Chapter 9
Stonewalling: Politics and Public Relations

We have a responsibility—both legal and moral—as a cigarette manufacturer to ensure that people are aware of the facts relating to our products, that a factual and balanced picture is presented, and that inaccuracies and imbalance are corrected [emphasis in original].
Anne Johnson, BAT attorney, 1985 {1828.02, p. 4}

Introduction

The attorneys at B&W and BAT were instrumental in establishing the companies' public relations posture toward the growing evidence on the health dangers of smoking. The public relations statements had to be carefully crafted to avoid creating liability problems. The attorneys had to walk a fine line between not saying anything and saying too much about the alleged health dangers of tobacco. At the same time, the tobacco industry continued to develop increasingly sophisticated marketing strategies to promote tobacco use and maintain the social acceptability of smoking. In addition to traditional advertising, these efforts included product placement of B&W brands in movies and on television. The companies directed their efforts not only at the general public but also at physicians, so that they would encourage smokers to switch to low-tar cigarettes, instead of simply stopping smoking. The documents also reflect efforts by the tobacco industry to use its considerable economic clout with suppliers and the media, as well as important community-based organizations, to obtain favorable treatment.

Influence Of Attorneys Over Public Relations

On November 2, 1985, Anne Johnson, a member of the BAT legal department, wrote a lengthy memo containing a detailed discussion of

what BAT's stance should be with regard to smoking and health {1828.02}. Her memo is labeled an "Attorney Work Product" and is divided into sections titled "Smoking and Health Issues," "Scientific Information," "Reasons for Making Public Statements on Smoking and Health," "Areas for Response," and "Proposed Response." The basic premise of Johnson's memo is that BAT cannot afford to remain silent on issues related to the health effects of tobacco. By remaining silent, the company will be implying that it agrees with claims that its products are hazardous to health. Under the heading "Reasons for Making Public Statements on Smoking and Health," Johnson states:

If we fail to make the facts and our views known on smoking and health, we run the risk of seeing the introduction of more and more restrictions—some unacceptable and unwarranted—on our products, our commercial objectives and our freedom to operate. If we have no statement to make, then we lose credibility with government, and the public (including shareholders and employees).

We have a responsibility—both legal and moral—as a cigarette manufacturer to ensure that people are aware of thefactsrelating to our products, that a factual and balanced picture is presented, and that inaccuracies and imbalance are corrected.

This applies not merely to the BAT Companies, but also to the National Manufacturers Associations in each country. The NMA's are often seen and indeed are set up to be the spokesman for the industry as a whole and, even more than individual companies, are expected by government and other institutions to respond effectively on smoking and health issues. In the case of the N.M.A.s other member companies may wish to take some action or make a response and we need the ability to participate with those companies [italic emphasis added]. {1828.02, p. 4}

Nevertheless, Johnson notes, even discussing causation might be dangerous in view of the ongoing lawsuits in the United States:

Since the New Jersey Law Suits [probably a reference to the Cipollone, Haines, and other cases] and the RJ Reynolds campaign were commenced we have effectively taken no action and made no response in deference to the US legal constraints.

We recognize that there are legal constraints in the US which we must observe and we appreciate the practical problems of discussing causation and in particular the possible impact of causation on the voluntary assumption of risk defence [emphasis added]. {1828.02, p. 6}

This position precluded any objective discussion of the scientific evidence that smoking causes disease; such a conclusion was simply not acceptable on legal grounds.

Johnson is acknowledging that comments made by BAT officials might have an impact on lawsuits against the industry in the United States. She is concerned that the industry's assumption of risk defense, which depends on the plaintiff's knowing the risks of his or her actions, might be endangered if it were to be revealed that the industry actually possessed information about the causes of smoking-related diseases and had not shared that information with the public. In that event smokers, in fact, could not have known the full risks of smoking or, at least, could not have known the extent of those risks. As noted in chapter 7, this defense has been largely responsible for protecting the industry from liability in the wave of lawsuits that began in the mid-1980s. Johnson continues:

We have no wish or intention to "overplay" the causation argument or to mislead consumers (or anyone else) into thinking that smoking is free of risk, or that the risks are minimal, or that they can ignore the potential risks or health warnings.

However for the reasons mentioned above the effective silence which the BAT Companies have maintained over the last few months cannot be sustained.

As science is the basis for the smoking and health arguments, we wish to put third parties in possession of a balanced view of smoking and health issues based on the scientific information set out in the appendix [discussed below]. {1828.02, p. 6}

Thus, although Johnson recommends that BAT not remain silent, she also advises that the company should not take an aggressive stand regarding the health effects of smoking. Instead, the company should provide third parties (presumably, scientists, politicians, the media, and the general public) with a "balanced" view of the issues, a tobacco industry euphemism for making the public believe that there is a controversy as to whether cigarettes are dangerous. The implication here is that BAT should provide third parties with scientific research supporting the position that the causal relationship between smoking and disease has not been proven. As discussed in chapter 8, the industry has funded research through its lawyers that was specifically designed to develop this sort of contradictory scientific evidence.

The memo then provides a general outline of the argument that BAT should make about the health effects of smoking:

There is a lot of evidence which links smoking statistically with certain diseases ...

Statistics alone cannot prove cause and effect ...

Research is needed to clarify the situation. {1828.02, pp. 6–7}

These are the same arguments that the tobacco industry has been making since the 1950s, when it established the Tobacco Industry Research Committee (discussed in chapters 2 and 8). They are also the same arguments that the tobacco industry is using in current discussions over the health effects of environmental tobacco smoke.

The memo ends with an interesting cautionary note:

The views expressed above[,] which incorporate warnings to the consumer, creates [sic ] problems in countries where warnings are not required on packs or advertising and this situation should be reviewed. {1828.02, p. 7}

This afterthought by Johnson suggests that the tobacco industry might be more vulnerable to products liability lawsuits in countries that do not require warning labels on cigarette packages. In the industrialized world, where warning labels are required, the tobacco industry has been protected against claims that it has failed to warn smokers about the health effects of its products. In other countries, however, the industry may have a much harder time proving that it has given smokers adequate warnings.

Johnson's memo contains two appendices. The first, titled "Scientific Information," summarizes the scientific position of Dr. Ray Thornton, the smoking and health adviser at BAT's research center {1828.02, pp. 8–10}. It provides the scientific underpinnings for the tobacco industry's argument that causation has not been proven.

Thornton notes that a large number of epidemiological studies have shown a statistical association between smoking and a variety of diseases, particularly lung cancer. However, he states, it has never been formally established through experimental studies that smoking actually causes these diseases. After listing various other potential causes of cancer, Thornton concludes:

It is therefore impossible to claim as a fact that smoking is the only or main cause of lung cancer and other diseases. On the other hand the views of the medical profession and the judgment they have made cannot be ignored and the reverse has not been established either—it is equally impossible and quite wrong—factually and morally—to suggest or imply that smoking is safe or free from risk or that the risks are not particularly great.

Smoking may be implicated in the inception or development of some diseases—it may not—whether it is and/or the extent to which it is or may be is not known. Other factors appear to be implicated as well.

The theory that smoking has been established as the main cause of lung cancer has become "conventional wisdom" and is accepted both in medical and scientific journals, and in the media generally without question—information is used selectively and other potential causes and evidence which conflict with the "traditional" view may be and often are ignored.

As has been pointed out ... there is risk that the real causes of diseases may be "missed" by ignoring "non traditional" research [emphasis added]. {1828.02, pp. 9–10}

Again, this argument—that the causes of lung cancer and other diseases normally associated with smoking are not really known and that further research is necessary to determine those causes—is the same argument used during the 1950s, when the Tobacco Industry Research Committee was formed. Yet, by the mid-1980s there was universal agreement among scientific and medical authorities around the world that a causal link between smoking and disease had been established conclusively. Also, the suggestion that "non-traditional" research may be needed to discover the "real causes" of diseases is in keeping with the industry's efforts to fund research projects that it knew would be unavailing, for the purpose of distracting scientists and the public from the worthwhile research being conducted (see chapter 8).

The second appendix to the memo is titled "Summary of BAT's Approach to Smoking and Smoking Issues" and is dated May 21, 1984 {1828.02, p. 11}. It appears to provide an explanation for why BAT would produce low-tar cigarettes when it claims that it does not believe the tar produced by smoking is dangerous. The document states that, although there is a statistical association between smoking and disease, "the question of cause continues ... to be a controversy" {1828.02, p. 11}. It then notes that many government agencies and physicians have advised the public to switch to low-tar brands, and that the industry has simply responded by meeting the public demand.

The tobacco industry has responded quickly to this changing demand, and to published government advice, by marketing an expanding range of cigarette products—so that each consumer can make his own informed choice of product. {1828.02, p. 11}

Of course, the consumer is hard pressed to make an "informed choice," since the tobacco industry has not provided the information it had that smoking is dangerous, regardless of the amount of tar in the cigarettes. This behavior is still another example of the industry's trying to have it both ways: maintaining that there are no health dangers in smoking but providing "healthier" cigarettes to those people who are worried about possible dangers.

B&W's lawyers were also involved in setting public relations policy for the company. Some of the issues that particularly concerned them are discussed in a memo from Ernest Pepples, who was then B&W's senior

vice president and general counsel, to E. E. Kohnhorst, vice president of research, development, and engineering (RD&E) at B&W {1831.01}. The memo, dated August 16, 1984, and marked "Privileged," discusses Pepples's concerns over a report titled "The Functional Significance of Smoking in Every Day Life." Pepples states that use of the report for public affairs purposes, either by B&W or by the industry, would be inappropriate and inadvisable.

Even the theme of the report, which promotes the concept of "the psychological benefits of smoking," is not appropriate or advisable as a public affairs position. {1831.01, p. 1}

This concern about promoting "the psychological benefits of smoking" is another indication of just how much the industry's attitudes toward cigarettes had changed since the 1960s, when research on nicotine as a stress reducer was being conducted because of the fear of competition from new tranquilizing drugs (see the discussion of Project Hippo II, in chapter 3). Pepples also voices his concern that some of the authorities cited in the report might not agree with its conclusions.

[N]amely they might maintain that cigarette smoking is a [sic ] not a suitable "coping aid" in everyday life. {1831.01, p. 1}

Unfortunately, we do not have a copy of the report itself, so we do not know which authors Pepples is referring to or what the report actually said.

Pepples then points out "more serious problems" with the report {1831.01, p. 1}. Specifically, it essentially concedes that nicotine is an addictive drug.

In developing and carrying forward the position that a "simple" addiction model cannot explain smoking behavior, the report seems to concede that many potential criteria for addiction identification are met by smoking behavior. For example, the report urges the position that the primary motivation for smoking is ultimately tied to a pharmacological "psychoactive" function of nicotine. Some of the scientists who consult with B&W in connection with health litigation would not agree with this approach. Accordingly, the report presents some potential for an apparent inconsistency among B&W's scientists, which could cause some difficulty in court.

Throughout the report, unfortunate concessions appear regarding "tolerance and withdrawal". ... The report frequently expresses the view that smoking has certain "therapeutic properties" and nicotine is compared to the action of tranquilizers, alcohol, etc. In addition, smoking is referred to as one form of "drug usage", "psychoactive substance abuse", or "psychoactive drug usage".

The authors of the report attempt to draw a fine line between "addiction" and "functional" behavior. ... Our opponents would probably disregard

such a distinction and contend that this was an acceptance by the authors of the report of the basic allegation that cigarette smoking is addictive [emphasis added]. {1831.01, pp. 1–2}

Pepples then discusses the danger to the tobacco industry of admitting that nicotine is addictive. He specifically mentions that such an admission could be used against the industry in court as well as by the Food and Drug Administration (FDA) to justify regulation of tobacco products.

As you know, in the current legislative and litigation environment, claims of addiction have been and will be used against Brown & Williamson and the other companies by our adversaries. Such claims have been vigorously opposed in order not to give a claimant an unjustified weapon to use against the company or the industry.

In addition, the possibility for FDA involvement would be heightened by company or industry promotion of the theme of this report, as it will be generally perceived [emphasis added]. {1831.01, p. 2}

These memos written by attorneys for B&W and BAT clearly indicate that the companies were carefully monitoring their public statements in order to avoid making any claims that could be used against them in court or regulatory actions. The BAT attorney advises the company to maintain that a causal relationship between smoking and disease has not been proven, while the B&W attorney warns the company not to admit the addictiveness of its products. These are the same positions that all the tobacco companies have publicly held. Again the position of the lawyers has changed since the early 1960s, when they were encouraging the companies to develop a "safe" cigarette as the best way to stave off litigation (see chapter 4).

There is an interesting contrast between these two memos, indicating the different approaches to public relations problems in England and the United States, which, in turn, probably reflect the different levels of concern about potential lawsuits. Whereas the BAT attorney focuses on the need for the industry to be more forthright and willing to engage in public discussion of the health issues, the B&W attorney is more concerned about covering up any possibly damaging scientific material. Specifically, Pepples evidently believed that tobacco industry public relations statements must never even cite scientists who disagree with the industry's basic positions on the health issues, even though they may support the specific statements made. To do so would lend credibility to the scientists and thereby undermine the industry's attack on the scientific evidence indicating that there is a link between smoking and disease. (A particularly striking example of this attitude is discussed in the following section.)

The B&W attorney also evidently wanted to impose a rigid uniformity on the scientific opinions expressed by B&W scientists, so that no untoward scientific opinions would come to light and be used against the company in court (also discussed in chapter 7).

The Blackman Paper: Rewriting Scientific Documents

The extent to which lawyers for B&W were concerned about having damaging scientific statements linked to the company is conveyed in a letter dated October 25, 1984, from J. Kendrick Wells, III, B&W's corporate counsel, to H. A. Morini, a lawyer at BAT {1833.01}. The letter contains Wells's comments on a draft paper titled "The Controversy on Smoking and Health—Some Facts and Anomalies," which had been written by Dr. L. C. F. Blackman, executive director of research and development for BAT (figure 9.1) {1833.02}. The paper presents the industry's view on the "controversy" over the health effects of smoking. As it was originally written, the Blackman paper contained a reasonably complete presentation of the evidence that smoking causes disease, and then used quotes from various scientists and scientific reports to support the claim that a causal link between smoking and disease had not been proven. However, as Wells's letter shows, even merely acknowledging the existence of some evidence pointing to such a link was unacceptable.

The title page of the Blackman paper indicates that it contains "Notes on talks given at the BAT Management Centre, Chelwood, by Dr. L. C. F. Blackman" {1833.02}, suggesting that the paper was intended to be a primer for BAT executives on issues related to smoking and health. The introduction states:

This booklet is not a comprehensive review of all the research on the issues, but it sets out some of the reasons for stating that a controversy exists, and gives examples of some of the research reports which are inconsistent with the view that smoking has been proven to be a cause of disease. {1833.02, p. 3}

Wells made comments on virtually every page of Blackman's thirty-three-page paper, some of which are written in the margins of the draft. He also made forth-five detailed comments, including line-by-line recommendations regarding items that he thought should be deleted or included in the final report. These comments were too long to be written in the margins and are instead enumerated in his letter to Morini. Many of the suggested changes involve deletion or reconsideration of scientific authors cited in the paper, usually because the scientists cited had

published work (sometimes not even cited in the paper) that did not support the tobacco industry's position. In other instances Wells suggests that material be rewritten so that it will conform to the company's stated positions, rather than the published scientific evidence.

Wells's comments on the draft paper are prefaced with a cautionary note:

Recent developments have reaffirmed the need for the attention we customarily have given to proposed BAT publications. The smoking and health litigation in the U.S. has demonstrated that plaintiffs' lawyers are aggressive in questioning tobacco CEOs about published company statements, as we had predicted they would be. Peter Taylor's Smoke Ring [1] demonstrated that BAT publications which may be intended for limited distribution can be obtained and scrutinized by our most articulate adversaries. {1833.01, p. 1}

This comment suggests that attorneys for B&W routinely reviewed BAT documents prior to publication, even if they were only intended for "limited distribution" within BAT.

Wells began by changing the titles of some of the chapters (figure 9.1). Some of his revisions appear to have been designed to reinforce the idea that there is a "controversy" over the dangers of smoking. For example, Wells recommended changing the chapter on "Background to the Medical Concern" to "Background to the Scientific Dilemma." Interestingly, Wells also recommended deleting the word "facts" from two of the chapter titles: "Some Facts and Anomalies in the Literature Regarding Cancer" was changed to "Some Anomalies in the Literature Regarding Cancer." A similar change was made in the chapter on heart disease.

Wells seemed particularly interested in removing references to researchers who had published any findings that did not agree with the tobacco industry's position. For example, the original document contained the following quote from Sir Richard Doll and Richard Peto, who conducted one of the first epidemiological studies showing that smoking is associated with lung cancer and heart disease:

To say that these conditions were related to smoking does not necessarily imply that smoking caused (or prevented) them.

The relation may have been secondary in that smoking was associated with some other factor, such as alcohol consumption or a feature of the personality, that caused the disease. {1833.02, p. 8}

In his letter to Morini, Wells suggests that this reference be deleted:

8. Delete Doll and Peto reference. Doll and Peto have published a table which shows "cancer of the lung" is "caused by cigarette smoking" and have

FIGURE 9.1. Cover and table of contents for the Blackman report {1833.02}, which was based on talks
given at the BAT Management Centre by Dr. L. C. F. Blackman. Note that the editing by the lawyer
J.K. Wells {1833.01} changed "medical concern" to "scientific dilemma," deleted the term "facts,"
and emphasized the use of the term "causality."

FIGURE 9.1. (continued)

concluded that "much of the excess mortality in cigarette smoking can be attributed with certainty to the habit ..." {1833.01, p. 2}

Later in his comments, Wells notes that any mention of Doll should be handled with care.

35. ... Parenthetically, any reference to Doll must be crafted carefully because he is a dedicated advocate of the causal hypothesis. {1833.01, p. 6}

Wells also recommends deleting a reference to research conducted by Drs. Friberg, Cederloff, and Lundman, who had compared disease rates in smoking and nonsmoking twins. Interestingly, this research had been funded by the tobacco industry for years in an attempt to prove the "constitutional hypothesis." The constitutional hypothesis, which had originally been proposed by Sir Ronald Fisher in 1957, essentially argues that some people are genetically predisposed both to being the type of person who smokes and to developing diseases such as lung cancer and heart disease. Friberg and his colleagues all but disproved the constitutional hypothesis when they showed that a person who smokes is more likely to develop smoking-related diseases than his or her nonsmoking identical twin, even though they have the same genetic makeup and therefore the same genetic predisposition to disease. The Friberg group's work was referred to in the original draft of the Blackman paper in a quote taken from the 1979 Bibliography on Smoking and Health (published by the federal government):

The results from the twins study clearly demonstrate the importance of genetic, behavioural and psychosocial factors which have not been considered in conventional epidemiologic studies. {1833.02, p. 18}

Wells states in his letter that the reference to Friberg, as well as the reference to the bibliography, should be deleted.

21. Recommend delete references to Friberg and the Bibliography on Smoking and Health. Unfortunately, Friberg, Cederloff and Lundman published a monograph in 1977 which stated that "lung cancer is closely related to the amount smoked ...," that associations were confirmed between smoking and respiratory, cardiovascular and other symptoms of disease or ill-health, that there is no doubt about a causal link between smoking and lung cancer, and that the results from the Swedish monozygotic twin studies are contrary to the constitutional hypothesis advanced by Fisher.

The problem carries over into the quote from the Bibliography on Smoking and Health. ... The same article states that "the well documented evidence of a causal association between smoking and lung cancer found in other studies has been further supported." {1833.01, p. 4}

Ironically, the monograph of the Friberg group's work mentioned by Wells was actually funded as a CTR special project (table 8.1).

A quote from Dr. Lawrence Garfinkel, vice president for epidemiology of the American Cancer Society, and an author of one of the early papers on environmental tobacco smoke (ETS) and lung cancer that had produced equivocal results (2), was included in the draft:

Passive smoking may be a political matter, but it is not a main issue in terms of health policy. {1833.02, p. 31}

The tobacco industry had widely used this quote in its efforts to create controversy about the early evidence that ETS causes lung cancer (see chapter 10, particularly figure 10.1 and the associated discussion). Wells, however, notes in his comment that Garfinkel later retracted this statement after his second study on ETS and lung cancer showed an increased risk (3) and criticized the tobacco industry for continuing to use Garfinkel's first study in industry advertising.

40. Delete. Dr. Garfinkel has published a letter in the New York Times (June 5, 1984) which protests R. J. Reynolds' use of the passage quoted in the Draft and states:

It is irresponsible of Reynolds to attempt to create a false sense of security about the potential dangers of passive smoking, especially at a time when incriminating evidence continues to accumulate. {1833.01, p. 7}

Wells left unchanged quotations from an international symposium in Vienna in 1984, which was organized by an individual affiliated with the tobacco industry (4) and exonerated ETS as a cause of disease.

In his letter to Morini, Wells even recommends deleting a short subsection of the paper dealing with chronic obstructive lung disease (COLD). The subsection presented a table from the fourth report of the Royal College of Physicians. The data in the table suggested that COLD might be associated with social class. However, Wells notes,

26. ... The same paragraph in the fourth Report which presents the table reprinted in the Draft states "it must be emphasized that at present only the effects of tobacco are reliably known to be of substantial importance." {1833.01, p. 4}

Table 9.1 (on p. 377) summarizes some of the changes suggested to the Blackman paper. These editorial changes would have effectively removed any reasonable presentation of the then-current state of scientific information from the paper and turned it into a purely public relations piece. Given that the paper was apparently prepared for "limited

distribution" within BAT to review the "smoking and health controversy," it is remarkable that B&W evidently did not want its employees to be presented with arguments contrary to the company position, even when those arguments appeared in a document designed to discredit mainstream scientific opinion.

Science And Public Relations From A Lawyer's Perspective

On June 16, 1981, in response to a request from Ernest Pepples, William Shinn, an attorney at Shook, Hardy, and Bacon, sent a "Confidential Memorandum" to Pepples, listing various events in the area of smoking and health over the past few years and categorizing them as either "plus" or "minus" items {2130.02}. Two days later, Pepples sent the same material, essentially verbatim over his own signature, with the list of items reformatted, in a "Privileged Memorandum" to C. I. McCarty, BATUS's chairman and chief operating officer, with a copy to Dr. I. W. Hughes, B&W's chairman and CEO {2130.01}. The complete text of the memorandum follows:

The following list of what I am calling "plus" and "minus" items is certainly not complete (nor in any particular order) but should be illustrative of smoking and health "events" over the past few years, sometimes having a great deal of coverage and sometimes not. I know you asked for "science" only but I have included a few other items for completeness. The designation of "plus" in some cases should probably read "mixed".

Many of the "positive" scientific developments involved publications by individuals who were being quietly supported by the tobacco industry (e.g., Seltzer, Sterling, Gori, Huber, Eysenck; see chapter 8). In addition to providing an insight into the wide range of issues facing the industry at the time, this memorandum once again demonstrates the extent to which the lawyers were dominating B&W's corporate affairs. As the memorandum indicates, the original request for information was for "'science' only," and yet the information was sought from an attorney rather than a scientist. Of course, there was a good reason for this: as discussed in chapter 8, the lawyers were directing much of the scientific research, and Shinn was one of the principal actors in that endeavor. Again, even assuming a scientist should not have compiled such a list, one might expect that a public relations person would have done so, but then the lawyers were pretty much in charge of that aspect of the business as well. One item in the list stands out as an example of the inconsistency that exists between the tobacco industry's internal and public pronouncements on smoking issues. Despite the consistent claims by the industry that it does not advertise to attract children and that it believes smoking is an adult custom that children should not adopt, the memorandum lists a congressional bill, which included a program to deter children from smoking, as a "minus."

Swaying Public Opinion

The documents show that Brown and Williamson—and probably the other tobacco companies—was not above using its significant economic clout to try to sway public opinion. Several documents from the 1970s and 1980s describe discussions about, or actual involvement in, manipulating corporations, the media, and physicians.

Influencing Corporations

As the tobacco industry faced increasing government regulation, it turned to the corporate world, particularly the corporations with which it had business ties, for assistance. Such corporate friends could obviously be useful to the industry in various ways, but, if nothing else, they could at least refrain from taking actions that were detrimental to the industry. A memo from the late 1970s discusses a proposal to use B&W's economic relationships to convince various corporations to maintain a more fa-

vorable attitude toward smoking and the tobacco industry. The memo, dated February 3, 1977, was sent from Ernest Pepples to C.I. McCarty.

A question has arisen in different forms about approaching companies we do business with who are prominent in association with the American Cancer Society or with other forces against the tobacco industry, or who happen to be involved in some other way with aspects of the anti-smoking campaign. Three examples: the Chairman of the St. Regis Paper Company is lending his name to the anti-smoking press release put out by the American Cancer Society; TWA [Trans World Airlines] would not let their premises be used by persons who were seeking petition signers in support of the industry's position before the CAB [Civil Aeronautics Board]; and the Chase Bank in New York is permitting a stop smoking clinic on their premises.

I favor the idea of raising with our friends in such companies the points which we consider are being used unfairly and falsely against tobacco and giving our side of the story.

It is imperative that we do not apply overt economic pressure in carrying our message. It is also essential that we operate this program solo. If it is done in collaboration with other companies or through the [Tobacco] Institute, in my opinion a serious question arises under various trade regulation laws which prohibit boycotts and other joint economic action.

Just as a rule of thumb, we have considerably greater latitude in deciding who [sic ] we will deal with than we do in deciding when we will stop dealing with someone. Both areas must be approached with great caution.

If properly structured, however, Brown & Williamson can certainly tell its side of the story in the smoking and health controversy and refute the false claims made against cigarettes. It goes without saying that communications to our friends in other industries should be done deliberately, carefully and tactfully in order to have maximum impact. If we follow that common sense approach, we will not stray off the path into the thicket of unfair trade practices and boycotts [emphasis added]. {2116.01}

In view of the industry's consistent public posture that smokers can quit if they so wish, it is hard to understand Pepples's concern over the existence of a stop-smoking clinic at the Chase Bank. In any event, the memo was written just as an initiative campaign was being launched in California to limit smoking in workplaces and public places (see chapter 10), and the tobacco industry in fact did exert enormous influence on restaurants and small business associations, as well as other corporate entities, to oppose that initiative. However, although the industry was able in the early days of the nonsmokers' rights movement to wield great influence with corporations, it gradually lost much of its corporate support as the dangers of secondhand smoke and the costs of smoking to employers became more evident. For example, when a law

to regulate smoking in the workplace was proposed in San Francisco in 1983, it was supported by the Bank of America.

Influencing The Media

Like any other industry whose products are the subject of public debate, the tobacco industry has always attempted to curry favor with the media. As discussed in chapter 5, during the "safe" cigarette era of the 1960s, the industry enjoyed some strong support in the media. However, by the 1980s much of that support had eroded, and the industry often had to struggle to find a sympathetic media voice. As several memos from the early 1980s indicate, the industry attempted to influence media coverage of proposed legislation on cigarette labeling and advertising by Congressman Henry Waxman (D-CA) and Senators Orrin Hatch (R-UT) and Robert Packwood (R-OR).

On February 8, 1983, Horace Kornegay, chairman of the Tobacco Institute, wrote to Ernest Pepples at B&W stating:

First, the project to determine in each company who is personally acquainted with the publisher, editor or business manager of any of the newspapers on the list which was distributed at the meeting of the Executive Committee and to set up a meeting with the publisher, editor or business manager for the purpose of informing him of the great dangers contained in the Waxman-Hatch-Packwood bills. I would urge you to move as soon as possible on this undertaking inasmuch as the Congressional committees could begin action on these bills within the next few weeks. {2131.02, p. 1}

This project appears to have been part of an industry-wide effort to approach all major media. Thus, a letter dated February 8, 1983, from C.H. Judge, who was in the office of the president of Lorillard Tobacco, to Samuel D. Chilcote, Jr., president of the Tobacco Institute, states:

Have met with Dick Monroe, Chief Executive and Cliff Grum, Executive V. P. of Time, Inc. Agreement reached for presentation to Editor-in-Chief of Time, Inc. and Managing Editors of all Time, Inc. Magazines. Presentation to be mainly rebuttal of upcoming Surgeon General's Report and a plea for fairness and objectivity.

...

cc: TIEC [Tobacco Institute Executive Committee] Members. We need help. Key city newspapers (eg. NY Times, LA Times, Wash. Post, Houston Chronicle, etc., etc.) key. If you can set up and attend a similar meeting, please let Sam [probably Sam Chilcote] know. {2131.03, p. 1}

In a memo to Dr. I. W. Hughes, B&W chairman and CEO, also dated February 8, 1983, Tom Humber, B&W assistant director of corporate

affairs, discusses the possible pitfalls involved in attempting to influence the media:

I have persistently criticized the industry and TI [Tobacco Institute] for not taking a pro-active stance with regard to article placement in what I call, for lack of a better umbrella term, the popular press. By that I mean the mass circulation magazines, ranging from Ladies Home Journal to Playgirl . That, I believe, is where the attack is headed. Having lost our advantage of positive pursuit during relative quiet, we must now fight a rear-guard action with limited hopes.

...

Given the proclivities of several companies, I believe there is significant danger of pressure tactics that could easily backfire and make matters worse. If we've got what we say we've got, then the authoritative, coherent presentation of information is the best course. The seminar approach is substantive and clean; it can, to some extent, be better controlled. It can provide more information to more people in a shorter time. We will be attacked for whatever we do, but the open approach has a better chance of being regarded as honest and straightforward, even gutsy, than private meetings in parking garages [perhaps a reference to "Deep Throat" of Watergate fame] or French restaurants.

Our message should be simple: We shall not use our advertising dollars to influence editorial material. In fact, we believe that the smoking and health controversy mandates more public discussion, not less, just as it mandates increased research. But the discussion should be informed, balanced and accurate, not based on anyone's propaganda. To that end, here are scientists, here are films, here are documents, here are resources for you to call on when you have questions [emphasis added]. {2131.04, p. 2}

Some of the same concerns are expressed in a February 14, 1983, "restricted" memorandum from Pepples to Dr. Hughes, regarding "industry contacts with editors":

The gist of what I said was as follows. While contacts to media by CEO's do make sense in the present circumstances, they need to select the ground carefully and coordinate with the appropriate advisers. I suggested that the better ground was the Waxman-Hatch-Packwood legislation on cigarette labeling and advertising because it presents First Amendment concerns which are so dear to the heart of publishers. I further suggested that the footing would not be as good on the alternative ground, heart disease and the Surgeon General's Report. [The 1983 Surgeon General's report dealt with smoking and heart disease.]

...

Finally, a concern was mentioned to [Arthur] Stevens about a potential backlash, legal and otherwise, if the publishers see our contacts as either solo or jointcoercionto influence news and editorial content. I mentioned the Wall Street Journal article of some several weeks back as well as the recent

contact from a Milwaukee reporter, raising the issue of advertising dollars and the press' freedom to express antismoking views. This is merely a caveat, not a bone-breaker. The industry has a good, respectable position to present. It is just a matter of keeping it in mind and saying it to the publishers. No company uses its advertising dollars in a coercive way. Indeed, the industry urges that the public deserves more not less discussion of the smoking and health controversy. But the discussion should be balanced and accurate and it should be free of the rhetoric and one-sided propaganda which sees no good in cigarettes and only great harm.

...

Curt [Judge] then informs his listener that if such legislation [providing for rotational warnings on cigarette packs] passes, litigation will wipe out the cigarette industry and the publishers will not have a customer for their advertising space. Arthur [Stevens] indicated that Curt Judge would use this approach as part of his presentation to the editors of Time Magazine . Stated another way, he would get into the Waxman/Hatch/Packwood situation even though it is extraneous to the central subject of heart disease and the Surgeon General's Report [italic emphasis added]. {2131.01, pp. 1–3}

That both Humber and Pepples would state that the industry does not use its advertising dollars in a coercive way is remarkable. Not only does the industry apply pressure through its advertising clout to forestall criticism in the media, but, as was discussed in chapter 5, the industry occasionally buys favorable media coverage by paying people to write articles supporting the industry without disclosing their ties to the industry.

Influencing Physicians

The tobacco industry's efforts to influence physicians began with the publication in 1954 of a booklet entitled A Scientific Perspective on the Cigarette Controversy (5). The booklet was merely one part of a large-scale public relations campaign being organized on behalf of the industry by the firm of Hill and Knowlton to counteract the emerging evidence of the health dangers of smoking (see chapter 2). According to a May 3, 1954, memorandum from Hill and Knowlton to the Tobacco Industry Research Committee (TIRC), the publisher of the booklet, it was released on April 14, 1954, and 205,000 copies were printed. It was sent to 176,800 doctors (general practitioners and specialists as well as the deans of medical and dental colleges), members of Congress, and 15,000 members of the press. As noted in a "Confidential" memorandum from Hill and Knowlton to the TIRC on August 17, 1954 (reporting the firm's activities through July 31, 1954), the booklet contained quotations from three dozen research and medical authorities, culled from both domes-

tic and foreign sources. The booklet "was held necessary and urgently timely to present to leaders of public opinion the fact that there was no unanimity among scientists regarding the charges against cigarettes" (5).

The documents contain evidence of continuing efforts by the tobacco industry to influence physicians over the next few decades. An untitled and undated document, apparently from about 1970, summarizes various proposed advertising strategies for the tobacco industry and B&W's analysis of them (see chapter 5); one item relates to "Communications with Physicians":

The need was felt for directing printed material to MDs on research efforts and studies which cast doubt on anti-smoking theory. Talk centered on reinstituting the [Tobacco] Institute's "Tobacco and Health Research" publication [which was distributed quarterly to more than 100,000 physicians in the late 1950s and early 1960s]. Our [i.e., B&W's] opinion was that a better approach would be to run a paid insert in some medical journals (particularly the well-read "Medical Economics" [a "throw-away" journal that focuses on how physicians can increase their incomes]) rather than direct mail pieces, which would probably end up in wastebaskets. We were in favor of a pilot study to determine the best method and, indeed, the feasibility of this type of communications. {2112.04, p. 2}

Thus, as in 1954, the tobacco industry was not content to influence physicians by passively responding to inquiries or communicating with them through the media. Rather, the industry was considering proactive steps, at substantial expense, to communicate directly with physicians.

Brown and Williamson also studied physicians' attitudes about cigarette smoke, to see what physicians were telling their patients and what their attitudes toward a safer cigarette would be. In March 1979 Dugan/Farley Communications Associates presented a report to B&W on a series of interviews with physicians {2127.01}. The emphasis the interviewers placed on "gasses" suggests that this was a marketing study for the Fact brand, which B&W had on the market at that time (see chapter 4). The interviewers found that doctors generally had poor success encouraging people to quit smoking, and that virtually all physicians were aware of conditions besides lung cancer linked to cigarette smoking. Despite this knowledge, fewer than one-third were aware that carbon monoxide is a problem or that other gases are linked with other diseases. Dugan/Farley's report concludes:

The "concept" of a cigarette that is low in tar and nicotine with a filter that greatly reduces known deleterious gasses was exposed to them [the doctors]. It was generally well received.

...

At this early stage in our research there seems to be hope for an educational program that would lead to acceptance by the medical profession of a "safer" cigarette. {2127.01, pp. 10, 11}

Medical textbooks at the time advised physicians to recommend low-tar cigarettes if a patient was not able to stop smoking. The marketing company's interviews with physicians introduced them to the concept of toxic gases in cigarette smoke, a problem they had not usually considered. Once confronted by this new problem with tobacco smoke, physicians responded favorably to the idea of a low-tar cigarette that also reduced "deleterious gasses." As it happened, B&W had such a product already on the market, Fact cigarettes, and the competition did not. However, B&W apparently was unable to capitalize on this insight, since Fact never attracted enough sales to warrant continued support. Indeed, this marketing study may have been part of a last-ditch effort to revive the brand. Nonetheless, the vignette well illustrates the underlying health benefit B&W promised in a low-delivery cigarette and, if the market research was, indeed, for Fact, it also shows that, with the Purite filter of Fact, the company made an additional health claim: that lower levels of certain toxic gases are better for the consumer.

Two years later, on April 29, 1981, G. E. Stungis, B&W's director of marketing research services, sent a "Limited" memorandum to Dr. I. W. Hughes, J. Alar (president and chief operations officer), and Ernest Pepples. In this memo Stungis discusses the possibility of marketing low-tar cigarettes through a Medical Communications Program {2129.01}. First, Stungis presents some background:

Up to now we have bits/pieces of how "Medical Communications Program" (MCP) may operate. Several optional and indeed variations within options exist ... all with cost structure implications.

Currently a number of assumptions exist ... by necessity at this stage. In this document Benefits Research will not be dealt with directly; consequently, we take as a given that:

There is [sic ] indeed benefits associated with smoking along the lines of stress/mastery.

There is a stable , sound and controllable benefits research team that is operative.

The output of the Benefits Research is technically sound.

Appropriate information channels with associated controls are indeed "assets in place".

Opposition counter measures developed [emphasis in original]. {2129.01, p. 1}

Using a communications diagram and an explanatory text, Stungis next describes an "MCP Model." In both the diagram and the text, he distinguishes between the "General Smoking Public" and "Extreme Concerned Smokers." The diagram pictures communications running among "Health/Medical," "Benefits Research Program," "Extreme Concerned Smokers," and "General Smoking Public." The text, which is written in shorthand form, reads as follows:

Benefits Research conducted in conjunction with credible asset . Results of Benefits Research are communicated through two controlled information channels ... devices for physician[s] and extreme concerned smokers. Physician community, accepts/refers in an interactive sense with smoking public and initiates information diffusion or so-called word of mouth process. To operate, the entire system must be continually driven. At introductory stage (time period?) referred smoking product would be only distributed through outlets associated closely with Health/Medical System [emphasis in original]. {2129.01, p. 2}

In conjunction with the model, Stungis notes that the following assumptions operate:

However, these assumptions are far from exhaustive:

Our earlier work (qualitative) with physicians provided clues ... no more, no less. We should pursue fairly rapidly to tighten up loose points above as well as uncover latent issues. Suggested further research work is:

Quantitative Study among Physicians ... primary objective would be to determine willingness on part of physicians to consider alternatives to consumables that affect patients' health and well being ... eg., cigarettes, coffee, etc. ... Properly designed study should confirm/refute assumption 1 through 3.

Qualitative Studies—Peripheral Health/Medical Systems (Pharmacist[s], Nurses, etc.) ... primary objective is to determine attitudes toward alternative risk/benefit consumables. This phase similar to early qualitative physician study. Would in all probability require quantitative follow up.

Consumer Qualitative Study ... primary object would be to obtain clues as to how effective physicians would be in convincing patients to use alternative products for improving his/her lifestyle management. Would require quantitative follow up [emphasis in original]. {2129.01, pp. 3–4}

Finally, Stungis outlines the cost estimates of the proposal {2129.01, p. 4}.

By 1981 several epidemiological studies had demonstrated that the tar reductions of the previous generation did not markedly reduce the risk of lung cancer (6), and internal BAT studies beginning around 1974 had shown that smokers of low-tar cigarettes compensate for the weaker smoke by smoking more intensively, in order to maintain their accustomed nicotine levels, and thereby lose much of the supposed benefit of low-tar brands (see chapter 3). Despite these findings, B&W apparently continued its efforts to sell low-tar cigarettes through the medical profession. Stungis's proposed Medical Communications Program may have been organized around the Barclay brand, B&W's "99% tar free" cigarette. Whatever specific brand, though, the concept belies any pretense that low-tar cigarettes are not about health. The MCP was organized to influence physicians to recommend certain types of cigarettes, if not specific brands, on the basis of their perceptions of health benefits.

These documents corroborate the impression that low tar and "low gas" were intended as a health benefit and demonstrate that B&W at least considered marketing these benefits to physicians. The documents do not indicate whether the MCP was ever actually put in practice. Its existence as a concept and the physician survey about "deleterious gasses," however, reveal that B&W, at least internally, considered marketing particular types of cigarettes as intended to prevent disease. This intent to provide health benefits (whether or not the products actually provided any), in turn, would have made the brands that were to be detailed through the MCP, as well as the "low gas" brand (probably Fact), drugs under the Food, Drug and Cosmetic Act.

Buying Friends

The Brown and Williamson documents include the confidential budget for state and local activities performed by the Tobacco Institute for 1987 {2229.01}. The proposed budget allotted $10,096,000 for state lobby-

ing activities, including campaign contributions and donations to a wide variety of organizations that play a role in determining public policy (table 9.2, p. 385). In many cases the connection to tobacco is not obvious; the industry simply seems to be opening doors and buying friends who can be called on to oppose controls on tobacco sales and use, taxation, and other issues handled politically.

Advertising

From the late 1970s through the mid-1980s, Brown and Williamson was investing in two new forms of mass advertising. First, the company bought on-screen advertisements in movie theaters, so-called trailers, that run before the movie itself is shown. Second, it contracted for product placements in movies themselves as well as in television shows. Both types of advertising reach large numbers of children. As discussed below, in one instance the placement of a cigarette ad in a movie particularly attractive to children proved to be a bad idea.

On-Screen Advertising And The
Snow White Controversy

The on-screen advertisements used by B&W were coordinated by Cinema Concepts, a company based in Nashville, Tennessee, and were distributed to movie theaters throughout the country. For example, as of January 24, 1984, advertisements for the Kool Jazz Festival, a nationwide series of jazz concerts sponsored by Kool cigarettes, were being shown on 1,235 screens at virtually every large theater group in the United States, with a combined yearly attendance of 93.8 million people (table 9.3, p. 387).

B&W's campaign backfired when its ads for Kool ran prior to screenings of Walt Disney's Snow White and the Seven Dwarfs in Newton, Massachusetts, and attracted protests by a grass-roots nonsmokers' rights organization, Massachusetts GASP (Group Against Smoking Pollution), because it was shown before a children's movie. The Brown and Williamson advertising department's reaction to this incident is summarized succinctly in an August 4, 1983, memorandum from N. V. Domantay, B&W's vice president of brand management, to Dr. I. W. Hughes, the company's chairman and CEO.

In line with your request to be kept informed of all complaints re: cinema advertising, attached is a copy of Mr. Sutton's attorney's letter, which summarizes the KOOL incident in Newton, Mass.

Our response is also attached. Please note that Mr. Sutton is not directing his complaint at us but rather at the theater owner.

Nevertheless, if this becomes a firestorm (apparently thanks to GASP's efforts in alerting other newspapers to the story), it could impact the acceptance rate of our ads among other theater owners. Worse yet, it could get Washington into the act.

Screenvision, our theater distributor, has already taken steps to avoid this kind of mistake in the future. The KOOL/BARCLAY film reels now carry a warning sign: "DO NOT EXHIBIT AD TRAILER WITH A G-RATED FEATURE ." In addition, Screenvision is soliciting input from theater owners as to how they could absolutely avoid these mistakes in the future [emphasis added]. {2400.15}

Most likely because of the negative publicity surrounding the Snow White incident, and potential further public relations problems, B&W ultimately discontinued its cinema advertising program. The decision to discontinue the program is set forth in a letter written on February 21, 1984, by Ernest Pepples, B&W's senior vice president and general counsel, to Cinema Concepts {2400.12}. According to a memorandum of March 8, 1984, to Pepples from B. H. Freedman, B&W's marketing counsel, Brown and Williamson had by then extracted itself from its contract with Cinema Concepts by settling for $545,000. Freedman indicated that a Jim Adams needed to know whether the payment should be charged to law or marketing, and recommended it be charged to marketing. In a handwritten note, Pepples agreed {2405.06}. That there was a question as to where the charges belonged may indicate that liability concerns played a role in the company's decision.

Thus, an extensive B&W advertising program using trailer advertisements in movie theaters was derailed by the protest of a small grass-roots organization. This incident illustrates the potential effectiveness of strong grass-roots action against tobacco promotion activities.

Product Placement In Movies And On Television

Product placement refers to the practice of having a specific product, or the product's brand name or logo, appear conspicuously during the course of a chosen movie or television show. Such placement is considered especially effective when an actor or actress playing the part of a hero or a sympathetic character personally uses the product in a conspicuous manner on screen. This is a relatively recent phenomenon; not only did older movies not contain product placements, but the producers and directors deliberately avoided having any identifiable product names appear in the movies. Of course, many products other than ciga-

rettes are now advertised in this manner, such as candy and soft drinks. However, such advertising of cigarettes raises obvious ethical concerns not associated with the advertising of other products; when the advertisements are placed on television, there may be legal ramifications as well, because of the ban on television advertisement of cigarettes, which went into effect on January 2, 1971.

Brown and Williamson hired Associated Film Promotion (AFP), a firm in Century City, California, to obtain product placement for B&W in motion pictures and television programs. B&W eventually became dissatisfied with the placement of its product by AFP and felt that other companies, particularly Philip Morris, were getting better exposure. In addition, B&W concluded that even Philip Morris often did not get its money's worth. According to an October 26, 1983, "Limited" memorandum from D. R. Scott, B&W's director of auditing, to N. V. Domantay,

The relationship with AFP or Mr. Robert Kovoloff, President of AFP, apparently began in 1979, and was prompted by the Company's desire to remain competitive in the "movie placement" arena [emphasis added]. {2400.01}

This statement suggests that tobacco industry advertising by product placement predated 1979 and was a widespread activity in the industry at the time. According to the audit report itself, between the inception of the contract with AFP in July 1979 and August 1983, B&W paid a total of $965,500 to AFP, which included $687,500 for special movie placements (summarized in table 9.4, p. 387) and $278,000 in retainer fees {2400.23, p. 1}.

In one of the most important deals arranged by AFP, it received firm written commitment for use of Brown and Williamson's products from Sylvestor Stallone (figure 9.2). In a letter dated April 28, 1983, and addressed to Kovoloff, the actor guaranteed in writing to smoke Brown and Williamson cigarettes in five of his upcoming films for payment of $500,000. Stallone wrote:

As discussed, I guarantee that I will use Brown & Williamson tobacco products in no less than five feature films.

It is my understanding that Brown & Williamson will pay a fee of $500,000.00. {2404.02}

The agreement between Brown and Williamson and Stallone (via AFP) was consummated shortly thereafter. On June 14, 1983, James F. Ripslinger, senior vice president of AFP, wrote Stallone:

In furtherance of the agreements reached between yourself and Associated Film Promotions, Inc. representing their client Brown & Williamson Tobacco

FIGURE 9.2. Letter from star Sylvester Stallone agreeing to smoke B&W products in five
upcoming movies in exchange for a $500,000 fee. Source: {2404.02}

Crop. (B&W), I wish to put in summary form the various understandings and details regarding B&W's appearances and usage in your next five scheduled motion pictures. B&W is very pleased to become associated with the following schedule of films and to have you incorporate personal usage for all films other than the character of Rocky Balboa in Rocky IV, where other leads will have product usage, as well as the appearance of signage (potentially ring).

The following is the current list of the next five (5) minimum films for B&W's appearance. It is understood that if production commitments change the order or appearance of any of the group of films to be released, B&W will appear in a substituted film. The only nonappearance for B&W will be by mutual consent of both parties in which case another Sylvester Stallone movie will be arranged for substitution.

The initial schedule of films is:

In consideration for these extensive film appearances of B&W products, Brown and Williamson agrees to forward to Robert Kovoloff and Associated Film Promotions, Inc. their initial deposit to you of Two-Hundred-Fifty-Thousand Dollars ($250,000.00). This represents a fifty percent (50%) deposit of the total financial commitment by B&W. The subsequent Two-Hundred-Fifty-Thousand Dollars ($250,000.00) is agreed to be forwarded in five (5) equal payments of Fifty-Thousand Dollars ($50,000.00) each payable at the inception of production of each participating film. {2404.01}

As discussed below, B&W terminated its contract with AFP before all the films were made, because of disappointment with the lack of prominent placement achieved. A file note, written on February 8, 1984, by J. M. Coleman, manager of media services, with a copy to T. P. McAlevey, media director, indicates that B&W discussed settlement with Stallone for $110,000, although it is not clear whether such a settlement was made or whether Stallone actually smoked B&W brands in any of the planned films {2400.07}.

Some motion picture producers were actively soliciting product placement in their films as a way to increase the overall profitability of the project. For example, Alta Marea Productions, a motion picture production company, sent promotional material to B&W soliciting product placement for its planned movie Supergirl , specifically mentioning the effectiveness of placements that had appeared in Superman II . The material, which is undated but refers to the release of Superman III "this June" (1983), states:

Audiences everywhere will recall watching the titanic battle over Metropolis between Superman and the Arch Villains, which occurred in front of gigantic Coca Cola and Cutty Sark signs, and will be able to tell you that a truck bearing a prominent Marlboro logo played an important role in the sequence. The advertising opportunities on the Midvale Street [in Supergirl ] will be equally as memorable.

In addition to the outdoor billboard advertisements, exposure can be provided on storefronts, bus shelters, neon signs and trade vehicles. We are also offering a variety of promotional and premium opportunities, and are developing plans for advertiser tie-in promotions, in conjunction with the United States Government programs on Drug and Alcohol Abuse and Highway Traffic Safety [emphasis added]. {2400.24, p. 2}

Although B&W did not respond to this solicitation, Liggett & Myers apparently did. Liggett's placement was one of many that were later highlighted in congressional hearings in 1989 on a bill (H.R. 1250) to, among other things, ban product placement of cigarettes. At the opening hearing, on July 25, before the Subcommittee on Transportation and Hazardous Materials of the Committee on Energy and Commerce of the House of Representatives, Thomas A. Luken (D-OH), a cosponsor of the bill, described the various methods by which "the merchants of addiction advertise and promote" cigarettes. One such method, he noted, was to

[spread] their message in ways that do not appear even to be advertisements, such as paying to have cigarettes in the movies. The subcommittee's investigation in recent months has revealed, for example, Philip Morris paid $42,500 in 1979 to have Marlboro cigarettes appear in the movie "Superman II" and paid $350,000 last year to have the Lark cigarette appear in the new James Bond movie, "License to Kill." Liggett told the subcommittee that in 1983 it paid $30,000 to have Eve cigarettes appear in the film "Supergirl", and American Tobacco told us that in 1984 it supplied more than $5,000 and other props to have Lucky Strike appear in the movie "Beverly Hills Cop." Philip Morris told us in 1987 and 1988 it supplied free cigarettes and other props for 56 different films. {2406.01, p. 2}

The tobacco industry realized that one of the benefits of placing tobacco products in films was that people would also be exposed to the product if they saw the movie on video or on television. As a letter from Kovoloff to Ted Parrack, vice president for brand management at B&W, dated August 4, 1981, makes clear, the placement of tobacco products in films was treated as a mechanism for getting around the broadcast ban on tobacco advertising:

Pursuant to our telephone conversation this morning, I believe that it would be most beneficial for the Barclay Brand to take advantage of the placement of two Barclay Billboards in the soon to be produced, Columbia Feature, The Tempest.

The Tempest, produced and directed by Paul Mazursky, will star Mr. John Cassavetes, Ms. Gina [sic ] Rowlands, Ms. Susan Sarandon and Mr. Victorrio [sic ] Gassman. The two principal characters, Mr. John Cassavetes and Ms. Gina Rowland [sic ], will both use Barclays [sic ] cigarettes in such a way that the packages will be readily identified by movie-goers, as well as future cable television, video cassette, video disc, and network viewers.

The total investment to Brown & Williamson for the above service is seventy-thousand dollars ($70,000.00), payable upon the commencement of production of The Tempest [emphasis added]. {2400.16}

This proposal generated an enthusiastic response from B&W. The letter {2400.16} includes a handwritten note from someone stating, "Tom: follow up immediately I would do." "Tom" was probably Thomas Neville, B&W's director of marketing services. On August 13, 1981, Neville wrote back to Kovoloff:

Confirming our August 12 conversation, we will proceed with the Tempest project. As you requested we will forward four 30-sheet billboards to your office. Additionally, I am enclosing two BARCLAY lighters which might be appropriately used in the movie.

Also we are getting together a list of new materials for the various brands and this will be forwarded to you as soon as possible. We are looking into creating a new KOOL T-shirt that can bee [sic ] worn by appropriate people. {2400.17}

Despite Kovoloff's representations, Brown and Williamson was not pleased with the results of the Tempest project. On March 22, 1982, Neville wrote Kovoloff:

Thank you for your recent letter explaining what we will receive for our $70,000 dollar commitment to your company. However, I am still at a loss as to what happened in 1981. I was under the impression that we would also get some placement in the film, The Tempest. While I now understand that the placement was not as originally presented, there was something for BARCLAY or was there?? The attached letter also indicates that two BARCLAY lighters were to be used. If so, can you let me know how? {2400.19, p. 1}

In 1983 B&W conducted an audit of its relationship with AFP, and a report on the results of the audit was transmitted from D.R. Scott to Domantay on October 26, 1983 {2400.23}. The audit was requested by Domantay and Coleman. Its principal objectives were stated to be:

(1) review of current and past contractual agreements, (2) review of Company internal control systems, and (3) review of performance of AFP. {2400.23, p. 1}

In his October 26, 1983, memorandum accompanying the audit report, Scott raised serious questions about the sufficiency of B&W's procedures for documenting the product placements specified in its contract with AFP.

Based on the audit findings and recommendations, I have concluded that the Company's internal controls and procedures for documenting intended movie placements and performance have not been and are not currently adequate. {2400.01, p. 1}

Perhaps more troubling to B&W, however, was the fact, as noted in the audit report, that AFP had a practice of keeping two sets of books and of distributing payments in the form of cash, jewelry, or cars, rather than in the form of checks.

During a field visit we were informed by AFP personnel that AFP keeps two sets of books for its movie placement activities. One set of books is for their daily operations (commissions earned and ordinary business expenses) and the "second set of books" is for all their special movie placements (e.g., the Sylvester Stallone movies).

Mr. Robert Kovoloff, President of AFP, and Mr. James Ripslinger, Senior Vice-President, are primarily in charge of operations. They told us the following concerning the monies involved with the special placements:

It should be noted that this "second set of books" appeared to have been prepared solely for the auditor's visit. {2400.23, p. 3}

According to the audit report, the practice of keeping two sets of books violated the provision in the contract between the parties requiring AFP to maintain proper accounting procedures {2400.23, pp. 3, 4}. As is indicated in an audit of the AFP payments to actors, producers, and other people associated with the films where B&W products were placed (see table 9.5, p. 388), B&W's auditors did not question the use of noncash payments. (After release of the documents, the Los Angeles Times found that many of these goods never reached the stars; Kovoloff told the Times that Sean Connery never got any jewelry, and that Paul Newman, Sylvester Stallone, and Clint Eastwood never got cars [7].)

As part of the audit, B&W did a detailed analysis of several of the films, similar to Hazan, Lipton, and Glantz's research on smoking in the movies (8), except that it was much more detailed and focused on looking for specific brand imagery. The B&W auditors were not pleased with what they found:

No procedures have been in place at B&W to ensure that AFP actually has been placing our products in movies. Because of this, we viewed seven movies in which AFP has indicated that they have made placements for B&W (two of which involved special payments). Our observations are as follows:

Body Heat —We observed a Kool poster on a wall in a restaurant. It appeared three times in the movie. The first time it was on screen for approximately a minute, but was blurred except for a couple of seconds. The other two times the sign was blurred. We also observed the two lead characters in the movie smoking Marlboro throughout the movie.

First Blood —We observed a Kool lights billboard on screen for a couple of seconds. We saw a glimpse of a Raleigh billboard and a Barclay poster.

Jinxed —The top half of a Barclay pack appeared on screen momentarily.

Only When I Laugh —We observed a blurred pack of Kool on the front of a vending machine. The lead character of the show bought a pack of Marlboro from the machine. She smoked Marlboro throughout the movie.

Nine to Five —We observed no B&W products or advertising in this movie. We did see a cigarette vending machine in the movie.

Never Say Never Again ($20,000 special payment)—We observed what appeared to be a pack of Kool Super Lights on screen for one or two seconds. The word Kool could not be seen. A pack of Winston appeared briefly in this film.

Tempest ($70,000 special payment. The Company also was to receive a bonus placement in Traces. We were unable to obtain a copy of Traces.)—We observed what appeared to be a pack of Barclay on screen for a second. The word Barclay could not be seen. Mr. E. T. Parrack (Vice President of Brand Management when the Tempest was released) stated that Mr. Kovoloff called shortly after Tempest was released and told us that B&W did not receive much exposure and he promised to provide placement in two or three other movies as a "make good". Records currently available at B&W do not indicate which movies were to be utilized.

With the exception of the Sylvester Stallone movies, there is virtually nothing in writing at B&W which indicates what specifically B&W is to receive. The agreement involving the Sylvester Stallone movies only specifies that he will be smoking our products in four of the five movies and that B&W signage will be included. The agreement does not specify the length of time or frequency of [sic ] which our products will appear nor does it assure that the visual clarity of the product logo will be acceptable to B&W. {2400.23, pp. 5–6}

Despite these concerns, as late as November 8, 1983, Tom Humber, B&W's assistant director of corporate affairs, wrote to J.M. Coleman, manager of media services, and recommended continuing the product placement program:

Confirming our conversation of yesterday, I support the continuation of product placement in movies made for theatrical release, provided that correct business practices are followed, there is a concerted effort to restrict the program to adult-interest films and characters, we have greater knowledge than I believe currently exists about context, and each project is commercially sound. {2402.06}

In any event, disappointment with AFP's performance and growing political pressure—fueled in part by the Snow White controversy—led Ernest Pepples, B&W's senior vice president and general counsel, to recommend getting out of product placement. He explains his reasons in detail in a "Restricted and Privileged" memorandum to Coleman on November 8, 1983:

Brown & Williamson should discontinue the [AFP] program in an orderly way.

Of the four points listed under RATIONALE [in a draft statement of issues on the AFT matter], I agree only with the statement that "control weakness can be corrected". In my opinion:

Accordingly, it is foolish for Brown & Williamson to continue this program both for business and political reasons [italic emphasis added]. {2400.02}

In addition to analyzing the value of its own product placement in movies, B&W was acutely aware of the placement of its competitors' products in films, and evidently believed that they, too, were not effectively served. For example, in a memo to N.V. Domantay, dated December 5, 1983, on the subject "Apocalypse Now—Marlboro," Coleman concludes:

The exposure Marlboro received from this movie is worth something but not $200M—if I had to assign a value it would be approximately $100M. This placement is not worth $200M because the actual logo is not seen, and because of the setting, they were not able to use any other product identification (i.e. billboard, cab top). This movie is a "Marlboro commercial" only to people in our industry because we know the pack and the cigarette brand even when the pack is not shown—but to an ordinary person, the pack/cigarette shots are not that intrusive. {2400.13}

Of course, Philip Morris may have had a different opinion about the value of Marlboro's appearance in this film.

On January 11, 1984, B&W met with AFP to work out termination of their agreement. The meeting is summarized in a memorandum of February 2, 1984, from Coleman to Domantay:

During the period of the contract between AFP and B&W, AFP claims to have attempted to place Brown and Williamson brands in more than

150 movies or television shows and succeeded in making placements in 22 movies and one television show (table 9.6, p. 390) {2400.23, p. 10}. Significantly, product placement in the television show The A-Team , a program with a strong youth appeal, was paid for by the B&W advertising budget. The payment for product placement on a television show did not appear to raise any questions with those involved in the process, despite the federal law against advertising tobacco products on television. The auditors, and indeed everyone in the process, treated it in a very matter-of-fact manner.

Whatever Brown and Williamson's professed policies on advertising may have been, any advertising in theaters, particularly when an ad appears in conjunction with a movie aimed at a young audience, would reach children and teenagers. Yet, B&W stopped the theater advertising only when a public relations gaffe made its continuation too embarrassing. Similarly, product placements in the movies and on television were discontinued only when the company determined that it was not receiving sufficient value for the money being spent. There is nothing in the documents to indicate that the company was having second thoughts about the propriety of the practice.

Using Modern Marketing Techniques To Sell Cigarettes

As the public became increasingly concerned about the health dangers of smoking, the marketing of cigarettes became increasingly difficult. Thus, in addition to using the more traditional marketing methods, such as emphasizing the taste of the product and targeting various population segments, the industry attempted to develop more sophisticated marketing techniques, based on knowledge of smoking behavior; this new approach to marketing was the subject of a Smoking Behaviour—Marketing Conference held in Montreal, Quebec, from July 9 through July 12, 1984. The conference was attended by delegates from Imperial Tobacco Limited (ITL), the Canadian subsidiary of BAT, who worked in marketing or research in five countries (United States, United Kingdom, Australia, Germany, and Canada). The conference proceedings demonstrate that the tobacco companies took research about marketing at least as seriously as research about the health effects of their product.

Evidently, the purpose of the Montreal conference was to increase interaction between the marketing and research personnel at B&W and BAT, in order to devise methods of selling tobacco products in an increasingly

unfavorable environment. In his opening remarks for the conference, P. J. Dunn, vice president of research and development at ITL, notes the importance of having a clearer understanding of smoking behavior:

One way of defining smoking behaviour has been the fundamental understanding of the complete smoking process, but I feel that this definition should be enhanced to include the complete smoker process. In other words we must understand all elements which make up our customer, his wants and needs, translate these, using product, pack imagery, advertising, into some specific brand direction which inevitably will meet those needs. The basic question that begs a response is how do we provide smoker satisfaction from a lower tar base with specifically enhanced acceptability traits, and at the same time help our consumer rationalize his decision to smoke in light of increasing external pressures .

... [T]he means by which this goal may be better accomplished would be if marketing and consumer research and product development techniques and methodologies are exchanged freely [emphasis added]. {1224.01, p. BW-W2-03186}

Dunn then outlines the purposes of the conference sessions:

Topics covered at the conference included (1) discussion of a consumer survey; (2) an overview of research on human smoking behavior; (3) ITL's approach to marketing and new product development, segmentation, and models to explain brand-switching behavior; (4) marketing research methods; (5) the response of research and development to marketing needs; (6) a review of and update on the role of nicotine; and (7) social pressures, including consumer awareness of smoking and health issues. (The overview of nicotine presented is discussed in chapter 3.)

Wayne Knox, marketing director of ITL Canada, described ITL's sophisticated market assessment methodology to identify key consumer

trends on a monthly basis. After analyzing these trends, ITL developed a "switching model" of marketing:

Smokers don't buy products[,] they buy brands. We sell a Marketing Mix—Product, Package, Ads, etc. {1224.01, p. BW-W2-03245}

In other words, the product itself is only one element that contributes to the consumer's decision to buy a particular cigarette.

The first area of discussion focused on knowledge of the consumer's smoking behavior—specifically, his or her brand-switching behavior. The delegates agreed that the companies needed to investigate the roles of product, pack, imagery, and advertising in brand switching. These discussions of consumer smoking behavior clearly show that the tobacco companies were interested in getting people to start smoking as well as to switch brands. The tobacco companies have continued to deny that their advertising induces people to start smoking. Nevertheless, the conference report states:

Since our future business depends on the size of this starter population set, it was considered important that we know why people start to smoke and this may be more important than why they continue to smoke [emphasis added]. {1224.01, p. BW-W2-03197}

Participants at the conference also discussed the significance of smoke components, including nicotine, in relation to development and marketing of a low-retention cigarette; market segmentation; target markets; third-party endorsements; and communication of the attributes of the product.

Conclusion

The sophisticated marketing, political, and public relations strategies continued to protect B&W and the tobacco industry's interests very well through the 1980s. Advertising and promotional techniques grew in sophistication, as did the industry's efforts to influence editorial decisions and key community organizations to support the industry's position—or at least keep the smoking and health "controversy" open. As with the efforts surrounding scientific research, the effort was closely monitored by lawyers, with constant attention to avoiding any statement that could be construed as admitting that smoking causes any disease whatsoever. At the same time, the companies were to insist that an open-minded debate on smoking and health should take place. These techniques, which have served the tobacco industry so well, are now being applied to contest the evidence that passive, as well as active, smoking is dangerous.

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References

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2. Garfinkel L. Time trends in lung cancer mortality among nonsmokers and a note on passive smoking. J Natl Cancer Inst 1981;66(6):1061–1066.

3. Garfinkel L, Auerbach O, Joubert L. Involuntary smoking and lung cancer: A case-control study. J Natl Cancer Inst 1985;75:463–469.

4. Bero L, Galbraith A, Rennie D. Sponsored symposia on environmental tobacco smoke. JAMA 1994;271:612–617.

5. Pollay RW. A Scientific Smoke Screen: A Documentary History of Public Relations Efforts for and by the Tobacco Industry Research Council (TIRC), 1954–1958. Vancouver, Canada: History of Advertising Archives, 1990. Tobacco Industry Promotion Series.

6. USDHHS. The Health Consequences of Smoking: Cancer. A Report of the Surgeon General. US Department of Health and Human Services, Public Health Service, Office on Smoking and Health, 1982. DHHS Publication No. (PHS) 82–50179.

7. Levin M. Tobacco pitchman agrees stars did not receive gifts. Los Angeles Times 1994 June 14:1.

8. Hazan A, Lipton H, Glantz S. Popular films do not reflect current tobacco use. Am J Pub Health 1994;84:998–1000.