for probably two and a half years. We had searched in vain for a tobacco industry mole. Someone who was in the know, in tobacco, who would tell us what really went on inside that industry. There was no one out there who could speak from an insider's perspective. We had no one. There wasn't anyone that would do it. He was the one person who had come forward, who - who came forward and talked about what really went on inside tobacco. Q. What makes Wigand so important? Scruggs: Jeff Wigand was able to bring the documents to life. He could tell things that were not in the documents. The genesis of the documents. What led to various studies. Strangely enough, many of the documents he had not ever seen before and was amazed himself when he saw them. As the Director of Research, the Vice President in charge of Brown & Williamson's research, many of these documents had been secreted even from him. So he was amazed himself when he saw some of the research that had gone on in the company that he was not even allowed to look at. Or not made privy to. He also, of course, knew about things that had gone in Brown & Williamson subsequent to the date of most of these documents. These documents ended sometime, I think, in the late 1980s. Wigand was there up through about 1993. So things that went on under Wigand's purview, international conferences he attended of other tobacco scientists within his company add greatly to the information we learned from the documents. Especially about nicotine and nicotine pharmacology. Q. You bought Merrell Williams a boat. You bought him a house. Jeffrey Wigand, you paid his expenses, flew him around in your plane. Got him a lawyer. Sounds like you are on the edge there, ethically. Scruggs: Some have said that, but I disagree. I think what we did was to grant a safe harbor for those who were willing to risk whatever they were risking. Intimidation and threats from the tobacco industry. We were willing to grant a safe harbor for those who were willing to step up and tell the truth about the industry. I helped Merrell Williams. I didn't buy him these things. These were, in essence, loans that I made to him and he has, at the time, agreed to repay me one day for that. And I hope that he will. I trust that he will. I can understand how it might look like it was some sort of a payoff, but it wasn't. Q. Wigand? Scruggs: We both represented Jeff Wigand in defending him against Brown & Williamson and we found lawyers in Kentucky and paid them to defend him against Brown & Williamson. Q. I guess the question is, with Merrell Williams, you knew that he did not come by these documents through a legal process. He walked out the door with the documents. Scruggs: I disagree with that. Q. Well it made a whole bunch of other people real nervous. I mean people who are dedicated anti-tobacco activists wouldn't even go near him. Scruggs: That is true. I don't think you have a right to conspire against the public health and then cry foul when someone takes the documents that show that you have done that and make them public. Especially when you turn them over to law enforcement officials or the Congress of the United States. I don't see... I think you almost have an obligation to do that. To, when you catch someone in the process of committing a crime or a fraud on the public health and you don't make that public, I think that is the crime. And so that what Merrell Williams did, regardless of whatever his motives were, and what we did was, in our minds then and now, a civic duty. A civic responsibility. Q. But you had some great risk involved in there. Once the tobacco industry, once Brown & Williamson found out, they sued you. Scruggs: They did. Q. They had investigators after you. Scruggs: They did. They followed us, they followed me. They put me under surveillance, did the same to my family. Sued us in federal court. Sued me. Sued Merrell. Sued any other lawyer, had a long list of John Doe defendants who had seen or had participated in turning these documents over. Presumably Mike Moore. And unleashed more or less a smear campaign of their own that we were paying for stolen documents is the way they spun that. Even though we turned the documents over, as we were compelled to do, to the proper enforcement authorities. Q. And once you facilitated, let's put it that way, Jeffrey Wigand giving testimony in your case. Scruggs: That is right. Q. What... He did that at some risk. Scruggs: At great risk to Jeff. They sued him, of course. They sued a number of news organizations in connection with Williams and threatened to in Wigand's case, to try to intimidate everyone into being silent. It was great risk to Jeff. He was, he was a school teacher at a public high school in Louisville, Kentucky, having gone from making hundreds of thousands of dollars a year to making what a school teacher makes in a public school system. They unleashed an unprecedented smear campaign against him. They hired investigative firms in the world to go into every aspect of his past. Drag out every, every piece of paper or transaction that Jeff Wigand had ever conducted to try to put a false light on it and on him. They tried to show that he was a mental case, that he was a wife beater, that he was a shoplifter. I mean they came in with all sorts of allegations to actually smear him. Q. Let me take you back to, let's say, November of 1995 when Jeff Wigand testifies. He is under possible threat of arrest in Kentucky. Scruggs: Yes. Q. And you are being sued. Did you ever worry about that was going on? Scruggs: Sure. But when you are in the middle of combat like that with people like we were fighting, all your thoughts are to whip--to beating them. We were going to beat them, no matter what the cost. I mean it was one of these things that becomes a cause, a crusade. You are inspired to do it, regardless of the risk. You feel that there is so much justice in the cause that you are willing to take those sorts of risks to get what you consider to be a proper result. Obviously Jeff Wigand felt that. Obviously Merrell Williams felt it. And all of the lawyers an the Attorney General felt that that's what, we were on a crusade. Q. Didn't your wife, didn't your brother-in-law, didn't somebody come to you and say, what are you doing? Scruggs: No. My wife was incredibly supportive throughout this. My brother-in-law had nothing to say or do about this. We didn't discuss it. Q. But he did encourage you, at one point, to get into discussions with the tobacco industry. Scruggs: Actually that is, it was the other way around. After the first Liggett settlement, this would have been in April of 1996, I read in the newspaper where the, where Steve Goldstone from. the CEO of R. J. Reynolds, when asked would R. J. Reynolds ever settle, like Liggett just did, responded, "We would be interested in a comprehensive resolution but not a piecemeal series of settlements." It dawned on me then that there may be room to open up a dialogue to resolve these issues. Q. Were the stakes now high enough so neither side could afford to lose. Scruggs: The stakes were getting up to the point where neither side could afford to lose. And this was the first signal, or overture from the industry proper, not just a dissident like LeBow, but from a mainstream large tobacco industry, R. J. Reynolds, one of the target defendants in the case, that they were willing to consider a compromise. I called Mike Moore. I said, "Mike I have got an idea that if, that I'd like to call Trent and see if he would be willing to try to broker a meeting with the industry, based on what Feldstone had said in the press." Mike said, "Okay, give it a try." So I called Trent and I said, "Trent, you haven't been involved in any of this. You are probably considered to be tobacco friendly by the tobacco industry. You are someone that they would probably trust. You are someone that I would trust. Would you like to... Would you consider trying to set up a meeting to see if anything can be worked out on a national basis?" Q. You are claiming that your main motivation here was the public health, doing something good and through all of this your brother-in-law is the majority leader of the Senate, one of the most powerful Republicans in the United States. And you never went to him? You never talked to him. And he never talked to you? You are in the headlines every day, you are killing his political party. Scruggs: At the time, in early 1996, he was not the majority leader. In fact I think at the time he was not even the assistant majority leader. He was just a United States Senator. Not that I am belittling being a United States Senator. Q. There were risks involved here that weren't normal to a regular law suit. This wasn't just a risk to the overhead of your law office by putting too much money into a case. What were the risks to you back then? Scruggs: There was a risk of, I think, public humiliation was the worst one. If you are unsuccessful after taking on a task like this. Financial ruin. Discreditation, professionally. The wear and tear it puts on your family to read unfavorable things in the newspaper every day when you are not used to--not only not used to publicity, you are not used to national adverse publicity. Those sorts of things. http://www.pbs.org/wgbh/pages/frontline/shows/settlement/
  16. Moore is Attorney General, Mississippi and lead negotiator for the state Attorneys General in the tobacco settlement. A suggestion from Mississippi attorney Mike Lewis led Moore to the idea of suing the tobacco industry to recover Medicaid costs paid by the state in treating sick smokers. He hired Dick Scruggs, a friend from Ole Mississippi Law School, to research and develop the case. The two of them, nicknamed Scro and Mo, then took their idea on the road and convinced other Attorneys General around the country to sue the tobacco industry. Their efforts ultimately led to the tobacco industry coming to the bargaining table and negotiating the June 20, 1997 national settlement agreement. This agreement provided the basis for the current debate in Congress over national tobacco legislation. Before becoming Attorney General of Mississippi in 1988, Moore was District Attorney in Pascagoula, MS. He was named "Lawyer of the Year," by the National Law Journal in 1997. The following is selections from FRONTLINE's interview with Attorney General Moore in early 1998. Lowell Bergman: Let's go back to May 94 or thereabouts. Back then, how did you describe the tobacco industry? Mike Moore: Probably the same way I describe them now. The most corrupt and evil corporate animal that was ever been created in this country. I believe they're the most corrupt and evil corporate animal that has ever been created in this country's history. They sell the drug, they make a drug, and they sell it knowing that it's addictive. They market it to our children, who they know will become addicts and they know that they will die from the causes of--of this tribute tobacco related disease. So yes, they're pretty evil. Q: And they lie about it. Mike Moore: I mean that's the bad thing. You know the two biggest mistake they made, Lowell, to me, and frankly the way we were able to catch them is they didn't tell the truth about their products, and they hid the dangers. And, they marketed to kids. But for those two things I don't think we wouldn't have had an Achilles heal. Q: So in comparison to lets say, the dealers in illegal drugs, how do they compare? Mike Moore: Well, a couple ways to measure that. all the illegal drugs in America cause twenty thousand deaths a year. All of them. Cocaine, marijuana, Heroin, all of them. Tobacco kills four hundred twenty thousand people a year. That's 21 times the n ber of deaths. They cost us billions and billions of health care dollars. Deaths are not quite as immediate as in the cocaine trade or in the illegal drug traffic, but they're much more detrimental, in my opinion. Q: Let me take you back even further. Because you've come a long way. When you--you grew up here in Pascagoula? Mike Moore: Right. Q: When you were growing up as a kid, what did you want to be? Mike Moore: Well, I guess early on in, in life I guess I toyed with the idea of becoming a priest. And then I discovered girls. So those things didn't work. I played in a rock n' roll band. I even thought at one time I would be a rock n' roll musician. My daddy quickly let me understand that the world is full of mediocre piano players. So, I didn't get very far there other than having a lot of fun through school and college making some money. Then I really wanted to be a lawyer during my high school years. And knew when I graduated high school that's what I was going to do. I was going to be a lawyer. And I wanted to be a lawyer because I knew that's a job that I could take where I can make a difference in people's lives. That's what I've done my whole career is make try to make difference. Q: To do what, to make money? Mike Moore: No, I really didn't know what field of law that I'd go into. I just knew I wanted to be a lawyer because I knew a lawyer was an advocate and somebody who could go into a court room and make a difference and fight for people and win -- right, wrongs if you, if you will. That is something that energized me. From the earliest days of my life, I have always got a good feeling. It is almost indescribable from helping someone. When you help someone and you made their life a little bit better, I just get a good feeling about it. And that feeling never left me. I still do. Whenever I do something good for somebody, I just feel good about it. I like it. It is a high for me. I mean maybe that's drugs for somebody else but that is a high for me. Q. What are your politics like? Mike Moore: I am a pretty conservative Democrat. I am conservative in more ways than most Republicans. But I, I also feel that you ought to treat people fair and just. And the law serves everyone not just the folks at the top of the spectrum. I also believe government can do a lot to motivate people. You don't hand out things to people but government officials can act in such a matter that they can inspire and motivate people to reach out and help themselves and maybe that sounds like a Republican to some folks but I am a Democrat. Q: You are a Democrat because why? Mike Moore: Well, I've always seen the other party, Lowell, as a party of exclusion. You know, you can't be a Republican because you are black, or you can't be a Republican because you not rich enough or you're not in this club or whatever at least that's the way it's been in my state. Q: Why tobacco? Why pick on tobacco in Mississippi? Mike Moore: Why not tobacco? In retrospect, you know it's easier to say this now then maybe in 1994 but, in retrospect, it was the -- the biggest challenge, the biggest legal challenge in history. If we could climb this mountain, so to speak, then there would never be one larger than this. No challenge greater. Nobody have ever beaten the tobacco industry before. We felt like we had a chance. We also knew if we won, we might just do more good than any lawyer had ever done in history. Might save more lives than most doctors have ever saved in history. So I mean, why not do that? Why not be a part of that? And as the movement grew through the years I became more and more convinced we were going to be successful. I mean just the question you ask me, my mom and dad asked me why am I suing the tobacco industry? Most of my friends asked me, "Mike, you know this--this is crazy. They are going to come after you -- they may kill you, I mean this is nuts. You'll never win." But I knew somewhere deep in my soul, I suppose, that we really were going to win. Because it was the right thing to do. We were going to have a lot of obstacles. I didn't know quite how many when we filed it. But I knew we were going to win and I just never lost sight of victory. Q: Is this a religious experience? Mike Moore: I don't know if it was religious or not. I know one thing that we had a lot of breaks in this thing. We were very fortunate. A lot of courageous people came our way. I mean the Jeffrey Wigand's of the world, the Merrill Williams of the world and so many others. That didn't just happen by happenstance. That didn't happen because we were brilliant lawyers or there was some great magnetism that brought them here. I think we had some help from above, I really do. I think that we were guided in this case and I think we are still guided in this case by a higher power. Q: That's hefty talk from a politician. Mike Moore: Well, you gotta understand from where I came in life. The source of any strength that I have in my life is a very strong faith in God. When I fought the supervisor wars here, which were public corruption cases, the first stop I made every morning was the church across the street from the courthouse. And nothing more than to go and say a prayer and ask the Lord to help me this day and the next day I would do the same thing. That is a source of energy for me, Lowell, maybe some people understand it and maybe some people don't. But if works for me. Q: You are a practical politician. I mean back in 1994, you had to know that this would be a risky political move and that tobacco was very powerful? Mike Moore: Well, I just always believed if you do the right thing, for the right reason and you never ever give up, no matter how tough it gets, that you are going to succeed. I am not naive enough to know or to not believe that you'll lose sometimes. But losing, to me is a temporary loss. I mean you may lose in one way just saddle back up and go at them a different way. This is one of those fights against the industry that we couldn't give up and that's what I made the lawyers do. I made them promise that they were going to help me, you know you can never, never give up. And if I mean if you don't want to be, you know make that kind of commitment, then stay on the other side of the line. I mean if you want to come over here on this side of the line, I am never giving up. You guys may all go home but I am going to be in the ditch when you give up. So it was that kind of fight. And it still is. This fight is not over. I am still fighting it. We got a long way to go. But it is worth it. It really has been worth it. Q: Now tell me what happened when Mike Lewis called you up on the phone. You were in the office? Mike Moore: Yep. Sure. Lewis, Mike Lewis and I were classmates at Ole Miss. We actually studied together. And he was almost like a big brother to me in school. He called me up one day and had the darndest story about a secretary and a secretary's mother who was in the hospital dying from heart disease attributable to tobacco related disease. You know he was almost fretting a bit because he couldn't do anything to help her. And he wondered because he had sold everything she had and now she was on Medicaid and the state was actually spending dollars, wonder if there was cause of action that the state can bring against the industry. We just explored that a little bit on the phone and I hung up the phone I go "I don't know about that, I mean I don't know if that's a good idea or not". But he and his wife came down, who is also a lawyer, and talked to me another classmate of ours at Ole Miss and we talked about it. And I thought it might have some--some merit. I wasn't convinced then, at that point, that there was a justiciable case, a real legal case against the industry. But I called Scruggs, a little while a few weeks later, probably, or maybe a short period after that and got him to work on it and Steve Boseman to work at it. And so the theory started being researched Nobody had ever thought about this before. I mean this is such a novel theory of the law that we worked over a year researching and actually shopping our theories with legal experts across the country. And we expected them to say we were crazy and what we got in return was "gosh, you guys may have just come up with--with the silver bullet here, this has, it's risky, but it has a chance". We start going, "Hmm, right here in Mississippi," you know. Q: How did you recruit people to join in the lawsuit? Mike Moore: Well, we began after we filed our lawsuit going around the country. Obviously as Attorney General went to talk to other Attorneys General. I tried to twist arms if I could, tell them how much proof we had. Insist that this is the right thing to do. Talk about the children issues every motivating factor I could think of to get them interested. Because, I knew the political pressure involved in this. I mean suing the tobacco industry is not a smart political move, especially back then. Because they come after you. And they did. They sent former Attorney General, hired as lobbyist, to every Attorney General in this country, they sent business representative, industry representatives. Uh not just tobacco but the whatever state it was in. In Louisiana, they sent a chemical industry and oil industry to the state Attorney General said "You better not do this or we are coming after you." You know, its bad for business, I mean in my own state, my governor sued me. You know, the business community came after me saying that this is bad for business in Mississippi. So I knew the political price that some of my brothers and sisters would have to pay. But the biggest argument I had is, "This is the right thing to do gang. This is going to save a lot of people's lives. And these guys are targeting your kids. I mean, just weigh it out, political pressures vs. the children of this country, where do you come out as Attorney General?" And I would have to tell you that I am so proud of the men and women that are Attorneys General of this country cause they came out for the kids and came out for the public health. Q. What role did Merrill Williams play in the events? Mike Moore: Probably the two most dramatic events with people would be right here in this building, where we are right now, when I met Merrill Williams, back in probably early 1994. Merrill brought us the famous Brown & Williamson documents here in Mississippi, which are probably still the most damming documents ever produced against the industry. The fellow I met that day was a guy who was scared to death. I mean, remember I've been prosecuting criminals all my life and I've had all kinds of witnesses turn states evidence. I have never met anybody that was more afraid of losing their life being in some accident -- this guy was sweating, I mean you could almost see his heart pounding in his chest. He, he spoke, you know, a few words and backed off a few words. I mean you had to pull the information out of him. I met him in this room right over here, and he started handing me some documents and when he handed me the now famous Addison Yeaman memo that says "we are in the business of selling nicotine an addictive drug", I mean I knew we had the goods on the industry. Having just seen them testify before Congress that you know that "we swear that nicotine is not an addictive drug", I knew why he was sweating. I knew why he was scared to death. So that was pretty dramatic. Q. What about Jeffrey Wigand? Mike Moore: Then there was Jeffrey Wigand, a fellow who I believe has as much character and integrity as anybody in this whole fight. Because Jeff had some real choices to make. And I saw him make them. When Jeffrey made the choice as a Brown & Williamson executive to leave--I know he got fired, but he, he could have contested that. And then when he came here and agreed to testify for us and take the deposition that day out on the beach in front of Dick's house, I mean he made a decision again for what is right. I mean he knew that they were going to come after him. They were already after him. He knew that his family was going to be hurt. But he knew what he was doing would probably would do more good for this country than anything anybody had done for public health for many, many years. So, I mean I just I was so proud to see somebody with such courage because that he wouldn't get anything out of it. Nothing. I mean he was losing, that was a losing decision for him. But he gave so much. Q. How important were these whistleblowers? Mike Moore: So, I mean those two guys, Merrill Williams and Jeffrey Wigand, we wouldn't be here today where we are with the three hundred sixty-eight billion dollar settlement without the courage of those two people. And for people who criticized Jeffrey for any of the blemishes in his life or Merrill Williams, I'd have to ask them to examine themselves and see would you have the courage to stand alone against one of the most powerful industries in this world and do the right thing? Most people would have to answer no. Q: Tell me about Scruggs. Mike Moore: We, it's funny, as time has gone one we've become Scrow and Mo or Mo and Scrow. Dick is one of the most unique fellows I've ever met in my life. He is a genuine person from this stand point, when I met Dicky, he didn't have anything. He was married. Well, I say he didn't have anything, he was married to a lovely lady and he had a son. And they didn't have any money. He was going to law school. He and I met in law school. And he got out of law school and practiced law and did ok for awhile. And now obviously he's doing very, very well. And you know able to buy big planes and boats and all kinds of things. But he is still exactly the same person as I met in law school. He cares about people. He is generous, there is not an arrogant bone in his body if you really know him. He contributes not only of his time, but of his money to things and never ask anybody for credit. He doesn't even want anybody to know that he's doing things to help people. He's a sensational lawyer, a great strategist, and a damn good friend. I picked well when I asked Dicky to be involved in this. But I knew I was going to pick well because I wanted someone who, no matter how tough it got, would not run. I mean and who would have the resources and wouldn't be afraid to invest them all. And people don't know this, Lowell, Dicky and his wife Diane, invested everything they have in this case. And the reason I know that is because we had we got to a certain point where we had to go out to actually get more funding from other people. Include other people in this case, other lawyers had to split what possible legal fees that maybe paid down the line what other people who really didn't have anything to do much with the case. I mean, even if he had to spend every penny that he had, he knew it, and I had the commitment to fight this battle till it was over. And luckily he's got a wife like Diane who let him do it. And it could have gone, this thing could have bellied up easy, and Dicky would have been back broke, without anything, and have to start all over again. So, I mean that's commitment and that's why I get a little bit defensive when people start coming out and saying all these lawyers are going to make a bunch of money. Nobody's ever sacrificed the way some of these folks have for a cause that's going to benefit the entire nation. And I don't think I can say that about every lawyer involved in these cases. But I know I can say about the ones representing Mississippi. Q: Tell me about Ron Motley. Mike Moore: Ron Motley. What a character! The best thing I can say about Ron is he is one of the most heartfelt people I have ever met in my life. He is a very emotional character. Uh, he uses that emotion in the courtroom for his clients. He's a wonderful trial lawyer because he believes. He really deeply believes in the people he represents. In this case, I saw Ron working at 3 o'clock in the morning, 4 o'clock in the morning, get two hours of sleep, and he's calling me on the phone at 7 o'clock in the morning saying, "look, let me read page 16 of this deposition to you, you're not going to believe this. I mean he was enthusiastic. His talent and his motivation, and his acceptance of this case as a life mission, uh, is probably one of the things that got us far as we've gotten so far. He's gonna be a benefit to every other state that has him as a lawyer. Q: Can you remember somebody coming to you, "what are you doing, Mike?" Mike Moore: Well, you know, several people did. My parents thought I was nuts, filing a lawsuit against the tobacco industry. My best friends told me that this would be the last political thing that I'd ever do in my life. The political advisors in the state and out of the state told me that this was not a smart thing to do, and if you ever had any aspirations for higher office, you can forget them. You may not even win the election, re-election campaign, because they're going to run somebody against you. And they'll fund them, and they'll talk dirty about you and they'll spend a lot of money doing it. So, the truth of the matter is, Lowell, I didn't care. I mean I really didn't care. Q: Now wait a second. You really didn't care? Mike Moore: I really, really didn't care. I like to consider myself a public servant. I mean I got into this business for one reason, to make a difference. And if I'm not going to do something because there is political threat, on the other side, or because this is going to be tough, I'm not worth myself. No, you can't make a difference many times if you're not there to make a difference. I understand that. You got to understand me. I never think I'm going to lose. I always think I'm going to win. And maybe that's naivete, uh, it's driven me through my life pretty successfully. I knew I was going to win. I knew the chances. And I've lost before, but I knew this was right. Man, I know it's hard for people to understand. I knew this was in my soul I knew this was the right thing to do and I knew it had the potential to do more good than anything I'd ever done in my life. So what if I lost? So what? I don't get to be Attorney General? I don't get to be a United States senator? I don't get to be some politican, who cares? I will have done more good for this country, even in losing, by exposing this industry than any other opportunity I'd ever have in my life. So why not do it? I didn't see it as a possibility of a loss. Q: Sounds like some kind of madness was overcoming people in Mississippi. Mike Moore: Well, you know you could say it was madness. But it was more damn the torpedoes, full speed ahead. You know, we knew we were right. We knew we were going to be criticized. We tried to be as smart as we could in calculating how to file the case, who the opponents were going to be, we were pretty about how we did it. Q: Did you home cook the case by filing in Pascagoula? Mike Moore: Well, I'd say that we made sure that we were going to have a fair playing field. The tobacco industry, when they came to Mississippi, and they saw that we filed a lawsuit in my hometown, in Dickey's hometown, hometown law firm. A half way popular attorney general, they knew that they had a challenge on their hands. Uh, when they couldn't use their gimmickry to get it removed to federal court or coerce some judge or others to move it to a jury trial rather than a judge trial, they knew they were in trouble. We knew they were trouble. Then when we were able to get the other states involved, which is where they really fought us, uh, and they, the biggest thing they did in my state that helped me eventually, but hurt me at first, is they coerced my governor into suing me, and then they sued me. It took a year of effort to beat that lawsuit. But when they lost that, they were history. I mean, when the Supreme Court of my state said this trial will go forward, they were through, and they knew it. Q: You know, one of the key moments in all this, I think tactically, strategically was when Bennett LeBow and Liggett said, "hey, we want a deal". Tell us what happened. Mike Moore: Well, uh, another one of our Ole Miss Law School classmates who we included in the trial team, Don Barrett, had a relationship with a lawyer in New York, Mark Casowitz who had a relationship with Bennett LeBow. And, uh, Don, to make a long short, Don and Mark began to talk about a possibility of working with the small Liggett Tobacco Company and possibility of a settlement. And Don talked with us and, uh, things proceeded on for awhile and we had meetings, you know, we met in Miami, we met in Memphis, we met all over the country, uh-- Q: In secret? Mike Moore: Oh, absolutely in secret. If this got out, I mean, this would be a, the tobacco companies would do everything that they, the big tobacco companies do everything they could to kill Bennett LeBow and his company, just like they're doing now. So it had to be done in secret. And we were able to keep it a secret. That's probably the only secret we were ever able to keep, is the Liggett One settlement. Nobody knew about that until the day before we announced it. , and it probably was one of the most remarkable events in this four year battle. Because for the first time, a tobacco company agreed to pay money, and cooperate with the plaintiffs in a lawsuit. It shook the industry, uh, pretty strongly. They didn't act like it, but it did. Q: Hubert Humphrey opposed it. Mike Moore: Yah, I tried to get Skip involved in the Liggett One settlement. You know it's funny. I had Bob Butterworth of Florida, who is my friend and partner throughout this thing, who gets very little credit, but who is as instrumental as anybody else in our success. Bob immediately agreed to be involved in the Liggett settlement. He saw the potential. Scott Arshbarger, you know, Attorney General of Massachusetts, I go to see him when he's on vacation, down in Florida, and Scott agreed, after one hour of session that he would be involved. Uh, then we called Daryl McGraw in West Virginia, the Attorney General there. He said, "Mike, I'm with you. If you think this is a good thing, we're going." So the fifth state that was involved was Minnesota. Dick and I flew, along with Bob Butterworth, the three of us flew to Minnesota to meet with Skip Humphrey, and we never met this Mike Ceresi guy, but he was there that day. We couldn't have been treated more harshly. They thought we were nuts. Uh, they thought this was a bad idea. Uh, and didn't want to have anything to do with it. It was almost like it wasn't their idea, so it must not be good. So we left, knowing we had four states, uh, we wanted to have five, so Louisiana. We got Louisiana to file a lawsuit. They filed a lawsuit, flew to, uh, Washington and joined in the settlement. So, at that point, there were six states involved and five settled with Liggett. It worked the same way with Minnesota the second time, when we did the Liggett Two deal. Uh, we had 22 states, I believe at that time who had filed lawsuits, a few less than that because we got a few more when we were going to do the Liggett settlement. And Minnesota again didn't want, didn't see the worth in the Liggett Two settlement, with all the documents and admissions and all the things. And they didn't agree to sign on until all the other states were lined up, we were walking across to the press conference, and then they agreed to sign on to the settlement and stood there with the rest of us. And I'm glad, it was, it was, it was helpful. But Minnesota has, from the very beginning just drew a line around their state and they wanted to do their own thing and they didn't want to be a part of all that we were doing, uh, building the army. They just, they just felt like they should just do their own thing and let us do our own thing. Q: Well, I think what they say is that you're a great advocate, you're for the anti tobacco movement, you've done a great job, but they're doing the real lawyering. Mike Moore: Well, I guess the difference is, I was involved in my case, from the very beginning. I did the discovery, I read the documents, I was prepared to try the case myself. I don't believe Skip's done that same thing. He's let Mike Ceresi, uh, and those lawyers run his case for him, and that's fine, but it's just a difference of opinion. Also, from the very beginning, said to every other state in this country, anything that I have, you can have, witnesses, documents, whatever. And that's how we were able to elicit and get all these other states involved. Minnesota, basically said, "we want you to dump all the documents in Minnesota, and then you've gotta come sign all these agreements and you can't tell anybody about it." We would have never been able to beat this industry if they were able to cordon us off, state by state, like that. So, I hope they do well. I mean, we want Minnesota just to beat the pants off tobacco, when they, when they try the case. Q: Now, Bennett LeBow continues to complain about how he's been treated. He gave you, he broke, if you will, the Great Berlin Wall of tobacco. Mike Moore: Well, you know, I'm proud of what Ben LeBow did. I've grown to know him more and more through the years. He was very, very helpful to us. We're going to make sure in this national settlement, that LeBow and Liggett are taken of. And I think we'll have a lot of congressional support to do that. So I don't really think he has anything to complain about. He's still very helpful to us. I mean, he's lobbying as hard as he can for the settlement, if it excludes him. Uh, in other words, if it makes, gives him the ability for his tobacco industry to have some growth and make some money. Q: So the keys were two whistle blowers and a defector. Mike Moore: I think, we could not have done this without those three things. I mean some, like Minnesota and others will tell you, "Oh, Merrill William's not important, and Jeffrey Wigand's not important." They wouldn't be where they are without Merrill William's documents and without Jeffrey Wigand and without Bennett LeBow. We just saw the value of that early on, and we grabbed hold of it and used it to our best benefit. Q: And you created, if you will, a safe haven here in Mississippi? Mike Moore: We did. You know, and, people, I don't know they ask me, "why Mississippi?" You know, "why did Merrill Williams come to Mississippi and why did Jeffrey Wigand and all these documents?" But, we had a safe haven for the truth for, I believe. Uh, and we weren't afraid to risk everything to protect these people. Merrill Williams has been protected here. He lives here in Mississippi now. Wigand has been a beneficiary of Dick Scruggs and many others who tried to help him in his life. You know, we hired the lawyers that represented Jeffrey Wigand and Merrill Williams and many others in the lawsuits that the tobacco companies brought against them. I mean, as you know, you were integrally involved yourself in many of those things. Nobody else was willing to do it. Nobody, Lowell. I mean, there weren't any lawyers in Louisville, Kentucky that were going to come to the aid of Jeffrey Wigand and Merrill Williams. With court orders out there threatening to do everything from holding them in contempt to take their bar license away from them. I mean, nobody else was going to help them. We just took the chance down here, knowing somebody would take action against us. Q: With Merrill Williams, his documents were stolen from lawyers. Let me put myself in the position of a general counsel for another major corporation-- Are you saying, Mr. Moore, that you as the attorney general, can be above the law, and make public documents that are trade secrets, possibly even more valuable than that? Mike Moore: No, I'm saying with the background information that I had at the time, and understand what it was, I saw with my own two eyes, seven tobacco executives raise their right hand and swear, before Congress, that nicotine was not an addictive drug. They had no evidence of that whatsoever. And then, the very next couple of weeks, I had in my hand, a memo that proved that they were lying. This is evidence of a crime. And when an Attorney General of this country has evidence of a crime, he has a duty to put it in the hands of those people who can do something about it. So where did we take it? We took it back straight to that same committee, the Henry Waxman's committee, and put those documents on his desk, for him to do what he needed to do with them. We sent them to the Justice Department. We sent them to the Food and Drug Administration. And we saved a copy to use in our case. Q: And you knew they were going to end up in the New York Times? Mike Moore: I didn't know where they would wind up. Uh, I just knew that I had done my job in putting them in the right places. Q: By the summer of 1996, you're starting to talk to the tobacco industry. Communication's starting to happen. Mike Moore: We had some, what I would call, uh, secret, indirect communications, uh, with the industry by summer of 96. That's right. And we were working jointly, uh, with the Food and Drug Administration, with Dr. Kessler and some of his top assistants. Frankly, we've been working with them for four years. Uh, they've helped us, we've helped them. Uh, that's been a good working relationship. Uh, and I think, uh, without their assistance, again, that they're a player who, if they were missing from this battle, we wouldn't be where we are. Q: In a sense, they're there because the President of the United States let them be there? Mike Moore: That's right. Q: Dr. Kessler served at his discretion? Mike Moore: That's right. Q: So, how important was Bill Clinton's lack of tobacco company support, if you will, or alliance with them to your effort? Mike Moore: Well, President Clinton, I have to give him a tremendous amount of credit, because he made the right decision on coming forward with the FDA rule. There was a lot that went into that, as you know, many of the same players, the Merrill Williams documents, the Jeffrey Wigand, the assistance with the FDA, uh, all those things helped buttress the President in making that decision. But he still made it. He made a decision, I think, that took a lot of political courage, because at that time, he was facing re-election. A lot of tobacco states, a lot of democratic vote that he needed, uh, he could have lost that. And Kessler and President Clinton and I think with Al Gore's push, they all made the right decision to push the children's issue especially. Well, that buttressed the Attorney's General claims, because, one of our main claims was that they targeted the kids. So, it was, it was then a federal state effort, uh, moving forward. And I think that shook the tobacco industry a little bit. Q: How did you meet Dick Morris? Mike Moore: I'm trying to think the first time I, I met Dick. I met Dick Morris through, uh, Scruggs. Uh, he had done some work, uh, with Dick in doing some polling. I think even on our case, uh, there was some polling that was done about the advisability of whether judge or jury or whether, uh, the people of this state would really reward the state for uh, the losses from the tobacco industry, which the results came back that they wouldn't. So it was not a, we found out it was not a very popular thing to do to sue the tobacco industry. Uh, as a matter of fact, I think it was like two to one against us, uh, but we did it anyway. But, I met him several times, uh, through Scruggs, and then, I dealt with him a lot of times since then. Q: The talks started, they floundered, basically they became public the first series of talks. Mike Moore: We thought we had a nice plan working, a proposal for a national resolution, but it was still in the works. It was an early drafting stage and the Wall Street Journal, uh, somehow, uh, got a hold of an early draft and leaked it on the front page of the Wall Street Journal. People picked it apart, like it was a roadkill, you know, attacked by buzzards. Even people who had been involved with this began to make public statements against it. It was the most amazing thing I'd ever seen. And of course, we were a bit perplexed, because, wait a minute, we, we hadn't done this yet. This is just an idea. And of course, we quickly found out how Washington worked. Uh, dpeople leaked things to the newspapers for the sole purpose of finding out how everybody's gonna respond to it. I mean, that's how that game works. What a way to do business. Q: So, you first hear about Philip Carlton from the White House and then it's my understanding that you then hear from one of Ron Motley's partners about a possible meeting? Mike Moore: No, that's not exactly how it happened. We were meeting with Bruce Lindsey and he asked us whether or not we knew a guy named Phil Carlton. And I think we had also heard that Phil Carlton was suppose to be trying to contact us although I had not received a phone call from him. And Bruce told us that this Phil Carlton guy, whoever he was, neither one of us knew at that time, wanted to meet with him and wanted meet with us. And so, Bruce told us he was going to meet with Phil Carton. We went back and met with Bruce again after he had met with Phil Carlton and of course what he wanted was he wanted a copy of our first proposal. He wanted the industry to have a copy of what the proposal was that we were drafting because at that point, as you remember, what our strategy was is to get a bill done that we thought the industry will never agree to. And have congress pass it, basically cram it down the tobacco industry's throat cause we never thought they would agree to the restrictions on marketing and advertising and many other things that we wanted to protect the public's health. Bruce wouldn't give him a copy. And we wouldn't give him a copy. The tobacco industry was frustrated they knew we were about to make a play in Congress. And they knew maybe Trent was going to help us with this and they didn't know what it was. And they couldn't get a copy anywhere. So, that's what this constant calling and urgency to try to they were actually trying to stop something but maybe also trying to start something at the same time. Q. What happens next? Mike Moore: The way we finally got a direct meeting is that I got a call from the White House. I talked to Bruce Lindsey, and Bruce said that the President wanted us to at least meet with the tobacco industry. At that point, we weren't wanting to meet with them. You know we were trying to hold off meeting with them. Cause we just didn't believe, we didn't trust them. We didn't believe they would actually do the things we thought we could get passed in Congress. I mean we had already been burned one time you know by letting people in on this thing, we just we wanted to get our own deal and get it passed through Congress. Whether the tobacco industry liked it or not, as naive as that sounds. But when, you know, the President of the United States through Bruce Lindsey tells me he wants me to meet with the industry. I mean who am I to say I am not going to? So I called Scruggs, I say Scruggs we got to change the plan here, we need to meet with them. So Joe Rice, who was working with us, ended up going and meeting with Carlton and Meyer Capwell and couple others the first--they wanted to meet with us. And so we agreed to do it. So the meeting, the first meeting was set up to be in North Carolina, which I was pretty hesitant to go to North Carolina because I mean these guys were pretty much after us. You know I was afraid we were going to get tricked I was afraid it was a trick. I didn't know what it was. I mean, tell you these guys had sued Dick and all these unnamed John Does they had taken out after Merrill Williams, they taken out after Jeffrey Wigand. They called me everything in the book. I mean, I wouldn't I wouldn't just go up there and just show up in North Carolina for God's sake and meet somebody I never met in my life. Q: Enemy territory? Who were the people who came from the tobacco industry? Mike Moore: Phil Carlton and I believe Meyer Capwell, for sure. I don't know if there's anybody else there or not. But Joe went and told them that we would meet with them. We just wanted to see what they had in mind and they told Joe that they were sincere that they really wanted to set up some meetings. So what we did is when Joe got back and called us, we set up a meeting and what we called neutral territory. It really wasn't neutral territory. We had Phil Carlton come meet us at the Campaign for the Tobacco Free Kids in Washington DC, at Matt Myers' place. And so, we had Matt Myers and myself and Dick and I believe John Cole go and meet in Washington at the Campaign for Tobacco Free Kids with Phil Carlton. Q. What happened at that meeting? Mike Moore: I wanted to see his credentials. I wanted to know that he represented the industry. He is a former Supreme Court Judge. I did a lot of checking on him before he showed up. As I am sure he did a lot of checking on me before I showed up. And, he was a very genuine fellow. He was very businesslike and assured us that the industry wanted to have face to face meetings, and I made several conditions for a meeting. I mean what I told him was that the only way I would meet is if they would bring the Chief Executive Officers of the industry face to face. I wanted Geoffrey Bible seated right across the table from me. I wanted Steven Goldstone seated across the table from me. Because I wanted to look them eye to eye, man to man to judge their sincerity. I didn't want a bunch of tobacco lawyers. I had had it with tobacco lawyers. Don't send me these lawyers who are involved in these cases cause you know they have no credibility with me, whatsoever. And they said "well I don't know if we could work that out but we'll try." I said "Well if you can't there won't be any meeting." So I got a call the next day and they said that they'll have Bible there and Goldstone there and I said that was fine. And they picked them a team of negotiators and my job was to pick a couple other Attorneys General. We were trying to keep it at 4 and 4. That's what we were trying to keep it at. Believe that or not. Q: Two CEO's. Mike Moore: We were going to have a couple of CEO's who would come make some statements and they would leave and be available for they didn't know how long these negotiations were go on. And they would replace them with negotiators who were not tobacco lawyers, new guys. Meyer Capwell, Arthur Golden and many others Bob Fiske and the like. Q: Boy that's high power little group there. Mike Moore: Real high power group. Q: Bob Fiske, former US Attorney in New York, former special prosecutor. Mike Moore: That's right That's right. These were high dollar players, and very smart, very shrewd negotiators. So my job at that point when I left the meeting in Washington was I had to select some Attorney's General to be part of the negotiating team. I had to reach out and grab people who I can trust number one to keep it quiet because these had to be secret negotiations. We walked into what was a pretty big ball room with a big long rectangular table. And in front of the table was Geoffrey Bible, you know there to greet us when we walked into the room and Steve Goldstone. It was strange. I mean it was you know when the grip on the hand shake was, you are thinking to yourself, these are the guys that I've been you know railing against for the last four years. These are these are some folks who've done some bad things and you know I'm walking in the room shaking hands with them. And you know the usual nice things gestures that you do and glad to meet you etc. and I don't know if I was glad to meet them or not but I was glad that they were there. What I wanted to see and I am sure what the other Attorney's General wanted to see what was it that they were going to say. And more importantly what was it they were going to do. At the first meeting with Phil Carlton, I had given him a copy of what we had hoped to accomplish with a resolution. We had some goals and objectives that all 22 Attorneys General at that time who had cases had sign on to these are the things we wanted. Q. What was said at that first meeting? Mike Moore: Steve Goldstone was tired of being called a drug dealer. He was tired of being called someone who is marketing to kids, and ruining their lives and causing people to die. I think he fundamentally didn't want to be, uh, described as that. I think it was heartfelt. I really do, don't get me wrong. I don't think they're good guys because of that, but I think that had gotten to him. That every single day, you're killing kids. You're marketing to children. I think it had gotten to him, personally. He was a lawyer, remember. I mean he was a lawyer representing the tobacco industry, and then moved into the job of chief executive. Well it was kind of a different position for him. He wasn't a lawyer anymore representing them. He was them. So, I'm not sure he liked that. But, you know, so we started negotiations and it was pretty amazing, Lowell, the things they started saying that they would agree to do. Q: Why did the industry come to the table? Mike Moore: I think a number of things. The change in public opinion from the time we filed our lawsuit in '94 to the time that they began. And that in my estimation was accomplished by the work that the media in this country had done, exposing the truth about the industry. The power of the state's lawsuits because they'd gone from one little case in Mississippi to 40 cases in this country. The FDA rule. The President of the United State's involvement. Congressional hearings in the past. The work of all the public health advocates. I think everything built on itself to bring the industry to the realization, they had to have a day time. They had to have a peace of some sort. http://www.pbs.org/wgbh/pages/frontline/shows/settlement/
  17. Matt Myers is Executive Vice President and General Counsel of the National Center for Tobacco Free Kids, a Washington based anti-tobacco lobbying group. As a private lawyer in the eighties, he lobbied Congress and won a doubling of the per pack cigarette tax. In 1996 the National Center on Tobacco Free Kids was created with private donations from groups such as the American Cancer Society and the Robert Wood Johnson Foundation. It launched an intensive anti-smoking campaign to reduce smoking among children. While Myers was working at the FTC on warning labels, he enlisted the support of then Congressman, Al Gore and it was this connection that made Myers a central player in the settlement debate. As negotiations began, the White House insisted Myers be part of any talks to ensure that the public health perspective was included (the very first meeting between the Attorneys General and a Tobacco Industry Emissary, Phil Carlton, took place at Myers' offices in March of 1997.) As a longtime critic of the tobacco industry, Myers confounded his fellow health advocates when he joined the negotiations. "One of the best examples of the fact that the tobacco industry knew long before the Surgeon General, just how deadly it's product is, is by looking at how they had clearly, carefully planned. When the Surgeon General's report came out in 1964, tobacco industry members of Congress were already situated in key position in each and every committee of the Congress of the United States." Q. Matt, you are a veteran of the tobacco wars. Give me an idea back three or four years ago, before all this started in a way, of the power of the industry. Its political and legal power. Myers: It is remarkable, when you consider that it has been over 30 years since the Surgeon General found that without any doubt, tobacco was the number one preventable cause of premature death and disease in this country. If it had been any other product that caused 1/1000th of that sort of problem, we as a nation would have acted and acted decisively. This industry wouldn't continue to exist if it was any other product. Q. How did they do it? Who worked for them? I mean, to people who don't know how powerful they were, what did they look like to you? Myers: The tobacco industry has used its political power and financial muscle to tie Washington up in a way that no other industry ever has done before. If you look back to 1964, Surgeon General, President of the United States declare this to be the number one cause of premature death and disease. Causing one of the worst deaths we know. Lung cancer. And yet, when the Federal Trade Commission proposed simply to put strong health warnings on it, Congress swooped in and literally cut them off at the knees. The Federal Trade Commission as an agency didn't recover for decades to the swipe they took. It was so bad, frankly, that the person who was the Chairman of the Federal Trade Commission in 1964, when confronted with a report in 1980 by the staff of the FTC, recommending stronger health warnings said, "I will never vote against the tobacco industry again in my entire life. You have no idea what it is like to go up to the Congress of the United States and face those people under those circumstances." Fifteen years later that man was still terrified of stepping out and doing what was right against this industry. Q. Who did they have working for them? I mean, lawyers, politicians, who was on their side? Myers: You know, one of the best examples of the fact that the tobacco industry knew long before the Surgeon General, just how deadly its product is, is by looking at how they had clearly, carefully planned. When the Surgeon General's report came out in 1964, tobacco industry members of Congress were already situated in key positions in each and every committee of the Congress of the United States. So when the federal government proposed action, it was a tobacco state senator or representative who was presiding over the committee that said, "No how, no way, not now, not ever." They knew it was coming and they were the first of the industries, long before we had this with any other industry, to recognize that the key to continuing your action was to get your members of Congress in the right place. To make the right political contributions at the right time. And to organize your constituency back home in a way that would have been sophisticated for 1980, let alone 1964. It is one of the real worst examples of pure corporate power used to undermine sound public policy. Q. Just so I understand, we now know that these various different companies met together and conspired together? Myers: The documents that have come out in the last four years are incontrovertible. These companies sat down in a room together and devised an orchestrated scheme to deceive the American public about what they knew about their product. And undermine the will of Congress in terms of taking on the industry in a way that they would have if it was any other industry. Q. You are an attorney. It sounds illegal. Myers: I think it was illegal. It was certainly immoral. Q. What was your reaction when you heard that the State of Mississippi had filed a Medicaid suit. Myers: I have to admit my initial reaction was skepticism until I began looking at the legal theories that were behind the lawsuit. And it was only after spending time carefully analyzing the case that I began to realize that this might be something truly different. Q. And when you first met Mike Moore and Dick Scruggs, what did you make of them? Myers: You know when I first met Mike Moore and Dick Scruggs, I was struck by a couple of things. That Mike was a charismatic figure who had an ability to carry off things that others probably underestimated. And the last thing that Dick Scruggs was, was some hick lawyer. This was a bright guy with broad visions. And that this was the sort of guy the tobacco industry ought to be afraid of. Q. Because? Myers: Because Dick Scruggs had the experience and the breadth of vision to mount a challenge against the tobacco industry, unlike any other that they had seen before. From his experience in asbestos, where he was one of the lead lawyers in bringing down the asbestos industry, it was clear he really had a sense for the jugular. And in this case it was clear that he had a better understanding than those who had been close to the tobacco litigation for years, of the weaknesses in the traditional cases, and the type of claims that could well strike a very different and more responsive cord in juries. Q. Your organization is, describe it, what does it do? Myers: The National Center for Tobacco Free Kids is slightly less than two years old. We were created out of a number of foundation grants and grants from voluntary public health organizations to be the nations largest non-profit organization fighting the tobacco industry. Our primary focus on public policy changes that will reduce tobacco use among children, but not to the exclusion of trying to reduce overall tobacco use. Q. So when you got a call, I assume, from Dick Scruggs or Mike Moore in March of '97 that the tobacco industry, some guy named Phil Carlton, wanted to talk. That the White House wanted to meet with them, what was your reaction? Mike said to me that he had gotten a call from a fellow by the name of Phil Carlton who I had never heard of. That Carlton wanted to meet and wanted to enter into a series of discussions on behalf of the tobacco industry. And Mike said to me that he wasn't going to do so. And just wanted to make sure that we were on the same wavelength. That he knew that I had been contacted. He had been told that I had been contacted. And he, for the first time, told me that somebody from the Costano Group, the class action lawyers in Louisiana had also been called. And that he had been talking to them. And at least on behalf of the Attorney Generals, Mike's inclination was not to have a meeting. He didn't think it would be productive. That he thought it was a side show at that point in time. And so, if I was comfortable with that posture, they were just going to go ahead and continue to prepare for trial. Q. So Mike Moore contacted you after this initial meeting with Mitchell's partners and said he had been contacted, but he didn't believe it. He thought it was hot air. So what changed his mind? As I understand it, they all met in your office. Myers: Well Mike would have to be the one who tells you that because I didn't get the call. What I understand happened is that Bruce Lindsay from the White House and Mike Easely, the Attorney General from North Carolina called Mike and said, each in their own way, we would really like you to at least have an initial meeting. You don't have to have a second meeting, but at least have one. And so Mike called me and said he had received these calls. That he thought out of respect to the individuals who had called that we had to have the meeting. Was I willing to do so? He suggested he thought it would be better if we met together and could we do it in my offices? So I said yes. And it was literally the next afternoon the meeting took place in my office, with Mike Moore, myself, a representative from the Costano Group in Louisiana, Dick Scruggs and Phil Carlton. Q. What was going on in your mind when you are sitting down to a meeting with somebody from the tobacco industry who says we are going to change. Myers: My view at that point was that it was still nothing more than a smokescreen. That this was exactly what they had always done before. Anybody who had followed the history of this would see that every four years or whenever they were in deep trouble, a key tobacco representative would stand up and say, we recognize that we need to make change and we are prepared to do it. We want to live like honorable citizens in the United States. And I thought this deserved the same credibility that every one of those other statements deserved. That was my personal view at the time. At the same time, my view was that you didn't have a choice about whether you listened or not. That it was simply wrong not to listen and then make an independent evaluation. Q. So in March when you are having your first meeting with Phil Carlton, you already know that some of your colleagues aren't going to be happy, that you even had that meeting. Myers: Now, we had done other things since the November meeting had broken down. After the November meeting broke down, we engaged in a series of discussions with the CEOs of a number of voluntary health organizations and other major health organizations. Saying to them, we still need try to come up with a set of principles. We have go to be ready because we won't be able to withstand an effort to come up with a compromise. If we don't set forth a solid agenda that makes sense, the White House and the Congress simply isn't going to listen to, no, not without regard to what is on the table. We simply won't deal with those people. We have got to be able to make a case and to do that we have got to have an agenda that makes sense. Because otherwise we won't be listened to and that is what has happened to the public health community every time in the past. And if we are going to influence the outcome, we have to be substantive, we have to be focused. Q. You can't just be nay sayers. Myers: You just can't be nay sayers. That works for people for whom tobacco is their whole life. It doesn't work for members of Congress. It doesn't work for the press. It doesn't work for the public and it won't work for the White House. And so if we are going to want to be able to say no, we had better know what it is that what we want and what we don't want. And if we are going to push the White House to do the right thing, we had better know substantively what that is as well. It is the only way to be a key player in which will clearly be something that is going to happen, whether we like it or not. Q. In your mind, when you are going into that first meeting, what is going on? Myers: Well, my mind was actually pretty clear. I thought I was going to one meeting. That the meeting would relatively rapidly break down and the it would be business as usual. I had a very hard time envisioning any situation where the industry would really make an offer in enough detail to make it worthwhile to continue to participate in discussions with them. That was 100% my mind set. I couldn't envision this being anything more than one afternoon. Q. You go in. You sit down. George Mitchell comes in, as I understand it. Myers: I was late. I mean the great irony, the only person who doesn't have a case. I was late to the meeting because I was coming from the Hill. And I had trouble finding a parking place. They were already seated. George Mitchell. Phil Carleton had apparently introduced everybody. When I walked into the room they were already seated there. People stopped when I came in. The thing that struck me about it actually, more than anything else, was Goldstone and Bible coming up to me and very personally commenting about how pleased they were to meet me. And how they thought that I would be surprised, what they were going to have to say. So I sat down in the room. The room has probably been described to you already. Mitchell finished his talk which, frankly, said nothing. And... Q. George Mitchell was the greeter. Myers: Yes. That is exactly what he was. The greeter. He had no substantive role whatsoever. His job was to use his name and reputation to bring people into the room and then do nothing else. And I was struck by that. I was struck by it with a phone call to me. I was struck by the role he played that day. And then he turned it over to Bible and Goldstone. Q. When in the meeting did you have a flicker that maybe these guys were serious? Myers: Bible and Goldstone spoke. They are both very persuasive individuals, but they only spoke in platitudes. So, you know, my thought... My reaction was if you were hearing them for the first time, if you didn't know anything about the tobacco industry, this would have been pretty persuasive stuff. Although there was no meat to it. My reaction to it was, these guys are good. But whether there is anything here yet, is still to be seen. After they spoke, the meeting broke. They left with George Mitchell. And then their lawyers came back and going through the agenda that the state Attorney Generals had laid out, item by item, made general representations about things that they were willing to do. The general representations were concrete enough to be different. But general enough to not be certain how different. Concrete enough that it demanded a reply to try and draw them out and see how much more was there. What was clear from the very get-go was their demands of what they wanted were completely outrageous and totally unacceptable. Q. They wanted immunity. Myers: They wanted immunity from everything. I mean they wanted... They, you know, their request was for peace now and forever. They never wanted to walk into another courtroom again. They didn't want to face criminal immunity, they didn't want any civil... Q. Civil prosecution. Myers: Criminal prosecution. Yes, that is right. They didn't want to face criminal prosecution. They didn't want to face any more lawsuits. They weren't willing to say, but they said they were willing to pay a lot of money to do that. And willing to change every aspect about how they do business. You couldn't listen to that and say, immediately, that is so far off the charts. That is so beyond the realm that it is impossible. Q. These are the people that you been trying to beat, put out of business, if you will, for decades. Myers: These are people I have called the greatest mass murderers in the history of mankind. People who have no moral gyroscope. I believed that when I walked into the room, I believed that after I listened to them. And I ultimately said to myself, and this is something I had thought about beforehand so whether it was right, wrong or what have you. Maybe it is the training as a trial lawyer. But the ultimate goal here can't be dominated by the extent to which I despise those people and what they have done. The ultimate goal really has got to be focused on what can we do to change how tobacco is marketed and sold in this country. The number of people who have died in this country from tobacco. And do it in a way that meets basic principles with moral and social justice. Q. Who is Steve Parrish? Myers: Steve Parrish has been the mouthpiece of Philip Morris for a decade. Yes. But it may be hard for you to see, but I went into the meeting with the conscious thought that I had to separate personal feelings about the individuals from the public policy goals that we needed to achieve. That is not an easy thing to do. Q. Isn't it in the back of your mind that your colleagues, your allies are saying he is doing that in secret if they found out you were meeting with the enemy in secret and they didn't know. Weren't you taking your life work in your hands? Myers: In some respects, yes. I did some things to try to decrease that risk. That very night I had the President of the organizations I work with set up a conference call with the CEOs of a number of the major health organizations. The Cancer Society, The Heart Association, AMA Academy of Pediatrics. I believed at that time, The Lung Association as well then. I will have to go back to double check exactly. I didn't set up the conference call. So that within a day we would be in a position to at least let the leadership of those organizations know that there were conversations going on. But the other question, the one that you raised, is one that I really only began to focus on over the week-end. This conversation, first conversation took place on a Thursday afternoon, if my recollection is correct. There was another meeting on Friday afternoon. And enough energy just went into preparation for focus on those meetings. It was really only over the weekend where you had a chance to step back a bit and say, okay, now... And try to figure out where you are in all that. And, that juncture, I recognized full well that if this went wrong, that this would make it very difficult for the work I had, you know, committed to doing with a large number of people. Q. Well some people say that you got carried away. That you had not right to negotiate on their behalf. Myers: And I didn't negotiate on their behalf. There are two ways to look at it. There is three ways to look at it. And in the different perspective, each had merit. I told Goldstone, Bible and everybody else I wasn't there on anybody's behalf. That if they wanted me to be there on somebody's behalf then they had to give me permission to go and consult with all of them to do that. Q. Why did they have to give you permission? Why didn't you just say, hey, I can't negotiate with you guys, I am just one person. I have to go talk to my people. Myers: Well, but I did that. Because in the very first conference call with the very CEOs, I raised the issue of whether there ought to be other people there. And whether they had suggestions of who it ought to be and whether they wanted other people there. And the conclusion they reached at the time was that they hoped I would be willing to keep going for a while, while they figured out the answer to that question. By the time that the discussions became public, which was really less than two weeks later, we had already begun talking seriously about trying to insert other public health representatives into the process. And immediately after they became public... Q. But you were there on June 20th, you endorsed the settlement. Myers: I did not endorse the agreement. I did not sign the agreement. Q. You said it was a great step forward. Myers: And it was. It was. I said the agreement was flawed but it provides the best opportunity for change that we have ever had. Q. Here is what your critics say. This is the draft proposal. They tell me, look to page 37. Title 7, paragraph C. $500 million dollars shall be spent annually in such multi-media campaigns. That is, public education campaigns... Myers: Right. Q. ...Designed to discourage and deglamorize the use of tobacco products. To carry out such efforts, an independent non-profit organization, made up of prestigious individuals and leaders of the major public health organizations shall be created, etc. And they shall contract or make grants to non-profit, private enterprises who are unaffiliated with tobacco manufacturers or tobacco importers. Who have demonstrated a record of working effectively to produce tobacco product use and expertise in multi-media communications campaign. What the critics say is, this is your organization. That this was a payoff to your organization, directly. Myers: I wrote those words. I wrote those words. I'll take direct responsibility for them. I wrote those words based on the best of what we know you have to do to produce an effective counter- advertising campaign. I wrote those words based upon the comments of many of those same people about what was wrong with the advertising campaigns in states like California and Massachusetts in an effort to insulate it from public political pressure. I also said that the National Center wouldn't accept one penny of that money so that there would never be a question that that was designed to enhance our organization. Q. How do you explain that your colleagues, who you worked with so many years were so bitter about your participation in this deal? And, in fact, in the deal even being announced. Myers: This agreement and all that it has led to has provoked the most fundamental passions, many of which for good reason. It moves us forward so far in answering fundamental questions. Questions that were just literally hypotheticals only a year ago. What really are the ultimate policies we want to enact in this country? What are our real goals with regard to the tobacco industry? What are the moral questions about political trade offs of this magnitude? They should have and they did provoke the deepest most passionate feelings. Feelings that have been an undercurrent but you didn't have to get to. As long as you were only tinkering at the edges of this problem. And that is what we were doing before now. This agreement has provoked the deepest, most important public policy debate about tobacco that this nation has ever had. And anybody, in any single position with regard to it is going to be subject to some level of criticism. I knew that when we at the National Center decided to participate that I was taking a serious risk. You know, I got into this business for one reason and that was that this country's history of reining in the tobacco industry is beyond deplorable. I think it is one of the great tragedies of this century. And if there was an opportunity to do something to make a fundamental change, I was willing to take a risk to do that. Q. Well, but your colleagues would say, they were on the ropes. They were going to get wiped out by these Medicaid suits. They may still get wiped out in Minnesota as we speak. And you were providing them a way out. A way to survive. Myers: I guess there are a couple of answers to that question. They were on the ropes, but we have to ask to what end and at what risk? The outcomes of those lawsuits was, and remain, uncertain. Having worked with those Attorney Generals, I know that the vast majority of them were prepared to settle their cases before and will be prepared to settle them in the future. Having studied those cases and looked at the law, you can't get away from the fact that those cases bear substantial risk and that those courts are not likely to order fundamental wholesale change. Bankruptcy ultimately isn't going to be an answer. Q. You don't believe that you, in a sense, have been outsmarted by the industry. I mean I have a document from 1980 from British American Tobacco that basically outlines a deal. Let's change our policy. Let's stop youth smoking. Let's not try to get more young people to smoke. We have got the wrong strategy in the United States. And it concludes that the problem to date has been a severe constraint of the American legal position. This problem has made us seem to lack credibility in the eyes of the ordinary man on the street. Somehow we must regain this credibility. By giving a little, we may gain a lot. By giving nothing, we stand to lose everything. Myers: If we accept them giving a little, then we will have lost. That is why it is so fundamental important that we focus on what it is we, as a nation, want. Not what the tobacco industry wants to give. If we demand from Congress that they enact the right policies, policies that go far beyond anything the tobacco industry was prepared to give, even in those negotiations, then we have an opportunity to bring about the sort of fundamental change that we are not otherwise going to see. Q. So are you saying that what you did on July... Are you saying that what you did on June 20th was, in a sense, make them think you endorsed the deal but actually outsmarted them because they can never go back? Myers: What I think we did throughout the process is change the debate about what is possible and that the June 20th agreement was the starting point for the public and Congressional debate. Now only history will tell us whether they outsmarted us or we outsmarted them. But what I do know is that without that agreement, we wouldn't be having the debate today in Congress or in the public about what to do with the tobacco industry along these lines. We wouldn't have legislation being seriously considered of the threat, toughness and expanse that we have today. There has been a sea change in Congress on which side to be on of this debate, since June 20th, that is unprecedented in the 20 years before it. Q. What do you mean? Myers: There are members of Congress now that are supporting tough action against the tobacco industry who never voted with us. Never voted with us before. We have members of Congress who have endorsed the most stringent regulation by the food and drug administration. Who, only a year and a half ago, signed a letter to the FDA urging them not to assert jurisdiction over tobacco. We have members of Congress sponsoring legislation with the toughest possible controls on the tobacco industry who, only last summer, voted not to give the Food and Drug Administration enough money to enforce simple youth access restrictions. This debate has forever changed how members of Congress are agreeing to deal with the tobacco industry in an extraordinarily positive way. Q. Then why are some of your colleagues so worried that the tobacco industry will slip out of their clutches, if you will, in Congress? Myers: I share those concerns. I mean there is no other way to put it. I share those concerns and that is why the public debate, I think, has been so constructive. Congress' history of tobacco is a history of failure and backroom deals that were bad for the American public. You can, however, say that we have the tobacco industry on the brink of oblivion, with wholesale public attitudes change and not also recognize that that could well give us an opportunity to do something in Congress that we couldn't do before. If we do it right. You can be frozen into inaction by past mistakes or you can learn from them and try to make change. Q. Is it really a done deal already because there is so much money involved? Myers: Fortunately, the answer is no. It is not a done deal precisely because of the passions that it has provoked. For once this is not going to be a deal that is done behind closed doors without people paying attention. Q. Well let me ask you about what you are willing to give them. Are you willing to give them immunity from punitive damages? Myers: First and foremost, my role in this process has changed. I am no longer sitting in a room negotiating with the tobacco industry. The debate has moved beyond June 20th to the halls of Congress. What Congress has got to decide is not what the tobacco industry wants, but what is good public policy. As an advocate for the public health, my job is to make sure that Congress does the best possible job. Q. Okay. What is the best possible job? What are you going to trade for all this public health money, for all these reparations, for all these payments, for all these education campaigns. Will you give them, would you advocate giving them immunity from punitive damages. Myers: I would never advocate giving them immunity for anything. I didn't advocate it in the June 20th agreement. I didn't accept it in the June 20th agreement. I wouldn't advocate it now. Whether there will have to be a trade off at the end is something that is impossible for me to predict. If we in the public health community do our job, there shouldn't have to be a wholesale trade at the end. Q. If the tobacco industry is willing to put up $60 billion for past punitive damages, would you give them a buy on past punitive damages. If they are just going to pay $60 billion up front? Myers: It is a question I can't answer for you. My initial inclination is that the issue of past punitive damages is one of the most difficult ones. I objected to the negotiations about past punitive damages throughout the negotiations. The agreement on past punitive damages, as everyone knows, was made on a day that I wasn't at the negotiations. Q. You do agree, however, that $500 million should be paid to an organization or organizations that are involved in public education against smoking? Myers: I agree and everyone in the public health community agrees that a well funded independent public education campaign is a crucial part of any comprehensive plan whatsoever. I also have agreed that our organization has said from the get-go that we wouldn't accept that money, so that there would never be any question about our motives. Q. Do you agree with the view that giving them immunity from class action suits is actually giving them nothing because existing precedents are you can't sue in a national class action anyway. Myers: I put it differently. I happen to believe that the law of class actions means that they are not likely to be a powerful tool for the public health. But I think that is a reason why they shouldn't be given immunity from them. http://www.pbs.org/wgbh/pages/frontline/shows/settlement/
  18. Blakey is a former federal prosecutor and the author of the federal RICO statute, which has been used to prosecute members of the mob. He was hired by Ronald Motley to develop the civil racketeering portion of the Texas and Florida Medicaid cases. Both states ended up settling their cases, but the racketeering element of the cases threatened the tobacco companies with bankruptcy. Below are excerpts from the interview with Blakey in which he expresses his opinions, and compares the structure of the cigarette industry to the structure of the Mafia and recommends using RICO laws to criminally prosecute the industry. He is currently a Professor of Law at Notre Dame University. This interview was conducted in 1998. Interviewer: How has the tobacco industry changed? Robert Blakey: The tobacco industry morphed in 1953 from a legitimate industry to an illegitimate industry and it became a front for the selling of a drug, not cocaine, not heroin, but nicotine. In 1953, studies came out that cigarettes cause cancer and it was now like scientifically established and the reaction of the industry was not let's clean the product up and do it right, it was to treat it as a public relations problem, cover it up. And they knew now that if used as directed --it killed, and instead of stopping it or cleaning it up, they covered it up. They morphed from a legitimate industry into a front for the sale of a, of a illicit drug, in the sense that it is a lethal drug and when they lie about its character, they become a front for the sale of drugs. Interviewer: They would say, 'what we did was try to examine what this scientific research was. People already knew they were coffin nails, they weren't necessarily good for you, that there was risk involved.' Robert Blakey: What you've just said to me is part of the propaganda they created. Science has standards about how you investigate it, how you analyze it and how you make it public. They didn't do that. When the Surgeon General came to them in '64 and said, tell me what you know about tobacco, they didn't tell him. They hid it. They treated it as a public relations question, designed by the lawyers to avoid legal responsibility, rather than, this is a common problem that all Americans have, with the health of a product. If they had been open and candid, we have a product here that we think there's a problem in and we're trying to clean it up, these are the risks. If you want to use it, these are the risks, assume them, that's one thing. But what they did is they created a bogus scientific controversy. The research that they were doing, they didn't tell anybody about. At least initially, it looked like they thought they could clean it up and the more search they did, they found out they couldn't clean it up. Did they come clean? Did they make a safer product? No, the lawyers told them, don't make a safer product because that's an admission that your existing product is unsafe. They engaged in a complex scheme to defraud the American people. It's just that simple. Interviewer: Over a 40 year period? Robert Blakey: Beginning in 1953. They are today a $45 billion- $50 billion industry that causes $60, $65 billion worth of damage. As many as 450,000 die each year using this product, as directed. They must replenish the people from whom they do it and this is the sinister problem about it. We talk about drug pushers. The only really drug pushers in this country are the tobacco industry. They have to addict as many as 3,000 people a day. The statistics show that a majority of those people, over 50% of those people are addicted at under age 18. This industry targeted young people and induced them into using nicotine products and nicotine addiction is harder to break than heroin addiction. Interviewer: When you say racketeering, people think of organized crime, the Cosa Nostra. Why do you believe this industry is like them and how widely is RICO applied? Robert Blakey: In the early 1930s, the families of le Cosa Nostra, the mob, put together a national organization to coordinate their illegal and legal activities. In 1953, the cigarette industry put together a similar organization, headed by the lawyers, headed by a bogus scientific research group and a public relations group and if you just look at the structure of the national syndicate of organized crime and look at the structure of the national syndicate of the tobacco industry, you'll see how they are the same, hand in glove. Interviewer: Now, you say the lawyers, that's the committee of counsel. What is the committee of counsel? Robert Blakey: The particular scheme to defraud that the industry put together was, in fact, designed, implemented, structured, by the lawyers. The ligation in Florida that I was involved in established in court hearings that these lawyers were not performing as lawyers, providing traditional legal services. In fact, they engaged in what in the law is known as a crime fraud exception... The lawyers, not the scientists, designed the research. The lawyers decided what was to be disclosed publicly about the research. Now, there's nothing wrong with legal advice. Lawyers should do that, but there's a difference a lawyer and the house counsel for the Mafia. These law firms, just as the industry morphed, these law firms morphed into providing criminal advice, criminal advice to the industry. They orchestrated a fraud and a crime and that's precisely what we established in Florida. It-- normally, the lawyer client privilege is sacrosanct. There's an exception to that. If you can establish prima facie, that is, on first face, that the behavior of the lawyers is not advancing a legitimate industry in a legitimate way, but rather, a crime fraud, you can get the disclosure of the conversations between the client and the lawyer and we got those documents in Florida under precisely that standard. Interviewer: This group of lawyers was known as the committee of counsel? Robert Blakey: That's correct, which were lawyer representatives of each of the major firms in the tobacco industry. Interviewer: But, some people would say many industries do that. It's their First Amendment right to do that. Robert Blakey: Well, it's your First Amendment right to say, in public, whatever you want to. It's not in your First Amendment right to counsel the commission of a crime. Justice Holmes once said, you can't yell fire in a crowded theater and the same thing is, you can't tell a person falsely that a product is not addictive if it is addictive. You can't tell him that it's not lethal, you know, if it is lethal. You can't induce children with sophisticated advertisement to think that it's an adult thing to smoke. You can't target children when the sale of tobacco to children is illicit. And that's what that industry did. The first Amendment rights were abused by engaging in a scheme to defraud and there's a difference between saying what's on your mind and lying and lying is illegal. Interviewer: But lying, sir--there are very serious charges you're making. People can lie, industries can lie. It doesn't necessarily mean that you're breaking the law. Robert Blakey: If in fact, an industry systematically misrepresents the nature of its product in an effort to sell that product to a child and that product is addictive and lethal, that's a federal felony. Interviewer: Do you believe you could prove this beyond a reasonable doubt? Robert Blakey: I've been a federal prosecutor, a staff member in the House and the Senate and a teacher of the federal criminal law for 30 years. I didn't do anything in Florida for Attorney General Bloodworth, I didn't do anything in Texas for Attorney Morales that I couldn't do for Attorney General Reno. I could design a federal criminal RICO case and the evidence here is sufficient to pass muster beyond a reasonable doubt. Interviewer: And you came to the conclusion that this is a racketeering enterprize? Robert Blakey: I sat down and went over the evidence with the staff in Florida and we put together the RICO count. I drafted the Florida RICO statute in 1977. Know it cold. And you could just take the evidence on each of the elements and it just fit. What you need to do is don't think of a cigarette as tobacco, aimed at your tongue. Think of it like a syringe and it's going to put the drug not in your vein, it's gonna put it in your lung and go right to your head. All, all cigarettes are is a delivery system for nicotine and nicotine is addictive and also happens as a byproduct of it, to be lethal. Interviewer: But it's legal. Robert Blakey: It's not legal when you sell it to kids under 18. It's unlawful to advertise it to kids, it's unlawful to sell it to kids and the statistics indicate that adults don't take up cigarettes. Adults don't take it up. Kids do. These people are pushers for an illicit, illegal, lethal drug for children. It's just that simple and once you're addicted, that addiction continues into adulthood. Interviewer: The Justice Department has a special tobacco task force, at least, apparently 11 attorneys, 9 FBI agents full time. They've chosen not to do RICO. Why? Robert Blakey: If you can do a conspiracy to defraud and they tell me they can do that, I can do it as a RICO and I'll tell you, while it may impose on you, the paradox is it permits you to do what you do more effectively and it radically changes the nature of the trial. More evidence will come in. The American people will see more of the story. They won't just see the fraud, they'll see the organization behind the fraud and the remedies that you get are the end are more significant. You could get forfeiture, you get long term imprisonment and you get, as a parallel remedy to the criminal case, civil sanctions, modeled on antitrust and just as DuPont was required to divest themselves of ownership in General Motors, because it was a monopoly, you could great up the cigarette industry and require them too become what they were in 1952, a legitimate industry. Clean your product up or don't sell it. If you do sell it, sell it only to knowledgeable adults. Don't sell it to children. Interviewer: What is 1001? Robert Blakey: 1001 is 18 USC, which is volume 18 of the United States Code and it's Section 1001 and basically what is says is don't tell a material lie to the government. And if you submit written documents or oral documents to the government and they are materially false, it's a felony. Interviewer: We have heard that the Justice Department is focusing on submissions of the tobacco industry to the FDA during the comment period. That would qualify? Robert Blakey: Absolutely, but those same submissions, in all likelihood, were mailed and if they were mailed, part of a national conspiracy, originating in the early 50s, to obfuscate the issues, to hide from the American people or to confuse the American people, about addiction and about the lethal character of cigarettes, that's also a scheme to defraud. A scheme to defraud that's been in operation, orchestrated by the lawyers, participated in by the major figures in the industry from 1953 to today. Show me the organization of the industry, show me that it has an enterprise in it, show me that the scheme to defraud has been orchestrated for this period of time, you just showed me a RICO. If they can make that case, 1001, I can make a mail fraud. If I can make a mail fraud, given what I know about the organization of the industry, I can make a RICO. If I can make a RICO, I can come in civilly and reorganize the industry. Interviewer: What are the criminal violations that you see? And what's the evidence that you've reviewed about the tobacco industry? Robert Blakey: The easy one's are false statements to the government. Which is 18USC 1001. And when you have false statements to the government, you would also have mail fraud. That is, were the false statements sent through the mail? Or, were their statements sent through the mail part of a scheme to defraud. You have wire fraud. Which is to say, is if it's sent through, ah, fax as opposed to a letter it's federally something that you can take cognizance of. This is at heart a fraud that involves lying and cheating. And, and more so, it's a fraud that, that targets children. And thus you potentially have the interstate transportation of, of what's federally called an immoral product. Immoral, in this context, because selling cigarettes to children, ah, is immoral. Interviewer: In your opinion, tax fraud? Robert Blakey: There is some indication that some of the documents filed by organizations had false statements in them about the nature of the organizations. So that you'd have false statements, ah, to obtain tax exemptions. And those kinds of things. If you look at this case, for example, as perjury before Congress and you focus on a single line in the statement by the CEO before the Waxman committee. Is it perjury? Is it prosecutable as perjury? And the answer is probably not. Because it was lawyered. If you step back and stop looking at the trees and look at the forest and ask, what was it done? When was it done? Why it was done? You've got a classic scheme to defraud. If you bring, for example, psychologists in to analyze the advertisement and ask, who is this advertisement aimed at? When they, for example, put in Teenage magazine, don't smoke. That's an adult thing. Literally it means, don't smoke. But advertising executives will tell you, psychologists will tell you, children want to be adults. By telling them not to do it, because it's an adult thing, you're really telling them to do it. And if you target your advertising at kids that's illegal. Particularly, if you publicly say, we don't target kids. Interviewer: In your opinion, can they make a conspiracy to defraud, looking at the forest and at the trees, when they have to deal with these lawyered statements? Robert Blakey: The answer is yes. Get the documents. And parallel them out. This is what they're saying publicly. This is what the documents are saying privately. Is there a difference? Why is there a difference? If there is a substantial difference between what you say publicly and what you say private, that's an [inditia] of an attempt to defraud. If you say you're making a safe cigarette or safer cigarette publicly, and privately you know you're not, that's an [inditia] of a scheme to defraud. If you say you're not targeting children publicly, and your internal studies are of what do we have to do to get access to the youth market, that's an [inditia] of a scheme to defraud. Put all that together, you'll make your scheme to defraud. It requires imagination and understanding of the industry. If they won't take the time...if justice won't take the time and trouble to master the documents and understand the crisis the industry faced in fifty-three...they had a product that potentially was lethal, and as they got into it, they found out it was lethal and addictive. They had to either clean it up or get out of the business. And they were making too much money to get out of the business. So they covered up the nature of the product. They lied to all the regulatory people in an effort to prevent themselves from being regulated. They came to the congress to get cigarette warnings on the labels. Why? Because they wanted to be honest with us? Give me a break. What they wanted in that legislation was to pre-empt state claims for relief. So that private people couldn't sue them in state courts. Pull all of that out of their records. Put them on the stand. Ask them questions to explain this. Contrast their public statements before congress to their private statements. Put that before an American jury. And there's not an American juror in the world that will believe that these people are still honest business men. Just because lawyers...I don't say this intentionally...blow smoke, it doesn't mean that American people have to have smoke in their eyes...that got common sense. Read it with common sense. Stop being a lawyer. And start using common sense. Present to the jury the whole story and this is eminently a scheme to defraud. Interviewer: So you're saying you believe that these tobacco executives and their companies should be held accountable criminally for this conduct? Robert Blakey: I believe that they should be held accountable personally to the people that they have injured. And that means civily. I think they ought to be held accountable to the tax payers of the United States both federally, and all of the states, who have paid for the poor people who have suffered and died because of these cigarettes. And to the degree that you can identify individuals in the companies and lawyers in the law firm that have participated in the fraud, yes. I think that the law ought to be equally applied on Mulberry street to the mob, on Wall street to illicit industries, and on tobacco row to people who morf from a legitimate industry into an illicit industry. Why shouldn't they be held accountable just like everybody else? Because their shirts are white? Ah, the white collar offender is not responsible like the blue collar offender of the guy who can't wear a shirt? Yes. Civily and criminally. Personally and institutionally responsible. We have not enough responsibility in this society today. Interviewer: The national settlement, however, could get in the way of a criminal case? Robert Blakey: That's true. And a criminal case could get in the way of the national settlement. That's just one of those things we have to work out. I don't know why we have to give up the criminal case to get a national settlement. These people need the national settlement. We need the national settlement. Maybe what they do is, they do what a lot of people do. They plead guilty. And they work out a settlement. What they'd like to do now is work out a settlement and not plead guilty. That's not the American way. What you do is you confess responsibility. Accept responsibility. And then you work out your rehabilitation. They want the rehabilitation before they accept responsibility. Interviewer: But just recently Geoffrey Bible said, in testimony in Minnesota, I'm horrified at these documents. I don't know where they came from. I don't know anything about them. I don't even know about the committee of counsel. Robert Blakey: All I can think of is Claude Raines in "Casablanca" saying, I'm shocked. There's gambling in this casino. Interviewer: But the Mafia--that's racketeering, prostitution, murder...And this is a legitimate industry. Robert Blakey: In fact, it's not a legitimate industry. This is an outline of the Rico statute. You have to have a corporations up here, that's the first thing. The second thing you have to have is an enterprise. And what you saw previously, was the organization of organized crime. This is the organization of the tobacco industry. Now, what do they do over here. A pattern of racketeering activity. Let me show you that pattern. This is the industry's scheme to defraud. Here's the statute again. Person, enterprise, pattern of racketeering activity. And here it is, the intentional sale of a defective product that's both addictive and lethal. The failure to market a safer product. And you can go down this list at each stage, taken collectively, these are the trees of the forest to show that this product was no longer legitimate and legitimately marketed. It's illegitimate and illegitimately marketed. And in particular, targeted to the children. Despite the fact that in fifty states the sale of cigarettes to children is illegal. This is not a legal product when it's sold to children. It's the same thing functionally as cocaine or heroine. This is a drug industry. Not a tobacco industry. Rico was designed to deal with the drug industry. And that's exactly what it does in this situation. It's just that the drug, instead of heroine and cocaine, is nicotine. The form of it is not wholly illicit. The form of it is front. A legitimate industry behind which it is in fact selling drugs to our children. And it is the beauty of their success for so long that they've convinced us that they are the legitimate industry that they were before nineteen fifty-three. After nineteen fifty-three, they morfed into this...what amounts to a Rico enterprise. A scheme to defraud to addict our children and to kill our children by selling a product unlawfully. Interviewer: I can see people out there saying, give me a break. We've got Fortune 500 companies; we've pension funds that are invested in their stock...the idea of prosecuting them as a racketeering criminal enterprise... Robert Blakey: This is exactly what the attorney general in Florida did using this theory. It's exactly what the attorney general in Texas did using exactly this theory. These are exactly the allegations that appear in both of those complaints. And this is exactly the basis on which they settled for over ten billion dollars in Florida and over fifteen billion dollars in Texas. Rather than try this case, they settled. Interviewer: Now if we were to go and interview a member of the lawyers....the Committee of Counsel, someone who was in those meetings, what should we ask him? Robert Blakey: You want to ask him point by point, paragraph by paragraph, whether the complaints in Florida were true, whether the complaints in Texas were true. And if they weren't true, why did they settle the case? Interviewer: So, in summary, why do you believe that it's the role of lawyers, consigliaries if you will, that is key to keeping this racketeering enterprise going? Robert Blakey: Lawyers can do both legal advice that's lawful, and legal advice that's unlawful. Some of the lawyers here gave legal advice that was lawful. But a core of lawyers orchestrated the fraud. One of the things proven in Florida was precisely that these lawyers and their communications were not confidential, that they should be disclosed because of the crime fraud exception that was found after an adversary hearing in Florida. We broke the chain of silence, or the lawyer client privilege, by establishing the fact of fraud. http://www.pbs.org/wgbh/pages/frontline/shows/settlement/
  19. Professor Glantz has been a long-time critic of tobacco and is a leader in the anti-tobacco public health community. In 1994, more than 4,000 pages of secret internal tobacco industry documents mysteriously arrived at Glantz's office at the University of California. They were sent by a secret source, "Mr. Butts." Dr. Glantz posted them on the Internet, as well as compiled them into a book, "TheCigarette Papers." In California, Glantz has lobbied extensively for reform of cigarette laws and he and other local activists are responsible for the recent passage of the ban on cigarette smoking in bars. Glantz is opposed to a national settlement and believes that the cigarette industry can never be trusted to comply with any national deal. Q. When the Brown and Williamson documents arrived, what was your reaction when you opened the box and started reading? Glantz: Well, my initial reaction when I opened them was that I'm going to send these to Dick Daynard. Because I up until then had been working on issues around secondhand smoke and local clean indoor air laws, and was really not that interested in the litigation aspect of tobacco and nicotine pharmacology and cancer and all that. And, and so--I kind of knew what they were because they'd been floating around for some time and I'd heard about them. But my initial reaction was "well, I'll look through these for a few minutes and ship them off to Dick because he's the guy who's really doing litigation." But as I started to look through them I just got sucked in. I mean it was like an archaeologist stumbling into a new, you know, tomb or some kind of archaeological site. Because after working for years against the tobacco industry and listening to the absolutely ridiculous public statements that come out of the Tobacco Institute and their other spokesmen, to have a window into the industry and to see how they were really thinking--intelligent, motivated, sharp people--was just in, incredible and it sucked me in. Q. Sucked you in how? Glantz: I just realized I wanted to read all this stuff and I wanted to write about it. There was just an important story that needed to be written about and you know, I work in a university, it's publish or perish. So I decided to publish something. Now we had no idea, or I had no idea when I started this that we'd end up writing a book. I was expecting writing maybe an article for a medical journal. But it just, it's, it's, it's--I recruited some of my colleagues to work on the project and we got into it--the thing just grew and turned into, into the book we wrote. Q. Now you say you heard about the documents, for a while some of your colleagues knew about the documents, but they wouldn't go near them. Glantz: Yeah what I had heard was there was a group of highly secretive internal industry documents that were floating around out there, that they'd gone to a variety of the health groups and other people and no one would touch them. That that was everything I knew till the story broke in May of 1994. Q. What do you mean "no one would touch them"? Glantz: I just heard that no one wanted them. I mean, I didn't--I wasn't paying that much attention. I mean I was working on secondhand smoke and trying to get local clean indoor air laws passed. Q. Dick Daynard, Nader's people, we understand through Merrell Williams he went to Daynard, he went to Nader's people, he went to Morton Mintz and everybody acted like this is radioactive. Why would they do that? Glantz: Well, the tobacco industry is very litigious, they're very nasty, they have an infinite amount of money so they don't need to have a good case. They'll just bring a case to torture you. I mean they're trying to do that to me at the University of California right now. And I mean it's a baseless case but they'll spend thousands of dollars just to keep us busy. And I think people just were frightened of them. I don't know, I haven't talked to them about why. Q. Is this one of the reasons why Dick Scruggs and Mike Moore are important, that they weren't scared? Glantz: Yeah. I mean I think--when you look at what Dick Scruggs and Mike Moore and Humphrey and the others that came in to the Cerisi--the lawyers who come into this case have done the public a great service, because they've come in and had the courage and the wherewithal to take the industry on on its own terms. And I think that the activities of these lawyers really points to the really inadequate job that the public health community's done on this issue for the last forty years. They've talked about tobacco a lot, but they've never been willing to put the resources into taking the industry out. If you go back and look at the--back to 1964 when the Surgeon General's report first came out and read the Brown and Williamson documents and other things that have come out, the industry was terrorized of the public health groups, especially the Cancer Society, that they were just going to come in and squash them. And they didn't, you know? Instead of coming in and smashing the tobacco industry they decided that they would keep kids from smoking. They're making--the same mistakes they're making now. It's just right now you see history repeating itself. But if the public health community had been willing to demand the kind--and commit the kind of resources that it took, there--pardon me. If the public health community had been willing to commit the kind of resources that they, that they could have, they could have wiped out the tobacco industry in the sixties as a public health problem. But it wasn't until Scruggs and Moore and, and all these other lawyers, Motley, uh, Humphrey, Cerisi, came along and started to take the industry on seriously. And you know, these guys are very sharp and they spend a moderate amount of money, but it's not an astronomical amount of money, it's not money that the health groups couldn't have spent if they'd wanted to. But the tobacco companies not only have worked hard at influencing government, they've worked hard at influencing the public health community and keeping them frightened, and trying to convince them that if you did anything meaningful your donations, uh, would go down and it would be controversial. And one of the things the industry understood very early on was groups like the Cancer Society and the Heart Association, the Lung Association , were terrified of controversy. So every--because they thought it would hurt their donations. And so any time those groups started to move toward doing anything effective, which generally meant something in the political arena, the industry would yell and scream and jump up and down, they would get their, their toadies to yell and scream and jump up and down, and these groups generally backed off. And it was a strategy that worked for years and years and years. I mean the thing I've learned is that when the industry tries to make something controversial, you should run straight at it. Because that's what matters, you know. You don't see the industry complaining about reducing youth smoking because they know that the strategies aimed at just reducing youth smoking won't hurt them in the long run. You don't see the industry complaining about smoking cessation because they know it isn't very effective. But clean indoor air, meaningful restrictions on advertising and promotion, things designed to hold them responsible for the costs they impose on society--those are the things the industry's scared of. And those are the very things that these health groups have been very slow, to take up. Q. So Moore, Scruggs, they were the father of Dr. Butts at least, or Mr. Butts, right? Glantz: No one's ever told me where it came from. Q. You've never asked? Glantz: No. why, what's in it for me? Just make my life more complicated. Q. If you knew who it was who changed you life for the last four years? Glantz: I'll find out when I get to a nursing home. It's a lot simpler to just leave that door closed. Q. When you first heard of this lawsuit in Mississippi, the idea of suing for Medicaid, the third party suits like that, what was your reaction? Glantz: Oh, it was a great idea. Q. Most people we've talked to said it was a crazy idea. Didn't have a chance in the world. Glantz: No, I thought it was a great idea. I mean, the taxpayers get stuck with these costs, the industry's been lying to the public for decades, why shouldn't they try? Q. Were you suspicious of these personal injury lawyers? These guys with their jet planes and their big yachts and their swashbuckling attitude? Glantz: No more than you should be. I mean, my attitude toward the lawyers was they had their lawyers and--they had their greedy lawyers on horseback and now the public health people had their greedy lawyers on horseback. And that was fine. The big problem that we've had with the lawyers has not been with the lawyers. The lawyers are acting like lawyers. The big problem that we've had is that the public health community and, and the politicians, who should be serving the public interest and keeping the lawyers under control, effectively being the clients, have tended to let the lawyers tell them what to do, and, and have tended to let the lawyers set the agenda. Rather than asserting the public interest and keeping the financial pressures on these lawyers in balance by the public interest. I mean in the end the lawyers who brought these cases are going to make a lot of money, whether they settle, whether they go to trial, or whether Congress bails out the tobacco industry. And I frankly don't begrudge them the money. I think they've done a--done the public a great service in getting this process going. But right now these same lawyers are pushing a deal in Congress which is not in the public interest. And, and I think that the interest of the lawyers and the public health community have to some extent diverged. And one of the things that I think the public health people never understood in the--as this thing unfolded was there was a period of time when the interests of the lawyers bringing these cases and the public health interests were quite congruent but they weren't identical. And what's happened in the last few months is those interests have diverged. Q. Well let me take you back to 1996. By then you've got Wigand, you've got Merrell Williams, you've got Bennet LeBow, you've got a growing number of states suing. Glantz: Right. Q. And word is out that there is an attempt to develop a settlement. What was your reaction then? Glantz: I thought it was horrible. I thought it was premature, I thought it was a sellout, I thought that this was the beginning of the divergence of the public interests and the interests of these lawyers, and that it was a mistake. Again, the power--the, the, the power to fight the tobacco industry, the proper place to fight the tobacco industry is not in the United States Congress. If you were the Starship Enterprise and you searched the entire universe for the place where the tobacco industry had the most power, it would be the United States Congress. Particularly this Congress, which was put there in no small measure by tobacco industry money and influence. So you want to stay away from that. If you're in a war with a well-armed enemy you don't rush into their citadel to fight with them; you try to get them to fight on your terms. And what's happened with the tobacco control movement, particularly with regard to clean indoor air, is we've learned that the communities is where you can beat them. And what the AG's did with all of these suits is they distributed the problem all over the country into many different venues with different sets of rules, environments where the industry had not historically been so strong. And that's where we should keep the fight because we can win there. We have won there. So I--so the idea of some big blowout settlement, of pulling the whole thing back into the United States Congress, never appealed to me. And if you go back--and I thought, and, and they were asking for way too little. I remember Dick Scruggs when the first proposals came out, I think it was four billion dollars or six billion dollars. He was going around saying "this is the best we're ever going to do. This is the best we can do. You better take it. If you don't take it now they're going to take it away and we're going to never get anything." Well, that has only gone up by a factor of fifty or sixty since then. That the three hundred sixty eight billion dollars they're talking about now is only about five cents on the dollar. So it's still a great deal for the cigarette companies. Q. What do you mean, five cents on the dollar? Glantz: The tobacco industry costs America, just in health costs and lost wages, about a hundred or a hundred and ten billion dollars a year in just direct damages. The settlement would only produce about twelve billion a year. And it's tax deductible so it's really only five. So the deal that the AG's made is something that would, if it had been implemented as written, would have reimbursed the states pretty nicely for their Medicaid expenditures, which was the original motivation for those suits. But the other ninety five percent of the smoking-related costs, which the industry should be held liable for, were just blown off. You know, the, the deal that was negotiated and released last June, it, it took great, it took good care of the tobacco industry, it took reasonable financial care of the states, in terms of their Medicaid expenses, and it left the public out in the cold. Q. Up to that point, June twentieth, the tobacco industry had never admitted anything. Glantz: Yeah. Q. You didn't see that as a great step forward? Glantz: No, no. I think that the industry could read the handwriting on the wall. The history of this issue--and we're having very much a replay of the sixties. In the sixties, when the original Surgeon General's report came out, there was a tremendous amount of action against the tobacco industry going on all over the country. All over the country there was chaos from their point of view. And they went to the United States Congress and they pretended to compromise. And they gave a little bit on warning labels and later they gave a little bit on advertising restrictions, and got bailed out for thirty years. And that's, and that's what's going on again here. I think the way to beat the tobacco industry is to beat the tobacco industry. You know, it's not easy but it's possible, and you do it one step at a time. And the fact that these suits are distributed all over the country in many different venues under many different sets of rules and all the AG's and the other lawyers are cooperating with each other--to me, that's a recipe for long term disaster for the industry, which is what I'd like to see happen. I mean these people have killed ten million Americans since that 1964 Surgeon General's report. And they should not be allowed to just go on. The tobacco industry has killed ten million Americans since the 1964 Surgeon General's report, and they should not be allowed to buy their way out of taking responsibility for their actions. I mean we have a civil and criminal justice system to impose reasonable conduct on businesses, and the tobacco industry should not be allowed to buy their way out of their responsibility for five cents on the dollar. Or for even a hundred cents on the dollar. I mean, they should have to take responsibility for what they've done. And I think we're making very good progress in doing that. While I think the deal in Congress is, is a, almost complete victory for the tobacco industry, and particularly the June twentieth agreement was masterfully negotiated by their lawyers. Because they produced something that looked good, but when you get down and look at the nitty-gritty details of it on every little thing, on anything that mattered the industry won. And on anything that didn't matter they gave. And they sure think--the reason is very simple. They, I mean they'd been planning on this showdown for thirty years. I mean you can find things in the Brown and Williamson documents where they were talking about what should we do if we start really facing the chance of losing these suits? And they said we should establish a superfund that will give us immunity. And that's just what they're trying to do. Q. So they've outsmarted the public health community, they've outsmarted the Attorneys General. Glantz: Yes, absolutely. Q. Now, you say the devil's in the details. Let's go over a couple of details. Glantz: Okay. Q. You don't like the immunity that the deal provides. Why not? Glantz: Because the tobacco industry's killed ten million people. Because they've committed a huge fraud on the American public. And because they should be held accountable for that. They should be held accountable to the same rules of corporate and individual behavior as everybody else. It's very simple. Q. The immunity issue threatens their survival. They wouldn't want it unless they were worried about surviving. Glantz: No, that's correct. The issue of liability is what has driven this industry for the last fifty years. If you read the doc--the Brown and Williamson documents, if you read any of the documents that have come out, you'll see that this is an industry who is--whose whole thinking and behavior has been dominated by avoiding responsibility for their actions. ... They want to be released from responsible corporate behavior. And I think that's a mistake. Q. You know what the problem is when I'm listening to what you say it sounds like you want to wipe them out completely. Glantz: Well that wouldn't be a bad thing, to have the tobacco industry disappear. You know, if we go back to the, the--the tobacco industry as it exists in this hypermalignant form today, it, it always wasn't that way. If you go back to about 1890 or 1900, per capita cigarette consumption in this, in the United States was a couple of cigarettes a day, maybe, if that. And it was only with the advent of mass marketing that we got, uh, this huge monstrosity we have today. And yeah, I'm a public health person. I'd like to get rid of tobacco. I'd like to get rid of cancer. I'd like to get rid of heart disease. And I think that if the industry were forced to accept the same kind of financial responsibility for its actions that any other business would have to take, that would force a radical restructuring of how it functions, in a way that would lead to less smoking. Now exactly how that would play out isn't clear to me. [I]f they get stuck paying out billions and billions and billions and billions of dollars every year, then they're--at the very least going to have to raise their prices, which will discourage smoking. But if they can--in doing that they also have to be looking over their shoulder for their continuing liability--for their fraud, for their anti-trust actions, for their deceitful marketing tactics, maybe they'll change the way they do the marketing. Maybe Phillip Morris will decide they'd rather sell cookies and crackers and beer rather than cigarettes, and just get out of the business. Q. So you're basically a prohibitionist. Glantz: No, no. Q. You want to wipe them out? Glantz: No, no, that's different from being a prohibitionist. A prohibitionist says "I'm going to make it illegal for you to, to sell or smoke cigarettes. I'm not, I'm just saying I want them to have to play by the same rules as everybody else does. And that will force them to behave very very differently. Like when you say someone who wants to do this is a prohibitionist, that's like saying the people who used the legal system to force to make cars where the gas tanks didn't explode were prohibiting exploding gas tanks. Q. There's a difference. This is a product which, used as directed, will kill you. Glantz: That's right. Q. So there is no way out. You will either--from your logic. Glantz: Well I think that if the tobacco industry were forced to play by the same rules as everybody else, we would see a radically different tobacco industry. Q. The reality is, though, Stan, that what you would minimally do, according to industry, according to economists and everyone else, is you would drive them into bankruptcy. And bankruptcy, as you know, doesn't mean you're going to get what you want. Glantz: One thing that's clear, one group that would definitely be worse off if the industry went into bankruptcy, are the private lawyers. Because they wouldn't have a direct claim on any assets, and so they would be far down the list of people to get paid. So they would make less money. But whether the public health would be worse off if a bankrupt--if the industry went bankrupt, it's hard to tell, but probably they would. Because if the industry goes into bankruptcy--and there's one of two possibilities. One is what's called the Chapter Seven Bankruptcy where they just dissolve. Well, if the industry just dissolves then we don't have this huge malignant corporate entity out there pushing cigarettes. So that would be okay. The other possibility is what's called a Chapter Eleven Bankruptcy where the reorganize to try to manage their debt. But one of the things they have to do in such a reorganization is they have to be able to say that they will be financially solvent in the future. And you will get the other big corporate bankruptcies, like the asbestos bankruptcies, which were brought on by litigation. In every single one of those cases the company had to stop doing the things that generated the bankruptcy. And so while there's a lot of uncertainties in bankruptcy, I think the downside for the industry in doing it is much larger than the potential downside for public health. Q. But aren't you ignoring the fact that there are fifty million people who are addicted to smoking, that other people will get in the act of supplying those cigarettes, and other companies will rise up either from the ashes of the bankrupt companies or substitute for them? And they won't be liable for the damages of the past. Glantz: They won't be liable for the damages of the past. But they will be liable for their future behavior. And they'll be forced to operate in a very different environment, in a very different political environment and legal environment than the existing companies are. And you know, it's, if, if you're a businessman looking out there and saying "oh, these huge multinational corporations just got stakes driven through their hearts selling this product," I mean you don't see people rushing out to sell asbestos or silicone breast implants because there's a new market available. You know I think, you know, the other thing is, is that the kind of people who have been attracted to the tobacco industry are a special breed of people who can sleep at night knowing they're killing a lot of people. And there aren't a lot of people out there like that. And you know maybe what we would end up with is a situation where the government would--you know, we had like Amtrak for smokers. Where the government was making available plain cigarettes in plain packages for people who just couldn't stop smoking. I mean we've shown here in California that an aggressive anti-tobacco education campaign can triple the rate of decline of cigarette use. If Pete Wilson hadn't come in and wrecked the campaign because of his pro-tobacco ties, we'd have taken the percentage of adults who smoked in California from about twenty eight percent to about five percent in under ten years. You know, if the tobacco industry was out of the way politically, and--what I would do is I would figure out some way to take care of the addicted smokers, to get them their cigarettes without any active marketing whatsoever, and run a big tobacco control program and in ten years we could be rid of the problem. Q. [I]f the Congress of the United States says you paid the sixty billion dollars up front for punitive damages, so no one can sue you any more for punitive damages for the past (they could in the future), are you against that? Glantz: Yes. Q. Why? Glantz: Because it's not fair. 'Cause it's letting the industry off for pennies on the dollar. Q. You're against immunity for the industry. Glantz: Yes. Q. If in March of last year Dick Scruggs had called you up and said "Stan, come to Washington. I'll send a jet to pick you up. We're going to negotiate with these guys. They seem to want to give up." Would you have gone? Glantz: No. Because they won't give up. Q. You wouldn't have listened. Glantz: They won't give up. They never give up. They don't. I mean, I've fought these guys for twenty years. I've seen how they work all over the world. They may pretend to give up, but they don't give up. They're not stupid. And, and I don't think you can negotiate with them, at least at that level--at that venue. Obviously the state settlements are the results of some negotiations. And those worked out, I think, reasonably well. But there was no immunity. The important thing about the state settlements is they settle those cases. They don't take anybody else's rights away. Which is what the immunity would do. They don't foreclose anybody else's options. And the state settlements represent, I think, reasonable and just compensation to the states that have settled, together with good compromised by the industry which are getting better with each of the state settlements. And in doing that, it doesn?t give--take anybody else's rights away, and it doesn't foreclose any options. Q. Let's get specific again about the issue of what you call immunity. In fact the state settlements settle the Medicaid suit. The state cannot sue any more, ever, in the future. Glantz: On Medicaid. That's correct. Q. Okay, so that's a settlement. Glantz: Right. But the important thing is, if you look at what the states were suing for, it was for recovery of the Medicaid costs. And if you look at the amount of money that the states are getting, they're getting essentially a hundred cents on the dollar or better. And so into, into perpetuity in the future. And so they're reasonable suits. The state brought an action to recover its Medicaid costs; the industry is paying those costs. So the state doesn't need to sue again. Q. But the settlement, as I understand it, as proposed on June twentieth and also as getting tougher in terms of how it's perceived in Congress or what's going to be presented, only allows the industry off on punitive damages and class action suits. Glantz: Right. Q. You could still sue. Glantz: No, but the point is when you look at why the tobacco industry--well, there's a couple of problems. The first thing is the amount of money that the states got in the individual state settlements is what they're owed. The amount of money that people are talking about in the national deal is about the same amount of money. But it covers everything, you see? Medicaid costs are about five percent of the total smoking-induced costs. And so if the state settles a Medicaid suit for the Medicaid costs that's reasonable. But that still leaves the other ninety five percent. Q. But your numbers are cooked. Glantz: No they're not. Q. Well, people disagree about how much money it costs every year and? Glantz: We're using, the CDC's numbers. Q. Has anyone ever won a class action suit or gotten it certified in the United States against the tobacco industry? Glantz: No one's won one yet, but they did--oh wait, wait, but they did, they did the Mangini case here in San Francisco. Q. It's settled. Glantz: It's settled. But that's okay, it was settled on very favorable terms. Q. I'm asking you did anyone ever win one that went to trial? Glantz: Not yet. Q. Has anyone collected any punitive damages against the tobacco industry? Glantz: Not yet. Q. Has anyone got an award against the tobacco industry through trial that's been upheld on appeal? Glantz: Uh, yeah. Q. An award at trial? Glantz: The case, I believe--well, there was a case about the Kent Micronite Filter here in San Francisco that was won, and the industry agreed to pay the damages. Part of it's being appealed. But we're very early in this process. You know, we just, this is just getting going. And it's going very well, and all the signs are very good and why stop? Q. Tell us, once you had the documents, how did you get them out, and what impact did that have? Glantz: When I started reading these documents, I mean, I just got sucked into them. And I mean it was an amazing story of the realities of the tobacco industry from the inside. And I realized we had to write something about this.' And so I assembled a team of experts, and we started analyzing these documents, and writing about them. And that ultimately led to a series of papers in the Journal of the American Medical Association. Which happened to come out about the time Clinton was deciding whether to let the FDA move forward, which was just sheer luck. But that helped convince Clinton to let the FDA go forward. And we subsequently wrote a book about them, called The Cigarette Papers. And that book has become the bible for all these lawyers. I mean, when we wrote the book, I did the index for the book, which was very tedious. But it, the book has three indexes. It has the document index. It has a subject index, and it has a name index. And that name index I wrote for the lawyers. Particularly for the Justice Department. You know? And that book and the work we did in putting the documents up on the World Wide Web, despite a lawsuit brought by Brown & Williamson against the university, I think, helped us light the afterburners on this whole process. But you know, when we did that, we knew it would be important. But I'll tell you in hindsight, we did not appreciate how important it was. Or would be. And I don't think we still understand how important what we did is. And that's why I say the one thing you should never do is foreclose the future. You've got to let this thing unfold. You've got to have some patience to solve the problem. And you know, when the tobacco in -- when I got the documents, and the word got out that I had them, and the tobacco industry sued the University of California to try to keep us from putting them up on the World Wide Web, the university didn't try to cut a deal with the industry. Or look for some easy, fast way out. The university beat the tobacco industry. And when the tobacco industry sued the university over our research which showed that smoke-free bar laws don't affect revenues, and the industry sued the university trying to shut me up and to discredit our study, the university didn't say, "Okay, we'll only let Glantz talk to reporters on Saturday." They beat the tobacco industry. And that's what we need to continue doing. One victory at a time. Are we going to win every case? No. But we'll win more than we'll lose. Q. You said you had a name index in the book for the Justice Department. What are you talking about? Glantz: Well, I think there's been a lot of criminal activity on the part of the tobacco industry. I think that they've engaged in antitrust activities, fraud, covering things up. They've abused the legal system, abused the attorney-client privilege. I think there's evidence in there of a whole variety of misbehavior on the part of the industry. And the Department of Justice has read our book very carefully. I've met with them several times. Q. You've met with attorneys there? Glantz: Yes. Q. What have they said to you? What have they asked you? Glantz: They asked me not to tell people what they asked me. But I can tell you they've asked very pointed, intelligent questions. They're doing their homework. And I can't wait for them to finish. http://www.pbs.org/wgbh/pages/frontline/shows/settlement/
  20. Huber was a scientific researcher for the tobacco industry for many years. His emphysema project at Harvard was paid for directly by the tobacco law firm of Shook, Hardy and Bacon. When Ron Motley approached Huber with internal documents that described his project as a public relations ploy, Huber became a witness in the Medicaid cases against the tobacco industry. His story outlines how the tobacco industry controlled and manipulated scientific research. Q. What did you do for the Tobacco Industry? Huber: I don't think I did anything for the Tobacco Industry. They came to us initially when I was at Harvard and asked us if we would do research with Industry support. This was in the 1970's and we said no. Q. You said no. Huber: Well, we eventually said no and they were very persistent and they kept coming back and we already had support from NIH and we had a program going and we mistrusted them and initially we said no. I'm a chest physician and I sat day after day in the chest clinic taking care of patients with emphysema and chronic bronchitis and lung cancer and I couldn't help them. They had diseases that by the time they came to us for medical help, there was very little I could do for them. I could make them comfortable but I couldn't fix the problem. I thought about it. I thought these people wouldn't be here if they didn't smoke. So I thought we have to find solutions. The problem was growing and we needed solutions. This was an industry who made a product that caused disease and if we were going to do anything about it I thought we had to work with that industry. Q. So you were working on specifically the link between smoking and lung cancer and emphysema? Huber: Mostly emphysema. Q. So, step back for a minute, with what you know now, how do you see your role in their strategy-- why they were coming to you or what they did.... Huber: It's amazing. Because if you would have asked me that question a year or two ago, I would have given you a different answer but I think the opportunity to see the liberated documents, as they are sometimes called, has changed my perception of the Harvard Project and what was meant by it. Q. And so you see yourself now as? Huber: I asked a colleague of mine that was at the Harvard Project that recently. I said: "How could we have been fooled? We're supposed to be half-way intelligent, smart people and we were used. We were lied to. How could we let that happen?" And he gave the analogy of a card game. We were scientists, we were clinicians. We were trying to find answers to a very serious problem. We came to the table playing by, what I would say, were honest rules. We wanted to find answers. They had a product. We wanted to work with them to understand it and it was like a card game where we had our cards and they had theirs but they knew every card in the deck. They knew which cards we had. They knew the cards that were going to be played and every now and then they would give us a card. It was a plan and it was not honest. Q. You were a pawn in their grand strategy? Huber: We were used. I think we were used in a strategy. Within the past year, for example, no one had induced emphysema in animals and that was one of two or three of the primary points of the Harvard Project, to develop experimental animals. And we worked night and day for years and we did develop emphysema in animals and then I learned, 25 years later that they had already done this within the industry. And done it before the Harvard Project started and didn't tell us about it. We spent hundreds of hours of independent research and good scientist time chasing rabbits down blind alleys that we didn't have to do. So that's what I mean by were used. Q. They say the public knew all the risks concerned with smoking. They say the public health community knew and you're saying they already had research far beyond what anybody else outside had? Huber: Absolutely. Research that was not shared with the outside community. Research was not shared with the very investigators that they funded. Q. So they lied when they say that? Huber: Well, we knew the risks. That's why we started the research. As I said,I saw patients with emphysema and I couldn't help them. I felt they wouldn't be there if they didn't smoke and people kept on smoking. So we wanted to understand this process and get a solution. Could we intervene somehow sooner in this disease? Could we find a way to help these people. Q. I guess what I'm getting at, I want to make sure I understand. You are saying they spent in the end, millions of dollars assisting your research in various ways and particularly in the Harvard Project looking for a cause between smoking and emphysema. What was the mechanism there? Huber: Right. Q. And they already knew. Huber: Correct. Q. But they never told you? Huber: No. Q. Now that you know in hindsight and you reflect on what lawyers may have told you from the tobacco industry, do you now understand what was going on? Huber: Not totally. We'll never know totally all of the internal documents. In this past year or two, so many of them have come out it's been like a tapestry. New pieces are put into place and a much different final picture emerges. They knew things that they didn't share with the outside world not just us, NIH, hundreds of millions of federal dollars working on nicotine addiction, working on cardiovascular diseases, emphysema, cancer and so on. They had information in their internal documents and internal research labs that was 15 years ahead of the outside world and they let us and they let others, Federal Government, go forward and spend hundreds of millions of dollars, countless hours in research that didn't need to be done if they had opened their doors. And the tragedy of that is a lot of money and a lot of wasted research time and careers. But the real tragedy is all the lives that have been lost. Q. You met with one of the architects of the legal strategy. Who was he and what did he tell you? Huber: Well when we were initially approached by the Industry to do research there were no lawyers. We went to the Harvard administration and they encouraged us to do this. There were other initiatives by Harvard for other industry programs and so we went forward and before it really began the lawyers entered and it was primarily the lawyers from Kansas City from Shook, Hardy and Baccon. The senior lawyer was David R. Hardy and he's been considered by many the architect of the grand strategy. Q. And he explained it to you didn't he? Huber: Well to a degree. Things would come out from time to time he would talk about buying time. We heard some of the executives talk about buying time and we didn't quite know what they meant initially, but bit by bit some of this has come out and again the internal documents have really helped understand this. Q. They said buying time in what context? Huber: I think different things. They wanted to buy time with the labels. They wanted to pass the liability from the Industry onto the consumer. That was a transition that took several years. Q. They talked about that? Huber: They talked about that in the early 1970's. Today in liability litigation every consumer knows the risks as they say. It's right on the label. They know that tobacco causes cancer and emphysema and so on. Q. And they told you their strategy was let's get rid of our liability by putting a label on the package therefore the consumer assumes the liability. Huber: With time. And they had to buy time for that to take effect. And time for other things. Time to divert, diversify their profits into other non-tobacco industries. Time to diversify their markets overseas in the third world, time to adjust. Q. David Hardy talked to you about this? Huber: Yes. Q. He was part of or you were familiar with the Committee Of Counsel as I understand it. Huber: Yes. Q. How did you become familiar with Committee Of Counsel and maybe you could describe what it was in your understanding. Huber: Well, when I first met Hardy I got a lecture. He had an enormous ego and took great satisfaction in being a leader, explaining how things worked. For example in the Harvard Project he said, "Not all the companies will sponsor it because we have to worry about anti-trust litigation. So one company will drop off." He said it's the same way with the Committee of Counsel. The same way with the Tobacco Institute. It's the same way with all our other organizations. One company is always not officially there although they can have an adhoc membership. Q. To give the appearance that they weren't conspiring. Huber: Right to avoid the anti-trust. Q. So that was all a setup? They just made sure one company, one lawyer wasn't there and then they could say -- Huber: They took turns. It ended up it was American's turn to sit out on the Harvard Project but in the end they wanted to be part of it so I think the Harvard Project may be one the very few things that they all sponsored or all took part in. Q. And in the course of your relationship with them, did you ever meet Steve Parrish? Huber: Well throughout the Harvard Project the lawyers were frequently there. And then more often than not it would be David Hardy himself or some of his colleagues. But in the course of that, yes I did meet Steve Parrish. Q. And did he ever tell you he was a member of the Committee of Counsel or that he was involved in any way, what was his role? Huber: No. My interaction with him was minimum. We were asked to come out there and we were invited to a Sunday School class and that was about the interaction I had with Steve Parrish. Q. You were invited to a Sunday School class? Huber: He taught a Sunday School class and we were there over the weekend and we went to a Sunday School class. Q. So it wasn't tobacco related? You don't remember having any scientific or -- Huber: Not extensively, no. One thing I learned which was amusing and a little bit offensive but it came out somewhere recently that every scientist that the Industry had any contact with had a keeper, within the Industry, a lawyer, and they funded a lot of research around the country and it was millions of millions of dollars but apparently every scientist in any one of their research projects had a keeper and Steve Parrish was not my keeper. Q. Oh, he was not your keeper. Who was your keeper? Huber: My keeper was David R Hardy. Q. The big guy. Huber: The big guy. Q. Because you were Harvard, you were a thoracic surgeon-- Huber: A chest physician. Q. --chest physician. You were legitimacy from their point of view. Huber: I guess so. Q. But when they paid you they sent the checks-- Huber: Well, they never paid me. They've always paid, we've had grants from them. Research support. I've never worked for the Industry. I've never worked for the law firms. They've paid the universities that I've worked for about 25 years ago at Harvard the checks came in made out to me and Harvard University jointly. It was so unusual. We kept records of those and even Harvard asked that we photograph them because it was new to their experience. The checks would come in and I would have to go over and sign the checks over and then Harvard University would deposit them. We would use them for our research effort. Q. It would say Gary Huber Harvard University. Huber: Exactly. Q. And then later on you find out there was a method to this unusual madness. Huber: Apparently. I was subpoenaed to give a deposition and they claimed proprietary rights to my mind, my opinions and everything back to 1972. I found that rather amazing and shocking but that was part of it. Q. And they produced the check that they paid for the rights to your mind-- Huber: Well they produced things for the court and I didn't get an opportunity to see all of those but they claimed the right to my mind back to 1972. Q. Because you endorsed these checks. Huber: Yes. I guess so. Q. You said that you never worked for them. You worked for the institution, Harvard University. The money came from a law firm? Huber: No. The money I think was treated like an NIH grant or any other research support. We had more money from NIH in the end than we had from the Industry but with grants a certain percentage of your time and effort and so on is maybe paid for by a grant but the funds came to Harvard from each individual company through Shook, Hardy and Bacon. Q. So, the companies made sure that you were paid by a law firm correct? So we assume now that's because they were going to assert attorney-client privilege correct? Even though you are also getting support from the federal government at the same time correct? Huber: And we were publishing the results in the public domain and scientific period literature. Q. Did they ever ask you to comment on things? Huber: In more recent years to a very, very limited extent, and I mean a very limited extent, they might ask that but basically no. Q. But they were fond of quoting you or sending people to you for interviews-- Huber: With lawyers. Q. What do you mean with lawyers? Huber: Well, no one ever came without a lawyer. I mean it was just, in my experience in academia it's unparalleled and unprecedented. Every time someone came up to see us there would always be a lawyer present. Q. Did you ever ask why? Huber: Sure, of course. I mean it was so unusual we asked why and that's just the way it was. That was the response, "This is what we have to do." Q. You mean when a reporter would come to talk to you or a writer or -- Huber: Yeah, sure. We would talk to people on our own and, but you know if it had to do with a project or whatever and they got wind of it there was a lawyer present. Q. Why have you in a sense changed sides. I mean you were supported by them directly or indirectly over a number of years. They liked you. You had a long-term relationship, in fact didn't you have a relationship with at least one of the CEO's at one point in one of the tobacco companies? Huber: Well, we had a long-term relationship and I stuck with them longer than I wish I had. But I was still trying to find the answers. People are still dying in greater numbers than ever before from tobacco related diseases. There were two things. I attended an open meeting at Duke University on the Eclipse nicotine delivery device. It's a new cigarette that doesn't burn. And I sat there quietly in the audience and it dawned on me that a lot of time had been lost, by the ending of the Harvard Project, ten or fifteen years of scientific progress had been set back when I saw that presentation. And then very shortly thereafter I got a call from Ness Motley and they said we have internal documents from the Tobacco Industry we would like to show you. I'd never met them before and they came up and visited us and brought us down to Charleston. My family and I were going to go on a vacation and we couldn't, it was our only chance to go on a vacation with our children that year and we went down there and I agreed to give them four or five hours of time looking at these documents. My wife made the comment that she'd never seen me like this. I read these documents. I couldn't sleep. I couldn't eat. I couldn't laugh with the children. I was stunned. In shock. Many of these documents still haven't reached the public domain. I saw documents that characterized the Harvard Project as a public relation effort, not a research effort. I saw documents that characterized the Harvard Project as part of a legal strategy for the industry, not as a research project. It's the card game. They were using different cards than we were playing by. We were doing our best to find answers and they had another agenda and at that point I knew what I had to do. I had to come forward and express what I knew and put these things in some perspective. Q. Somebody sitting out there watching this program would say; "Now wait a second. This was last year that this happened? It's 25 years since the Harvard Project started? You've seen all the publicity since then in the intervening 25 years. What was so different about this than say the Merrell Williams documents or Wigand or all the other revelations that have taken place?" Huber: We didn't trust them from day one at Harvard. We setup an independent oversight committee that had nothing to do with the Project. The were clear that they would use us and we knew that. We understood that. We went forward because we needed an answer, we needed a solution to a very difficult problem. We have a tobacco epidemic. There are over a billion people now smoking in the world. It's projected that there will be ten million tobacco-caused deaths a year. That somebody will die every three seconds from a tobacco-related disease today. That's more so than it was in 1972 and for these 25 years I've stuck with it, beyond now which longer than I wish I would have knowing what I know, trying to find a solution. What was different about Charleston was an appreciation of the utter magnitude of deceit. The organized magnitude of deception. ....Going back to 1972. Chief Executive Officer, Chief Scientist writing memoranda about the Harvard Project that I'd never heard of, never seen. Imagine! Fifteen faculty members, a team of forty or fifty technicians working every day, seven days a week, on a project trying to find an answer that they already had an answer to before we started and didn't share with us. We were used. We were used, we were misled, we were duped. Q. You were part of their legal and public relations defense strategy. Huber: That's what the internal documents said. We were using funds to study children in the 1970's. We were trying to find out how we could better intervene, at age ten, age fourteen, to prevent people from smoking. We had projects that were doing this. We now have documents from that very same period of time with market strategies from the Industry, how to find, how to addict 14 year-old children to nicotine. At the same time we were making our best efforts to do these things, looking at these problems, in part with their support, they were at the same time in what are now liberated documents, plotting strategies to do just the opposite. Q. Steve Parrish. You go to his Sunday school class. You thought these were good people. Huber: I always very much wanted to believe that somewhere within this industry there were good people who, ah, were responsible, who wanted answers, who were committed to doing the right thing. Q. And then you discovered that they weren't being straight with you. Huber: Absolutely. Yes. Some of the very people, we trusted, that we thought were doing the right thing, as you now see the documents they were at the Committee of Counsel. That's, where some of these things were being, ah, planned. Ah, ah, they were telling us one thing and really planning another. Q. Now, was it just lawyers who came to visit the Harvard project of did the owners? Did the CEO's come? Huber: Ah, the CEO's, their scientists, and their lawyers came. Ah, the CEO's and scientists never without their lawyers. They all came. Q. And did they see that you were progressing towards a link, for instance, between smoking and emphysema? Huber: There was, there was no hidden or secret research. We shared everything with the external scientific community and with them. We showed them our research on animals developing emphysema. We showed them our research on nicotine, ntitration and addiction. We showed them our work on, ah, ah, coronary arteries disease and hardening of the arteries. We showed them everything we had. Q. Were you, in a sense, willfully blind? Some people would say, were you, in a sense, willfully blind until you finally got approached by an attorney who might in fact make you testify? Q. No, not at all. I think, ah, we had mistrusted these people from the beginning. I think it was being hit with a sledgehammer and realizing that, ah, no matter how hard we tried, ah, we were not going to be able to work with this industry under the leadership it's had, to solve the problem that's still there. You have to understand, the problem is bigger today than it's ever been. Ah, we have more emphysema, we have more, ah, cardiovascular disease world wide, we have more lung cancer than we've ever had before, linked to tobacco. Q. You were trying to take money from the people who are profiting from spreading this illness, to find a cure? Or to find the link? Huber: No, no, no. No. We were using research fundin to try and find answers that would make a difference. And I think...thought, I felt...I still do, but I, there has to be some kind of new, new rules. Because every rule we've ever tried hasn't worked. I felt they had a responsibility to find answers. And they needed to fund research to do this. So we accepted it. Q. And what they were getting out of it was this delay? Huber: I think the delay is extraordinary. I think, not just in my view but leaders at NIH have said the same thing. They bought ten or fifteen years of scientific--arrested ten or fifteen years of scientific progress,by funding research in such a way that, uh, disinformation was generated and that confusion and controversy were developed and perpetuated. Bought time. Q. So that they could deny something that seemed obvious to everyone, that smoking caused cancer. Huber: Well, I think worse than that. Not just deny. I think create disinformation. They could go on one hand to Congress and say "look, we're funding research, we're trying to get answers." They could go to the public and say, you know, "we don't know, we're trying to find answers." But they were really, I think , funding research in different ways, the outcome of which would create confusion and disinformation. Unequivocally. Q. And again, we're not talking just about their lawyers. Their executives knew what was going on. Huber: I asked Ron Motley "how could this occur?" How could that many people for that long hide that much? I mean, there are boxes of documents that angry spouses have delivered, whatever. That had been sitting around for years. Um, how could they go home at night knowing that? How could they fund research programs like ours, knowing they already had answers that they didn't share with us. How could they let the government, NIH, researchers around the country, go down these blind alleys? How could there be that many people who could do that? His answer was money. I find that hard to believe. I find that there must have been people in there, a few, uh, Jeff Wigand, Merrell Williams, whatever, there must have been a lot more that, that had a great deal of difficulty going home at night knowing this. I mean I've seen documents written in the nineteen fifties that would have made a huge difference to the outside research community if we'd had them. Documents in the sixties, seventies, eighties. How could there be that many people who kept all this under wraps for so long? I don't know the answer. I don't know the answer to that, but when I saw it, it was a magnitude of shock that, uh, I'd never experienced before. Q. When you read these documents and you had this devastating reaction, is it part guilt? Huber: Stupidity for being fooled. More, though, the cost in lives. My own father died of emphysema. And I think the magnitude of the cost in illness and suffering and death, uh, that could have been avoided with full disclosure and with honesty didn't occur. Q. The obvious question to people in the audience is you had a long career but it sounds like you think that a large part of it was wasted. Huber: That was a closing question to me in, in my deposition. "Doctor, have they wasted your career?" No. I've published a hundred and fifty peer-reviewed journals. I've had a, a good, uh, professional and personal life. It would have been much different, uh, we would have achieved the goals we were trying to, uh, to reach in helping people if they had been honest. Uh, but whatever my answer is personally pales, pales in comparison to the loss of life of individuals who had diseases from smoking. Q. You're angry. Huber: It's beyond anger. It's beyond anger. This is a level of irresponsibility that, uh, um, when I first saw it I could not comprehend. We have let them get away with this. I was used; I became a part of it. It has to stop. Q. So if you had a warning to Congress, to the President, to the Vice President, what would it be? Huber: Do not trust them. They cannot be trusted. You know, their new chief executives have come forward and said "trust us, we're different." Same lawyers are still there. Chief executives have come and gone; same lawyers are still there. http://www.pbs.org/wgbh/pages/frontline/shows/settlement/
  21. Dr. Kessler is the former commissioner of the Food and Drug Administration under both Presidents Bush and Clinton. He began looking into the regulation of nicotine as a drug and was instrumental in convincing Clinton to enact tough federal regulation of tobacco. The tobacco industry fought this in a North Carolina court and the FDA won. Kessler has been generally opposed to settlement with the tobacco industry and supports tough legislation against advertising to children. In July 1997 Kessler became the Dean of the Yale University School of Medicine. Interview conducted in March 1998. Q. How difficult an adversary was the tobacco industry, let's say, in 1992? Kessler: No matter who you asked, anybody you asked whether you can take on tobacco. You get the same answer. You can't do that. It'll be hard. It's impossible. It's a fool's errand. No matter who you asked you got the same answer. You can't do that. They're just too powerful. You can't take on the tobacco industry. Q. Politically you can't take them on? Legally? Anyway? Kessler: In 1991 and 1992 people asked a very simple question. Why doesn't the federal government regulate tobacco? Very simple question. Everyone you asked would give you the same answer. You can't do that. You get your head handed to you. It would be political suicide. You would put not only yourself but an entire agency in jeopardy. It would be a fool's errand. Q. You were in the Bush administration during that period of time. You couldn't do it then, why? Kessler: We weren't ready to do it. We didn't, we had not thought through what it would take. We hadn't done our homework. It took us 2 to 3 years to write a simple three page letter. We issued that letter in February, 1994. That letter turned out to be a critical turning point. It was the first time that the Federal government it would consider regulating tobacco products. First time in 30 years since the Surgeon General's report in 1964 that linked smoking and cancer. The Federal government it would consider regulating tobacco products if there was evidence that the nicotine in cigarettes and smokeless tobacco were drugs under the federal law. Q. How important was it that Bill Clinton was president of the United States when you did that. You got to step back. Kessler: What happened here was we had to ask the right questions. Is nicotine a drug? You and I think we know the definition of drug and we know that a definition of a drug in common parlance, but the legal definition of a drug is different. It goes to what a company knows, what a company intends by an agent. And no one went to look before at what the companies knew about nicotine. So, the first part was finding out whether nicotine was a drug under the Federal Food Drug and Cosmetic Act. It required us to figure out, to look for the first time and ask the question of what the companies knew. What the companies did. Q. But if everyone in Washington, everyone you had gone to in the past said, if you go after tobacco it's suicide, political suicide and you're the head of the FDA in Bill Clinton's administration, didn't you have to check with them before you issued a letter? Kessler: No, in fact we didn't wait until the Clinton administration. We, in fact, started looking at that question in the Bush administration. We started thinking about how could we approach that question. When we issued that letter in February of 1994 no one asked the White House permission. Q. You didn't give them a heads up that you were about stir up the most powerful political lobby in Washington. Kessler: About a year later a number of people in the White House said how did this start. But, in fact, I told the Assistant Secretary for Health, I told Phil Lee, my boss, but no one really focused on it. We issued... it was a very simple 3 page letter. It said that we would consider regulating nicotine if we could establish that the companies intended nicotine's pharmacological effects. Q. So, it was a year before the White House said anything to you about it. Kessler: We asked a question and we went to look at the facts and we asked what the companies knew. What the companies were doing and no one had really gone to look before. We see 30 years worth of sophisticated research, highly sophisticated work on nicotine. We saw how they measured how fast nicotine gets to the brain. It identified specific receptors in the central nervous system. We were able to see what they knew, I mean for years, that, in fact, nicotine was an addictive drug. And it was that evidence, it was that evidence which was absolutely critical. Without that evidence we couldn't have gone anywhere. Now that evidence... just having evidence is not necessarily going to get you where you want to get to. It's one thing when a regulator goes out and says nicotine is a drug. It's another thing when a regulator and a President of the United States makes that statement. Q. So, how important was the backing, let's say, of Vice President Gore or Clinton in what happened next? Kessler: The Vice President was absolutely critical. The Vice President, in the end, made this happen. We went to the Vice President. We told the Vice President what we knew, what we found, what our conclusions were. We told him what we were ready to do and he carried it to the president. Q. And what were you ready to do? Kessler: We made a decision that nicotine was a drug under the Federal Food Drug and Cosmetic Act. That was our decision. We didn't ask for permission to make that decision, we didn't ask for clearance on that decision. But we did as is normal policy, have to get a clearance on any regulation. So we brought the regulation through the normal channels, but in the end it was the Vice President going into the President. Q. Did you have a face to face meeting with the Vice President? Kessler: It was a face to face meeting with the Vice President. My... one of the people closest to me went in and saw the Vice President. Q. And briefed him. Kessler: Ten minutes. Q. I guess what I'm trying to figure out now... we have an industry up until this point that is described as being politically bulletproof. Big tobacco, big tobacco. You sitting there in your agency come up with this policy. You do your study. You walk in... you send an emissary to the White House and the Vice President says sure we'll do it. Something must have changed. Kessler: The Vice President said that he would carry it into the President. What you saw was evidence that came out almost on a daily basis in floods of evidence. Thirty years worth of evidence that was always there, but no one had gone to look. And it was that evidence, evidence that they knew that nicotine was an addictive drug. Long before FDA knew that nicotine was an addictive drug and also the fact that they marketed it to young people. That they marketed to children and adolescents. It's one thing... you can talk about nicotine manipulation. You can talk about what they say about smoking and health. But when you read the documents of what they... how they marketed their products to children and adolescents that's where, I think, the debate has changed. Q. How important was Jeffrey Wigand to helping you figure out what was going on? Kessler: I was sitting there in my conference room and I was talking to one of the most important people we would talk to during our investigation. I knew him only by his code name. I knew him as research. And I was sitting there one day and I'm looking at documents and I'm saying who's this person, who's that person. Then I go who's Jeffrey Wigand? And he looks at me and he says I'm Jeffrey Wigand. Jeffrey Wigandd was among the most senior people to come out. Not... surprisingly there were not a lot of people. Maybe it's not surprising. Maybe when you think about it and you look at how... the costs of coming out for the people who came out. Certainly if you look at what Jeff Wigandd went through you understand why a lot of people haven't come out and talked. But the one thing that was clear when we talked to people who knew what the industry knew, who had worked for the industry, there was one thing that united them all. They were very scared. They were very frightened. They knew what the industry's modus operandi was. They knew the kind of force that unlimited resources could have on you. They understood the kind of legal proceedings that you could face. Not only today and tomorrow. But for years. Imagine having unlimited resources to hire any lawyer, any number of lawyers you want and have them come after you. And that was generally understood to be how the industry operated. So it's maybe not surprising that there weren't a lot of people who came forward. But we didn't know that the industry had spent millions of dollars researching genetically bred high nicotine plant. We didn't know that the industry understood the effect of using certain chemicals that, in essence, were the same as free basing. We didn't know that. We learned that through people who worked in the industry. We learned it from people like Jeff Wigandd. Q. And if I remember correctly, back in May and June of 1994, when you first meet Jeffrey Wigand and some of your people go and talk to the various tobacco industry and gather information in North Carolina, in Richmond, Virginia and they go to Louisville and ask questions and it's at that point, isn't it, that you discover that they are lying? Kessler: We received... Jeff Wigand told us. I knew him only by his code name, Research. Research told us to look at patents filed in foreign countries. Didn't say here it is. But he led us down that path and we found the patent filed in Brazil, written in Portuguese, held by Brown and Williamson for a high nicotine, genetically bred tobacco plant that had twice the concentration of nicotine that normal tobacco has. We traced one of the individuals limit... we traced one of the individuals that was listed as one of the inventors to a small genetic engineering firm in New Jersey and began to piece together a rather remarkable story. She told us that her company had been hired by Brown and Williamson to produce a special version of this high nicotine plant. A version of the plant that was sterile, so it couldn't be stolen by other competitors and she told us that she had actually been to Souza Cruz and seen Y-1 growing in the fields. Q. Souza Cruz is the Brazilian subsidiary? Kessler: She told us that she had been Souza Cruz of Brazil and had seen Y-1 growing in the fields. But that didn't mean that it came back into the United States. It certainly didn't mean that it was used in American cigarettes. We sent an FDA inspector... I remember it was literally he had just come over to the agency. It was his first day on the job and he had come over from customs and I called him up and I said come up to the Commissioner's office. I need you to go see if there's evidence that Y1 had been brought into the United States. And he literally went up and down the ports of call on the Southeast coast. Do you have any idea how many millions of entries, each day, come into this country? And I remember the phone call when he found that one invoice on page 25 of one of the manifests. There it was in small type. From Souza Cruz to Brown and Williamson. It said your order, Project Y1. It was illegal at the time to ship seeds outside of this country unless there was an export permit. We weren't interested in the tobacco seed export laws. We were interested in understanding whether nicotine was a drug. And under the law, an article is a drug if a company intends its pharmacological properties, if it intends its effect on the body. So what we were interested in is whether a company manipulated or controlled nicotine levels. That's what we were interested in, because the issue of control and manipulation went to the question of a company's intent. Here was research being conducted. Millions of dollars being invested in a high nicotine, genetically bred plant to boost the level of nicotine. It was the most blatant example of control and manipulation that we had seen. But they say they only use nicotine as a blend for taste. They don't use it to manipulate for addiction. The... if you look, look at patents, you will see patents held by the tobacco companies that call for the use of certain chemicals to mask the harsh flavor of nicotine. Nicotine is a very bitter, harsh chemical. Look it up in the Merck index. See what it says. See what it's taste is. And it's very harsh. It's very acrid. Q. Over and over again they say we do not independently manipulate nicotine, right? They say it under oath. They say it in submissions to your agency. Kessler: That's correct. Q. They say it publicly. Kessler: That's correct. Q. You're saying they're lying. Kessler: I am saying there is evidence that the tobacco companies manipulate nicotine. What they did. Understand what they did. If you put a filter in front of a cigarette what's going to get taken out? It's going to filter out the tar. It's also going to filter out the nicotine. Why do people smoke? They smoke for the nicotine. If you take out the tar and you take out the nicotine and you take out too much nicotine people are not going to smoke. So what do you have to do? You have to up the nicotine levels and that, in fact, is what we saw. We saw an industry that was manipulating the level of nicotine in the low delivery cigarettes. And the vast majority of cigarettes sold in this country are low delivery. Light cigarettes are light in what? They're light in tar. They're light in nicotine. We sent light cigarettes to our laboratory and found the light cigarettes have a higher concentration of nicotine than the regular cigarettes. How does that happen? That can't happen without manipulation and control of nicotine. At least I don't know how that can happen without some form of manipulation and control. Look at three brands of Merits. Look at three brands of Merit. Merit regular. Merit Light. Merit Ultra Light. Merit Ultra Lights has the highest concentration of nicotine in that cigarette. I don't know how that can happen without some form of manipulation and control. Q. The Council on Tobacco Research announced in the 1950's that they would do independent research to determine the health effects and pharmacology of tobacco. What is their role? Kessler: The Council... It's interesting, CTR was set up by Hill and Knowlton, one of the largest PR firms. In fact, what CTR ended up funding, they funded a lot of stuff, that was on the periphery. They funded what caused cancer but it stayed away from what people really would like to know. What are the effects of tobacco? It didn't fund critical research on pharmacology and cancer. Now that research was done and it was done by the tobacco companies and when you look you see all three companies have highly sophisticated research programs on nicotine but that wasn't done by CTR. CTR was simply a PR operation. Q. Run by lawyers apparently. Kessler: Well there was a part of CTR that was run by scientists that gave out grants and those grants investigated a lot of things. But they didn't investigate central questions about tobacco. They looked at a lot of things but they stayed away from questions about tobacco. And then there was another arm of CTR that really was designed to defend against cases. And that's where the lawyers took over and that's what the lawyers controlled. Q. Don't they have an obligation under the law to tell the FDA the truth? To be open about what they know? Kessler: You can't submit a document... you can't make a statement to a federal agency that's false or misleading. That would be a violation of federal law. Q. Of the things that they submitted to you, that they said to you, were they truthful or were they misleading? Kessler: They said they don't manipulate nicotine. Everything I've seen suggests that they manipulate nicotine. Those two statements just don't jive. Q. To someone listening to what you just said, it sounds like they were lying. Kessler: The ultimate question... It's not up to me to determine whether they were lying. That's a question for the department of justice. Q. I want to take you back to April or May of 1994 when you issued this letter and the tobacco industry has just sued ABC News... Kessler: And they sued ABC maybe, in part, as a signal to us. It was a shot across the bow. It was the day before I was going to testify in front of the house committee. Tell me it wasn't just coincidental. Q. And then the seven CEO's get up at the same time and say we don't believe nicotine is addictive. You didn't feel threatened politically? You didn't see your career going down the tubes? Kessler: What would you have done? This wasn't about careers or risks to individuals. We asked a question and we started looking at the evidence and once we started down that path it was evidence that we saw that just was overwhelming. And that's what persuaded us. Q. Did the White House ask questions and try to find out what the political cost of these regulations would be? Kessler: The White House did conduct polls to see what the public thought of controlling tobacco use. In some ways, for years taking on tobacco was thought of impossible. For years if you went near it it would be highly controversial. People thought we had lost our minds. Speaker of the House, in fact said it, and said it in those exact words. But what people didn't realize was this wasn't controversial at all. Nobody wants vending machines out there that kids 11, 12, and 13 buy cigarettes from. Nobody wants kids exposed to these cartoon characters when they walk to and from school. Some people needed polls to see that. But it was there all the time. In fact, there was very strong support for what we did. Q. Was it a surprise to you that the industry wanted to negotiate in the end? That they wanted to come to the bargaining table? Kessler: Confronted with the choice of bankruptcy, it wasn't surprising at all. Q. Did you know negotiations were in the works? Kessler: There were many different attempts at negotiations. There were numerous attempts of negotiations here and negotiations there. Q. Let me take you back to something else. The Medicaid suits by the states. Kessler: Right. Mike Moore, Dick Scruggs came to my house one day in April, May of 1994 after we sent out this letter and they told me what they were thinking of doing. Q. And what was your reaction? Kessler: What was important, in some ways, was we kept our eye on the ball ahead of us. We were asking very different questions. And we went down to roads. We, looking at the question of whether nicotine was a drug. They, looking at the question of whether they could win in court against the tobacco companies for all the health, Medicare, Medicaid expenses that the states incur. Q. But when they first came to you with this idea no one had ever tried that before. What was your... You're an attorney as well as a medical doctor. What was your reaction? Kessler: They were basing their theories in some ways on similar, but not exactly, what we were looking at. We were focusing on nicotine manipulation. They were focusing on what the industry knew but never said. So, in some ways, we were on similar paths, looking at similar questions. But the approach was very different. We were focusing on federal regulation. They were focusing on state suits. I still believe that without a settlement we've only begun to scratch the surface of potential liability suits. The notion that you, the tobacco companies, fooled me, a 65 or 70 year old person with lung cancer into smoking in front of a jury, especially in this country where we believe in personal responsibility. I'm not sure you're going to win that case. Sure there may be documents that would make that jury angry. And in some ways, it's the same with the state's Attorney General cases. You fooled me into smoking and therefore you're responsible for paying all my Medicaid expenses. The jury can go either way. That's not where the industry is most vulnerable. The case where the industry is the most vulnerable is a case that says you targeted my 11 year old. You knew that that was illegal and yet you went ahead and did that. I would take that case any day. Q. That's essentially the criminal case. Kessler: No, the criminal case, as I understand it, is you lied. You lied to federal authorities. You lied to the FDA. You lied to the Congress. You committed conspiracy. Q. To defraud the United States Government? Kessler: To defraud the United States Government. Q. And you think they did? Kessler: I cannot reconcile their statements with the evidence. I'm not going to sit here and say they perjured themselves. I am not going to sit here and say that they lied. I'm going to tell you what the evidence looks like to me. And I see evidence of actions that just do not square with their conduct. I'm not sorry I didn't do that right. I'm not going to sit here and tell you that they committed perjury. It's not for me to do. That's for a US. attorney to do. But I can sit here and tell you that I saw things that they did, that they manipulated nicotine when they said, and they said it to federal authorities, that they did not. Q. When the negotiations began in earnest in March of last year, actually April 3 when they actually sat down at the table, you were invited to the table weren't you. Kessler: I was invited to join the settlement talks. Q. You chose not to? Kessler: I decided not to go to the negotiating table. Q. Why? Kessler: I didn't want to be captured. I wanted to be able to evaluate it for what it was. I wanted to have some distance to be able to look at it and see whether I thought it would be in the public interest. Q. What about advertising? The courts have held, as I understand it, that the industry has a right to advertise. It's a legal product. Kessler: You don't have a legal right to promote an illegal use. You don't have the right to deceptive advertising and in fact, if the government has significant public health interest and you take actions that are narrowly tailored. If you focused on kids, what could be more of a significant governmental interest and you focus on kids, that certainly permissible under the First Amendment. The Securities and Exchange Commission requires tombstone advertising. Three thousand kids starting everyday and a thousand going on to die is not as legitimate substantial government interest as the Securities and Exchange Act, I just don't know what is? Q. Let me ask another question about FDA jurisdiction of it as a drug. So you get jurisdiction? What do you do with it? Kessler: What the agency did was to look and say that this product was an unsafe product. It's a product that 50 million Americans use. Prohibition won't work. So how do you reduce the use of an unsafe product? The focus on children and adolescents wasn't because there was apple pie and motherhood. It wasn't because who could object focusing on children and adolescents. The reason we focused on children and adolescents is if you really can get children not to start, 20 years from now very few people are going to be smoking. Because very few people begin to smoke after the age of 18. That's what the industry knew. Q. But my understanding is that in the June 20th settlement the industry agrees to fund $500 million a year in advertising and tobacco control activities to reduce that. Kessler: The real question here is whether, for the first time, this country is going to break the hold that the tobacco industry on our elected representative. Whether for the first time in half century the real power of the industry over the Congress is going change. Whether for the first time Congress can enact a law without asking the industry for permission. That, in and of itself, may be more important than any single provision. Breaking that whole... Q. What does that FDA control really mean? Control over the level of nicotine that's in cigarettes? Control over advertising? Kessler: What FDA said in it's regulations was that it would assert control over the way cigarettes were sold, whether the way they are advertised, whether over the way they are promoted. That's what FDA focused on in it's ruling. Q. But as of today, in that federal court decision in North Carolina, you have control over nicotine, but you don't have control over advertising and promotion? Kessler: The federal district court judge upheld FDA's classification of nicotine as a drug. Upheld the restrictions on limiting access, making it harder for young people to buy. He said that the Food and Drug Act did not give FDA the ability, under the section that we use to control advertising. Q. Now the June 20th settlement gives FDA, and the proposal in general, limits advertising. The industry gives up that control. What they won... Kessler: The June 20th settlement is, in fact, that. The June 20th settlement is, in fact, just that. It's a settlement. It's a deal. It's a deal between state attorney generals and the tobacco industry. That's not the same thing as passing a law. The Congress of the United States doesn't pass laws by doing settlements. The Congress of the United States can pass a law that's in the public interest without asking the industry, without asking the industry whether it has it's permission. Q. The Congress of the United States, as I understand the law, or as been expressed to me, does not have the power to stop the industry from advertising a legal product. Kessler: That's absolutely false. The Congress of the United States can pass a law that restricts the ability to advertise. It does it in the Securities and Exchange Commission. It certainly... There are certain rules, there are certain ways you can do it. Perhaps you can't ban all advertising, but you certainly can ban advertising that causes an increase in young people to smoke. Of course you can do that under the First Amendment. You can't go yell fire in a theater. Not all commercial speech is protected. You go down your street and see ads for controlled substances. Of course there are rules and regulations that govern the form of some advertising. Q. So you foresee that the FDA, having regulations that have now been upheld, do everything that's in the settlement without the settlement? Kessler: There's no reason why... the Congress doesn't have to make a deal. It can accomplish everything in that settlement without giving the industry special legal protections. It can accomplish everything in that settlement without any quid pro quo, without giving the industry... The industry would love you to think that, gee, you have to give us immunity. We're not going to give that up. One of the lawyers for the tobacco industry said... It was one of the most remarkable statements that I've seen reported. He said if you don't give us immunity, if you don't give us limited liability, we just may bring back the cartoons. I thought I had heard and seen just about everything. Q. Do you see the June 20th settlement, though, as, in a sense, a watershed? That something was actually accomplished? Kessler: I give the state AG's a lot of credit. If I were in their position I certainly would have considered settling also. But that's a settlement. Their in a preceding where the tobacco industry is on the other side of the table. We're not, in this country, in a position where the tobacco industry is on the other side of this table. That's not the way we enact the laws. I didn't, in 1994, when we went out a three page letter say, gee, what does the tobacco industry think. Q. But you said it yourself, earlier. You said the industry was facing bankruptcy. The industry, in the face of everything we know today, facing bankruptcy primarily from the state attorney generals and their lawsuits... Kessler: And all the lawsuits that are potential down the road. Q. Possibly, but the reality that we're facing where the state attorneys general, three of them became 20. Twenty became 40. Kessler: When Mike Moore sat in my living room, it was Mike Moore. And then it was Mike Moore and Florida and then it was three of them and then it was 5 of them and then it was virtually all of them. It was very powerful force and in some ways that's what it took. It took all the state law enforcement officials to send a very clear signal to the industry that the world in which they've been operating has begun to change. Q. But it's these same people who pushed the industry to the wall who are now saying O.K., let's have some constructive settlement of this. Kessler: Why a settlement? Why not enact legislation? Why not enact comprehensive legislation that's aimed at reducing the number of young people who smoke? Why do you need a settlement? Why do you need to give the industry immunity? Why do you need to give the industry limited liability? Q. Well they're saying they're not giving the industry immunity across the board. Kessler: They're certainly giving the industry forms of limited liability. That's certainly forms of immunity. Q. Their argument is no one has been able to certify a class action that's gotten a judgment anywhere, from their perspective. So they're giving them the ability to get out of the class actions. Kessler: Why? Why do you have to give them that. Why does this industry deserve special protections that no other industry has? Q. The alternative is to go back into the trenches and fight it out state by state. Go on for years and years. They'll continue to spend their $600 million a year on lawyers and more kids will keep smoking every day, more kids will die and you'll just have a bigger and bigger war and the original problem will never be addressed? Kessler: Maybe there are people that don't believe that you really can pass legislation without permission of the industry. Many people really do think that the industry still has controls and powers. Maybe it still is big tobacco, maybe not quite as big, but I think in the end... I think if you ask the average person out there whether they want their elected representatives giving special protection, special legal protections to this industry, especially in light of everything that's come out... I certainly wouldn't want to go home as a member of Congress and say that I voted to give this industry some form of special legal protection. http://www.pbs.org/wgbh/pages/frontline/shows/settlement/
  22. Former chief strategist to President Clinton, Dick Morris was once described in Time magazine as the most influential private citizen in America. He has worked in election campaigning for over twenty years and was political advisor to Clinton in 1978 when he was Arkansas governor. As special advisor to President Clinton, Morris met with him on a regular basis in the Treaty Room at the White House. Morris had worked with Richard Scruggs on asbestos litigation. When Scruggs told him of his intention to sue tobacco companies, Morris conducted a poll in Mississippi to weigh public reaction. Morris had personal reasons for wanting to sue the tobacco industry. In September 1993, Morris' mother, a lifelong smoker, died of cancer. Morris was also born two pounds 11 ounces premature and almost died because his mother chain-smoked during her pregnancy. Morris asked Scruggs for help in convincing the President that this was a good issue. Scruggs paid for a poll in the five tobacco states (North Carolina, Georgia, Virginia, Kentucky and Tennessee). It showed that the public was strongly against teen smoking and tobacco was a major health concern. After seeing the poll data, President Clinton decided to act. He proposed new anti-tobacco regulations that would restrict marketing to children and give the FDA the authority to determine if nicotine was an addictive drug. FRONTLINE interviewed Dick Morris in January 1998. Q. Could you explain, given your political expertise and background, how dangerous was it before, let's say 1994, for a politician, someone like Mike Moore to take on the tobacco industry. Morris: I believe that there were three sort of protected industries in America that everybody agreed you don't touch. The Mob, the tobacco companies and the beer companies. The beer companies still are sacrosanct, they get away with it. Reagan was very aggressive in cracking down on the Mob and the other--and that's followed. But tobacco enjoyed a charmed life in American politics until about the mid-1990s and the assumption was that you could never take them on. That they were absolutely the giants of American politics. You just didn't mess with heavyweights. Remember the old stuff about Jim Brown. You don't spit on Superman's cape--you know walk on Superman's cape, you don't spit into the wind, you don't mess with the Lone Ranger, you don't fool around with Jim. Well, that's how people I think felt about the tobacco companies. And the irony of that was that it took a--a pygmy to take them on because the giants were too scared. That is the courage of Mike Moore to do that. Q. So to politicians, the tobacco industry was Darth Vader? Morris: Yes. It was the source of a vast amount of money, an incredible amount of advertising. Erskine Bowles told me when we were considering the tobacco initiative, "Don't pick on somebody that spends six billion a year in advertising." And you know that was--that made some good sense. Q. So it took a pygmy as you put it. The pygmy is Mike Moore. Morris: The giants turned away and it took one man who believed that he could use the court system to bring about justice. The beauty of our court system is that anybody can enter the court and sue. Uh, you have to be appointed to be in the Executive Branch. You have to be elected to be in the Legislative Branch, but anybody can go into court. And Mike Moore basically said, "I'm anybody, and I've got basically a free lawyer in Dick Scruggs who's willing to front all the money that's required and all the time and all the energy and uh I'm willing to do it." And the beauty of this, the amazing thing about it is this was such a incredibly courageous idea and it took me so long personally to understand what he was doing. That he was suing over Medicaid. It was just uh, a very unusual idea. And he really singlehandedly brought about the changes that are going on the country today. And he did it, not as Attorney General. He did it as just a regular plaintiff. Q. You said you had a hard time understanding it at first. Do you remember when it was explained to you? Morris: I had been working with Scruggs on some of the asbestos litigation he had been doing and uh, he called me and he said, "I'm going to go after tobacco." And I said, "Well, great. But what's, but, most people are losing in these smoker lawsuits. They don't believe that the cigarette companies have liability about people who have died as a result of smoking." He said, "No. We have a new theory. The State of Mississippi is going to sue and to say that the tobacco companies owe us money for the people who we've been treating for lung cancer and emphysema and heart disease and that the cigarette companies should pay for that treatment." And I said, "You mean actually charge them for the treatment?" And he said, "Yeah." And I said, "Under what theory?" And he said, "Well, the theory of any liability, that their misbehavior, and their selling products that kill people caused this liability and that they should be required to pay for it." And it was a fascinating theory. So I said, "Well, I don't know if anybody's going to buy that, but that's incredible." And he said, "Well, why don't you do a poll on it?" So I did a poll in Mississippi and I outlined it to people. And at first blush we got 55 that agreed and 40 that opposed. Q. Fifty-five that agreed to what? Morris: We had 55 percent that said that tobacco companies should pay and 40 percent that said that they shouldn't. And after we went through the argumentation on both sides, pro and against-- Q. In your poll. Morris: In the poll. Q. So you went down to New Orleans to do what? Morris: Well, Scruggs asked me to meet with all of the anti-smoking lawyers, to test the viability of this weird idea of suing over Medicaid. And I went to them and showed them the poll that we'd done in Mississippi. And the poll showed that about 55 percent of the people, off the first blush would vote for the plaintiff's position that the tobacco companies would have to pay, and that with some arguments on both sides for and against, you could get it up to 65 percent. And I said, "Hey, if you need three-quarters of a jury to win this, maybe you can." Because there clearly is good, solid public consensus. And the data showed that the people really believed--number one that smoking caused these diseases; but number two, they also believed that these cigarette companies were targeting kids. They had absolutely no doubt that the purpose of cigarette advertising was to go after the kids and that was a very, very important element of it, of making this whole case work. Q.What was your sense of Dick Scruggs? Morris: I thought that he was a regular lawyer, litigating to make money and that he had this really good thing going because there were so many people that were sick from asbestos in this--the area of Mississippi where the shipyard was. You know, he was doing very well financially. But then as he became more involved in tobacco, I began to realize that this was not a profit-making thing on his part. This was a holy crusade. This was sort of something he was dedicating his life to. And uh, I really believe, and came to believe that if he didn't make a penny out of this uh, it would be fine for him. I think he made all the money he would need for the rest of his life in the asbestos litigation. And I think he basically decided he would dedicate it to fighting tobacco. I think Dick Scruggs is probably one of the most idealistic people I know. He puts the rest of us to shame. Q. This is coming from hard-nosed Dick Morris. What can--was there an incident, something happened that convinced you that this guy wasn't in it for the money or just to win? Morris: Well, a lot of times as we talked about the proposed tobacco settlement, I would say I thought a real vulnerability here was the attorneys' fees and--because they were pretty large. And I said, "The tobacco companies and people will pick on that aspect of it, and, and they'll pick it to death." And he said, "Well, look, as far as I'm concerned, I don't care if I make a dime off of this. I don't care if I lose money, for the millions that we've put out in this thing. I'm just determined to see this through." And at first I just thought that was a speech. But then, the more we talked about the formula and who would get what and how that would work, it became very clear that he literally was willing to make nothing from it. Literally. Q. So you believe that Dick Scruggs is in it for the issue? Morris: Yeah, idealism isn't fashionable in America these days and it certainly is suspect. But I think that he is one of the truly publicly spirited people around. I think that he decided that he made a lifetime's worth of money off of the asbestos stuff, that he was just going to basically spend the rest of his life fighting tobacco. And if he got money for it, fine. If he didn't get money for it, fine. But he was going to go after it. And you know, he put his whole law practice on hold. He uh, basically stopped taking any other cases. He focused all of his energies and resources on this tobacco litigation. And he didn't have all that good a chance of success. I mean, if he was a pragmatist, he was a pretty stupid pragmatist. There were a lot of better targets he could have--you know, people get hurt in automobile accidents every day. He could have focused on that. Q. So, you took this, in a sense--by the time you went back to the White House, 95... Did you talk to them about this litigation? Did you talk to the President about it? Morris: Yeah. Starting around January or February of 95, I raised with the President the tobacco issue, because I thought Henry Waxman, the Congressman from California had done a very fine job of focusing attention on the issue. But then there was kind of the assumption that with the Republican victory that the deregulation, anti-regulation forces were in the driver's seat. And I knew from my polling in Mississippi how strongly people in what's after all is the most conservative state in the country, felt about that issue. So I told the President that I thought this could be a really good issue for us to focus on. Q. Give me a sense of the conversation. You're in his living room, the Oval Office, where are you? Dick Morris: We would meet in the Treaty Room it's called, which is in the President's residence. And it's his office. And there's this huge picture on the wall with William McKinley settling the Spanish American War and behind you there's a picture of Abe Lincoln, an original oil painting of Lincoln and Admiral Farragut and General Sherman and General Grant on a river boat settling the Civil War strategy. And then there's his desk and then there's his book case of his personal book collection. So it's really a heady and a very intimate kind of atmosphere. Q. Subject of the day was? Morris: Well, it was part of our weekly meetings. We'd meet every week, initially alone and then with others. It became kind of a strategy meeting. and I said, "You know, we ought to look at tobacco down the road as an issue we could focus on. And he just kind of grunted. He looked at me and, you know, just nodded and it was kind of lightly and in passing. Then we were looking for issues that we could take the offense on. We were playing defense on school lunches, defense on Head Start, defense on Medicaid, defense on Medicare, defense on education, defense on environment. And we were looking for something--I was looking for something where we could take the offense. Where we could really go out with a new proposal. And as the President was beginning to move towards the center on the balanced budget and stuff like that, I thought just strategically, it would be a good idea to have an issue where we were really going out left. Where we were really being very aggressive and very active. And then, I guess, two influences combined in my mind. One was that I knew from my work with Scruggs how incredibly deeply the American people felt about this stuff. And in September of 1993, just about a year and a half before all this happened my mother died of cancer after a lifetime of smoking and that affected me. And I also personally was born two pounds 11 ounces, premature and almost died and my mother chainsmoked during my pregnancy and had no idea in 1947 that that caused premature birth. So tobacco almost killed me and it killed my mother. So I took it personally. Q. Well, there is this way in this issue, whether you're Hubert Humphrey, with his father, and other people, that there's a personal connection to this issue. Morris: Yeah. And, and I felt it, and I felt that it was politically good. But that really wasn't enough to make it work. That was just kind of the beginning of the process. Q. And this is at the time that the FDA is getting ready to propose regulation of cigarettes? Morris: The FDA's thinking about it. And, um, we're now around March or April or May. Then, um, in early July, the President gave a speech at Georgetown University where he really talked about a values agenda in our politics. He said that we need to basically move from an exclusive focus on dollars and cents to something where we're really focusing on values. And I think that that gave the whole anti-tobacco thing a new spark in terms of the thinking that kind of catalyzed it. Because I think that it--that he was very clear that the anti-tobacco stuff would be kind of the one of the centerpieces of that new agenda. So I think that was, an important part of the calculus. Q. But did he bring up the fact that, "Hey, Dick, tobacco. They're the Darth Vader of politics"? Morris: Well, he was scared to death of losing Kentucky and losing Tennessee because he felt it could get tight in the electoral college when the reelection came. And he felt that this would absolutely wipe him in those two states. And he was a little worried about Georgia, Virginia and North Carolina, but he pretty well figured he wouldn't win those states anyway. But I kept telling him that even in those states, there was a strong probably a strong majority in favor of banning tobacco companies' efforts aimed at kids. You see, at that point, the anti-tobacco cause had not really distinguished adults from children. They had focused on smoking as a whole as being a health issue in general. And the contribution that, I guess, I perhaps had the most to do with was to say that, that voters felt one way about kids and teenagers and another way about adult smoking. When you talk about restrictions on adult smoking, you basically had about 40-50 disagreement--45 on one side, 45 on the other. It was a real split community. But when you talk about restrictions on teen smoking and on advertising to kids and of targeting kids, you have about 80 percent that wanted to crack down hard. And the the funny thing about it, the amazing thing about it is people that have never smoked didn't switch, they were always anti-tobacco. People who had smoked and quit, were always anti-tobacco. So they didn't switch. The difference was smokers, people who were now smoking were almost unanimous against restrictions on adult smoking, but 70 or 80 percent in favor of restrictions on teen smoking. Because they were hooked and they were basically say that "I know that I smoked when I was 12 years old and they were not very sentimental about the process." They are flipping. They gave you the votes that made this politically viable. Q. So Scruggs tells us that you called him at one point and asked him "can you do a poll in the tobacco states, because I need the information for my discussions with Clinton." Morris: That's right. Q.Tell me how that happened. Morris: Well, as it turns out the--I did the poll. Voters absolutely felt that cigarette companies were targeting kids. We asked them in one question, "Do you think cigarette companies advertise to get people to switch brands, to get people to smoke more or to get children to start smoking?" And 80 percent said "children to start smoking" and only 20 percent said the other two answers or weren't sure. They got it. They knew what Joe Camel was about and the Marlboro Man and all that. But the President said, "Okay, well this'll be the issue. But I'll lose two states. I'll get killed in these two states." I remember he once said to me, he said, "I'm going to get a one-day story and I'll lose two states." So I said, "Well--" Q. Was he laughing? Morris: No. He wasn't laughing. He was deadly serious. Because he felt that you know, he would get a nice one-day story and it would look good, and then he'd get killed in two states that he absolutely had to win. So I did a survey in five states... in North Carolina, Georgia, Virginia, Kentucky and Tennessee, which were the five tobacco states. And we asked people, "Who are you voting for?" And then we said--we talked about the anti-smoking stuff being aimed at kids, and we said, "If Clinton backs this would you vote for him? And we found that in every single one of these states he gained by taking this position, as long as it was aimed at kids, at teenagers. And uh, he was shocked by that. He was absolutely blown away by that. Q. What'd he say? Morris: He was shocked. He said, "In other words, it's not adult smoking, it's teen smoking?" And I said, "Yeah, this is--as far as their concerned, smokers see it as a subset of the drug issue." You know, not the civil liberties issue, and not seatbelts and that kind of stuff. They see it as basically a drug issue and a character issue and it was a whole new perspective for him in that sense. So that was significant, and I think that was very important. But the absolute key intervention was Gore. Because Gore was from Tennessee. And, I remember at the seminal meeting when he really decided to go ahead in early July. We were pondering it and he was thinking about it. Erskine, who usually--Erskine Bowles the current Chief of Staff--who usually was an ally of mine, was here against it because he's from North Carolina. He favored it in principle but he was scared to death of the tobacco companies. He said, "Let's don't go against somebody that spends a billion dollars in advertising." And the President turned to Gore, he President was sitting in a wing chair, in front of the table and Gore was sitting at the edge of the couch, right over here and he turned to Gore after everybody had spoken and he said, "Al, what do you think?" And you know, Gore always speaks like he's giving a Supreme Court opinion. And he said, "Well, Mr. President, the history of this issue goes back, blah-blah-blah and he was, you know, like writing for the Court majority. And he said, "Listen, early in my political career, an issue came up about labeling on the cigarette packs to say this--the health warnings that you see." And he said, "I had to vote on that, and I decided to vote in favor of that. And I thought I was ending my political career." From Tennessee voting in favor of that. And he said, "I would go before tobacco farmers and I would say, "I voted for this because I don't want your kids to smoke. Do you want your kids to smoke?" And he said, "None of the tobacco farmers wanted their kids to smoke. And they really identified with it. They understood it and they voted for me, even though it hurt their economic interests. Because it was their children." And he said, "Mr. President, I am deeply convinced that if you do this, it's not going to hurt you politically, it's not going to cost you Tennessee. It's not going to cost you Kentucky and it's going to be a very important advance for public health." And I think that decided Clinton. Because he wanted to do it anyway, but when the former Senator from Tennessee was saying it's not going to cost you Tennessee, that I think was the decisive moment with him. Q. That's when he let Commissioner Kessler issue his regulations. Morris: Yes. When he endorsed those regulations I think that he--there ensued a couple of weeks there where he was talking with Governor Hunt of North Carolina and was, I think, hoping for a negotiated solution with the tobacco companies. But I think he understood that he wasn't going to get that and that he should go straight ahead. Morris: When Clinton decided to take on tobacco it was really very close to the absolute low point of his presidency. Uh, his popularity was very far down, he had been battered by the Republican Congress which had passed a lot of its programs and um, this was a, this was an act that was taken by a president who was looking at the face of extinction. Uh, whatever you think of Bill Clinton, it's clear that this was the single most courageous moment of his presidency. The single most courageous moment. Q. His willingness to take on the people no one else would ever take on? Morris: Exactly, his willingness to take on this mass collection of power and money and uh, and political clout that the tobacco industry represents. He took on the NRA. The NRA is probably a tenth as potent as the tobacco companies were. He took on the pro-life people. They're probably a tenth as potent as tobacco. To take on the tobacco was just extraordinary. And the interesting thing about it, it is that while he probably came to believe that maybe this wouldn't cost him two states, he sure didn't believe this would help him. Because he didn't really believe that America would get energized about tobacco. It wasn't a national issue. It wasn't a big deal. Nobody was talking about it back then. And, uh, he was kind of rescuing the issue from the dust heap. It had fallen by the way side. Q. Now during this period of time, according to Dick Scruggs, you are the Prime Minister, as he put it. You were talking to Trent Lott. Who was, at one time, or was still your client as well. Morris: At one time was my client, right. Q. Yeah. What was Lott's reaction to all this? Morris: Well, Trent had a weird relationship with Scruggs. Uh, he would always refer to Scruggs as "my no good scum-suckin' brother-in-law." And when I met with him in the future and I wanted to refer to Scruggs, I would say he's the "NGSSBIL" the initials of that "no good scum-suckin' brother-in-law." So he kind of saw Scruggs as this crazy Liberal who he was related to by marriage. Who he liked a great deal. He had a very real affection for him. But Trent uh, didn't and I think that he really was sensitized on that issue. And I think he was really uncomfortable with the tobacco industry and I think that one of Scruggs's key aces in the hole here is his relationship with Trent. Q. Is that why Scruggs turned up in Trent Lott's suite at the 96 Republican Convention? Morris: Okay. Well, the sisters are very close, Trent's wife and Dick's wife are very close and Dick's wife is very involved in this and feels very passionately about it. Q. During this period of your being the Prime Minister-- Morris: That's your phrase not mine. Q. Well, that's Dick Scruggs's phrase. Morris: Okay. Q. The go-between between Lott and [Clinton], right? Morris: Yeah. Q. What stands out as sort of your feeling that these guys really were together actually on this issue? Morris: Well, most of the time I--I didn't really deal with Trent on tobacco very much until April or May of 96 when Scruggs told me that the tobacco companies were suing for peace. That they had reached out to him and said they were interested in settling these lawsuits. And at that time it seemed that it was very possible for that to happen in 1996. And uh, as I mentioned, Trent had kind of designated some people to help put this together, and those were the negotiations that were going on. So I kept the President closely informed of what Scruggs was doing and Scruggs kept Trent closely informed of what he was doing. And uh, I kept the President aware of the fact and constantly focusing on the fact that Trent was probably moving with Scruggs and that therefore he probably could count on helping Congress and getting this thing done. It was the willingness of Lott and the Republicans to be part of the process uh, that gave it sense of political reality to it. As opposed to pie in the sky. Q. Did the President ever say, "I want to settle because I want to show them we've accomplished this."? Or, was he reluctant to settle and say, "Listen. We wounded em, we better kill em."? Morris: The President was thrilled at the idea that this could be settled. He was absolutely euphoric about it. Q. Did he jump out of his seat or what? Morris: He said, "You mean they really could do this? I mean we really could bring this about?" Just, he was just excited about it. Uh, and constantly, whenever I would brief him on the talks and stuff he would say, "That's great. Great. Let's just keep going. Keep going, that's terrific." Gore was apprehensive about it. Gore is much more-- read the fine print and pay attention to the details. And Gore had a very cynical view of the tobacco industry, and felt that they couldn't possibly mean anything in good faith, and that if they were going to give you a concession then there was something that they had in the back of their mind that you didn't know about. They were smarter than you were. And that they had some-- Q. Did he say that? Morris: Yeah, in effect. And that they had some marketing gimmick that they would pull out of the hat at the last minute and would screw it all up. And he told me early on that he would look to three people to give him advice on this. Uh, Kessler, Waxman and, Myers from the smoking coalition, the anti-smoking coalition. And, um, I relayed that back to Scruggs and that's the time when Scruggs reached out to Myers from the Coalition Against Smoking to get him into these talks and these negotiations because he would be so influential with Gore. Um, so the state of play really in the White House in the April, May, June, July, August of 1996 period was eager anticipation of the possibility of a tobacco deal by the President and tremendous concern and caution on the part of the Vice President. Q. And then the trial balloon, or the week in September destroyed the whole process? Morris: Derailed it for this time. There was no longer a chance of getting it through before the election. Q. Okay. And then we have from Scruggs and from Moore the history of the deal progressing. You know they backed away and then--what do you think brought the tobacco industry back to the table. Back to, you know--? Morris: Well, the macro of any negotiation is that the only time you can cut a deal is when both sides are hurting. If either side is, is well and feeling happy, you can't get a deal. Then they go for victory. You need--if they're willing to settle for things the other side can live with, it's because they're hurting a little bit. And the tobacco companies at the beginning of this process weren't hurting at all. They were winning everything, that they encountered. Then they began to see their vulnerability with these Medicaid lawsuits, when state after state after state followed Mississippi's model and filed these lawsuits, uh they, the potential liability piled up and they were really scared. Uh, frankly, if they lose two or three of these lawsuits they're going to go broke, and this is a very serious issue for them. Q. Scruggs and Moore, once they announced their deal in June of 97, uh, in their words, "descended into the swamp of Washington." They say they learned a lot of lessons. They really did not realize that it was a town where people told you one thing in private and then something else in public. Morris: Right. Q. Did they talk to you about that? Morris: Yes. I think that Scruggs and Moore were so used to fighting the tobacco companies that they were unused to fighting a two-front war, with the tobacco companies in front of them and the public health companies in the rear. Because the public health community basically said, "Thanks for the gains, now get lost. We want to kill these guys. We don't want to make a deal with them." And whereas the President strongly believed that this should be limited to stopping teen smoking, the public health community wants to wipe out cigarette companies entirely and make everyone that smokes not have cigarettes anymore. I mean that, that's their goal and it's laudable, but impractical. So, um, Scruggs and Moore I don't think were prepared for the splash on the Left over this issue, and I think they were shocked by it. And then, I think they expected Clinton to stand up and deal and tame the Left and get a deal going. But I think Clinton basically took the position of, "Why should I do this when the courts are going to do it? The courts are probably going to rule against the FDA. If they do then that'll give me the ammunition to put a deal together." But then I think Clinton also realized because he's a marvelous student of the practical, that if the courts ruled in favor of the public health groups and against the cigarette industry that no force on earth was going to constrain them. Then there was just going to be rout, and frankly I don't think Clinton weeps over tobacco companies. I don't think he cares much if those companies die. Uh, he's not going to be too grieved about that and at that point, you know, the Huns sack Rome. And then who knows where it goes? Uh, but I think that his feeling was that he would only attempt to impose a deal when there was a reason to do it, which is that it was the only way he could get FDA jurisdiction. Q. One last question. You placed this issue, this whole thing on a macro level that is beyond belief in terms of what the politics can accomplish and all of this came out of a bunch of guys in Mississippi in Pascagoula? Morris: When the history of the 20th century is written, there are going to be some pretty obscure people who are entitled to sainthood. And they're not going to be well-known. Nobody is going to know their names, and um, I don't know if they'll go on to do anything else in their lives. I don't know what their futures hold. But Scruggs and Moore have earned their place in heaven. http://www.pbs.org/wgbh/pages/frontline/shows/settlement/
  23. Bennett LeBow is the CEO of the Brooke Group which owns Liggett Tobacco, the smallest of the six major tobacco companies. Considered a relative newcomer to the industry and a Wall Street operator, LeBow stunned his counterparts at Philip Morris, Brown & Williamson, RJR Nabisco, Loews and Lorillard when he broke ranks and announced he would settle the Medicaid suits brought by forty state attorneys general. In this February 1998 FRONTLINE interview, LeBow also revealed that he was cooperating with the Justice Department in its criminal investigation of the tobacco industry. Q: What was the tobacco industry's legal strategy in essence? Lebow: Then it was fight every lawsuit. Wear them down. Spend all the money in the world because the cigarette companies had all the money in the world to spend. Just wear the other side down, and they'll go away. And they were going away. The strategy seemed to have been working. Q: When did you begin to question that strategy? LeBow: Well, honestly, for about eight, nine years, I just followed the strategy. We had a group of lawyers, about six or seven outside attorneys that just did, year after year, this tobacco litigation. Then the major companies led the way, so to speak. And back in 1995, about three years ago, a couple of strange things happened. This group of outside attorneys that we had were doing most of the tobacco litigation for Liggett and their law firm was dissolving for other reasons. And they came to me, and they said we want to go to another major law firm in New York. I said, your law firm is dissolving, I know this other smaller law firm that specializes in product liability...they're experts in it, why don't you go to that law firm. I'll put you there, and we'll use them because they're experts in this. And I don't know this other law firm. They called me up the next day. They said, "Mr. LeBow, you let us go to this big law firm, Philip Morris will pay all of your legal fees." I said, "What? They want to pay my legal fees. My competitor wants to pay my legal fees." I know we're in the joint defense thing, but it didn't sound right. So I started to smell something wrong there. This is now, I think we're talking about September of '95. I said, "Go ahead and go there, because I'm busy with some other things. Go there. They want to pay my legal fees. I won't right now look a gift horse in the mouth. We'll take the money." But I really started to smell something. Q: In effect these were bargain attorneys? Lebow: Yeah, well, free. Q: Free lawyers. Free. . .? Lebow: Free lawyers. I mean, you know, how can I turn it down. It really got my. . . the bells going off. Q: What kind of money are we talking about in terms of your legal fees? Lebow: It was running about eight million dollars a year at the time. Q: So, Philip Morris is willing to give you a legal defense fund at eight million dollars a year, no questions asked. Lebow: Right. Providing my lawyers go to one of the firms they like, not my firm. Q: And so then, you get into the attempt to leverage. Lebow: And so then, I get involved with some other share holders and am attempting to. . . recommending to RJR that they spin off Nabisco. They take their three businesses and separate it from the tobacco business. Q: You own Liggett, your holding group and you then want to try and take over a larger company, RJR, which also obviously has a big tobacco component. Lebow: And make money in stock that we've bought in RJR. And the obvious way was to separate the two businesses, the tobacco business and the food business. The food business in this case being Nabisco. So, myself and other shareholders, we started an action doing that, and we won. All the shareholders voted for this to be done. Q: Now, why did you want to split them up? Lebow: So, the share values would go up. Q: And what was your sense of the Medicaid suits? Lebow: Well, let me finish. They came out and said, "Mr. LeBow, we can't split these two companies up because there is too much litigation." I said, "What litigation?" I've been told for eight, nine years that there's no litigation. There's a couple lawsuits, you know, Medicaid and a few other individuals. There was some class actions then, which everyone has said, "No problem. We win everything. There's no issue." Now, I've got two things happening. I have Philip Morris paying my legal fees. I've got RJR saying they can't do this spin off or split up because of all the litigation possibility. I really got suspicious. So, then I authorized the new law firm. We're now talking three months after Philip Morris' overtures to the other side. I really want to find out what's going on now. Q: Talk to the other side in what? Lebow: Meaning the plaintiffs, meaning the Attorneys Generals, meaning the Castano case class action lawyer. Q: So, both the class action lawyers and the Attorney Generals like Mike Moore. You authorized the new lawyers, not part of this big firm. Lebow: Not part of those guys. In secret. Q: In secret, to talk to the plaintiffs. Unheard of before. Lebow: Never been done before. No tobacco attorney ever talked to any of these other attorneys in thirty years. So, the first time in secret talking to them in late December, '95, they had some secret meetings to explore what's going on. Because I want to find out what's going on. And the easy way to find out is to talk to the other side. Instead of trying to read papers, let's hear the other guy's view point. The lawsuit, which I didn't quite understand at the time. There are these class action lawsuits, and the big issue is nicotine. Nicotine, never disclosed by the tobacco companies that they really believed that nicotine's addictive. And also in the back of my mind, remembered everybody getting up in Congress and swearing, "No, nicotine is not addictive. We don't believe it is. Etcetera, etcetera." Q: Tell me about when you first talked to the other side. LeBow: But then in '95 when all these other things are happening, I'm starting to think something's wrong here. See after meeting with these AG's, we had to have two months of secret meetings not telling any of the attorneys, not telling anyone. The only person I told was the new president of Liggett at the time, and myself, and the new attorneys. We then negotiated...the settlement in the March of '96. Q: This is called Liggett One?. Lebow: Liggett One, with five Attorneys General and the Costano class action suit attorney. Q: Did you notify the people who were paying your legal fees or any of their friends, or RJR that you're about to do this? Lebow: No. Q: You didn't tell them that after thirty or forty years of a united front, that you were about to defect? Lebow: Absolutely not. They all read about it in The Wall Street Journal. I didn't tell anyone because I honestly, you know, I can't tell my attorneys, they're being paid by the other tobacco companies. So, I can't. . . I don't say, I don't trust them, but it wasn't right. The only attorneys who knew worked with a new law firm. Q: You didn't trust your own attorneys? Lebow: Not in this place. Now, needless to say, when that came out, they came and fired me, my attorneys. Q: Wait, they fired you? Lebow: They fired me. Q: Because? Lebow: Because I didn't confer with them in this negotiation, I suspect. You'll have to ask them why they fired me. It's pretty obvious. So, in this Liggett One, in March of '96, everybody goes crazy. Wall Street says, "What did you do? This is insane." Etcetera, etcetera. And the truth of all this, I didn't believe the strategy these tobacco companies are following. I mean none of the strategy made sense. Intellectually, I just didn't believe it. You have to win every lawsuit. There's nothing here. We're never going to lose. And also recognize that Liggett is the smallest of all the tobacco companies. From a financial point of view, I also said to myself, we can't afford to lose even one lawsuit, one Medicaid case. We go neatly bankrupt. So, from a financial point of view, at this time, I figured it was the right thing to do, to make a settlement. Why stay in court the rest of your life? The other companies have this scorched earth policy that we're going to spend, and spend, and spend, and spend, and spend, and win and win and win. And I didn't want to become a satellite of Philip Morris with them paying my legal fees, or a subsidiary of them. When we did this, everybody went berserk. Q: Didn't you ever doubt what you were doing? Lebow: No, I never did. Not for once. I knew it was the right thing to do. I really did have this sense, call it a gut feel, call it what you want, it was the right thing to do. Talking on a personal level, I also see a tobacco company standing up and saying, "Well, cigarettes don't cause any harmful effects." What kind of a statement is that? Cigarettes are not addictive... what kind of a statement is that? How can they keep doing this? Then, let me tell you what then happened. I got fired by my old law firm. I told my new lawyers, let's get these documents everybody is talking about. I want to see these documents. We had not looked at any of these documents, because I didn't want to confer with my previous attorneys at the time. My new lawyers then took the documents away from the old lawyers, and spent about four or five months studying. And by the end of '96, the middle of '96, they came to me and said, Ben, there's some serious things in these documents. There's some issues of crime and fraud and all kinds of things, and it's well known that smoking is addictive, and all these types of things in these documents. I said, "That's it. I don't want to talk about it anymore. Let's get in touch with all the Attorneys General, all the attorneys involved in this thing, and try to negotiate a new settlement for us." Which we did. Q: You mean a new broader settlement? Lebow: A new, broader settlement. And by this time, more Attorneys General had filed lawsuits. Q: And by then there were 23 states. Lebow: Originally there were only four or five. Now more had come in, and it had broadened the whole situation. Then, we took about four to six months negotiating. We now come to March of '97 when we announced a new, broader settlementt with 21 states. Now we're up to 26 states that have settled with us. Q: And you've agreed at this point, not just on a financial deal, but also to do what? Lebow: To admit to everything, admit to smoking being addictive, admit to all the health hazards of smoking, to turn over all of our documents, to waive all of our attorney-client privilege. Turn all of our documents over which we did. Immediately, that very day, RJR ran to a North Carolina court to stop me. . . to try to stop us from turning over documents. And we had turned them over to the courts in escrow for the judges to decide whether there is anything in these documents that represents crime or fraud and whether attorney client privilege should be waived, etcetera, etcetera. So, we did all this. And lo and behold, two weeks later, all the attorneys, all the other companies show up at the door of the Attorneys General to negotiate a broader, more comprehensive settlement for themselves. Q: Let me take you back, again. You indicated then--I'm talking about Liggett One -- that you were not doing this out of altruism. You were doing this to help you take over RJR. Lebow: RJR was saying they couldn't do a spin off, they couldn't take out Nabisco and so forth, because of all of these lawsuits. One obvious motive I had was, okay, let's settle the lawsuits and solve that problem for the shareholders. That's what got me started looking into it. To really find out what's going on here, what the problems are. But the more I look. . . And then after the lawyers fired me, and then we got the documents, I mean it was obvious we were doing the right thing. And then the whole thing changed in that regard. Q: What do you mean? Lebow: All right, there were two elements to it. First of all, admittedly, the first time we started looking at it, I had economic motivations going into this. And one economic motivation was to get a better deal for Liggett, a better economic deal. Now, in theory I had the idea that if Liggett got a better economic deal...if the other people had to pay more and Liggett had paid less, we'd have a competitive advantage and be able to survive. And at this point, bear in mind that Liggett is going down. Q: What was happening to your stock? Lebow: Well, our stock and our sales are going down. And especially, after I did something like this in Liggett One and Liggett Two, the other companies are coming after us, I mean competitively. So, we had to have some sort of economic life preserver to survive, to survive all this onslaught. The other issue they're talking about is the RJR issue. At the time, back in '95, '96, we were involved in this proxy fight, and RJR was saying they can't do the spin off because of litigation. So, the most obvious thing for a business man to do, okay, is settle the litigation. There's no more problem, and we can do this spin off and everybody makes money. So, I was sort of flabbergasted that when we did this, all the shareholders are, "What are you doing?" "This is crazy" But we have the right to spin her off. And as it turns out, a lot of the shareholders also hold Philip Morris stock, own Philip Morris and RJR. And they saw this as possibly hurting Philip Morris more than it would help RJR. Q: Who are these shareholders? Lebow: Institutions, major institutions. Q: Like Fidelity Magellan. Lebow: Every major institution in the United States you can think of, you know, owns stock in both companies. Q: Like public employee funds. Lebow: Yeah, state funds, etcetera, etcetera, etcetera. Q: So, these are the big heavy hitters in the marketplace? Lebow: Right. Q: What I've been told by the negotiators, Scruggs, Moore, and others, is that when they brought up the Liggett deals, RJR said, "That's a deal breaker." We are not giving -- they wouldn't mention your name -- we are not giving them anything. And Philip Morris' lawyers' eyes just rolled up to the ceiling. Lebow: Well, it's not up to them, it's up to the President and the Congress to do what's right here. It's not up to the tobacco industry. I mean, they don't make the laws in this country. Yeah, I've heard they've threatened to walk away from any settlement, tobacco settlement, that Liggett got, the contracts we have. Nothing special. We're not asking for anything special...all we're asking for is that our contracts be honored. The deals we negotiated. Q: They're paying hundreds of millions of dollars. Lebow: They're not paying a penny. They're paying nothing. Let's get it straight. They're raising their prices to cover it. The poor addicted smoker and the U.S. taxpayer is paying. So, don't yell at me that we're only paying a couple of million dollars out of our pocket, I don't see them paying a penny yet. Q: They're not paying up front out of their own cash in Mississippi and Florida? Lebow: They're raising the prices to get the money back. Q: And they're already raising the prices. Lebow: They already did. They did it last year. they've already done it. . .with the new settlement. Q: I mean, I was amazed that things have changed so fast. Lebow: Yeah, I was too. I knew it would change. I felt it would change. I thought it would take a little bit longer. But they had the trials coming up, that was the impetus. The Mississippi trials, and the Florida trials coming up. And they should have really done it six months earlier. Because it turned out they didn't have time. Q: What do you mean? Lebow: Well, they really should have settled, I think, a year earlier than they did. Started the negotiations a year earlier, because they're under the gun with the trials, the Mississippi trials and the Florida trials. They had to go settle with really big numbers, you know, a lot different than it probably would have been a year earlier. And they knew the schedule, they knew these trial schedules. These are all public knowledge. So my opinion is, they should have started the negotiations to settle these things a year earlier. And they could have had time to get it through Congress. Q: Your perspective was, you guys might lose in court. LeBow: I started to understand. I never understood before, but I do now. Yeah, there are warning labels on the cigarettes, have been for many years, since 1967 or so. But there was a never warning label that smoking is addictive. That one warning label was not there. You know, when I really focused on it a few years ago, when I heard the Medicaid cases from the Attorneys General, they had a good case...maybe. But why fight? Why not try and work out a reasonable settlement and do the right thing. Q: But you're a businessman. You're not going to pay somebody a lot of money or make such a settlement that will cause all this havoc, unless you were making a bet that they could win. Lebow: Obviously I was making that bet, yes. Absolutely. I believe they had a strong case. And I believe sooner or later, they're going to win. And I wanted to settle quickly. Obviously the first person is going to get a better deal. Q: But once you admit that it does all these things, aren't you admitting that you're selling consumers something that could very well kill them? Lebow: Well, A, it's legal. But, B, they're fully informed. Consumers now have full information about everything. All of our documents are released. We've waived our attorney client privilege, etcetera, etcetera. I mean, that's the way it is, that's the way it's going to be going forward. And not sold to children, that's the important thing. And by the way, another thing we've said publicly which is important. We've said this publicly, and I'll say it again now, that in 25 to 30 years, we sure will be out of business. Because by definition, if you're really, really not going to sell to children, they're not going to have any customers in 25 or 30 years. So, I'd like to hear the other companies make that statement that they intend to be out of business in 25, 30, whatever, a generation. If they're really, really not selling to children, we're all going to be out of business. Q: You're known as a hard dollars and cents guy. Lebow: Liggett could not afford to lose one Medicaid case. Because we can't even afford to post a bond to appeal it. Even though we thought we were right, we had economic motivations in that regard to make a deal, no question about it. But after seeing the documents and understanding these things, I couldn?t just from a moral point of view couldn't go forward and keep saying that smoking is not addictive. Q: What did your attorneys tell you? Lebow: My attorneys told me that these documents became serious evidence, a crime, fraud, obstruction of justice, etcetera, etcetera, and we turned these documents over to the various courts. And so far, three courts have found the same thing. So it's obviously true. I mean a court in Florida, a court in Minnesota, and even another court I believe, came out with the same type of informations saying these documents have serious problems in them. Q: And have you turned these documents over to the Department of Justice criminal investigation? Lebow: Yes. Q: They've come here and gotten copies?. Lebow: Yes. They got them from either our attorneys or from the courts we turned them over to. There's no issue there. Q: Have they come here and questioned people? Lebow: Not to my knowledge. Not that I know have. Q: No one from Liggett, as far as you know, has been subpoenaed or brought to Washington to testify? Lebow: I don't know if I can answer that question because I'm not sure of the legalities. So, I'd rather not answer that. I'm sure some of the people have testified. Q: So, this could get serious. I mean beyond money, even if you're willing to reform. Lebow: Well, it's well known that the Justice Department is investigating, has some grand jury investigations going. That's well known. There was, one plea on the nicotine plant issue last week. So, I suspect there's other things going on. We'll see what the Justice Department does. Q: But in the background of all of these discussions about public health and how much in damages and how to change marketing, there still looms this cloud of potential criminal charges. Lebow: That's correct. Q: Do you think that's motivating anybody in the settlement? Lebow: My understanding is during their settlement negotiations, they do have criminal attorneys present. They're trying to get some criminal immunity without totally taking it off the table. So, I'm sure that's part of the motivations the companies have. We have no concerns over it at Liggett. I mean, I have no personal concerns. And we're cooperating completely with the Justice Department. Q: So, when you say, you're in a sense turning over evidence to the Attorney General, you're also turning over evidence to the Attorney General of the United States. Lebow: Oh, yes, absolutely. Q: What about the so-called stealth amendment -- the fifty billion dollar tax deduction if they had to make these settlement payments. Lebow: Right. Instead of 368 billion, it would be 50 billion. Everybody in Washington just went crazy over that. And it was 96 to 4 in the Senate. The vote was completely lopsided. You don't do those things in secret like that. You know, it just shows. . . Q: It was a stealth amendment. Lebow: It was a stealth amendment. Q: They showed their power. Lebow: They tried to show their power, and I think lost a lot of power because of it. I think Congress and the White House -- they've wakened to the fact that this is not the way things should be done. Things should be done correctly, and I believe that Congress and the White House will do the correct thing going forward. Q: Let me change the subject on you a little bit, just because we're focusing to a certain extent on the attorneys general and what happened. When you first met Dick Scruggs and Mike Moore, what did you make of them? Lebow: I thought they were really crusaders. Q: Moore was a crusader? Lebow: Absolute crusader. He was crusading for something he believed in. And I was very impressed by his record. And it turns out he was a hell of a crusader...General Moore. It turns out he was right all along. And I was impressed. Q: Not your average politician? Lebow: No, not your average politician. Q: Why not? Lebow: He had a focus. He and Dickey Scruggs wanted to accomplish something, and they went for it, you know, all the way. And they did it, and they deserve all the credit that they get. Q: In a nutshell, what was the importance of these suits by the attorneys general in your mind? Lebow: I think they're very important, and I think it's obviously been proven true. They led the way. It's gotten people really started thinking. And also they were major in numbers. I mean the amount of money that they were demanding, asking for was quite large. Florida, for example, passed a special statute which took away a lot of tobacco's traditional defenses. So, I think they were very, very important in the scheme of things. Q: They, if you will, check-mated the industry. Lebow: Yeah, as you saw, all the class actions got thrown out. Most of them got thrown out. So, it's strictly the large lawsuits, the attorneys general lawsuits, that worry the industry. The industry is never afraid of one individual lawsuit. They could always pay, you know, a million dollars here or a half million dollars there, wherever it may be. But the attorney general lawsuits also included RICO charges and punitive damage potential, which really got the industry thinking. Q: Is it a lesson for other corporations, for other industries? Lebow: Yeah, I think it should be a lesson. I think all these lawsuits and all this litigation should be a lesson that people should do the right thing and not withhold information. Not withhold over years and years, all these types of things. You sit back and you look at it, it's kind of ridiculous. We all know cigarettes cause problems. We all know it's addictive. So, why don't we disclose all this stuff. Why were all these secret things being done. I mean just on an individual basis, sitting back and looking at this, I don't understand why they did it. Q: I don't think I've ever talked to a businessman before who says that he hopes that his business will go away. Lebow: Well, I hope it goes away. I really, truly hope it goes away. I hope I'm around to see it go away even, at my age. But I really hope it goes away. http://www.pbs.org/wgbh/pages/frontline/shows/settlement/
  24. Steven F. Goldstone is the Chief Executive Officer of RJ Reynolds, the second largest cigarette maker in the United States. Goldstone joined RJ Reynolds in 1995 after having been a corporate attorney in New York for 25 years. Q. You’ve been quoted in newspapers as saying that under your stewardship, you intend to make Reynolds uh–to instill a new sense of corporate culture in Reynolds. Do you recall making that statement? A. Actually [talk over each other]. Q. Well, is it true? A. Uh, Mr. Miley, I think that managers today at Reynolds understand that, that company has to accept responsibility uh and conduct itself in a responsible manner and to that extent, I’m satisfied that they are doing that today. Q. Mr. Cosco, do you agree that in the past Reynolds managers, not under your helm, have made mistakes that have impacted adversely on public health? A. I can’t say that, Mr. Miley. The only thing I–and I know you were going to go through a lot of this, but in fairness to me, really, I’ve been in this company a year and a half. I know there are lawsuits surrounding the conduct of this company. I talked to my lawyers about it a lot. I understanding there are ranging debates in these cases, including this one you have in Florida, but I, I don’t have judgments to make. I’m not interested in the past. That’s something for you and the judges and the juries to figure out. For me, it’s going forward in the future and how we conduct ourselves in the future. Q. Well, if you’re going to conduct yourself differently in the future than obviously you’re going to make some changes, correct? A. What is said to you is that we’re going to conduct ourselves responsibly. I’d like to think our company conducted itself responsibly in all circumstances in the past, but that is what the subject of this litigation in Florida’s all about. Q. As the calls came [unintelligible]? A. Well, it’s a, it’s a complicated question for me, uh, and I hope you’ll give me a second. Q. You take all the time you want, sir. A. Answer that one for you, because um, for myself, and this is just my own personal opinion. I have been in this world for 51 years. I’m not a scientist, but I, I do believe that uh today that uh cigarette smoking play plays a role in causing lung cancer. Um and uh I’m in the job I’m in and I believe that uh, uh the State of Florida, the government of the State of Florida, I think most people on your side of the table, I believe the President of the United States and I believe everyone in Congress and I believe most Americans believe that cigarette smoking causes lung cancer. And all of those people, Florida, the Governor, the President, the Congress, has decided against Prohibition. They’ve decided that American adults, with free information and with good information, ought to be able to make their own choice. Politically, I personally believe in that. I believe in that very much. I think it’s one of the most important principles that we have in this country, but uh, if Mr. Schindler uh–if it became a revelation for him and he decided he shouldn’t uh participate in the business anymore, I could understand completely. But I, I, for me, today, sitting here, if a scientist could connect the scientific gaps, fill in the scientific gaps, that would not be a revelation to me uh that uh cigarette smoking somehow was found to cause cancer. Um, that’s not a shock to me. I don’t think it’s a shock to almost any American today. So, that’s where I am on that. I will tell you this. Um, I was watching on CNN this morning and saw some–one of the universities, uh, one of the scientists thought that they had discovered what it was, the mechanism [unintelligible] cause from smoking to lung cancer. And Lord knows, I hope they do and if they do, um, these tobacco companies damn well better work like lunatics to figure out how to improve their products. I could be, it would great for all Americans to understand cancer more and I think it would be great for all Americans to understand cancer more and I think it would be important for this industry to do that. And the other thing, Mr. Motley on that, is this time, this industry will work hand in hand with the government and will work uh cooperatively on terms of medical research, but um denying basis uh truths, medical truths, is not what the industry will do, at least not what R.J. Reynolds tobacco company will do. Q. I take it, sir, then you do accept that cigarette smoking is a cause of disease in humans?” Goldstone: “I will tell you because I’m not a scientist, and I respect the views of our scientist in our company who very compellingly explained to me why there are gaps in scientific knowledge. But I’ve only been in this company a couple of years. I was a smoker myself at one time, and I have always believed– rightly or wrongly, I have always believed that smoking plays a role in causing lung cancer. What that role is, I have no idea, but I do believe that.” Motley: “So your answer to my question is yes?” Goldstone: “Yes, sir.” http://www.pbs.org/wgbh/pages/frontline/shows/settlement/
  25. Preston Tisch is the Co-chairman of Loews Corporation, a company that acquired Lorillard Tobacco in 1960. Tisch also currently owns fifty percent of the New York Giants. He and his brother Laurence Alan Tisch have been involved in a number of corporate takeovers including the acquisition of CBS, which they sold to Westinghouse Electric Corporation in 1995. State of Florida v. American Tobacco et al. August 15, 1996 Motley: “Do you believe, sir, that a corporation that makes a product has a moral responsibility to investigate the properties of that property–of that-” Mr. Boffa: (Defense Attorney): “Object to the form of the question.” Tisch: “I believe it is a question that I can’t answer. I’m not capable of answering.” Motley: “You are not capable of answering that… whether a corporation that makes 40 billion cigarettes a year has a moral responsibility to find out whether that product causes harm to their customers?” Mr. Boffa: “Object to the form of the question.” Tisch: “I never thought about it.” Motley: “You never thought about it. Motley: “Now, this letter from the American Cancer Society was addressed to Congressman Kornegay. It is in reference to a press release of January the 3rd. And then about an advertisement that was placed. If you would look, sir, at the letter, Number 10, the first paragraph, where they put in quotes, the “commitments to honest scientific research to help resolve the controversy about smoking and health.” And if you look at the ad, that uses words such as “commitments,” “honest,” “scientific research,” “controversy,” “smoking and health.”Do you see what I am talking about, sir?” Tisch: “Yes, sir.” Motley: “Let’s look at the American — by the way, did you ever meet Mr. Lewis?” Tisch: “No, I did not.” Motley: “You are familiar with the American Cancer Society?” Tisch: “Yes, I am.” Motley: “Have you ever been a participant in its activities –” Tisch: “No.” Motley: “–over your career? Mr. Lewis on behalf of the board of directors of the American Cancer Society, says at paragraph 1, `The controversy about smoking and health continues, largely, because of the energy, time and money spent by the tobacco industry in keeping this controversy alive. Advertisements of the sort you enclose seem to me to have as their major point the reassurance to cigarette smokers that you express in your headline: The question about smoking and health is still a question.’Is that, in fact, the headline of the ad?” Tisch: “Yes, it is.” Motley: “That the question about smoking and health is still a question.In 1971, sir, do you, when you joined the board of directors, do you recall whether the subject about the question about smoking and health is still a question was ever aired, a-i-r-e-d?” Tisch: “I don’t recall, sir.” Motley: “Then he goes down in the paragraph beginning, “Population studies”, number 2, then there is a paragraph that says, “Population studies.” Do you see that, on that –” Tisch: “Yes, I do.” Motley: “Okay. Then he says, “The evidence” — the second sentence — “The evidence of the threat to health has been accepted here and abroad by every medical, scientific, and public health body that has examined the problem and expressed an opinion. The most recent such statement came from London’s prestigious Royal College of Physicians which said ‘Cigarette smoking is now as important a cause of death as were the great epidemic diseases such as typhoid, cholera, and tuberculosis,’ and asked the government to end ‘the present Holocaust- a reasonable word to describe the annual death toll (in Great Britain) of some 27,500 men and women aged 25 to 64 from the burning of tobacco.’ Another in the series of brilliant reports by the United States Public Health Service and the Surgeon General will soon be issued reaffirming the evidence that smoking is a major cause of lung cancer and contributes to heart disease, emphysema and other conditions, and stressing the grave dangers to women in smoking cigarettes.” Now, in regard to that one paragraph, sir, did anyone at Lorillard communicate to you, sir, as the president of Loews at the time, that such a statement was being made, and such information was being imparted, whether it is true or not? Was this the kind of information given to you from ’71 to ’76 while you sat on the board of the Tobacco Institute and the Council for Tobacco Research?” Tisch: “I don’t recall. I don’t believe so.” Motley: “There are some pretty strong words in there, aren’t there? Tisch: “That’s correct.” Motley: “Epidemic is a strong word, isn’t?” Tisch: “Yes, it is.” Motley: “Holocaust is a terrible word, isn’t it?” Tisch: “That is correct.” Motley: “Would you like to have known that people were– AmericanCancer Society is known to you to be a responsible organization, isn’t it?” Tisch: “I assume so. Yes.” Motley: “And would you not liked to have known that someone was using these kind of words to describe the industry that you had just joined?” Mr. Boffa: “Object to the form of the question.” Tisch: “The American Cancer Society wrote this letter, and that’s their opinion and, fine, they wrote it.” Motley: “Well, but it says here that it is not just the American Cancer Society. They are saying the Royal College of Physicians of Great Britain said that — likened it to an epidemic and Holocaust. My point is, would you just like to have known so you could have considered it in making policy decisions?” Mr. Boffa: “Object to the form of the question.” Motley: “Those strong words? Those strong accusations?” Tisch: “I would like to know whatever I can.” Motley: “Yes, sir. Thank you. Now, on page 2 down at the bottom, the last sentence, “The continued promotion and advertising of cigarettes contributes to a grave health program, it also creates a moral problem for your industry.” “You say, I know of no single individual among the hundreds of thousands of tobacco farmers, manufacturing and distribution employees and executives and retailers who believes he is profiting from poison instead of pleasure.” Mr. Lewis writes on behalf of the board of directors of the American Cancer Society, “Belief that a gun is not loaded, when experts reassure you that it is, is hardly an excuse when the gun goes off and someone is wounded or killed.” That’s, again, a strong statement, is it not?” Tisch: “By Mr. Lewis, yes.” Motley: “Yes, it is. And sir, from your public service — I know you have a commitment to the public and the public health, don’t you?” Tisch: “The public–” Motley: “Personally, do you?” Tisch: “The public service, yes.” Motley: “Including public health?” Mr. Boffa (Defense Attorney): “Object to the form of the question.” Tisch: “Anything in public service.” Motley: “And public health?” Boffa: “Object to the form of the question.” Tisch: “If that’s a part of public service.” Motley: “And you feel a moral responsibility for what your company does, do you not?” Tisch: “Yes, I do.” Motley: “Don’t you think, sir, that someone should have brought these things to your attention so you could have made a moral judgment, if not a business one, about what to do about making billions of cigarettes a year?” Boffa: “Object to the form of the question.” Tisch: “They may have. I can’t recall if they did or not.” Motley: “If they did, it didn’t impact on you? You don’t remember?” Tisch: “I don’t remember, sir.” Motley: “Well, can you tell me, sir, have you– have there been discussions at Loews at any time about cigarette smoking and lung cancer?” Mr. Boffa (Defense Attorney): “Object to the form of the question.” Tisch: “Not that I recall.” Motley: “Never been any discussions?” Tisch: “Not that I recall.” Motley: “Have you seen documents, sir, where questions and answers were prepared for management in the event stockholders posed questions about smoking and health issues?” Tisch: “No, I don’t recall.” Motley: “And you don’t recall since 1969, over 27 years, there has never been a word mentioned at the Loews board about tobacco and health?” Boffa: “Object to the form of the question.” Tisch: “I don’t recall.” Motley: “You don’t recall that a single word has ever been said at a board meeting of Loews about tobacco and health?” Boffa: “Object to the form of the question.” Tisch: “I don’t… I don’t recall.” http://www.pbs.org/wgbh/pages/frontline/shows/settlement/

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