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TOBACCO NEWS March, 1996
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- FEDERAL
- INTERNATIONAL
- LAWSUITS
- Texas Charges Tob Ind with Racketeering
- Liggett Settles 5 Lawsuits
- FLORIDA: Legislature Fails to Override Gov.'s Veto
- PEOPLE
- NEW WEB SITES
FEDERAL
FDA Reopens Comment Period
Philip Morris employees' statments prompt extensionWashington, DC. March 18, 1996. The Food and Drug Administration today made public the sworn statements of 3 former Philip Morris employees who asserted the company was aware of the addicting qualities of nicotine and its effects on smokers, had researched the subject, had sequestered "much good science," and had monitored nicotine's presence hourly on a 24-hour-a-day basis during the manufacture of cigarettes.
The statements apparently derive from the FDA's 2 year investigation of tobacco industry practices, and reflect an intense search for talkative employees. The three statemenst are by:
William A. Farone, former director of applied research at Philip Morris
Ian L. Uydess, an 11-year Philip Morris employee (1978-1989) who was an associate senior research scientist, said "Philip Morris wanted to know everything there was to know about nicotine," and that an "inner company" within Philip Morris "appeared to conduct [nicotine] research outside of normal channels." He said the company well understood the difference between taste and "impact"--"The term 'impact' is used by the tobacco industry to generally describe two separate effects. The first is the feeling that the smoker experiences at the back of the throat immediately upon inhaling a nicotine-containing cigarette. The second is a somewhat more complicated (and delayed) physiological effect which apparently results from the interaction of nicotine with receptor sites in the brain."
Uydess said he resigned in Sept., 1989, "as a result of: (1) my great disappointment (disillusionment) with the course (direction) of that company, and (2) my growing professional and moral concerns regarding a variety of smoking and health issues which had troubled me deeply for a great many years."
Both scientists claimed PM had developed an "olfactometer" which could not only give smokers precise amounts of nicotine and other chemicals which might act as niotine enhancers or substitutes, but in combinatioin with neurological computer devices could record nicotine interacting with receptors in the brain.
Jerome Rivers, a 23-year Philip Morris employee who had served as a shift manager. He detailed the monitoring of nicotine levels in the manufacture of cigarettes.
The statements by two senior scientists and a shift manager prompted FDA chief David Kessler to reopen the public comment period from now until mid-April. Kessler said he would incorporate the statements in the FDA's proposed tobacco regulations.
Philip Morris stock slipped badly on the news. The company said that it had not had time to review the affidavits, but that from news reports, the allegations were similar to those made in the past. "Historically, when documents that are sensationalized in the press find their way into the courtroom, juries have failed to find them to be evidence of wrongdoing."
Comments may be sent to:
Dockets Management Branch (HFA-305)
Docket Number 95N-0253J
Food and Drug Administration
Room 1-23
12420 Parklawn Drive
Rockville, MD 20857
INTERNATIONAL
CANADA, 3/14/96
: Vancouver, BC has passed a 100% smokefree ban at restaurants that allow children.
Nicaragua Bans Public Smoking
Managua, Nicaragua. March 28, 1996. The Nicaraguan National Assembly today passed a law prohibiting smoking in public places and indoors when more than 3 people are present, according to the Xinhua news agency.
The General Law on the Environment and Natural Resources will to into effect in 2 months. The law will also require those seeking to exploit natural resources to obtain permits from a national environmental commission.
LAWSUITS
Texas Charges Tob Ind with Racketeering
7th State to Sue Industry, has Texas-sized differences
Texarkana, TX. March 28, 1996. Texas attorney general Dan Morales filed a 10-count federal lawsuit against the tobacco industry today. The suit not only seeks Medicaid health care costs of smoking-related illnesses, as in the other 6 state filings, but also, in an important twist charges the industry with violating federal mail fraud, racketeering (under the RICO, or Racketeer-Influenced and Corrupt Organizations Act), conspiracy, anti-trust and consumer protection laws.
The suit seeks to prove that for decades the industry "deliberately, maliciously and deceitfully caused the addiction of millions of persons to tobacco products through the manipulation of nicotine impact levels," according to Morales. "History will record the modern day tobacco industry alongside the worst of civilization's evil empires," he said. Texas "will show that the tobacco industry systematically targets kids, to addict them to cigarettes, before they are old enough to make mature, responsible, adult decisions. . . It is no accident that Joe Camel is as widely known to elementary school kids as Mickey Mouse. It is no accident that 82 percent of adult smokers began as children."
Philip Morris called the suit "politically motivated" and "frivolous."
RJ Reynolds noted that the industry is seeking an order barring such lawsuits in an Austin court; Texas' case will not proceed until that court rules. Reynolds also said that "claims of personal injury cannot be filed under the RICO Act," and that a California has so ruled in a 1994 tobacco lawsuit in San Diego.
The suit was filed against Liggett, the American Tobacco Company, R.J. Reynolds Tobacco, Brown & Williamson, BAT Industries, Philip Morris, Lorillard, United States Tobacco, Hill & Knowlton, the Council for Tobacco Research and the Tobacco Institute.
Liggett Settles 5 Lawsuits
Settles Castano, Gives Medicaid $$ to States, Drops FDA Opposition
New Orleans, LA. March 13, 1996. In a stunning defection from the tobacco industry's once-solid ranks, Liggett Group has agreed to settle the Castano class-action suit. Liggett will be the first tobacco company ever to pay a single cent in a tobacco liability lawsuit, according to reports from AP, the Wall St. Journal and the New York Times.
Under the agreement, Liggett neither admits nor denies liability. The company will be removed as a defendant not only from the Castano case, but also from most of the state "medicaid" lawsuits. The company will pay the states of Florida, Massachusetts, Mississippi and West Virginia $4 million over a period of 10 years.
As part of the Castano settlement, the company will pay 5% of its pretax income toward programs to help people quit smoking.
In what could turn out to be an even more far-reaching betrayal of the industry's once-monolithic front, the company will withdraw its opposition to some degree of FDA regulation of tobacco.
Specifically, the company would:
--refuse to use cartoon characters in its advertising --refuse to post billboards ads within 1,000 feet of schools, 500 feet farther than present tobacco industry policy. --refuse to give away clothing as promotional items.The settlement could also alter the shareholder battle over at RJR Nabisco. Liggett, a Durham, NC firm, is a unit of Bennett LeBow's Brooke Group. LeBow is currently spearheading a fierce shareholder effort to force RJR Nabisco to spin off its tobacco unit.
LeBow just made a spinoff and subsequent merger with Liggett extremely attractive-- the RJR unit would enjoy Liggett's indemnification under the terms of the agreement.
All this could change instantly, however, as the escape clause has an escape clause: Liggett may terminate the agreement if the other tobacco companies win in court.
Liggett Group is the smallest of the 5 major US tobacco companies, and has only 2.2% of the American market. Even so, it makes about $11 million a year in profit. Based on that figure, the cost of its projected payments for stop-smoking programs, plus payment to the 5 states involved would amount to $1.3 million a year.
REACTION:
Philip Morris stock, previously rumored about to split, lost $3 billion on Wednesday, the day of the announcement. On Thurday, it lost another $5 billion, ending the day at 92 1/2.
Some criticized the proposed settlement as a cheap out for LeBow (who could wind up paying as little as $1/2 million a year, putting money into the hands of lawyers, but yielding nothing for the true plaintiffs, addicted smokers.
Some analysts feel LeBow has used the settlement as a weapon in his attempt to split off RJR's tobacco unit; however, LeBow's actions have seriously angered major institutional investors, whose stocks have plummeted in value.
However, LeBow defends his action, saying the company had been paying $10 million a year on the litigation. The settlement would result in a $2 million a year payment, plus "deliver a litigation-free company."
Liggett Group and its subsidiary, Liggett & Myers, Inc., manufacture L&M, Chesterfield, Eve, and Pyramid (discount) brand cigarettes.
FLORIDA: Legislature Fails to Override Gov.'s Veto
Tallahassee, FL. March 14, 1996. The Florida Legislature today failed to muster the necessary 2/3 majority to override Gov. Lawton Chiles' veto of legislation that would have repealed the 1994 law that makes it easier for Florida to sue tobacco companies to recoup health care costs for smokers.
Tobacco supporters thought they had all 26 votes necessary, and called for the vote today. But in a shocking development, the deciding vote was cast by a turncoat Republican whose father, mother, and sister--all smokers--had died young of cancer.
"I can't sit here any longer and play the tobacco game," Sen. Ginny Brown-Waite of Hernando County quietly told a hushed chamber. "I was awake all night laboring over this. This is the vote that I am going to be proud of." Sen. Brown-Waite, chair of the Health Committee, told of her work with lung disease patients. Her sudden change of heart was all the more startling because she had voted to overturn the veto last year.
Lobbyists quickly withdrew the measure. There are 60 days left in the session, during which the measure could be submitted for a vote, but observers feel the battle is effectively over.
"It was a great day for courage," said Chiles.
PEOPLE
Morton Downey, Jr. Quits NSA
March 22, 1996. Variety reports that Morton Downey Jr. has quit his long-held post on the board of advisers of the National Smokers Alliance over tobacco industry candor. "I am a person who is tragically addicted to smoking cigarettes and because of my public persona, am one of the most visible smokers in the country. Though I still defend the rights of people to smoke, I am no longer confident that the information imparted by the tobacco manufacturers and the NSA reflect the truth," Downey wrote the NSA.
OBIT: Victor Crawford, ex-tobacco lobbyist
Baltimore, MD. March 2, 1996. Ex-tobacco lobbyist-turned-tobacco-control-advocate Victor Crawford died tonight.
Crawford was most involved tobacco lobbyist to defect so publicly. His admissions, coming from a man dying of throat and lung cancer, were startling.
"I was in it for the money," he told AP in 1995, "and I was never concerned if people were dying. . . I told politicians that there was no evidence that smoking causes cancer. If that's not lying I don't know what is. I'm just trying to undo some of the damage I've done."
He made his first public break with the industry in July, 1994, when he was featured with former surgeon general C. Everett Koop in a radio spot urging higher tobacco taxes. He worked with Maryland Governor Parris Glendening to enact a sweeping, statewide tobacco control law in 1995. He was seen on CBS' "60 Minutes," and spoke on one of President Clinton's weekly radio broadcasts.
Crawford had been an elected politician in Maryland from 1966 till his retirement from the Senate in 1983. He was a hired lobbyist for the Tobacco Institute from 1985 until he was diagnosed with throat cancer in 1991.
NEW WEB SITES
- Ads make a killing Imprint (U of Waterloo) article on controversy
- Imprint defends tobacco ads.
And here's the homepage of the doctor who started the fracas: - N.O. P.A.T.S.Y HomePage Dr. Polevoy's war on Canadian tobacco interests. And he's taking no prisoners.
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