4. Beating the Tobacco Industry at the Polls

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Having laid the groundwork for going directly to the voters with their proposal to increase the tobacco tax, proponents still had to finalize the initiative and develop the necessary political and financial resources to withstand the huge campaign that everyone knew the tobacco industry would mount.

Locking in Money for Prevention

By mid-May 1987, Curt Mekemson (ALA), Tony Najera (ALA), Betsy Hite (ACS), and Assembly Member Lloyd Connelly (D-Sacramento) had begun discussing the transition from the legislative to the initiative process.^[1][2] Tim Howe, Connelly's chief of staff, took responsibility for writing the initiative. His goal was to present something clear and understandable to the public that was as impervious to industry attack as possible. Mekemson, Hite, Najera, and Connelly were Howe's primary sources of feedback during this initial drafting.

As the details of the initiative began to take shape, Mekemson was adamant that some of the revenues go toward funding tobacco prevention programs. Even before the Legislature defeated ACA 14, he predicted,

I think we have three major arguments for dealing with the tobacco problem: health impacts, kids, and economic impacts. While we may need to substantiate each of these in greater detail, they are real and extremely difficult for the tobacco industry, or others, to challenge. In these arguments lies the

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― 51 ―

justification for increasing the tax and for focusing the tax revenues on the problem. Most important is prevention. Everything else pales in relation to persuading kids not to smoke and helping smokers to quit. This is our justification for demanding that a substantial portion of the funds go for school and community health education. Without this guarantee, prevention funds will be eliminated whenever short term crises emerge.^[2] [emphasis in original]

Mekemson's early insistence that money for prevention be tied to the initiative proved critical in fights over implementation years later. Even with this strong language, public health proponents would face an uphill fight to maintain the prevention elements within Proposition 99 against strong opposition in the Legislature from the tobacco industry and the CMA.

Connelly wanted some legislative discretion to make the proposition less vulnerable to attack as an instance of “ballot-box budgeting.” In a May 13, 1987, memorandum, Mekemson was worried about not including some restrictions. He wrote, “I continue to feel that we need to set percentages. I know it isn't nice not to trust the infinite wisdom of the legislature, but I don't. If it comes down to dealing with immediate crises as opposed to funding long term solutions, the pressure for the immediate is tremendous.”^[1] Mekemson, Najera, Hite, and Connelly decided to hold a “high-level/high-stakes” meeting of leaders from the participating organizations and other interested groups. The meeting occurred in San Francisco on June 17, 1987, with the CMA, California Association of Hospitals and Health Care Systems (CAHHS), Planning and Conservation League (PCL), Blue Cross of California, California Dental Association, California Thoracic Society, and the Health Officers Association of California attending. The following revenue allocation was presented at the meeting: 25 percent to medical care (which included 5 percent for research), 20 percent to education, 5 percent to the environment (nonhealth), and the remaining 50 percent to established accounts, to be allocated by the Legislature.

In writing the initiative, the Coalition tried to select language that would broaden public support. One important instance of this approach was the titling of the initiative. The polling conducted for the Coalition (by Charlton Research) as well as for the tobacco industry (by Tarrance and Associates) had showed that Proposition 99 was viewed more positively when framed as a health issue. So Connelly pushed the Coalition to come up with a title that emphasized the health message; this title would help define the issue in the campaign, in the literature mailed to all voters, and in the voting booth where voters were reading the ballot items. According to Hite, “We submitted for title and summary with this

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real great encouragement from Lloyd about how it needed to be the `Health Protection Act, Health Protection Act!' And the opponents were just scared to death that was how it was going to get titled. And guess what? We got it titled. Attorney General Van de Kamp was very good to us.”^[3]

A seemingly minor clause in Proposition 99, as it was eventually finalized, was to cause great problems for tobacco control advocates. The drafters of the initiative specified that it could be amended by a four-fifths vote of both houses of the Legislature if the amendments to the initiative were “consistent with its purposes.” This clause was included to avoid criticism that the initiative would be inflexible; as a practical matter, the authors felt that only technical amendments would be able to garner this level of support. Pro-tobacco forces would eventually use this clause to loot Proposition 99 revenues.

Organizing the Campaign

The ALA's original $50,000 contribution defined the financial standard for Executive Committee membership of the Coalition for a Healthy California. From June through September, the Executive Committee consisted of the ALA, ACS, PCL, and Connelly. The AHA, which did not consider political issues like the tobacco tax initiative a priority,^[4] did not participate on the Executive Committee, nor did the CMA or CAHHS.

The effort by the tobacco industry to “tokenize” the CMA's participation was only one part of the industry's strategy to deny resources to the Coalition. In its report to the Tobacco Institute, A-K Associates noted, “Connelly, being a strong and respected member of the liberal political community, personally sought help from the Hayden/Fonda machine and organized labor.”^[5] The industry hoped to block the participation of these groups, too.

Campaign California, a liberal statewide political organization founded by Assembly Member Tom Hayden (D-Santa Monica) and his wife, actress Jane Fonda, had approached the Coalition in the spring and expressed interest in participating in the tobacco tax effort. While Campaign California had money to help finance the effort, a full-time campaign staff, and statewide volunteers, some Coalition members were concerned that Hayden, Fonda, and Campaign California's liberal politics would have a negative impact on the Coalition and the tobacco tax effort. By July, however, they let Campaign California join the Executive

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Committee because the Coalition needed their help. The industry countered this move by approaching Campaign California through the polling firm Fairbank, Bregman and Maullin (which also did a lot of work for Democrats) to convince Hayden “that there is little advantage to him personally or politically to get involved in the Connelly tobacco tax Initiative. Hayden/Fonda has pledged a modest $25,000 to the tax initiative.”^[5] This amount was the same as that pledged by the CMA, enough to support the effort without providing it with sufficient resources to succeed. But in contrast to the CMA, Campaign California was to make a significant contribution to the campaign that went well beyond monetary value.

Connelly tried to attract organized labor by offering to incorporate into the tobacco tax initiative the provisions of a pending union initiative designed to strengthen Cal-OSHA's worker protections. Jack Henning, secretary-treasurer of the California AFL-CIO, turned him down. (Organized labor had sided with the tobacco industry in opposing Propositions 5, 10, and P.) The tobacco industry, working through Paul Kinney of A-K Associates, had already made a deal to keep organized labor out of the tobacco tax effort.^[5]

In September 1987, W. James Nethery, a dentist and the immediate past president of ACS, was elected chair of the Coalition, which reinforced ACS's involvement. The Coalition hired Jack Nicholl as full-time campaign director. Nicholl, the past executive director of Campaign California, brought essential statewide political and campaign expertise to the Coalition. Nicholl set up the campaign headquarters in Los Angeles. When later asked why he had chosen Los Angeles over Sacramento, he answered, “If you listen to most of the griping that's going on, it's the Sacramento crowd that's griping. …They were always tied in these knots of conflict and contradiction among themselves. …That's why I insisted that the headquarters had to be in LA. Because that's where people are, that's where the money is, and that's where you get away from this crap.”^[6] The Coalition also hired Ken Masterton to coordinate the signature campaign. Masterton, who had managed the winning campaign for Proposition P in San Francisco in 1983, was not only experienced on the tobacco issue but also willing to work with both voluntary and paid circulators.

Nicholl tried once again to interest some of the veterans of the Propositions 5, 10, and P campaigns and was rebuffed as others had been. Nicholl approached Stanton Glantz of the University of California, San

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Francisco, whose expertise in anti-smoking legislation he respected. Glantz declined to get involved: “I told them I thought they didn't have a prayer of winning. And even if they did, it was a stupid idea because the only thing that mattered was the tax and they may as well take the money out and dump it off the Golden Gate Bridge, because the health department would never run the kind of gutsy program it would take to do any good. And so I had basically nothing to do with it because shortly thereafter I went to Vermont on sabbatical to write a statistics textbook. I'm pleased that I was wrong.”^[7]

The Industry Campaign

As the Coalition was gearing up in September 1987, the tobacco industry was also moving ahead with its plans to oppose the initiative. Fairbank, Bregman, and Maullin conducted a statewide poll for the Tobacco Institute. The results were not encouraging for the industry:

In putting together a campaign on an initiative, whether for or against it, one usually looks for how the issue polarizes different segments of the population. Some of these are often in the form of Democrats vs. Republicans, men vs. women, liberals vs. conservatives, more affluent vs. less affluent. …These common voting divisions do not exist as readily on this issue. On most questions in the study there are few or no differences in the larger voting groups. …the only consistent group against the initiative is that of current smokers, who comprise just 20% of the electorate.^[8]

As revealed in the industry's poll conducted six months earlier by Tarrance and Associates, the greatest vulnerabilities for the initiative appeared to be in the issues of taxation and government regulation. The most persuasive arguments against the initiative were the following: “this law would create another state bureaucracy with a large budget” (43 percent said this argument made them less likely to vote for the initiative) and “government will have more money to mismanage and waste” (41 percent said this argument made them less likely to vote for the initiative).^[9]

Echoing the strategies used successfully by the tobacco industry in opposing Propositions 5 and 10, the industry's pollsters advised the “no” campaign to take this approach: Proposition 99 is a flawed solution to a real problem. They reasoned that “if the debate remains one of pro-smoking vs. anti-smoking, the American Cancer Society/Heart Association/Medical Association vs. the tobacco industry, then the measure will

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pass easily. If, however, the debate can be turned to the defects in the particular initiative, conceding the `good intentions' of the authors, then the voters may decide the issue in terms favorable to the `no' side.”^[8] To win, the industry had to focus attention away from the health issue and toward the flaws in the initiative.

Getting the Medical Providers to Buy In

After repeated invitations, CAHHS representatives finally attended an October 1, 1987, meeting of the Coalition's Executive Committee. They expressed an interest in the initiative but raised concerns about its language and revenue allocations. The Executive Committee agreed that CAHHS, as a medical provider organization, should meet with the CMA to discuss the initiative language as well as the organization's involvement in the tax effort.

The Executive Committee recognized that the initiative had to amend the Gann Limit so that its spending provisions could withstand a legal challenge. To qualify a statute initiative for the ballot in California, supporters were required by state law to collect valid signatures amounting to 5 percent of the number of votes cast in the last gubernatorial election (372,178 valid signatures in this instance); but a constitutional amendment initiative, which was needed to address the Gann Limit, required signatures amounting to 8 percent of the votes cast in the last gubernatorial election, or 595,485 valid signatures.^[10][11] Assuming a 65 percent validity rate, the Coalition had to collect over 915,000 raw signatures.

The need for extra funds as well as additional organizational and political support to collect the additional signatures was the main reason why the Executive Committee sought to enlist the participation of the CMA and CAHHS. The CMA was clear about its price for entry: it wanted more money for medical services. Carolyn Martin, a volunteer with the ALA who would play a leading role in the battles over Proposition 99, recalled the meeting years later: “My most vivid memory of the meeting was how shocked I was that the CMA proposed eliminating the Research Account completely and using the money for medical services. Since the American Lung Association includes the California Thoracic Society [a physicians' organization of lung specialists], I said, `absolutely not.' I couldn't believe doctors would oppose money for basic medical research on tobacco-related diseases! Yes, I was naive.”^[12]

The CMA got its money.

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According to the minutes of an October 26 meeting, the Executive Committee agreed to qualify a constitutional amendment and to allocate an additional 25 percent of tax revenues toward medical services in exchange for CMA and CAHHS participation and financial assistance to the tobacco tax effort. The minutes stated that “The Coalition is relying on pledges from CMA/CAHHS that between the two they can guarantee $250,000 in cash or signature equivalents and if they cannot make such guarantees in good conscience, they must tell us [the Executive Committee] so.”^[13] Duane Dauner, president of CAHHS, and Fred Armstrong, president of CMA, accepted these conditions.

Unbeknownst to the participants at the October 26 meeting, however, the tobacco industry had already created procedural changes to return power to the “old guard” at the CMA and to neutralize Armstrong's authority on the initiative. The CMA had no intention of producing $250,000 in cash or signatures. In fact, when he was interviewed in 1993, CMA vice president and chief lobbyist Jay Michael did not remember that the CMA had made any commitments. He said, “I was the point person. If anyone would know, I would know, and I don't remember. I'm not sure we would ever say we would bring X amount. I don't think we ever did that.”^[14]

In contrast to the CMA, CAHHS fully intended to keep its commitment and did so after finally deciding to get involved. According to Doug Hitchcock, the vice president and counsel for government relations at CAHHS, “We made a very heavy organizational commitment that we followed through on. And because we had done initiatives before, I think we brought some experience to the Coalition on ballot initiative campaigns. …Where hospitals were comfortable doing the signature-gathering campaign, they did signatures; where they weren't, they wrote a check, and most hospitals, as I recall, did some signature-gathering and then wrote a check for the balance of their commitment.”^[15]

The new revenue allocation was not based on the results of the February 1987 Charlton Research poll, as ACA 14 had been, but rather on political and monetary considerations within the Coalition (figure 1). Funding for medical services was given higher priority than education and prevention. Medical services received the greatest share of revenues—45 percent—much more than the original legislative proposal of 27.5 percent. The allocation for education and prevention was reduced from 47.5 percent to 20 percent. The share for research was reduced from 15 percent to 5 percent. (The research money was given its own

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account so that it would not be the first money to be cut or redirected.) The allocation for nonhealth (environmental) programs was cut from 10 percent to 5 percent. The 25 percent to be allocated by the Legislature, down from 50 percent, could be appropriated for the uses specified for the other accounts.

Collecting the Signatures

On December 4, 1987, volunteers and paid circulators began collecting signatures throughout the state. The Coalition held statewide press conferences on December 16 to launch the petition drive, and it received extensive media coverage.^[16][17] The tobacco industry, which had hired the Sacramento-based political consulting firm Townsend and Company to conduct its campaign activities, formed Californians Against Unfair Tax Increases (CAUTI) and immediately denounced the initiative.^[17]

The financial status of the Coalition was extremely important to the

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success of the ongoing signature drive. Chronically short of money, the Coalition depended almost entirely on the financial contributions of its Executive Committee members.^[18] According to Nicholl,

“We tried to work the corporate self-interest angle and the medical industries. Tried to work all the professional associations, and the suppliers, and people who would benefit by more money being pumped into the service delivery end of the health care system. …None of it worked; it was a complete failure. …The only things that worked were the institutional interests that were built into the text of the initiative. That's what worked. The hospitals primarily, because they were going to get millions and millions, hundreds of millions of dollars a year. And the Cancer Society, because this was its mission statement. Lung Association, same way.”^[6]

In addition, Americans for Nonsmokers' Rights (ANR), while not actively participating in the campaign, allowed the Coalition free use of its mailing list as well as access to its large network of politically oriented grassroots volunteers.^[19]

The Coalition experienced several problems during its signature-gathering campaign. The start of the petition drive in the middle of December coincided with the holiday season, and bad weather during the winter months caused an initial low return in signatures. After the first month and a relatively slow start, Campaign California and its grassroots network of volunteers joined the signature-collecting effort as additional paid circulators.^[20] Other initiative campaigns, also aimed at the November 1988 election, were paying professional petitioning firms forty-five cents to seventy-five cents per signature; Masterton was paying only thirty cents to thirty-five cents per signature, which reduced the number of paid circulators working for the Coalition.^[21] As it had planned the previous September, the tobacco industry even began circulating its own petition, entitled “The Tobacco Tax Ripoff.”^[5][22] This petition was not an official one approved by the secretary of state to qualify an industry-sponsored initiative; it was solely designed to reduce the pool of available paid circulators (by paying them as much as fifty cents per signature) and to confuse voters about the tobacco tax issue.

The voluntary health agencies had an overly optimistic view of the commitment and effectiveness of their local units in gathering most of the signatures. Their inability to get signatures surprised Nethery:

I anticipated that the volunteers, mainly meaning Heart and Lung and Cancer, would collect two-thirds of signatures. In reality they probably collected less than a third. What the truth of the matter was, and maybe I was naive, was that voluntary health agency volunteers are not psychologically and

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mentally equipped to get involved in political campaigns. They're out to do good and be nice people, and raise funds for other people. But they're not there to go toe to toe with anybody, whether it be on television or whether it be in the media, or anything.^[23]

Those who had observed the ability of the Propositions 5 and 10 campaigns to gather signatures through an all-volunteer effort failed to take into account the difference between the ANR and the voluntary health agencies. ANR had its roots in political activism. The voluntary health agencies had their roots in medical practice and middle-class charity. For ANR, political involvement was assumed; for the health agencies, it was often a dubious enterprise. The health agencies' ambivalence about political involvement would continue throughout the Proposition 99 battles, including the efforts to secure implementing legislation that reflected the initiative.

The CMA was not of much help to the signature-gathering campaign. A confidential report, dated March 29, 1988, and entitled “Tobacco Tax Initiative,” summarized the weaknesses of the Coalition campaign and expressed qualms about backing the initiative. The author, “JM” (probably Jay Michael), reported:

1. The campaign is broke, and the signature effort is slowing down,
2. Campaign owes American Lung Association $25,000
3. Jack Nicholl, the campaign director, is an unknown quantity and Gilanto—the ad man is also unknown. If the initiative qualifies it is uncertain that this team has the expertise to carry off the campaign.
4. A minimum of $2 million is needed to conduct the most basic campaign. Nobody has the slightest idea of how the money might be raised.
5. The tobacco industry has in its possession the most sophisticated data attainable on which to develop strategy and is prepared to spend whatever is necessary to defeat the proposal. They have bought options to retain the best campaign management available. Campaign strategy is beginning to jell.
6. The proponents possess only fragmentary data, thin expertise, no strategy and is broke.
7. The tobacco industry is planning a “doctor/hospital bashing campaign.”

Watershed Decisions Faced by CMA

1. Do we want the initiative to qualify?
2. Do we want to attempt to gain some measure of control over the direction of the campaign?
3. Do we need to protect physicians from a doctor-bashing campaign?
4. What will be CMA's financial involvement in the campaign?^[24]

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The CMA proposed to work with CAHHS to gain some control over the campaign. It also proposed to “Meet with industry representatives in an attempt to circumscribe the type of campaign each side might wage.”^[24] The CMA was apparently continuing to work both sides of the fence, participating minimally in the Coalition while consulting with the tobacco industry. Whatever the results of the meetings with tobacco industry representatives, the industry eventually appeared to pull its punches somewhat on the doctor-bashing theme once the campaign began.

In the end, 73 percent of the signatures were gathered by paid circulators (66 percent from Masterton and 7 percent from Campaign California), 9 percent from ALA, 5 percent from ACS, 6 percent from CAHHS, 2 percent from the CMA, and the rest from mail efforts and miscellaneous sources.^[25] The Coalition collected 1,125,290 raw signatures by the May 4, 1988, deadline, and the initiative qualified for the November 1988 election as Proposition 99.^[26]

Launching the Election Campaign

On May 2, 1988, the Coalition held a series of press events across the state when the signatures were delivered for validation.^[27] Some signatures were delivered in ambulances to attract press coverage. The same day, CAUTI held a press conference arguing that the tobacco tax was just another way that special interests and doctors would get richer. Even though the election was six months away, the battle promised to be long and controversial.

In late April, the Coalition had commissioned Charlton Research to gauge public opinion on the tobacco tax initiative and determine campaign themes and strategy. Support for the tobacco tax increase remained between 61 percent and 65 percent before and after various arguments for and against the initiative had been presented (

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table 1). The most popular argument for supporting the initiative was that 20 percent of the revenues were allocated to health education and tobacco-use prevention; 82 percent of the respondents said they would be likely to support the tax for this reason. The next most popular argument was that 45 percent of the revenues went for people who could not afford health care; 72 percent reacted favorably to this argument. But when the argument was restated—that 45 percent of the money would benefit doctors and health providers—it received the highest negative reaction; 58 percent of the respondents said they would be less likely to support the tax in

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response to this statement.^[28] Although the Coalition effectively used all of these themes, limited resources did not allow statewide advertising on the same scale as the tobacco industry's.

The industry had already geared up for the campaign. It hired the public relations firm of Ogilvy and Mather to provide spokespersons for the CAUTI campaign. Staff members in both Northern and Southern California were designated to handle media requests. Kimberly Belshé joined the tobacco industry team as its Southern California spokesperson and helped the tobacco companies organize their in-house mailings to smokers.^[29] In 1993, when asked where to find Belshé, Nicholl commented, “She's not with them anymore. I saw her turn up somewhere else. She became an aide to a politician.”^[6] By November 1993, everyone would know where to find Belshé because Governor Pete Wilson had appointed her to be the director of the Department of Health Services, the state agency charged with implementing the Proposition 99 health education programs.

The industry's polls indicated that, although the tobacco companies were in trouble, several messages might play well with the voters. Jeff Raimundo, an account executive at Townsend and Company and communications director for CAUTI, later described the tobacco industry's use of the polling data in its campaign against Proposition 99:

Our polling told us that doctors were…almost as unpopular as the tobacco industry. Doctors per se, not your own doctor. …Our polling also told us that the public was generally opposed to tax increases [and] that the public was generally opposed to using the initiative process to accomplish social policy…and that the public by and large thought individual rights were something that ought not to be trampled by initiative. Having said all that, the poll results showed us going in [with] public support of this initiative, like 75 percent to 20 percent. And I think their polls were about the same. It was huge. …And using all of our strategy to try to attack the soft spots in the initiative, even in our polling we could only pull it down to about 58 percent to 42 percent. Which is where it ended up.^[29]

By June, the tobacco industry was broadcasting radio advertisements using the theme that rich doctors would get richer with this tax while the poor would pay the most for it. The industry had considered running advertisements during the signature-gathering phase but did not want to give the circulators extra publicity. After the initiative qualified, these advertisements were designed to counter the free publicity that had surrounded the proponents on filing day. According to Raimundo, “There

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had been a lot of publicity around the qualifying of the initiative. And we didn't want that to go unresponded to for months. …They were getting all kinds of positive publicity. We had to do something to…plant the seeds of doubt about the initiative.”^[29]

The two campaigns shared a similar approach—designing a message around polling data—but they used the data in very different ways. CAUTI had the money to saturate television, radio, and print media with paid advertising that promoted the tobacco industry's position. The Coalition, with its limited resources, relied on free publicity to define the issue and to get its message to the public. The Coalition used the grassroots network it had established during the signature collecting campaign.^[30] Members held coordinated press conferences throughout the state using local volunteers who were assisted by press materials and information that Nicholl and his campaign staff provided. They established speaker bureaus, trained volunteers to debate the opposition, and secured endorsements.^[31] All this activity received widespread media coverage. Some of the more effective press conferences in early July featured children helping to promote the tobacco tax.^[32] During the campaign, only three major newspapers in California ran editorials opposing the tobacco tax.^[31]

Although the Coalition used the name and credibility of the American Heart Association (AHA) throughout the tobacco tax effort, the AHA had not contributed significant organizational, staff, or financial resources.^[4] Nicholl summarized the attitude of the voluntaries:

Here's the way I describe it. Cancer is Republican, Lung is Democrat, and Heart is nonpolitical. They can't stand it. They don't like politics, they're not comfortable with it. It's like walking on nails for them. So they were not really there until the end. Cancer is controlled by all these docs. This is just the lay person's view of things. And Lung Association, boy, if they were better trained, they'd be better, but their heart is out on the streets and, you know, kind of a democratic approach. But Heart, it is just not comfortable with politics.^[6]

However, on July 11, 1988, the AHA Greater Los Angeles Affiliate finally contributed $25,000 to the Coalition, and the California Affiliate (which included all of California outside Los Angeles County) gave $25,000 in early September.^[33][34] AHA had never even had representation in Sacramento until August 1988, when it hired Dian Kiser to be its first lobbyist. AHA worried that its name would be linked with radical organizations like Campaign California or ANR.^[4]

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Putting the Issue before the Voters

On July 20, the tobacco industry sued to stop the initiative. Two weeks before the deadline to submit ballot arguments, which the state mails to all voters, tobacco distributors filed a petition for a writ of mandamus and request for stay in the attempt to keep the initiative off the November ballot.^[35] The distributors maintained that Proposition 99 violated California's 1978 property-tax-cutting initiative (Proposition 13), which they claimed allowed only the Legislature to increase taxes, and then only by a two-thirds vote. They also claimed that the collection of taxes for multiple purposes violated the “single subject” rule, a constitutional provision requiring that an initiative only deal with one subject. The tobacco industry's challenge failed, and the Coalition held press conferences labeling the suit as an “outrageous misuse of the legal process.”^[35] The Coalition used the free media opportunity to further educate the voters about Proposition 99 and expose the tactics and misleading advertisements of the tobacco industry.

By early August 1988, Proposition 99 had established a substantial lead. The California Field Poll, released on August 10, revealed that 72 percent of the voters supported Proposition 99, 24 percent opposed it, and 4 percent had no opinion.^[36] An August 11 memorandum from Charlton Research to Nicholl stated, “After several months of the opposition's paid media and our own free media exposure, voters favor the initiative more than ever before.”^[37] Encouraged by the poll results, the Coalition launched another series of press conferences to generate free publicity.

In addition to the free media coverage that Proposition 99 was receiving, the Coalition also acquired a significant amount of free time for airing television and radio advertisements through the Fairness Doctrine, primarily because of the efforts of Campaign California. During the 1988 election, the Federal Communications Commission (FCC) Fairness Doctrine still required stations to broadcast both sides of controversial issues, even if only one side could pay for the advertisements.^[38] Campaign California, which already had regional offices and staff throughout the state in all major media markets, negotiated with television and radio stations with the goal of acquiring one free pro-Proposition 99 advertisement for every three paid tobacco industry advertisements.^[39] While not every station agreed with these terms or acknowledged the legality of the Fairness Doctrine, by the election campaign's end, Campaign

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California had negotiated approximately $1.5 million in free television and radio time using the Fairness Doctrine—in addition to the money and services Campaign California had already contributed to the effort.^[31][40] The Coalition's use of the Fairness Doctrine was even more impressive in light of the FCC's stringent limitations on the application of the Fairness Doctrine, although the agency did not explicitly repeal it for ballot initiatives until later.^[40][41]

Nicholl deliberately downplayed Campaign California's role during the campaign, in the interest of making Proposition 99 look very health-oriented and not political. As Nicholl explained,

You rarely saw Campaign California, you rarely saw Lloyd Connelly, you rarely saw the environmentalists, you only saw the health side, and that was conscious, that was my decision—to profile what was our primary selling point, which was a health measure. But I mean you shouldn't necessarily single out Campaign California in that regard, because the environmental thing was in a sense a weak link for us…and Lloyd, who was just absolutely instrumental in making this whole thing. But we didn't play him up either. And he was really wise in making sure that we didn't. But wise beyond our wisdom, I think.^[6]

The Coalition spent what it could on paid advertising. One of the Coalition's more effective television commercials, produced by its media and public relations consultant, Sid Galanty, depicted James Almon, a smoker who later died of emphysema. The commercial showed a noticeably frail Almon, his labored breathing assisted with oxygen, admitting that it was too late for him. He went on to say that he wished he had known more about the dangers of smoking when he was younger and that Proposition 99 would help prevent people from starting to smoke. Almon had died by the time the commercial aired. Another effective commercial portrayed actor Jack Klugman asking voters which side they believed in the debate about Proposition 99—the tobacco industry or groups like the ALA, ACS, and AHA.

In August the Tobacco Institute's polls likewise showed that voters overwhelmingly supported Proposition 99—by 74.5 percent. Even after respondents were presented with every possible argument against Proposition 99, public support remained as high as 61.5 percent. This poll also showed the popularity of Proposition 99's anti-tobacco and education programs, which received the strongest approval rating (56.9 percent, compared with only 15.4 percent who somewhat or strongly disapproved), followed by wildlife habitats (55.9

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percent), hospitals (49.1 percent), and tobacco-related health research (45.1 percent). Money for doctors' services was much farther behind all other allocations, receiving the support of only 11.4 percent (48.5 percent somewhat or strongly disapproved).^[42] The tobacco industry's commercials were affecting the public.

The Proposition 99 campaign also benefited from a reinvigorated ACS effort in September. ACS volunteers and staff had been assured that their principal contribution would be to gather signatures and that the campaign would be conducted by others. John Bailey, the new ACS executive vice president, was deeply offended by the tobacco industry's advertisements against Proposition 99 but discovered that, except for a few individuals, ACS was not involved in the campaign. Bailey, who had a background in politics, convinced the ACS volunteer leadership that “we won't have a chance like this one for the rest of the century and we better get off the sidelines and into the play.”^[43] Bailey thereupon made passage of Proposition 99 the primary goal of ACS staff members throughout the state. When the PCL suggested a gimmick in the important Central Valley, “99 for 99,” a road tour of the major cities along Highway 99 from Redding to Chessfield, Bailey made sure ACS offices in Marysville, Stockton, Modesto, Fresno, and other valley communities got on board. The tour succeeded in gathering media coverage in this crucial vote-rich region.

The CMA's Quiet Withdrawal

As the campaign progressed, the proponents' efforts continued to be hamstrung by the CMA for two reasons. The CMA had not come through with the money it had promised, and as a part of the Coalition, the CMA was a target for the tobacco industry. David Langness, a CAHHS board member who served on the Coalition's Executive Committee as the AHA representative, offered an explanation for the CMA's behavior: “At that point, the allocations were set, the language was cast in stone [and] it was a done deal. …They [the CMA] knew that if we lost, it was no skin off their nose. …The doctors committed to a large amount but never paid it, which is funny in a way, because they are who are reaping the greatest reward now. Maybe they were smarter than all of us.”^[44]

Despite the CMA's low level of participation, the tobacco industry remained concerned that the CMA might move in with serious money for proponents and held off on its doctor-bashing campaign to insure that this did not happen. The doctor-bashing tactic came late and was not a

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central focus of the campaign. According to Raimundo, “We had been holding back a little, hoping that they [the CMA] wouldn't get involved in the campaign, not wanting to do anything to piss them off and send them in…we had run out of things to talk about. We had to come up with another issue. So we started in on the docs.”^[29] At a Tobacco Institute planning meeting, held on July 6, 1988, to discuss Proposition 99, participants discussed three basic messages to be used in their advertising campaign against the initiative: police burden/crime increases, tax money into doctors' pockets, and government interference/fairness. Roger Mozingo, director of state activities for the Tobacco Institute, observed, however, that “how we address the doctors issue is obviously sensitive; thus, our approach will have to be carefully positioned.”^[45] The doctor issue had likely tested well in focus groups, but the industry was clearly not embracing this as a major strategy, perhaps as a result of its conversations with the CMA.

Nonetheless, the CMA used the anticipated tobacco industry opposition to Proposition 99 as its excuse for not making more of a commitment to the campaign. Langness observed,

They [CMA] said, “Oh they're [the tobacco industry] going to spend 40-50 million dollars and they're going to defeat you with sheer money and no matter how much money we put in, it's going to be going down a rat hole.” So what's unfortunate was, we based our campaign on the eventuality of CMA money and it never came. And we weren't able to do a lot of things that we would otherwise have been able to do had it come. And also, during the second period after their “guns and gangs” campaign failed to do anything in the polls, the tobacco industry really hit the doctors. I don't know if you heard any of their ads about the golf clubs dropping in the trunk of the Mercedes. But they were obviously the most visible target. And frankly had we bounced them at that point, had we just kicked them out, it probably would have been smarter. Because it would have removed that target from the campaign.^[44]

In June 1988 the CMA Council, in fact, had formally decided to back off in its support for the campaign. It agreed

not to contribute additional funds to the tobacco tax initiative campaign. The CMA believes it is not in the best interest of physicians to battle the tobacco industry, which has pledged to defeat the November ballot measure with a multi-million-dollar campaign that is likely to single out physicians as personal beneficiaries of the revenues generated. Part of the revenue from the increased tobacco tax will be used for health education and to offset the uncompensated care problem. The CMA will support the initiative by providing physicians with information about the initiative through California Physician magazine and possible all-member mailings.^[46] [emphasis added]

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This decision was not made public at the time, however, and Jay Michael continued to press for more of the Proposition 99 monies to go into health care.

There were even official conversations about kicking the CMA out of the Coalition. According to Langness,

We talked about it in meetings. People were angry as hell. Because basically what the docs did was played an end game on us. They committed to a certain amount of funds, we based the campaign on those funds, then when we look forward to such a point where the campaign was locked in, they said, “Oh gee, sorry, we ran out of money.” They know that if we lost, it was no skin off their nose. And if we won, great! They'd get a cheap victory. I think all of us got an education in extremely cynical coalition politics at that point.^[44]

The Coalition did not act on these feelings, however; the CMA remained in the coalition.

The Fake Cop Fiasco

The tobacco industry's polling data did not suggest that the theme of cigarette smuggling and crime would have a major influence on voters' opinions. Only 32.6 percent of those polled thought that Proposition 99 would lead to an increase in crime.^[42] Still, according to Raimundo, CAUTI's task was to move the Proposition 99 debate away from the health issue.^[29][47] And when the tobacco industry began its advertising blitz in mid-August, the crime theme worked especially well. In addition, very early in the campaign, CAUTI secured the endorsements of the California Sheriffs' Association and the California Peace Officers' Association, two organizations that gave credibility to the tobacco industry's claim that the tobacco tax would result in cigarette smuggling.

In August and September, CAUTI's most effective commercial showed an undercover police officer stating that if Proposition 99 passed, he would have to spend all his time chasing cigarette smugglers and that the illegal bootlegging would lead to a massive crime wave. He also claimed that the money obtained from cigarette smuggling would be used to buy guns and drugs. After the tobacco industry's August media blitz on cigarette smuggling and crime, support for Proposition 99 began to decrease. The tobacco industry was surprised at the success of this campaign, but the success had a downside. As Raimundo observed,

We were so successful, the success blinded us to the downsides of sticking on an issue too long. And as a result I think it gave the other side time to rally a response. But we caught them off guard on the crime issue. They did not

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anticipate that we would drive it so hard, and they didn't anticipate that the public would respond to it as much as they did. …The best world for me as communications director for this campaign would have been to stay on it for two, three weeks, catch them off guard, they're scrambling to come up with a response, and by the time they come up with a response, we're already on to a different issue. We're talking about the doctors' rip-off. So when the reporters come to us and say, “They just held a press conference with [Attorney General] John Van de Kamp saying it's a bunch of baloney about the crime issue,” we can say, “That's not the issue here; the issue is the doctors' rip-off.” I mean we'd just do our spin-doctoring on the campaign as much as possible.^[29]

Charlton Research confirmed the decline in support for Proposition 99 in a memorandum to Nicholl. The measure's 27-point lead in April (61 percent for, 34 percent against) was down to a 13-point lead (51 percent for, 38 percent against).^[48] On September 22, 1988, another California Field Poll showed that voter support for Proposition 99 had sharply dropped—from 72 percent in August to 58 percent (figure 2).^[49]

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The Coalition nonetheless benefited from several key events in late August and early September, which helped slow and ultimately stop Proposition 99's decline in support. Attorney General John Van de Kamp released a report based on state and federal data showing that cigarette smuggling was negligible even in states with high tobacco taxes. Van de Kamp criticized CAUTI's advertisements, calling them “a scare tactic of the worst and baldest kind. …[and] utter nonsense, fabricated by people who represent the tobacco industry.”^[50] As a result of this and other Coalition efforts, the two law enforcement associations dropped their opposition to Proposition 99 and took a neutral position.^[51][52] The report and Van de Kamp's position gave the Coalition and Proposition 99 free media coverage and damaged the tobacco industry's most effective campaign argument.

Nicholl also discovered that the undercover cop who appeared in the tobacco industry's advertisement, Jack Hoar, actually had a desk job at the Los Angeles Police Department and was a part-time actor. In spite of this, Hoar had signed a sworn affidavit, which he submitted to KGO-TV in San Francisco, declaring “under perjury and the penalties therein” that he was not an actor.^[53] More important, in the movie To Live and Die in LA Hoar had played a criminal who killed two secret service agents and spit a chaw of tobacco on one of the dead bodies. Nethery described how the Coalition had stumbled onto this information:

Jack [Nicholl] was at a party one night and…the topic was 99, and these ads came up, and one of the actors said, “Oh. I know that guy.” So Jack's antenna just went right up, and we found out immediately that this guy had been in movies, he was a cop, he was assigned to the studios for security. Once in a while they need a cop quick, they'd drag him in. Well, one thing led to another, and he had finally gotten film credits on this movie, To Live and Die in LA.

Jack rushed out that night, rented the movie, and the next day we were talking to everybody in the state practically, but we were talking and trying to figure out what to do. We had the evidence that this was a lie.

We had a written affidavit to KGO in Jack Hoar's handwriting, and so…I approached some of the lawyers involved with the Cancer Society, and they said, “You'll just get your ass sued off…you can't dare touch it. Can't use it any way, shape, or form.” Well, Sid Galanty, and here's where he really earned his money, he says, “Bull.” He says, “That's news.” He said, “We'll send it to the news media.” And we made up enough for every TV station in the state….

Basically we showed the written statement to KGO, we showed clips from the tobacco spots, and then we showed clips from To Live and Die in LA, including the credits with Jack Hoar. …The TV people just blew them out of

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the water on that. And within a day they were gone. …They pulled those ads so fast you couldn't believe it.^[23]

The Coalition held press conferences throughout the state, distributing the affidavit and showing the industry's commercial and a clip of Hoar's scene in the movie. Television, radio, and newspaper press coverage of the event saturated every media market in California.

CAUTI tried to argue that Hoar was not a full-time actor and that the desk job was only temporary. As Raimundo explained,

They [the proponents] used heavy-handed techniques, just as the tobacco industry has over the years. I don't want to say they lied, but they certainly manipulated facts in a way that was untruthful. …What they did was, they take a set of facts and then miscast what those facts represented. The perfect example of that was when they had Jack Hoar,…they said he was an actor, he's not a cop. And that was horseshit! He was an undercover cop temporarily on the desk assignment in LA. He's a Los Angeles police sergeant. He had only acted in two bit parts in his entire life, and didn't have enough time to have a Screen Actors Guild card. He was not an actor. And if you watch To Live and Die in LA, I guarantee you he was no actor. If you watch our commercials, he's not much an actor… .It was like he was like a stiff cop, because that was what he was: he was a stiff cop.^[29]

But it was too late. The plausibility of the bootlegging and crime argument was destroyed and CAUTI stopped running the undercover cop commercials. The Coalition damaged the credibility of the theme and at the same time highlighted the tobacco industry's misleading campaign tactics.^[54]

On November 2, less than one week before the election, the Coalition and Proposition 99 gained additional positive media coverage. Dr. Ken Kizer, Governor George Deukmejian's director of the Department of Health Services (DHS), released a report at a press conference organized by the Coalition which included an examination of the financial cost of smoking and smoking-related deaths in California in 1985. The total economic burden to Californians during that year totaled more than $7.1 billion—$4.1 billion for direct medical costs, $2.2 billion for lost future earnings due to premature death, and $800 million for smoking-caused lost productivity.^[55] Because the governor had recently announced his opposition to Proposition 99, Kizer was quick to state that he was not advocating support for Proposition 99, but simply presenting DHS findings. CAUTI responded, “This was obviously timed to be released in the final week of a political campaign. If the timings and the motivations

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become suspect, obviously the statistics must become suspect.”^[56] Nevertheless, the Coalition capitalized on the report to generate more free publicity for Proposition 99.

By election day, the tobacco industry had spent $21.4 million on the campaign, compared with the Coalition's $1.6 million (figures 3 and 4).^[57][58] The use of free media, the Fairness Doctrine, coordinated statewide press conferences, and local volunteers were all invaluable to the campaign. In addition, the undercover cop fiasco, the Attorney General's report, and the dropped opposition of law enforcement groups all contributed to undermining the tobacco industry's bootlegging and crime theme. The release of the DHS report in the final days of the campaign also helped. While the Coalition campaign was smaller than the tobacco industry's campaign, it was large enough to permit the Coalition to communicate these messages effectively to California voters.

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On November 8, 1998 the voters of California passed Proposition 99 with 58 percent of the vote.^[59]

Reflections on the Industry's Defeat

In his postelection analysis prepared for the tobacco industry, Ray McNally, whose firm Ray McNally and Associates coordinated the industry's direct mail campaign, wrote, “In retrospect, I believe we overplayed the crime issue. We came on too hot, trying to sell the argument that California streets would run red with blood if Proposition 99 were enacted. Had we turned the heat down, focusing less on the potential for violence and more on the actual economic loss and added strain on law enforcement caused by smuggling, then used actual experiences and spokespersons from other states as `proof,' we would have preserved our

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credibility and alienated fewer opinion leaders at the start of the campaign.”^[60] Nicholl substantially agreed with McNally and thought that the key mistake the “no” side made was dropping the crime theme after the Hoar controversy. If the pro-tobacco forces had merely dropped the Hoar advertisement, apologized, and continued the general crime theme, Nicholl thought the proponents of the initiative would have been in trouble. He said, “The victory was getting them to stop playing the ad, because that ad took us from over 70 percent down to 55 percent. And if they kept going, they would have kept taking us down. …The voters walking into the polls in November, if they had stuck with that thing, they couldn't see beyond it.”^[6]

Hanauer's initial skepticism about victory turned out to be wrong. He observed, “It showed that the tobacco industry could be beaten on a statewide campaign. Beyond that, and probably the reason why it was beaten, it showed once and for all that the people hated the industry.”^[61]

Conclusion

Proponents invested over two years to pass Proposition 99, conducting essential polling, planning strategy, gaining media exposure, developing a coalition, and running a successful campaign for enactment of the tax directly by the voters. The tobacco industry's large war chest worked for it in the campaigns against Propositions 5 and 10, but failed in the campaigns against Propositions P and 99. The popularity of using a tobacco tax to fund education and prevention programs as well as the unpopularity of the tobacco industry meant that public health activists did not have to match the tobacco industry dollar for dollar. They needed only a budget sufficient to take advantage of the tobacco industry's low credibility. Proponents of Proposition 99 effectively made the very size of the industry war chest an issue because they had enough money to publicize it. The initiative proponents had learned a lot in ten years, as had the public and the media.

In California it was clear that the industry was the enemy. What was less clear was the extent to which the CMA was also a problem. While the political and financial support of medical organizations, particularly the hospitals, helped pass the initiative, their presence in the pro-Proposition 99 camp presented a threat to public health programs. Actions and statements made by the CMA before, during, and after the tobacco tax effort showed that the CMA considered the tobacco tax solely as a source of revenue for medical services, which foreshadowed the

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subsequent pressure for diversion of funds from health education into medical services once Proposition 99 arrived at the Legislature. Although health education programs received the greatest public support during the campaign in both Coalition and Tobacco Institute polls, this support provided no guarantee that public health priorities would dominate the organizational interests of the other Coalition members. The difficulties that arose at the initiative stage were to be amplified when the issue of implementing legislation came before the California Legislature.

Notes