Chapter 31, Part 1

By Frank Tursi, Susan E. White and Steve McQuilkin
JOURNAL REPORTERS
© 1999 Winston-Salem Journal

James W. Johnston, the chairman of R.J. Reynolds Tobacco Co., raised his right hand with the six other stone-faced tobacco executives and swore to the tell the truth.

Heads of the nation's largest cigarette companies, being sworn in before a House Energy subcommittee in April 1994 are (from left) Robert Sprinkle III (American Tobacco), Donald Johnston (American), Thomas Sandefur Jr. (Brown and Williamson), Edward Horrigan Jr. (Liggett), Andrew Tisch (Lorillard), Joseph Taddeo (U.S. Tobacco), James Johnston (Reynolds) and William Campbell (Philip Morris). (AP Photo)

Like the others, he then said he didn't think that tobacco caused cancer or any other serious disease. His company, Johnston assured members of the House Health and Environment subcommittee on April 14, 1994, didn't manipulate nicotine levels in its cigarettes. Sitting in a row with the other executives, Johnson took his turn uttering a third denial.

First was William Campbell, then CEO of Philip Morris USA. ''I believe nicotine is not addictive, yes,'' he said.

Johnston was next. ''Cigarettes and nicotine clearly do not meet the classic definitions of addiction,'' he said.

And on down the line:

''I don't believe that nicotine or our products are addictive.''

''I believe nicotine is not addictive.''

''I believe that nicotine is not addictive.''

''I believe that nicotine is not addictive.''

''And I, too, believe that nicotine is not addictive.''

The R.J. Reynolds Tobacco Co. was once the largest cigarette company in the United States with a powerhouse of best-selling brands: Winston, Salem and Camel. But times changed, and as the case against smoking became more pronounced in the 1960s, RJR failed to adapt to the marketplace. Its rivals would eventually rush past it, and RJR's efforts to catch up would have a profound impact on the company and the cigarette industry.

The whole issue of addiction went to the heart of the industry's legal defense, which maintained that people chose to smoke, could quit any time with a little will power and thus were responsible for their actions. The argument played well with juries, but it would likely be harder to sell if tobacco executives admitted to Congress that their cigarettes ''addicted'' customers. Addicts don't have much free will. ''The defense must not concede that cigarette smoking has been proved to be addictive,'' lawyers with Jones, Day, Reavis & Pogue, RJR's main outside law firm, wrote in a confidential report in 1985. ''Indeed, there are substantial benefits to be derived over waging a definitional battle.'' A word game, in other words. Smoking was a ''habit,'' which had less serious consequences and was easier to stop than an ''addiction.''

Many smokers listening to the testimony on C-SPAN or reading it the next day in the newspaper may have failed to grasp the distinction. Call it an addiction, call it habit, call it a dependence, call it a craving, call it what you will, smoking, they knew, was a hard thing to stop. The great majority of smokers, according to government surveys, believed they were ''addicted'' to their cigarettes and most wished they could quit. But their ''habit'' or ''addiction'' is so strong that of the 15 million smokers who try to quit each year, only 3 percent are successful for any length of time, the surveys show. Almost half the smokers who have surgery for lung cancer resume smoking. Even when smokers have their larynxes removed, 40 percent try smoking again. Quitting smoking was so easy, quipped Mark Twain, a cigar-smoker, that he did it hundreds of times.

That the tobacco presidents would deny what most smokers already knew and then later in the hearing imply that smoking was no more habit-forming than eating chocolate stretched the credulity of even the industry's allies, noted Richard Daynard, a law professor at Northeastern University in Boston. He heads the Tobacco Products Liability Project, which does research for anti-smoking lawsuits. ''I think that (Congressional hearings) was the turning point because it was symbolic,'' he said. ''Everybody saw it . . . It upset an awful lot of people. I think even Republicans in Congress, even the people most beholden to tobacco industry, understood that their position just got a lot more tough after this happened.''

Nothing was easy for the tobacco industry any more. The medical case against smoking, as far as most people were concerned, had closed shut long ago. Rich lawyers were banding together to bring hundreds of lawsuits against the industry, and the internal documents they were uncovering revealed the companies' most closely held secrets. Whistle-blowers were talking to reporters or turning more damaging documents over to anti-smoking activists. The industry was being accused of spiking its cigarettes with nicotine to more firmly hook customers, who were being turned into social outcasts because their smoke was considered a threat to the public health. Federal agencies, under the direction of an anti-smoking president, were threatening to seriously regulate for the first time how cigarettes were made and marketed.

''The tobacco industry has always been king of the mountain, able to beat down plaintiffs one by one,'' Daynard said. ''But everyone has started rushing the mountain all at once, and the king no longer looks invincible.''

Ed Horrigan felt the brunt of the charge. A former chairman of Reynolds Tobacco, Horrigan was now CEO of Liggett Group, and he sat at the table with Johnston and the other executives. Congressmen continually cut off the executives in mid-sentence and threatened them with subpoenas if they refused to supply requested documents.

''That line of questioning, their treatment of us . . . You go back and look at A&E television, and look at Bobby Kennedy interviewing Giancana and Costello, the Mafia crowd,'' Horrigan said. ''And listen to him talk to them and compare that to the likes of that committee that day. And that's the way I felt.''

A New Administration

Almost from the moment she set foot in the door in January 1993, First Lady Hillary Clinton declared a ban on smoking in the White House. The hugely symbolic gesture was a warning shot over the industry's bow. It could count on receiving no help from President Clinton, the first avowedly anti-smoking president. He made his intentions clear a few weeks after his inauguration when he proposed tripling the federal tax on cigarettes to help pay for his health-care plan.

But nothing better illustrated Clinton's power to energize the anti-smoking movement than the action taken in early 1994 by Dr. David A. Kessler, a holdover from the Bush administration who as commissioner of the U.S. Food and Drug Administration was the one man in Washington with the apparent statutory authority to regulate cigarettes as a dangerous consumer product. Kessler had a streak of activism, and when he took over the FDA in 1990 he found an agency that was severely understaffed and underfunded and demoralized by a scandal over lax oversight of generic drugs. Kessler set about righting the ship by fining Proctor & Gamble for mislabeling orange juice as ''fresh'' when it really came from concentrate, banning nearly all breast implants as health hazards and implementing new regulations on food labels.

In response to a petition from the Coalition on Smoking or Health, Kessler assigned a few agency lawyers to study whether the FDA had the authority to regulate cigarettes as ''drug-delivery devices.'' The agency, according to federal law, could only regulate nonfood items and cosmetics as drugs if they were ''intended to affect the structure and function of the body.'' Though 40 years of scientific investigation had clearly shown smoking's pathological effects on the body, the tobacco companies were careful never to explicitly make health claims for their cigarettes.

They did, however, manipulate the nicotine and tar yields of their cigarettes and had been doing so with increasing sophistication since the advent of effective filters in the 1950s. The Federal Trade Commission had been reporting the varying yields since 1967, and every cigarette ad contained the tar and nicotine yields since 1971. Unless the FDA chose to believe that the reported and advertised levels of nicotine were tricks of nature, the tobacco companies clearly ''intended'' to vary the nicotine yields of cigarettes. An FDA commissioner could have taken that evidence to court at any time to defend the agency's statutory power to regulate nicotine as a drug. Instead, the FDA had historically taken the position that it was powerless to intervene.

Given this past reluctance and the other more pressing matters before the FDA, Kessler was willing to let the smoking issue lie dormant. Clinton's election changed that strategy. Kessler laid out his strategy in a Feb. 25 letter to the coalition. ''Evidence brought to our attention is accumulating that suggests the cigarette manufacturers may intend that their products contain nicotine to satisfy an addiction,'' Kessler wrote.

Three days later, ABC's Day One television program revealed what it called the tobacco industry's ''last best secret . . . never before disclosed to consumers or the government.'' The companies, the program's correspondent charged, ''spiked'' their cigarettes with nicotine to keep their customers hooked. The only evidence came from an unidentified and unidentifiable former ''manager'' at RJR, who said, ''They (Reynolds) put nicotine in the form of tobacco extract into a product to keep the consumer happy.'' The clear implication was that RJR and the other companies were adding nicotine from some outside source to their cigarettes.

ABC and, later, Kessler, pointed to reconstituted tobacco, which makes up about a third of the tobacco in all U.S. cigarettes, as evidence that the companies were spiking their products. Nicotine, they charged, was added to the reconstituted tobacco during processing. Developed in the Reynolds' labs in the 1940s as a cost-cutting measure, reconstituted tobacco is a paper-like sheet made of tobacco scraps and stems, which are lower in nicotine than the leaves. During the process, nicotine and other soluble compounds are removed and later sprayed back onto the sheet, along with flavorings, preservatives and other chemicals. The process has been described in numerous books and trade journals and several surgeons general reports. If it was a secret, it was a poorly kept one.

As RJR's vice president of manufacturing, Joe Inman is ultimately responsible for making reconstituted tobacco. ''That really bothered me -- when we were being accused of that,'' he said, his trademark grin disappearing. ''I go walking into my den at home and my two small children are sitting there, and Daddy is being accused of manipulating nicotine levels. My son was 12 or 13, and he says, `Daddy, do you do that?' That's what makes you angry when things like that get printed, and it's absolutely not true.''

Philip Morris and RJR said the same thing, only more forcefully, in their $10 billion defamation lawsuit against ABC. The network apologized in 1995 and paid Philip Morris $16 million for legal fees. The network agreed that the program should not have reported that manufacturers add ''significant amounts of nicotine from outside sources.''

True or not, the charge motivated Kessler into action and, combined with a new report on secondhand tobacco smoke, ignited hearings on Capitol Hill.

A Cloudy Issue

Just before leaving town in the closing days of the Bush administration in early 1993, William Reilly, the administrator of the U.S. Environmental Protection Agency, released the final version of the agency's long-awaited risk assessment of environmental tobacco smoke, or ETS. More than five years in the making, the study in its draft forms had been roundly criticized by the cigarette-makers, who accused the agency of practicing dishonest science.

Despite the industry's objections and pressure from the Bush administration to tone down the conclusions, the study's final version was unequivocal: ETS was a Group A carcinogen, meaning it was lethal to people. It was a ''serious and substantial public-health risk'' that killed 52,000 people a year, most from heart disease. More than 3,000 nonsmokers each year got lung cancer from breathing airborne tobacco smoke. ETS was implicated in up to 300,000 cases of pneumonia and bronchitis in infants and was a complicating factor for as many as a million youngsters with asthma.

Industry scientists questioned the study's methodology, took issue with the conclusions and criticized the EPA for omitting studies that conflicted with the agency's conclusions and for not considering ''confounding factors,'' such as eating pork chops and drinking whole milk, that could account for much of the increased risk.

The industry's objections were buoyed by the Congressional Research Service, an arm of the Library of Congress. It advised the Senate in 1995 that ''statistical evidence does not appear to support a conclusion that there are substantial health effects from passive smoking.''

The EPA stood by its findings. More than 100 studies in the past 13 years have examined the consequences of secondhand smoke, and about 63 percent found evidence of harm -- from respiratory problems to cancer, according to a literature review published in the Journal of the American Medical Association in May 1998. Of the reports that were inconclusive or found no effects on health, nearly three-quarters were written by scientists whose work was paid for by cigarette companies, the article said. It also charged that the evidence ''suggests that the tobacco industry may be attempting to influence scientific opinion by flooding the scientific literature with large numbers of review articles supporting its position.''

More than 80 percent of the studies report a weak relative health risk, said Stephen Sears, an RJR scientist. Some, he said, even suggest the possibility of a decreased risk. The four largest studies, done in the 1990s, offer a mixed bag of conclusions, he said. ''My conclusion from this has to be that random chance can not be excluded as a reasonable explanation of the observed weak elevations of relative risk,'' Sears said.

Credible independent studies continue to find no statistically significant connection between ETS and cancer, including a report in 1998 by the International Agency for Research on Cancer, which was paid for by the World Health Organization.

Regardless of its scientific merits, the EPA study set off a chain reaction of government and private measures that would gradually limit or ban smoking in most public buildings. McDonald's, for instance, banned smoking in its restaurants in 1994, the same year the Defense Department restricted smoking at all U.S. military bases worldwide. New York City in 1995 banned smoking in the dining areas of most restaurants and made it illegal to light up in outdoor stadiums. Other cities followed suit. California in 1998 even banned smoking in bars.

''In the United States, presumably, regulation should follow science,'' Sears said. ''In my opinion, the science is not there to drive any regulation in this particular case.''

The tobacco companies sued the EPA over the way it performed its risk assessment. Judge William Osteen of U.S. District Court in Greensboro struck down the study in July 1998, ruling that the EPA followed improper procedure in compiling its report by not including the industry in its deliberations, as required by the 1986 Radon Gas and Indoor Air Quality Research Act. He also faulted the agency for failing to follow standard statistical and scientific procedures. The EPA is appealing the decision.

''It was some degree of positive reinforcement for me as a scientist to read through the federal district court's decision in 1998,'' Sears said. ''It doesn't require the scientific expertise of an epidemiologist to see that basic principles of scientific methodology were violated in that report.''

Osteen's ruling may have reinforced the industry's scientific objections to the EPA study but it has done nothing to stem the tide of new smoking bans or persuaded cities or states to rescind existing bans.

One man who took the EPA's finding on ETS to heart was Rep. Henry Waxman, a Democrat from California and the tobacco industry's most vocal and persistent congressional foe. He and Rep. James Hansen, R-Utah, at the end of 1993 introduced the Smoke-Free Environmental Act, which would have virtually banned smoking in all nonresidential buildings in the country. Hearings for the bill were held throughout 1994.

Kessler was one of Waxman's witnesses, and he set the tone at the March 25 hearing by presenting what he said was preliminary evidence based on patents and an analyses of nicotine-to-tar ratios that showed that tobacco companies controlled the levels of nicotine in their cigarettes to sustain their customers' addiction.

That Waxman and his fierce anti-smoking ally on the subcommittee, Mike Synar, D-Okla., intended for the hearings to be a public whipping of their favorite target became apparent when Alexander W. Spears III of Lorillard tried to counter Kessler's and ABC's charges. While the FDA commissioner was allowed to answer questions expansively, Spears was cut off in mid-sentence. ''Would you let me finish, please,'' Spears pleaded at one point. ''No,'' Synar replied.

To answer the charges that his product was addictive, Johnston, RJR Tobacco's chairman, repeated the industry mantra: Smoking isn't intoxicating, doesn't impair the user's judgment and triggers no symptoms of physical withdrawal. Therefore, Johnston said, cigarette smoking doesn't fit the classical definition of addiction. At the April 14 hearing, Johnston asked the congressmen a question that company officials still like to raise: Would you want to board an airplane piloted by someone who had just had a couple of beers, smoked crack, shot heroine, popped pills or smoked a cigarette?

The allegation that smoking was addictive was part of a ''growing and disturbing'' trend, Johnston said, that was destroying the meaning of the word ''addiction.'' Any enjoyable activity that someone finds hard to stop -- drinking coffee, eating sweets, playing video games -- was being called ''addictive.''

Johnston was waging the ''definitional battle'' that RJR's attorneys at Jones, Day, Reavis & Pogue had advised in their 1985 memo. They suggested that company executives stick to the definition of addiction found in the first surgeon general's report, released in 1964. Smoking, the report said, was a ''habituation'' that differed from an ''addiction'' for all the reasons that Johnston laid out. ''Habits'' are easier to break than ''addictions,'' the lawyers noted, and a smoker's ability to quit was one of the central features of the industry's courtroom defense.

But by the time of Johnston's testimony, tobacco use was considered an addiction by most major health organizations in the world and was defined that way by the two most widely used psychiatric manuals on mental disorders in the United States, the American Psychiatric Association's Diagnostic and Statistical Manual of Mental Disorders and World Health Organization's International Classification of Diseases.

Some tobacco executives had said so for years. Six weeks after Johnston and his colleagues appeared before Waxman's subcommittee, The New York Times ran a story in which it quoted from a now-famous memo written in July 17, 1963, by Addison Yeaman, Brown & Williamson's general counsel. ''Moreover, nicotine is addictive,'' he wrote. ''We are, then, in the business of selling nicotine, an addictive drug effective in the release of stress mechanisms.''

The memo was among the 4,000 pages of Brown & Williamson documents that Merrell Williams, a paralegal for the company's outside law firm, secretly copied and gave to journalists, lawyers suing the industry and anti-smoking activists.

To tobacco executives, Williams is an incorrigible, common thief. But to anti-smoking forces, he is a hero. The documents, they say, provide evidence that cigarette makers have known for decades that smoking is dangerous and addictive, but have intentionally hidden that truth from the American public.

That was the verdict of the American Medical Association, which excoriated the tobacco industry over the Brown & Williamson papers in its July 12, 1995, issue of the Journal of the American Medical Association. ''The evidence is unequivocal -- the U.S. public has been duped by the tobacco industry,'' the magazine wrote.

Williams wasn't the only one to blow the whistle on the industry. Jeffrey Wigand, who was fired in 1993 as vice president for research and development at Brown & Williamson, became the highest-ranking tobacco executive to turn against the industry. He began to work secretly as a consultant to the FDA in 1994 and was source for a 60 Minutes segment on tobacco and health. The interview with him, which was scheduled to run in November 1995, was cut because CBS lawyers feared that the network would be sued for interfering with the confidentiality agreement Wigand had signed with Brown & Williamson.

Wigand testified that month before federal grand juries and to the U.S. Justice Department. He was also deposed later in the month in a Mississippi lawsuit in which the state was seeking reimbursement for the cost of caring for indigents sickened by smoking. The deposition was leaked to The Wall Street Journal. Wigand accused Thomas Sandefur, then Brown & Williamson's CEO, of lying when Sandefur testified at Waxman's subcommittee that he didn't believe nicotine was addictive. Wigand said his boss told him, ''We're in the nicotine delivery business, and tar is nothing but negative baggage.''

Other admissions weren't hard to find. Walker Merryman, a vice president of the Tobacco Institute, told a reporter in 1985: ''Sure, I think smoking might cause cancer. Nobody here is arguing that smoking is good for you. And I don't know if it's an addiction, or a habit -- maybe it depends on the individual. But, so what? People are aware of the dangers.''

Jack Kelly, a Tobacco Institute regional vice president in Sacramento, Calif., confessed in the same article: ''Hell, yeah. I don't doubt that I'm addicted. I have no problem with the term. All I know is, I'd hate like hell to have to ever try quitting. It'd be damned hard.''

''It is not clear what triggered either of these comments,'' the Jones, Day lawyers wrote when reviewing Merryman's and Kelly's comment, ''or why they appear to abandon traditional dogma.''

Confronting the Challengers

Before leaving the Capitol that day in 1994, Jim Johnston threw down a defiant challenge to the industry's congressional tormentors. ''The American public overwhelmingly opposes prohibition, whether it comes in through the front door or sneaks in through the back door, so let's be clear about the fact that back-door prohibition is prohibition nonetheless,'' he said. ''Raising taxes to force smokers to quit is back-door prohibition. Banning smoking in all public places . . . to further stigmatize smokers is back-door prohibition. . . . And advocating that the FDA regulate cigarettes as a drug, which would effectively ban cigarettes from the market, is clearly back-door prohibition. If any member of this subcommittee truly believes that cigarettes are too dangerous to be sold, then stand up, vote for prohibition, and be prepared for the consequences.''

David Kessler had no intention of banning cigarettes. He did, though, want to it more difficult for the companies that make them. Soon after Johnston and the other tobacco executives testified before Congress, Kessler, a pediatrician, noted that 90 percent of adults start smoking by 18. Kessler demanded that the Clinton administration not look at smoking as an issue of ''adult choice,'' as the industry liked to say, but as a ''pediatric disease.''

Steven Goldstone, who became RJR Nabisco's CEO, immediately understood Kessler's strategy. Not only was RJR pushing poison, it was selling it to kids. ''It was Kessler's tactical brilliance to call tobacco a children's issue,'' Goldstone said. ''We couldn't beat that.''

Voters in November 1994 offered Goldstone and the other tobacco chieftains a glimmer of hope when they handed control of both houses of Congress to anti-regulatory Republicans for the first time in 40 years. Waxman lost the chairmanship of the health subcommittee and his buddy, Synar, was out of Congress entirely. Bob Dole, who tended to tread softly on tobacco, took control of the Senate. Ted Kennedy, a fierce tobacco foe, was replaced as chair of the Labor and Human Resources Committee by Nancy Kassebaum, an opponent of FDA regulation. In this changed landscape, Waxman's Smoke-Free Environmental Bill, which had been passed by the health subcommittee, went nowhere.

The new speaker of the House, Newt Gingrich, called Kessler a ''bully and a thug.''

Kessler was undeterred. On July 13, 1995, the FDA declared nicotine a drug, and President Clinton, a month later, announced a proposed FDA rule intended to curb youth smoking through restrictions on tobacco advertising. The FDA published its final rule in 1996. The proposed restrictions included a ban on giveaway items with brand logos, such as T-shirts and caps. There would be no use of cartoon characters and no color and imagery in advertisements unless they were in adult-only locations, such as bars.

The five largest tobacco companies filed a lawsuit in U.S. District Court in Greensboro in August 1995 to block the FDA's rulemaking procedure. Six trade groups, including the American Association of Advertising Agencies, filed separate lawsuits in North Carolina, challenging the proposed regulations.

The industry has historically maintained that the FDA, an unelected body, shouldn't be given the authority to regulate tobacco, said Charles Blixt, RJR's general counsel. ''It's probably the most debated, studied product in the history of the country,'' he said. ''And if somebody's going to make a decision about it, whether it's restrictions or how it's regulated or anything else, it ought to be Congress because it's a policy question. It's not something that a legislative branch of the government should be implementing.''

Judge Osteen, who would side with the industry in striking down the EPA's secondhand smoke study, disagreed. He ruled in April 1997 that the FDA may regulate tobacco as a drug, but he struck down the agency's proposed regulations on advertising. The tobacco industry won an appeal in 1998, but the Clinton administration took the case to the U.S. Supreme Court, which heard arguments this month. A ruling is expected in the spring.

Blixt sees only three ways out of the regulatory morass. Congress can ban tobacco, run the industry itself, or leave it in the hands of private business. ''And if it's going to be left in the hands of private enterprise, we need to have rules, regulations, and policies that are established at the political level and legislature on how the product's going to be sold, how it's going be manufactured, and we'll live by those rules,'' Blixt said.

''But to allow all three branches of government to be making decisions on a policy basis on what's going to be happening and eventually get to one of the other options either because you've bankrupted the industry and therefore it's in one fashion or another eliminated or make it so difficult for people to sell and manufacture cigarettes that you end up with some form of de facto prohibition is not the way to go about this.''

• Coming Monday: Mississippi Burning