Tobacco.org

The study of 14,000 UK heart attack survivors was published in the The British Medical Journal, August 18.

Heart attacks are the greatest cause of premature death in the UK and USA.

FEDERAL

House Panel orders tobacco grant cut off

Washington, DC. August 8, 1995. The House Appropriations committee took an unusual step today in specifically cutting off a National Cancer Institute grant which had resulted in studies that had affects far outside of academia, including one which examinded how lawmakers are influenced by tobacco donations.

The 3-year, $600,000 NCI grant to Dr. Stanton Glantz produced studies which showed California legislators who receive tobacco industry donations are 42 times more likely than others to vote for tobacco industry interests, the effect of restaurant smoking bans on actual restaurant sales, and the compilation and analysis, published July 19 in the Journal of the American Medical Association, of Brown & Williamson "secret" papers.

In an Appropriations Committee report released days before the House passed its Appropriations Bill, Rep. John Porter (R-IL) wrote: "The committee was disturbed to learn that NCI has funded a research grant studying tobacco industry campaign contributions to State legislators and voting records by those individuals on tobacco control initiatives. While the Committee is not rendering judgment on the merits of the grant proposal, it feels strongly that such research projects do not properly fall within the boundaries of the NCI portfolio, especially when nearly three-quarters of approved research projects go unfunded.

"Accordingly, the Committee does not provide any further funding for this research grant within the NCI appropriation."

Rep. Porter is chairman of the Labor, Health and Human Services, and Education subcommittee; though his insertion has no legally binding authority, analaysts believe it will be impossible to ignore.

Since the grant has been ongoing for the last two years, the unprecedented step would cut off the last $200,000 due, and possibly give rise to a lawsuit by Dr. Glantz.

The move has riled the medical research community. George D. Lundberg, editor of the Journal of the American Medical Association, said, "For the U.S. Congress to politicize the decision as to what specific research is or is not funded, thereby circumventing the NIH's peer review system which has been used so successfully for so many decades, is reprehensible."

Porter responded to criticism by saying that, "This is not clinical or behavioral research and should not have been funded through the NCI."

Dr. Glantz said, "If you want to beat malaria, you have to understand the malaria mosquitoes that spread malaria. And if you want to prevent lung cancer, you have to study the tobacco industry to see how it spreads smoking."

The Senate has yet to take up the Appropriations bill.

INTERNATIONAL

POLAND: Strict Anti-Smoking Law Passes

Warsaw, Poland. August 25, 1995. Poland's lower house of Parliament, the Sejm, overwhelmingly approved a tough new law restricting tobacco advertising and sales-- a law tougher, in fact, than any in the US.

The bill passed the powerful body by a stunning majority, 335-9, with 28 abstentions.

The bill would:

1. ban sales to those under 18
2. ban smoking in public places, except in restricted areas.
3. ban cigarette vending machines
4. ban cigarette sales in :
• schools

• hostpitals

• sporting events
5. ban tobacco advertising
• on radio and television

• in movie theatres

• in youth magazines

• at sports events

• in schools, universities, health facilities and cultural institutions
6. require 20% of ad space to carry a health warning .
7. allow local government to set even harsher restrictions.

The bill is expected to pass the Senate easily; President Lech Walesa is expected to sign it.

Cigarette advertising in Poland is a recent development--introduced by American companies in 1987, according to the head of Poland's Institute of Oncology--and the Sejm had been seriously considering a total advertising ban. In June, however, all the Polish tobacco producers--8 domestic and 11 foreign organizations, including Philip Morris, RJ Reynolds, and BAT--formed Poland's first tobacco lobby, the National Tobacco Producers' Association (KSPT), which convinced the Sejm to reject a total ban because of economic considerations.

Reuter reports that Malgorzata Kowalczyk, director of Philip Morris's unit in Poland said in regards to the final bill, "Considering that there are so many opponents of cigarette advertising, I think it is a reasonable compromise."

Poland is trying to privatize its tobacco industry, and is in the process of selling off up to 55% each of 5 large tobacco factories. Currently, state-produced cigarettes still control 75% of the market, but Germany's Reemtsma, Spain's Tabacalera, Britain's Rothmans and B.A.T. Industries, and Philip Morris have interests in various domestic plants. Last year RJ Reynolds opened its own large factory.

POLAND TOBACCO DATA:

• Population: 38 million

• Number of smokers: 14 million

• Percent of adult population that smokes: 33%

• Number of cigarettes sold per year: 100 billion

• Preferred cigarette type: the locally-produced "Throat-scrapers"

• Number of tobacco growers: 70,000

• Health Ministry estimate of number dead each year from smoking: 50,000.

• Average Male Life Expectancy: 67.4 years, the lowest in Europe

AUSTRALIA: Anti-Smoker Hiring Policy Spawns Controversy

Canberra, Australia. August 22, 1995. It was strictly a business matter when US food giant Simplot bought Australian food conglomerate Edgell-Birdseye a couple of weeks ago.

But when founder and president Jack Simplot announced that smokers were a "liability," and that he would direct his Australian managers not to hire any--although present smokers could remain--protests were heard as high as the Senate, and liberal Senators battled over civil rights and health concerns.

In addition, Simplot may face a boycott of his new company's products. A Rothmans lobbyist--calling Simplot "an idiot" and "the kind of bully that we don't really want in Australia"--told smokers: "just don't buy Birdseye Peas."

In 1992, Mr. Simplot made #38 in Fortune magazine's list of world billionaires--just below Rupert Murdoch (both were listed as worth $1.7B). The entry reads:

38. John R. Simplot; Idaho; agriculture, high technology; $1.7.

ZIMBABWE Gets Health Warnings

Harare, Zimbabwe. September 12, 1995. The Zimbabwe Tobacco Association said that the country's cigarette manufacturers have agreed to place health warnings on cigarette packs and advertising, according to Deutsche Presse-Agentur.

Zimbabwe is one of the top tobacco exporting nations, supplying many European and American companies. Its economy is heavily tied to tobacco., and was hurt by a tobacco glut and bad weather conditions in 1993.

Health authorities were shocked by the sudden acquiescence the two Zimbabwean cigarette manufacturers, Rothmans and BAT.

"We will consider proposing them for a medal," said a WHO representative.

BUSINESS

RJR on the Net?

September 4, 1995 A page purporting to be the "RJR Nabisco Corporation's Home Page" has appeared on the World Wide Web.

The page is located at:

http://www.streetnet.com/rjr/

or at:

http://204.189.36.1/rjr/

The page is structurally and graphically primitive, and contains only two items: a 1993 RJR annual report and a balance sheet for 1993.

LeBow Makes Moves on RJR

New York, NY. August 29, 1995 Flamboyant Financier Bennett S. LeBow's New Valley Group has been cleared by the Federal Trade Commission to buy 15% of RJR Nabisco Holdings. New Valley already controls Liggett Tobacco, and the move, which could cost over $1 billion, could be the first step on the road towards another massive inter-corporate conflagration involving RJR.

A LeBow action is often unwelcome. A 1993 Fortune magazine survey found Brooke Group Ltd., the conglomerate which owns New Valley, the least-admired among 404 companies surveyed.

LeBow has made a career of acquiring troubled companies, and for a time financed his purchases with the junk-bond clout of Michael Milken and Drexel Burnham Lambert. Restructurings and controversy have often followed his acquisitions, and two years ago shareholders of Brooke Group brought suit to bring a halt to loans Brooke had been making to LeBow.

In the eighties LeBow gained control of tobacco company Liggett & Myers, troubled computer company MAI Basic Four, a near-bankrupt Western Union, which was later sold again; and other companies ranging from ice cream to gold to sports cards to pizza. He even bought the English boatyard which built his $21 million yacht.

And he seems to favor the tobacco business. In the eighties, while controlling Liggett, he proposed a buyout of American Brands.

In its statement today, RJR revealed that last May, LeBow had approached the company and proposed a merger that would result in a LeBow-controlled tobacco company and a spin-off of RJR's food business

"After appropriate review of the prior proposal, the company concluded that the proposal was neither viable nor in the best interests of RJR Nabisco's shareholders," RJR's statement said.

The Wall Street Journal quoted tobacco analyst Roy Burry: "Acquiring RJR would provide a safety net for his failing Liggett cigarette business."

New Valley is a subsidiary of Brooke Group Ltd. Brooke Group owns Liggett Tobacco. Liggett has a tiny fraction of the market dominated by giants Philip Morris and RJR, but it is still very profitable. It manufactures Chesterfield, L&M, and Eve, but its main profits derive from its generics.

In 1989, Liggett Group sued rival Brown & Williamson for price fixing. A 7-month, wildly complex trial dealing with the details of cigarette pricing and economic and financial theories (one juror, asked during deliberations what she thought, said, "How should I know?") ended in a verdict for Liggett--which was overturned by the Supreme Court. The Court said no reasonable jury could have ruled the way this one did.)

RJR, too, is no stranger to the world of financial and corporate battles. The present business entity was created in the aftermath of the massive 1988 $25 billion buy-out by Kohlberg Kravis Roberts, the largest hostile takeover at the time.

KKR never made money on the investment, and finally cashed out this year.

LAWSUITS

ABC Apologizes to PM, RJR Over Nicotine Charge

New York, NY. August 21, 1995. Tonight Capital Cities/ABC made a public statement of apology to tobacco companies Philip Morris and R.J. Reynolds, saying a news magazine program "should not have reported that Philip Morris and Reynolds add significant amounts of nicotine from outside sources." The statement said, "That was a mistake that was not deliberate on the part of ABC but for which we accept responsibility and which requires correction. We apologize to our audience, Philip Morris and Reynolds."

The statement also said, however, that "ABC believes that the principal focus of the reports was whether cigarette companies use the reconstituted tobacco process to control the levels of nicotine in cigarettes in order to keep people smoking."

In response to the extremely narrow apology, Philip Morris dropped its $10 Billion lawsuit; ABC has agreed to pay PM's attorneys' fees, costs and out-of-pocket litigation expenses--a figure that could run into the millions.

Tobacco control advocates blasted the apology as corporate cowardice which reflected the power of lawsuits to intimidate news reporting.

PM counsel Charles Wall claimed that since the recent FDA push to regulate cigarettes was based on the "Day One" program, the apology "should have an effect" on regulatory plans, and recent liability lawsuits.

The FDA, however, stated Monday night that, "Nothing in today's announcement affects the Food and Drug Administration's recently issued findings.

"Internal industry documents demonstrate the industry's longstanding knowledge of and extensive research on the significant . . . effects of nicotine . . . FDA's investigation revealed that tobacco manufacturers actively control the amount and rate at which nicotine from marketed cigarettes and smokeless tobacco is delivered to consumers."

Though they were named in the suit, Day One correspondent John Martin and producer Walt Bogdanich did not sign the agreement. ABC issued a statement saying the network had ""continued confidence in the journalistic abilities and integrity" of the two men, and that they had signed "new long-term employment agreements."

The apology took place only a few weeks after The Walt Disney Co. announced it would purchase Capital Cities/ABC Inc. for $19 billion.

The crux of the legal dispute seemed to be whether the tobacco companies bought and used "significant" amounts of nicotine from outside suppliers, rather than simply re-adding nicotine that had been lost in the manufacturing process. The "spiking" charge was never used in the body of the report, only in the prelude, and promotions for the program. Philip Morris was only specifically mentioned once in the report in connection with nicotine manipulation. This was the segment:

Voice-Over:

"There's another way nicotine is added to cigarettes, and it begins, perhaps surprisingly, at docks like his one in Newark , NJ.

"It is here that nearly pure nicotine is brought ashore to be combined with alcohol. It is called denaturing. The mixture can then be applied to tobacco during the manufacturing process for among other things, flavoring.

"As these trucking records show, Philip Morris, for example, received thousands of gallons of this alcohol mixture during the 1980s

"The cigarette makers say this mixture leaves only a tiny amount of nicotine on the tobacco."

ABC apparently worried about disclosures it may have to make during the trial. The identity of "Deep Cough," ABC's ex-RJR manager, will apparently remain secret. Also, ABC may not have wanted to explain some editing decisions.

For example, in material run before the show, John Martin is shown asking a Reynolds scientist,"Why are you artificially spiking your cigarettes with nicotine?"

In the body of the show, however, the camera focuses on the scientist as Martin is heard to ask, "Why are you adding nicotine to your cigarettes?" (to which the scientist replies, "We are not, in any way, doing that.")

A brief version of the statement was made by Diane Sawyer on Monday night's "World News Tonight," and the full statement was made during half-time on "Monday Night Football." The full statement will be made again on "Day One"--the news magazine program which first aired the 1994 segment on nicotine manipulation--Thursday night.

The following is the text of the ABC statement: