January/February 1992

Editorial: Tobacco Imperialism

The Front

• Niagara to Nicaragua
• Weaving Workers Together

By Judith Mackay

Addicting the Young: Tobacco Pushers and Kids

By Karen Lewis

The Tobacco Lobby

By Tom Ferraro

Fighting for Smoke-Free Skies

By John D. White and Clifford E. Douglas

Targeting Corporations: Canada’s Anti-Smoking Program

By Holley Knaus

Interview

Tobacco Buster

An Interview with Michael Pertschuk

Economics

The Marlboro Man Goes East

By Robert Weissman

Labor

Crushing the Workers at UST

By Kurt Petersen

Corporate Profile

RJR Nabisco: Transnational Tobacco Trafficker

By Philip Mattera

Names In the News

Resources

To the editor:

I appreciated receiving your article "Buying Manila" in the December Multinational Monitor . Your headline, among other things, however, is off its feet.

The recent unanimous decision of a Tribunal of the International Court of Arbitration (ICC) was a resounding affirmation of Westinghouse’s position that there was no "scheme of bribery and corruption" in the Philippine Nuclear Power Plant contract. As we filed the award with the federal court in New Jersey last week, it is now a matter of public record.

You now have the opportunity and obligation to inform your readers that an international tribunal of eminent jurists has ruled that Westinghouse in no way "bought Manila" or otherwise bribed Marcos to get this contract. Your readers must be informed of your article’s mistaken statements - based on allegations by the Republic of the Philippines that have been refuted by the arbitral tribunal - that Sabol and his notes somehow implicate Westinghouse in improper payments. With this decision you can correct the erroneous and now discredited insinuations of Mr. Hull, Mr. Jesus Disini and others.

Westinghouse was vindicated on all the key issues before the tribunal after a full adjudicative proceeding. For example, the jurists held:

"[The Republic of the Philippines and the NPC] have failed to carry their burden of proving Westinghouse’s alleged bribery."

"[T]here is no indication that [commission payments] were disbursed to any entity in which Marcos had an interest."

"[T]here is no evidence in the record indicative that Marcos ever received any benefits or payments from any [Herdis] companies."

"[T]here is no evidence either of any agreement between Marcos and Westinghouse, or that Disini acted as an agent for Marcos."

This impartial and respected tribunal, which was selected and paid for by the Philippines and Westinghouse and Burns & Roe, issued a persuasive 130-page decision based on voluminous submissions of briefs, documents, affidavits and deposition excerpts, and two evidentiary hearings with examination and cross examination of witnesses. As the decision makes clear, the allegations respecting bribery in the New Jersey complaint are identical to the allegations rejected by the arbitral tribunal after a full two-and-a- half-year review of all of the evidence.

The arbitration provided the Republic of the Philippines and the NPC a full and fair opportunity to adjudicate their case on the issue of bribery. Since the issues in the district court are the same, there is no reason to believe that the outcome - should there be a full trial - would be any different.

The Federal District Court in New Jersey will soon consider Westinghouse’s motion for summary judgment based on the decision of the ICC. That is, the federal court will decide whether the arbitral decision in favor of Westinghouse should become the final, binding adjudication of these issues, thus precluding further litigation on the charge of bribery.

Jonathan D. Schiller

Donovan Leisure, Rogovin,

Huge & Schiller

Washington, D.C

More Workplace Carnage

Peg Seminario, director of the AFL-CIO’s safety and health division, says that the statistics underscore the need to strengthen occupational safety and health laws. The Occupational Safety and Health Administration (OSHA) "program currently isn’t protecting American workers," she says. Seminario is particularly concerned that the figures rose during a time of economic downturn, since there is usually a decrease in worker injury and illness during recessions due to layoffs and lower levels of employment.

The AFL-CIO is supporting a bill introduced in August 1991 by Representative William Ford, D-Michigan, that would overhaul the OSHA program. The bill would require employers to implement health and safety programs, to involve workers in identifying hazards and to provide training for workers exposed to hazards. The bill also calls for increased penalties for criminal violations of workplace safety laws and for more inspectors to enforce regulations. Seminario says that there are currently only enough OSHA and state inspectors to visit each work site in the United States once every 79 years.

Seminario is hopeful that OSHA laws will be strengthened in the next year, noting that incidents "like the fire in Hamlet [North Carolina] focus public attention on workplace safety and health."

Dow Corning Coverup

The revelations about the 1973 study came on the heels of a January 6 Food and Drug Administration (FDA)-imposed moratorium on selling and inserting silicone breast implants. FDA Commissioner Dr. David Kessler said he would reconvene an expert panel which previously reviewed evidence about the safety of the implants to consider new data about the devices. Kessler said he had received increasing evidence that women with silicone implants suffer immune disorders.

Approximately two million women have received silicone breast implants since they came on the market in the early 1960s. Some evidence links silicone implants to chronic inflammatory disease and to the painful hardening of tissue around the implants. Animal tests have also linked silicone implants to cancer. Regulation of medical devices was not mandated by Congress until 1976, however, so the implants have never been forced to meet FDA requirements for proposed devices.

A statement released after Kessler’s January 6 announcement by the National Women’s Health Network, a Washington, D.C.-based health advocacy organization which has long pressed the FDA to require manufacturers to conduct clinical trials on the safety of the devices, supports Kessler’s move to halt silicone implants: "We are pleased that the FDA continues to work to create a situation of informed choice by acting upon the evidence at hand rather than a well-orchestrated public relations campaign by plastic surgeons and implant manufacturers."

Miners Under Fire

The miners were striking in response to the firing of 48 workers who had participated in a May 1991 strike over wage levels, according to the Vancouver-based Christian Task Force on Latin America. The miners had occupied the mine from October 7 to October 12.

Following the shooting and facing a threatened general strike, Honduran President Rafael Callejas stepped in to act as mediator between the workers and the company on November 7. Breakwater agreed to reinstate the fired workers with back pay.

Sarah Cox of the Toronto-based Jesuit Centre for Social Faith and Justice says that the incident is rooted in the growing strength of the solidarismo movement in Central America, particularly in Honduras and Costa Rica. Set up by government and private interests, solidarista associations are worker groups that emphasize cooperation with management and seek to displace militant unions. At El Mochito, solidaristas had taken over the union leadership and agreed to the salary changes that led workers to strike in May.

- Holley Knaus

For more than half a decade, operating under the authority of Section 301 of the 1974 Trade Act, the U.S. Trade Representative (USTR) has threatened to impose severe trade sanctions against countries which deny U.S. tobacco companies market access.

Yet even this barbarous practice has not satisfied the tobacco companies and their trade group, the Cigarette Export Association. Having gained access to the Japanese, South Korean, Taiwanese and Thai markets through USTR’s efforts, the U.S. tobacco industry is now protesting other countries’ anti-tobacco health measures.

Ever eager to aid the tobacco companies’ lethal commerce, USTR is threatening to impose sanctions against Taiwan if it enacts a set of far-reaching tobacco control proposals. Similar blackmail may be in store for China, which recently adopted strong tobacco control measures.

Taiwan’s proposed "Law Governing the Prevention and Control of Damage from Tobacco Use" contains many of the key provisions health activists advocate to lower smoking rates. It would ban cigarette sales through vending machines, restrict smoking in public places, prohibit all direct advertising and promotion of cigarettes, require disclosure of cigarettes’ tar and nicotine content and put into place an aggressive public education campaign on the health effects of tobacco use. Though all aspects of the law would apply equally to foreign and domestic producers, U.S. companies claim the law would discriminate against them.

Noting that the Taiwanese tobacco industry controls about 85 percent of the market, U.S. cigarette manufacturers argue that the advertising and promotion ban is actually a disguised trade barrier that would unfairly prevent them from increasing their market share.

Armed with data supplied by the industry, USTR has adopted the companies’ fallacious arguments. USTR has failed to consult the strongly anti-smoking U.S. Health and Human Services Department and it has ignored the protests of non-governmental health advocates in the United States and throughout the world. Few government actions could be more despicable than USTR’s attempt to stop Taiwan from implementing health measures and preventing needless deaths.

It is not surprising that USTR is pursuing its present course of action. Seeking to prevent Taiwan from enacting health measures is only a notch worse than its prior, successful efforts to open foreign countries’ tobacco markets to U.S. producers, even if market access issues initially appear to be straightforward trade matters.

The entrance of U.S. tobacco companies into markets previously dominated by national monopolies leads to increased tobacco consumption, with all of its horrendous health consequences. The U.S. tobacco companies transform foreign tobacco markets by introducing sophisticated advertisements and promotions, often despite advertising bans or restrictions. In Thailand, where all advertisements are banned, for example, Marlboro logos are reportedly on display at retail outlets.

The U.S. companies’ slick marketing strategies not only attract existing smokers to their brands, they also convince nonsmokers - particularly women and youth - to take up the habit. According to a Gallup poll cited in a 1990 General Accounting Office (GAO) report, after Korean import restrictions were removed in 1988, smoking rates among male Korean teenagers rose from 18.4 percent in 1988 to 29.8 percent in 1989. Over the same period, the rate among female teenagers rose from 1.6 percent to 8.7 percent.

An added health hazard is that national tobacco monopolies, usually sleepy companies, become much more aggressive marketers in the face of foreign competition. For example, according to the GAO, since the Korean market was opened, the Korean monopoly has developed and marketed brands, known as Lilac, Jade and Rose, intended for women.

USTR and the tobacco companies on whose behalf it is working can - and must - be stopped. A bill introduced by Representative Chet Atkins, D-Massachusetts, would prevent USTR from pressuring foreign governments who accord U.S. tobacco companies the same treatment as national companies (known as "national treatment").

Atkins’s bill deserves support, but it does not go far enough. USTR claims that it currently only asks countries - including Taiwan - for national treatment of U.S. tobacco companies. And Atkins’s bill would not prevent USTR from demanding market access for U.S. tobacco corporations, despite the deadly consequences of doing so.

Citizens should demand that President Bush order USTR cease all efforts to push U.S. cigarettes on foreign countries. Combined with the efforts of U.S. and international health organizations, many of which are focusing on this issue, widespread public outrage at USTR’s anti-health efforts could lead to a rescinding, or at least a significant modification, of USTR’s policy.

Nearby residents greeted the ministers’decree joyfully. "We are happy," says Aura Lila Rocha de Silva, 50-year-old resident of Ciudad Sandino, which neighbors the plant. "It was time to close the chlorine plant because we suffered for years. We suffered with lung ailments, and many of us were sick. I had to go to the hospital two times. But now I think that’s all ended."

Nicaraguan environmentalists hope the plant closure is the last chapter in a deadly story of hazardous technology transfer from the United States to Nicaragua, a story known in Managua as "El Caso Penwalt," after Pennwalt Corporation, the original plant operator.

Elpesa and Lake Managua

Elpesa, Nicaragua’s only chlor-alkali plant, came on line in 1968. The government held a 48 percent share in the plant, Philadelphia-based Pennwalt (now Atochem ) had a 40 percent ownership stake and the family of dictator Anastasio Somoza held a 12 percent share. The plant produced chlorine and caustic soda from salt using the mercury cell process, a technology licensed by the Stamford, Connecticut-based Olin Corporation , which operated a similar plant in Niagara Falls.

Almost immediately, Elpesa caused devastating pollution. As early as 1969, a study traced mercury pollution in Lake Managua to the plant. In the early 1980s, another study revealed that the company had discharged 40 tons of mercury into the lake over a 13-year period, making it one of the most polluted lakes in the world. (Mercury, a potent neurotoxin, is particularly dangerous in aquatic ecosystems because it accumulates in fish.)

In addition, Elpesa may have contaminated nearby Asosasca Lagoon, the drinking water source for much of Managua.

Elpesa workers have also been poisoned by mercury. In 1980, 37 percent of the workers showed evidence of mercury poisoning, including central nervous system damage. In the early 1980s, Elpesa’s management improved plant conditions and worker exposure decreased, but not before at least eight workers had already suffered permanent neurological damage. Maria Eugenia Garcia, a spokesperson for the Nicaraguan Environmental Movement, says she believes that 80 of the 150 current Elpesa workers have been poisoned by mercury or chlorine.

Mercury was not the only pollution problem at Elpesa. Releases of chlorine gas were common. One such release forced the evacuation of 200 families and more than 15 hospitalizations in Ciudad Sandino.

Olin in Niagara

While Elpesa was pouring mercury into Lake Managua, U.S. citizens were finding out just what the chlorine industry had done to Niagara Falls.

In the late 1970s, Love Canal became a symbol of the toxic terror of modern industrial life, and Niagara residents discovered that Love Canal was only the most infamous of dozens of contaminated sites in the region. Well before mercury cells and chlorine production arrived at Pennwalt in Nicaragua, the chlorine industry had transformed Niagara Falls into one of the world’s premier toxic hotspots.

Olin was part of the problem:

o Olin polluted the groundwater under its chlor-alkali plant with at least 25 toxic chemicals, including six carcinogens. According to the U.S. Environmental Protection Agency (EPA), "a substantial hazard to human health and the environment exists." The EPA is now investigating Olin’s potential liability. Houses are located within a third of a mile of the plant.

o Olin recently entered a consent agreement, along with Du Pont, to finish the cleanup of Gill Creek, a Niagara River tributary. The original cleanup, agreed to by Olin in 1984, left a 4-foot-deep mass of toxic waste at the creek’s entrance to the river. Sediments in the creek contain mercury, solvents, organic chemicals and PCBs at 100,000 parts per million.

o The EPA has ordered Olin and Occidental Chemical Corp. to undertake a $30 million cleanup of the 102nd Street landfill Superfund site near Love Canal. The companies dumped 159,000 tons of hazardous wastes at the 22-acre site between 1943 and 1970.

And local pollution was only one component of the havoc the chlorine industry wreaked. The end product of the industry - chlorine gas - is the worst poison of all. Chlorine is the building block of such infamous substances as dioxin, PCBs, DDT and ozone-eating chlorofluorocarbons.

When combined with hydrocarbons, chlorine produces a class of chemicals called organochlorines that are used in pesticides, plastics, solvents and refrigerants. Organochlorines tend to be toxic, persistent and bioaccumulative, and they can cause reproductive failure, birth defects, impaired fetal and childhood development, cancer and neurological damage. Additionally, ultra-toxic dioxins can be formed when chlorine is used in pulp mills or waste water-treatment plants and when chlorinated chemicals are incinerated.

The scheme

Olin stopped using mercury cells for chlorine production in Niagara Falls by 1990. In part this was a reaction to pressure that environmentalists have brought to bear against the producers of chlorinated products like CFCs, pulp bleach and certain solvents; the more fundamental reason, however, was the opening of a new chlor-alkali plant nearby. Niachlor, a joint venture of Olin and Du Pont, makes chlorine through the membrane process, a less-polluting technology than the mercury process used at the old Olin plant. Until fall 1991, the mercury cells just sat in Niagara.

Meanwhile, the fight over the Elpesa plant in Managua continued. Residents of Ciudad Sandino and other neighborhoods around the plant complained of respiratory ailments and other health problems, and called for the shutdown of the plant. It appeared they had won, when, on September 30, 1991, the government ordered the plant closed. Guia Ambientalista, a monthly environmental newsletter, proclaimed, "At last: Pennwalt will Close!!" and called the closure an "act of justice for our natural resources and the right of the public to a safe environment." The plant management responded that the permanent closure of the plant would not be necessary. They said the plant was undergoing modernization, though they did not explain what this "modernization" entailed.

In mid-November, details of the "modernization" surfaced when a local union official from Olin’s Niagara plant informed Greenpeace that some of the mercury cells had been shipped to Nicaragua. Olin management confirmed that the parts had arrived in Managua and claimed that the equipment would be used as replacement parts to "upgrade" the plant. In mid-December, Elpesa officials denied that the parts had arrived, but admitted that the cells were intended for the "modernization" of the plant and insisted the plant would stay open. Managua residents readied themselves for the next phase of the Elpesa struggle.

As of December 19, the Nicaraguan government was split over the issue. The Ministry of Health and Environment favored shutting the plant, while the Ministry of the Economy and Development supported modernization. A committee was formed to study the issue, with the final decision to come from the Presidential Minister.

The committee never met. In the first days of the new year, NotiMex, the Mexican press agency, emphasized that the cells for the modernization were 30 years old and had been part of the pollution problem at the Niagara Falls plant. The Nicaraguan newspaper Barricada also revealed that, on November 19, chlorine gas had again leaked from the plant. Two days later, a 17-year-old resident of Ciudad Sandino who suffered from asthma died from chlorine inhalation. On January 7, the government ordered Elpesa permanently shut down.

Garcia of the Environmental Movement of Nicaragua called the decree "a great victory for the Nicaraguan environmental movement, ... a great step forward." But, she says, "There are still problems to resolve, for example the return of the mercury cells to their sender [at Olin’s expense], the indemnification of the workers and residents who have health problems, help for the workers who will be unemployed and plans for the cleanup of the area which has been degraded by pollution."

Managua will be cleaner now, after 21 years of pollution from a technology brought from the United States. But this will not be the last attempt to export old and polluting equipment and technology to Latin America. Akzo America shut down its chlor- alkali plant in Alabama last summer due to the phase-out of ozone-destroying CFCs and carbon tetrachloride called for in the Montreal Protocol to Protect the Ozone Layer. According to the Chemical Marketing Reporter, a broker is now looking to sell Akzo’s mercury cells to Mexico or Colombia. Those countries would do well to study "El Caso Penwalt."

- Kenny Bruno

Most of the 17,000 workers still employed in the garment industry are immigrant Latina women, whose newness to the country, lack of familiarity with U.S. laws and inability to speak English make them particularly vulnerable to economic exploitation. "High production quotas and long work days provoke exhaustion, and accidents are common. There is no unemployment or disability insurance, and women frequently suffer racial and sexual harassment. These women workers are the least organized, least empowered and most exploited people in the country," says Carmen Dominguez, the director of Mujer Obrera (Working Woman), a locally based women-run labor organization. "Many of the women working in the factories don’t realize that they have a right to struggle for better conditions. Part of our work is to make people realize they have rights."

Mujer Obrera was founded in 1981, in the aftermath of a strike at the Farah garment factory which was organized by the Amalgamated Clothing and Textile Workers Union (ACTWU). Many of the workers who had participated in the strike felt that, because they were women, the ACTWU organizers and negotiators who had controlled the walkout did not respond to their needs, and they decided to form their own organization. Today, Mujer Obrera’s membership and leadership are all local, working Latina women, making it almost unique in the history of U.S. labor organizing.

Mujer Obrera embraces a concept of organizing that reflects the fact that women make up the group’s membership and leadership. It aims to reshape the internal social relations of community life as well as the traditional employer-worker economic relations. "We have a different idea of struggle from most unions. In addition to problems in the factory, women also have to deal with family problems: the lack of day care, poverty, long working hours, bad health, lack of resources," says Dominguez, who is herself a single mother supporting two children. "Our model for struggle comes out of our experience as working women. There are things that we need to live a decent life: to feed our families, to raise our children with dignity."

Mujer Obrera activists seek to organize entire households, which they see as the basic component of community life. "The majority of women are the heads of households, and by bringing them into the struggle, we bring their families into it as well," says Dominguez.

Mujer Obrera attempts to provide support to women workers both within and outside of the workplace. After working all day in a factory, most women are obligated to then take care of their homes and families. To compensate, Mujer Obrera operates a food cooperative, a clinic and a credit bank that provides small loans to members. Dominguez says that providing these basic daily needs enables women to spend time working on larger social issues. "Women need a little bit of security and confidence in order to enter the struggle. Right now most women are just trying to stay alive, to keep their families alive. It’s totally consuming. We have to deal with that reality."

Although its goals are often different from those articulated by traditional labor unions, the tools that Mujer Obrera uses to try to directly improve working conditions are traditional: strikes, work stoppages and lawsuits. With the support of the International Ladies Garment Workers Union, Mujer Obrera is currently striking against a small garment sewing shop called Sonia’s, a subcontractor for DCB Apparel, whose owner, Andreas Diaz, is infamous in El Paso. "Our goals include insuring paid overtime and sick leave, adequate ventilation, fire protection, safe machinery and pressuring the employers to provide legally binding personnel manuals," says Dominguez. Begun on April 29, 1991, the strike has spread to five other DCB subcontractors. A settlement has not yet been reached, but national pressure on the company is growing. Solidarity actions have been organized across the country to stop retailers from carrying Diaz’s line "Maximum Energy" and "Total Energy;" and J.C. Penney ’s, one of Diaz’s largest clients, has agreed to stop doing business with him until the strike is settled. The U.S. Attorney General’s office and the Department of Labor have also entered the fray by formally filing actions and restraining orders against Diaz.

In September 1991, the Institute for Policy Studies in Washington, D.C. presented Mujer Obrera with a Letelier-Moffitt Human Rights Award in recognition of the impact that the group’s organizing and community development work has had over the past decade.

Support and awards aside, Mujer Obrera and its members are facing difficult times. They believe the proposed U.S.-Mexico Free Trade Agreement will make it easier and more profitable for U.S. corporations to pull up stakes, devastating working communities in the United States. "The reality is that as more jobs disappear, there will be more pressure for workers all over the country to accept whatever conditions are offered. The situation of garment workers in El Paso is not unique; workers in electronics, auto and other manufacturing jobs are losing their jobs as companies dismantle their factories and move them offshore," says Dominguez soberly. "We can’t stand by and allow industry to abandon communities here and move to exploit low-wage workers in other countries. I’m not sure if it will be a struggle to the death, but it’s going to be a hell of a struggle."

-Micah Fink

HONG KONG - China ’s first anti- tobacco law went into effect on January 1, 1992. It has the potential to save more lives in a single country than any other health law in history.

The law mandates the reduction of tar in tobacco products, bans or restricts smoking in public transport and in public places, bans smoking by elementary and high school students, requires the printing of tar levels and health warnings on local and imported cigarette packets and bans tobacco advertising on TV and radio and in newspapers and magazines. The law also mandates improved education about the health effects of smoking, with particular emphasis on young people.

The law promises to have a substantial impact on both health and economics in China. It should also serve as an example for other developing countries, demonstrating that a developing country can grasp the political nettle of tobacco control.

The casualties

Anti-tobacco legislation is desperately needed in China, which houses the world’s largest population of smokers by far. There are more smokers in China than the entire population of the United States. Dr. Weng Xin Zhi, the executive vice president of the Chinese Association on Smoking and Health, reports that his 1984 National Prevalence Survey of 519,000 people showed "that 61 percent of males and 7 percent of females over 15 years of age smoked, with over 56 percent of male doctors smoking." This represents between 250 and 300 million smokers.

Oxford epidemiologist Richard Peto predicts that "of all the children alive today in China under the age of 20 years, 50 million of them will eventually die from tobacco."

Peto and Tom Novotny, an epidemiologist at the U.S. Centers for Disease Control, believe that the figures will inevitably worsen. China’s rising population means there will be more people who smoke, even if the percentage rates of smokers in the population remain the same. Additionally, smoking is on the increase in China, and the female market represents an as-yet-untapped source for future expansion. "Peak exposure of the market probably has not occurred, and peak mortality will not occur until well into the next century," contend Peto and Novotny. Recent studies in Beijing indicate that smoking is rising rapidly among Chinese adolescents.

Nor does the problem lie only in China’s future. Already the most common causes of death are tobacco-related: heart disease, cancer, stroke and respiratory diseases.

Smoking also affects large numbers of non-smokers in China. Dr. Weng’s 1984 survey showed that 40 percent of non-smokers interviewed were "passive-smokers," meaning that they regularly inhale the environmental tobacco smoke of smokers. Like their Western counterparts, Chinese children have been shown to be affected by their parents’ smoking.

Tobacco affects the environment as well as people. In 1989, the China Daily reported that "most of the forest fires that broke out this year were caused by human factors such as smoking." In a fire that swept the whole northeast part of China in 1987, five forestry workers were arrested for starting the fire by throwing cigarette ends onto grass, spilling oil and producing sparks from a chain saw. In this, the country’s worst-ever forest fire, 3 million acres of land were ravaged, 300 people were killed, and 5,000 people were made homeless. On December 24, 1983, a fire caused by a passenger’s cigarette led to the crash landing of a Chinese plane at Guangzhou, killing 23 people. China immediately banned smoking on all internal flights, becoming the first country in the world to do so.

Tobacco drains the economy with costs of medical and health care, premature death, lost productivity, the use of land which could grow nutritious crops, fires, clearing up smokers’ litter and in other ways. The Chinese Academy of Preventive Medicine notes that "the health-related economic costs caused by smoking in 1989 were estimated at US$5 billion," about the same figure earned from tobacco taxes.

The cost to the individual is also substantial. A pack of local cigarettes costs less than US$0.20 whereas imported cigarettes cost more than US$2.00 for a pack of 20 cigarettes. Even a pack of 20 local cigarettes costs between 14-19 percent of the daily median household income, whereas a daily pack of imported cigarettes costs twice the daily median income.

The domestic tobacco lobby

China is the largest producer of tobacco in the world. The government monopoly, the China National Tobacco Corporation (CNTC), dominates the Chinese market with an approximately 99 percent share.

Traditionally, the Chinese government has highly valued the tobacco industry. Jin Maoxian, vice president of the CNTC, says that "because the tobacco industry generated so much revenue, its development received a great deal of attention from all tiers of government and was given special consideration when it came to investment and the use of foreign exchange." Today, China collects more than US$5 billion annually in tobacco taxes, making tobacco the largest industrial tax source. Export earnings are steadily increasing and currently stand at US$120 million per year.

But there are differences between the CNTC monopoly and Western commercial tobacco companies. The monopoly sees its role as the organizer and controller of a state industry, carrying out government directives, and not as an apologist for tobacco. It acknowledges that smoking is harmful, is working to reduce the tar and nicotine in cigarettes, is cooperating with the Ministry of Public Health on health warnings on cigarette packets and even participates in the World Health Organization’s annual "World No Tobacco Day" by not selling cigarettes and urging people not to smoke on that day. How long this cooperation will be maintained is difficult to say.

Foreign tobacco companies: then and now

According to a story told by executives of British American Tobacco (BAT), when the cigarette rolling machine was first invented, James Duke, the U.S. founder of BAT, said, "Bring me the atlas." When he turned the pages, looking not at maps, but at population figures, he stopped when he came to the figure: Pop: 430,000,000. "That," he said, "is where we are going to sell cigarettes." And "that" was China.

By the end of the nineteenth century, Duke had achieved his goal, penetrating almost the whole of China with sophisticated manufacturing and advertising techniques the country had never before seen. In his book, Big Business in China: Sino-Foreign Rivalry in the Cigarette Industry, 1890-1930, Sherman Cochran reports that "BAT resorted to illegal as well as legal distributing techniques to circumvent government opposition."

BAT effectively demolished the local Chinese tobacco companies with legal writs, price wars, fierce competition, political pressures and a range of other activities to put the local companies out of action. After a turn-of-the-century boycott petered out, "BAT drove almost all 20 existing Chinese cigarette firms out of business or out of the market," according to Cochran.

Now, history is repeating itself. The foreign tobacco companies have identified China as their golden goose for the twenty-first century. In a September 1986 article in the industry journal World Tobacco, Rene Scull, then-vice president of Philip Morris Asia, stated: "No discussion of the tobacco industry in the year 2000 would be complete without addressing what may be the most important feature on the landscape, the China market. In every respect, China confounds the imagination." Rather than defending China’s people from predatory attacks, CNTC’s Jin Maoxian’s response was to tell the foreign companies: "China’s door is open to you all."

R.J. Reynolds Tobacco International took the CNTC at its word. RJR established a joint-venture cigarette company which commenced production at its Xiamen factory in 1988. U.S. health advocates have vigorously protested against this exportation of disease, disability and death to China. Assistant U.S. Surgeon General Dr. Jeffrey P. Koplan has estimated that the 2.5 billion cigarettes produced annually at this new factory "will eventually lead to 75,000 deaths yearly" in China.

One of the most immediate concerns of anti-smoking advocates in China and elsewhere in the world is that the United States may threaten to impose unilateral trade sanctions under section 301 of the U.S. Trade Act if China does not open its market to foreign tobacco companies and loosen its restrictions on tobacco advertising. In recent years, the U.S. Trade Representative (USTR) has pried open the markets of Japan, South Korea, Taiwan and Thailand with these threats. An October 31, 1991 letter to the director of China’s National Health Education Institute, Dr. Chen Bing Zhong, from Joseph A. Massey, the assistant U.S. Trade Representative for Japan and China, states ominously: "Because of discriminatory Chinese government import controls, the volume of cigarettes exported from the United States into Chinese markets is the lowest that it has been for several years."

Health activists are urging the USTR to not interfere with China’s anti-smoking program. A November 13, 1991 letter from this writer to the U.S. Trade Representative Carla Hills remains unanswered at the time of publication. The letter states: "China needs vital encouragement and support from countries with a long track record of recognition of the problems of smoking and proven effective action to protect their citizens. I would suggest that the U.S. would be better served, especially on a long-term basis in China, by extending health expertise rather than by supporting the tobacco companies. While I respect the need for fair trade practices, I would most earnestly urge you not to include tobacco products in these negotiations."

A letter from the Washington, D.C.-based Coalition on Smoking OR Health, representing the American Cancer Society, the American Lung Association and the American Heart Association, similarly asked the USTR to not press China to open its cigarette market. It stated, "health concerns [must] take precedence over trade concerns where uniquely harmful products such as cigarettes are involved." This letter, too, remains unanswered.

The current example of Taiwan bodes ill for China. In response to a threat of unilateral trade sanctions under the 301 Trade Agreement, Taiwan signed an agreement regarding tobacco in 1986 with the USTR. Six years later, Taiwan is now attempting to pass a national tobacco control law, which includes a provision banning advertising. The USTR claims that this law "reveals potential inconsistencies" with the 301 trade agreement and held a meeting in Washington, D.C. on January 23, 1992 to discuss the matter, only to postpone any decision and to schedule another meeting later in the year. In a letter to the Taiwan government, the USTR pointedly refers to the importance of cooperation "at a time when Taiwan is seeking active consideration of its GATT [General Agreement on Tariffs and Trade] application." The letter further states: "The Taiwan authorities should also take note of the importance of cigarette exports to U.S. trade interests. Cigarette exports have made a significant contribution to reducing the global U.S. trade deficit."

U.S. Senators Jesse Helms, R-North Carolina, and Mitch McConnell, R-Kentucky, and the tobacco companies have added their weight in letters to the Taiwan government.

Whether the Chinese (in China or Taiwan) smoke Western or Chinese cigarettes has significant public health consequences. Foreign tobacco companies may now only have a small market share in China, but their behavior is different from the national monopoly.

The foreign companies market and promote cigarettes in ways unknown to the national monopoly, with expensive advertisements portraying healthy, attractive, macho, wealthy, sporty and emancipated Western images. These are especially powerful images for China’s youth.

By 1987, a Media and Marketing article entitled "Great Leap into the PRC," reported that Philip Morris’s Marlboro was the fourth top foreign advertiser in China, behind only Toshiba, Hitachi and NEC. Many of the tobacco advertisements violate the restrictions China had in place at the time. For example, the South China Morning Post detailed in 1986 how a Hong Kong advertising agency places advertisements on clocks and lighted panels in railway stations and on trains, skirting the law by claiming that these are decorations, not advertisements.

The foreign companies also sponsor sports, arts and health organizations. Philip Morris contributes thousands of dollars to help the disabled in China, which some liken to the Colombian cocaine cartel establishing drug rehabilitation centers.

"The cigarette companies are very cunning," says Chinese Minister of Health Dr. Chen Min Zhang in the 1989 British documentary "The Fragrant Smoke." "Since they know they can’t have direct advertising, they use deceit to get their commercials placed before the viewing audience. Sport should really be a means of healthy enjoyment and recreation for the public. But [promotion] for smoking does precisely the opposite."

A journey of 10,000 miles begins with a single step

More than three centuries ago, a Chinese philosopher, Fang Yizhi, discussed the dangers of smoking, pointing out that long years of smoking "scorches one’s lung." But the anti-smoking campaign in China began only in 1979, with the issuing, with the approval of the state council, of a Joint Circular on the harmful effects of smoking by the ministries of Public Health, Education, Finance and Agriculture. In 1984, the then- Minister of Health made the strongest official public statement to that date that smoking was harmful to health.

Since 1984, China has conducted numerous health education campaigns on smoking, including an ongoing major campaign to help peasant farmers in remote areas quit smoking. The country held its first "No-Smoking Day" in Shanghai in April 1987, and, since 1988, it has held a national "No-Tobacco Day" coinciding with the World Health Organization’s World No-Tobacco Day. In 1990, Chinese health advocates established the Chinese Association on Smoking and Health to coordinate tobacco-control activity throughout China. The Chinese Academies of Preventive Medicine and Medical Sciences and the National Institute of Health Education have been the principle movers in tobacco-control activities.

The January 1 law represents a great leap forward in tobacco control in China. There is an ancient Chinese saying: "A journey of 10,000 miles begins with a single step." The first steps in tobacco control have now been taken in China, but there are still many miles ahead.

EACH YEAR, AN ESTIMATED 3 MILLION SMOKERS worldwide die from tobacco- related diseases. Millions more kick the smoking habit.

These basic facts pose a unique problem for the tobacco industry. Tobacco companies’ survival depends on the successful recruitment of new smokers, the vast majority of whom - approximately 90 percent in the United States - are children and teenagers. While there are undoubtedly multiple reasons young people choose to smoke, health activists charge that the marketing schemes of the major tobacco corporations target minors and drive up the youth smoking rate.

Tobacco companies deny that the massive sums they spend on advertising and promotion - more than $3 billion annually in the United States alone - are designed to appeal to children. They say they advertise only to influence the brand preference of current smokers. But the widespread use of cartoon characters, rock stars and sports to promote cigarettes leaves little doubt that young people are primary targets of tobacco companies’ marketing campaigns.

Mickey Mouse meets his match

Health advocates point to R.J. Reynolds’ enormously successful Camel cartoon advertising campaign as one of the most blatant efforts by tobacco companies to market cigarettes to teens and children. Launched in the United States in 1988, the Camel ads feature a cartoon camel character called Joe Camel, who appears in hot tub and as a player in a band, often with women nearby. Many of the ads feature the Hard Pack, a blues band consisting of Joe and four other cartoon characters. The Joe Camel character is based on a Camel cartoon used in France in the early 1970s to circumvent a prohibition on the use of human models in tobacco advertising.

R.J. Reynolds built on the campaign in fall 1991 with the introduction of a "Camel Cash" promotion in the United States. This promotion offers coupons resembling one dollar bills in every pack of filtered Camel cigarettes. The "Camel C-notes" feature Joe Camel, in sunglasses and smoking, dressed as George Washington. Consumers can redeem the coupons for "smooth stuff" offered in the Camel Cash catalogue. The catalogue offers merchandise with obvious appeal to young people: "flip-flops" (rubber beach sandals), insulators for beverage cans, jackets, towels, t-shirts and hats, all decorated with the Joe Camel cartoon character. Because each C-note only has a value of one, earning some of the more expensive promotional items requires purchasing hundreds of packs by the June 1992 deadline.

The Joe Camel campaign has had a dramatic impact on Camel’s popularity among U.S. children and teens. Prior to the campaign, Camel cigarettes were smoked by less than 1 percent of smokers under age 18. By 1990, that figure had risen to 33 percent, according to one of a set of studies on tobacco and youth published in the December 11, 1991 issue of the Journal of the American Medical Association (JAMA). Among youth, Camel is now surpassed only by Marlboro, and it is particularly popular among 12-to-17- year-olds. An industry source interviewed by Adweek’s Marketing Week noted, "Camel used to be the brand that was so harsh it was for cuckoos. But now, when you see teenage boys - people the cigarette companies aren’t supposed to be targeting in the first place - going crazy for this guy, you know they’re hitting their target."

The JAMA studies reveal that the Joe Camel campaign has been tremendously successful in raising brand recognition among young people, who, one of the studies shows, are able to identify the Joe Camel character at a much higher rate than adults.

The most widely publicized of the JAMA studies highlights the impact of the campaign on children, including the very young. Nearly one third of 3-year-olds correctly identified the Joe Camel cartoon character as representing cigarettes, while among six- year-old children, Joe was recognized at the same rate as the Mickey Mouse logo used for the Disney television channel. Among secondary school students, 94 percent were able to identify Joe, compared to only 58 percent of adults over the age of 21. Recognition and popularity of the camel figure peak in the adolescent age group. The widespread recognition among children has concrete implications, according to another of the JAMA studies, which found a correlation between cigarette brand recognition and consumption.

In an official company response, R.J. Reynolds Tobacco disputed the JAMA studies’ essential findings, claiming that "Camel’s potential customers are the 48 million adult smokers [in the United States]," not youth. "It is not in the tobacco industry’s best interest for youth to smoke," the statement said, since youth smoking "increases the potential for government restrictions on our ability to communicate with adult smokers." The statement denied that the Camel ads promote teen smoking: "Youth see literally hundreds of advertising messages intended for adults, but that does not mean they take action on any of them. Peer pressure and parental influence repeatedly have been cited by young people to be the main reasons they try smoking." Reynolds also pointed to a Tobacco Institute program called "It’s the Law" (a reference to age restrictions on tobacco purchases) as evidence of the industry commitment to prevent tobacco sales to children.

Copy cats ... and penguins and puffins

The success of Reynold’s Camel campaign appears to have spawned other tobacco company cartoon advertising campaigns. Brown & Williamson , a U.S. company owned by British American Tobacco (BAT), is testing a cartoon penguin to promote Kool brand cigarettes. This cartoon character has buzz-cut hair, day-glo sneakers, sunglasses, and is very conscious of being "cool." Brown & Williamson’s announcement of the test campaign is written in the voice of the penguin, who explains, "My older cousin, Willie the Penguin, represented Kool for three decades. Let’s face it, he’s gotten on in years. That, and the fact that I’m unique, colorful, good-looking - and very modest. Some people think I’m a little irreverent. (So what if I do have a little fun on the job?) I will admit to being just a bit unconventional."

Brown & Williamson claims that the new ad campaign is an update of the Willie the Penguin cartoon that appeared in Kool ads from 1933 to 1960 and is designed to appeal to young adults, 21-35 years old. Robert Fitzmaurice, senior vice president of marketing and sales for Brown & Williamson, reports that research "indicated it is very much an adult symbol."

The test ads play on the word "cool;" one ad shows four varieties of Kool cigarettes and the text, "Now, you got four chances to get Kool. Don’t blow it." Although some industry analysts speculate Brown & Williamson’s advertising spending for the Kool campaign will not be the same scale as Camel’s, Brown & Williamson’s press release indicates plans to provide the necessary support for the campaign: "Of course that takes big bucks, including all travel expenses (and when you’re coming from Antarctica, that’s not chicken feed!). Of course I’m worth it." In addition to billboards and print ads, the cartoon penguin will appear on promotional items.

Philip Morris has also introduced a cartoon promotional character, a stylized puffin logo for its Benson and Hedges brand in the United Kingdom. The symbol resembles the bird used by the Puffin Books company, a children’s books publisher. Puffin Books asked the British Advertising Standards Authority to rule that Philip Morris’s character is an infringement on its logo, but the agency rejected the complaint, asserting that the bird was "too surreal and too dissimilar from Puffin Books’ logo" to confuse children. The British Medical Association, among many others, denounced the finding, but Philip Morris is now free to use the puffin.

Hooking kids around the world

Youth smoking is not just a problem in the United States, where the smoking rate among teens is estimated at approximately 15 percent.

o About 22 percent of Japanese male high school seniors smoke more than one pack a week, according to a recent survey by the Osaka Cancer Prevention and Detection Center. The Tobacco Problems Information Center, a major pro-health organization, estimates that Japanese under the age of 20 smoked 40 billion cigarettes last year.

o In Kenya , smoking prevalence among primary school children was estimated at 40 percent in 1989, a staggering increase from the 10 percent level estimated a decade earlier. To make them more affordable, cigarettes in developing countries are often sold singly rather than in packs. This affordability makes cigarettes more accessible to the very poor and to children. Selling single cigarettes also serves to circumvent government mandates for health warnings on cigarette packs, where such regulations exist.

o A study conducted by Hong Kong University’s Department of Community Medicine and Department of Pediatrics found that Hong Kong children as young as 7 years old are addicted to cigarettes. Of children aged 8 to 11, 7.9 percent indicated that they had experimented with smoking or were currently smokers.

Much of the international youth smoking problem can be attributed to multinational tobacco companies, which are at the cutting edge of efforts to hook young people on cigarettes. Slick marketing techniques associate smoking with Western, and especially U.S., lifestyles. Operating in countries with few or poorly enforced restrictions on tobacco promotions, the tobacco multinationals are able to employ methods that would not be permitted in their home countries.

Rock music is a favorite medium of the tobacco pushers. At the Canton Disco in the People’s Republic of China, Reynolds sponsors live concerts, paying the fees of internationally popular singers. The tobacco company distributes free cigarette samples during the concerts, displays Salem posters and advertises Salem cigarettes during and after the show. In Beijing, Philip Morris is responsible for the "Marlboro American Music Hour," which features songs by Elvis Presley and Michael Jackson, and is especially popular among students. In Kuala Lumpur, Malaysia, a record store called the Salem Power Station wraps its products in advertisements for Salem cigarettes. Nearby, a Camel Adventure Gear store sells Camel brand items. In Budapest, at a December 1991 Philip Morris-sponsored rock concert, young women dressed in red-and-white Marlboro suits dispensed free samples of Marlboro cigarettes, and concertgoers who lit up the cigarettes in front of the women received a complimentary pair of designer Marlboro sunglasses.

The tobacco companies’ goal in employing these rock music promotions is to "associate [cigarette] brand imagery with international pop stars, youth and pleasure," says Greg Connolly, director of the Massachusetts Office on Nonsmoking and Health.

Sponsoring televised rock concerts and videos also offers the tobacco companies a way to circumvent television advertising restrictions. In Hong Kong, where television ads for tobacco are banned, Philip Morris sponsored the "Marlboro Rock-In," a series of televised rock concerts. And a televised Madonna concert in Hong Kong became the Salem Madonna Concert when R.J. Reynolds sponsored the show and superimposed the Salem cigarette logo over the concert introduction.

Domestic companies in most of the world are unable to compete with the marketing wizardry of multinationals like Philip Morris, R.J. Reynolds and BAT. In Japan, for example, young smokers who associate U.S. cigarette brands with style and glamour are making Japan an increasingly lucrative market for foreign tobacco companies.

"All I remember concerning tobacco ads are Philip Morris, Lucky Strike ... nothing about Japanese tobacco," says Yuko Watanabe, a 21-year-old Japanese college student. U.S. company ads generally feature couples or groups riding a motorcycle or singing while Japanese ads typically feature a solitary man smoking. While the high smoking rate among Japanese men is falling slowly, the decline is being offset by the rising rate among women, with most of the increases among young women.

Defending youth

The tobacco companies’ targeting of young people is not going unchallenged. Governments, prompted by health advocates, are increasingly placing restrictions on tobacco advertising and on children and teens’ access to cigarettes.

o Singapore plans to enact laws prohibiting sales of cigarettes to people under the age of 18 and banning cigarette sales from vending machines within a year, according to Health Minister Yeo Cheow Tong. Singapore has already banned all forms of cigarette advertising and prohibited smoking in public transport, government offices, enclosed public spaces and hospitals. Between 1984 and 1987, smoking among 15-to-19-year-olds declined from 5.1 to 2.9 percent.

o The Hong Kong Council on Smoking and Health (COSH) launched a program in 1991 to prevent children from smoking. It produced a public service announcement with an anti-smoking theme song, and recruited 24 popular singers from 11 different record labels to record the song. It was the first time in Hong Kong that so many singers from different labels had joined forces in support of a health project.

o Encouraged by international health advocates to accelerate its approval of tobacco control legislation after a General Agreement on Tariffs and Trade (GATT) panel ruled that its tobacco import ban was illegal [see A Thai Tobacco Tie," Multinational Monitor, January/February 1991 ], Thailand enacted a tobacco control law primarily aimed at preventing youth smoking. The Tobacco Act codifies Thailand’s total ban on advertising, point-of-sale promotions and discounts on tobacco products. It prohibits the use of cigarette brand names in the marketing of non-tobacco products. The Act also bans cigarette sales to youngsters under the age of 16 and outlaws vending machines and free samples.

o Two doctors are asking the New Zealand government to mandate plain cigarette packaging. Their plan aims to decrease cigarette smoking among youth by making smoking less glamorous.

Dr. Michael Carr-Gregg, executive director of the Drug Foundation, and Dr. Alan Gray, medical director of the Mary Potter Hospice, the main proponents of the plain-pack idea, say their proposal is based on a 1990 study by researchers at Otago University in Dunedin, New Zealand which found that generic packaging is significantly less appealing to young people. Carr-Gregg also points to a U.S. study which found that only 21 percent of Marlboro smokers said they would buy the cigarettes in plain brown packs, even at half the price.

Carr-Gregg argues that generic packaging is essential to "break the brand image" which he says attracts young people to cigarettes. He says the proposal is an essential component of a complete ban on tobacco advertising and promotion. New Zealand already has one of the most restrictive anti-tobacco laws in the world, and has reduced its overall smoking rate from 28 to 23 percent since 1989.

o In China, Beijing’s Education Bureau and the Communist Youth League have proposed legislation that will ban smoking among primary and middle school students inside or outside school buildings [see "China’s Tobacco Wars"]. The legislation also urges schools to include lessons on the perils of smoking in their curricula, and suggests that teachers and administrators be role models by not smoking on the school grounds.

The challenge for health activists is to devise ways to counter the influence of the tobacco multinationals, which command resources far in excess of a developing country’s health ministry or of a non-governmental health advocacy group. The task is doubly difficult, since the tobacco companies display an incredible knack for circumventing - or, in some cases, simply violating - restrictive rules. How well health activists can offset the tobacco companies’ marketing prowess will be a life-and-death matter for millions of children.

Sidebar

Detailed documents obtained during a legal battle over the banning of tobacco advertising in Canada reveal the plans of Imperial Tobacco Ltd. , a subsidiary of British American Tobacco (BAT), to target 12-to-17- year-olds for its Player’s Filter brand of cigarettes in the 1970s and early 1980s. The documents also include a confidential 1988 marketing strategy that recognizes that those firms "which respond most effectively to the needs of younger smokers" dominate the market.

BAT denies that it purposefully targets youth, claiming that any research project for youth was intended to give insight into older age groups. However, Imperial has come to dominate the Canadian cigarette market in the past 20 years by recruiting new smokers who now range in age from 15 to 35.

Additional evidence of the industry’s intent comes from Barbarians at the Gate, Brian Burrough and John Helyar’s chronicle of the takeover of RJR Nabisco. According to Burrough and Helyar, one of the unsuccessful suitors for RJR Nabisco, Ted Forstmann, was particularly uncomfortable with the industry’s focus on teens. They write, "Debating future [tobacco] demand in the teen market made him feel like a drug pusher."

- K.L.

Sidebar

Vending machines make it even easier for kids to buy cigarettes. Each day, 450,000 underage smokers buy cigarettes from vending machines in the United States alone.

About 12 percent of children’s tobacco purchases in the United States are made from vending machines, but the proportion approaches 30 to 40 percent in the youngest age groups, according to Richard Daynard, head of the Tobacco Products Liability Project.

The reason younger children make their purchases more frequently from vending machines is simple. "At the critical point when people are starting [to smoke], experimenting and afraid" of getting caught, says Daynard, "they are not afraid to drop quarters in a vending machine."

The vending machine problem is even more serious in other countries than it is in the United States. In Japan , vending machines, which can be found on almost every street corner, make it easy for those under 20 to skirt the (rarely enforced) law prohibiting them from smoking. "Japan is a vending machine society," says Robert Roper, president of Philip Morris in Tokyo, noting that there is one vending machine for every 13 people in Japan. Half of all tobacco sales in Japan are self-service from vending machines. The Japanese tobacco company Japan Tobacco International controls a well-organized vending machine network, but foreign companies, whose market share is rapidly growing, also rely heavily on the machines.

In South Korea, vending machines have proven to be a unique tool to increase foreign firms’ tobacco market share. Foreign cigarette brands were introduced in South Korea in 1988. These firms face tough advertising restrictions, which have made it difficult for foreign firms to gain a foothold in the market. In 1988, only 300 vending machines had been installed in South Korea. By June 1991, that figure had grown to 7,500 units, with foreign firms accounting for 6,600 of them. The vending machines typically feature brand names from R.J. Reynolds and Philip Morris.

-K.L.

WITH A HAND FROM AN INDUSTRY BLAMED for the deaths of an estimated 434,000 U.S. citizens per year, the Republican fundraiser saluted George Bush.

"To your health, Mr. President," the toastmaster said as 4,100 well-wishers at the Washington Convention Center lifted champagne glasses embossed with the words: "The United States Tobacco Co." Bush smiled and the black-tie gathering roared approval.

The U.S. Tobacco Co., along with five other tobacco giants - Lorillard Tobacco, Philip Morris, RJR Nabisco, the Smokeless Tobacco Council and the Tobacco Institute - were among 150 sponsors of last spring’s gala, The President’s Dinner.

These six concerns help form the core of the highly influential tobacco lobby, which campaigns each year against anti-smoking legislation and thwarts efforts to end tobacco’s lethal status as the nation’s least regulated consumer product.

Although tobacco has become unacceptable in many circles of U.S. life, it remains a strong presence in the inner sanctum of U.S. political life. A bona fide power broker, the tobacco lobby doles out money to politicians, Democrats and Republicans alike, in return for votes, favors and influence.

In 1988, the Tobacco Institute, the industry’s trade organization, ranked first among special-interest groups in honoraria fees paid to Congress, at $123,400. RJR- Nabisco, the food and tobacco conglomerate, ranked fourth, at $69,500. Philip Morris, the nation’s largest cigarette producer, paid $41,000 in congressional speaking fees, while the Smokeless Tobacco Council, which represents makers of snuff and chewing tobacco, shelled out $27,500.

Last year, Congress outlawed honoraria in exchange for giving itself a hefty pay hike. Regardless, tobacco money, called "blood money" by Health and Human Services (HHS) Secretary Louis Sullivan, continues to flow heavily through the halls of power.

In the 1990 House and Senate races, political action committees (PACs) representing tobacco interests gave more in contributions than any other agricultural PAC. Tobacco’s 12 PACs donated more than $2 million, a 48 percent jump over 1988. PACs are limited to contributing $5,000 per election per candidate.

In addition to writing "hard money" checks to candidates, the tobacco industry contributes "soft money" to the Republican National Committee (RNC) and the Democratic National Committee (DNC) for national, state and local party building.

In 1990, four tobacco concerns, led by RJR Nabisco, ranked among the top 20 "double givers," those who gave to both the RNC and the DNC, according to a study by the Center for Responsive Politics. RJR Nabisco contributed $32,825 to the DNC and $156,430 to the RNC. Philip Morris, U.S. Tobacco and the Tobacco Institute gave another $124,650, $83,761, and $59,650, respectively, to the two parties.

Tobacco executives make personal political contributions of their own to lawmakers, generally to those from tobacco-rich states or to those who serve on key congressional committees. Under federal law, individuals are limited to a $1,000 donation per candidate in a general election. Overall, they may contribute up to $25,000 per election cycle to a variety of candidates.

A random check of a dozen tobacco executives through the National Library on Money and Politics, which tracks campaign contributions, found that four had made contributions in the 1990 congressional campaigns. Louis Bantle, chair and chief executive officer of U.S. Tobacco, contributed $1,000 to Sen. Jesse Helms, R-North Carolina, $1,000 to Rep. Christopher Shays, R-Connecticut, and another $1,000 to Rep. Thomas Bliley, R-Virginia. James Johnston, chief executive officer of R.J. Reynolds Tobacco Co., gave $500 to the re-election campaign of Rep. Stephen Neal, D-North Carolina, while Michael Myers, chief executive officer of Philip Morris, donated $500 to Sen. Ernest Hollings, D-South Carolina. Andrew Tisch, chief executive officer of Lorillard Tobacco Co., contributed $1,000 to Hollings, $1,000 to Rep. Nita Lowey, D-New York, $500 to Sen. Claiborne Pell, D-Rhode Island, and $1,000 to Sen. John D. Rockefeller, D-West Virginia.

You get what you pay for

HHS Secretary Sullivan was among those at last June’s GOP fundraiser, The President’s Dinner. An anti-smoking advocate, Sullivan has ripped the tobacco industry for its $3 billion-a-year marketing campaigns, which use images of sexual attraction, business success and athletic prowess to hawk smokes, especially to women, the poor and the young.

In 1990, Sullivan blasted the Virginia Slims women’s tennis tournament for accepting tobacco sponsorship. Noting the number of people in the United States killed each year by smoking as well as the $65 billion annual cost for tobacco-related health care and lost wages, Sullivan made an emotional yet futile appeal. "This blood money should not be used to foster a misleading impression that smoking is compatible with good health," Sullivan said. "The most courageous, prudent and morally correct action would be for [advertising outlets]to kick the tobacco habit."

But Sullivan offered no protest over the "blood money" at the GOP fundraiser. Afterward, he said he felt "a bit uncomfortable" that tobacco companies were among the sponsors, but stated that he would not suggest that his call for a ban on tobacco money in sporting events be extended to the political arena.

"I really don’t want to get involved in that," Sullivan said. "We as a nation have these companies as legal corporations. Were I to get involved in this issue, that would become the issue and the rest of my issue would be lost."

"This is hypocrisy. This is politics," scoffs Scott Ballin of the Coalition on Smoking OR Health.

Ron Kaufman, White House political director, was asked if the Bush administration was indeed guilty of hypocrisy.

"On background?" Kaufman asked.

No, on the record.

"No comment."

Ballin says, "We understand that as long as tobacco is legal, the industry’s political contributions are legal. But we take offense at the power that political contributions have in buying votes on health issues. That’s happening. No doubt about it."

He adds, "This hasn’t gone on just during the Bush administration. It’s gone on with every administration, Democrat and Republican, and every Congress."

With the notable exceptions of warning label reform in 1983 and a ban on smoking on airlines in 1990, Congress has passed no significant anti-smoking legislation since 1969, when it banned tobacco advertising on radio and television. Efforts to expand that prohibition to the print media or place tobacco under the control of a federal agency - such as the Consumer Product Safety Commission or the Food and Drug Administration - have consistently been snuffed out.

Thomas Lauria, a spokesperson for the Tobacco Institute, which has yet to acknowledge that smoking kills, makes no apology for the industry’s power in Washington. "During the past 20 years, we’ve been under attack," he says. "We line up our lawyers and supporters. This is a democracy. We’re allowed to cover our bases."

For the past few years, Sen. Edward Kennedy, D-Massachusetts, has tried to move a comprehensive anti-smoking measure through Congress. The Tobacco Education and Health Protection Act would establish regulatory procedures for tobacco additives, further upgrade warning labels and financially encourage states to enforce laws against the sale of cigarettes to minors.

The White House has opposed the measure as unnecessary. Anti-smoking advocates disagree. They note that while additives for other products are required to demonstrate safety, the thousands of additives in tobacco products are neither disclosed to the public nor tested for safety.

Last November, an angry Rep. Michael Synar, D-Oklahoma, called a news conference where he let off steam and tried to rally the anti-smoking crusade. He pressed for support of legislation that would expand a federal drug and alcohol education program to include smoking while venting frustration over the influence of the tobacco lobby.

Synar asked, "Why have cigarettes and tobacco products, in spite of their devastating health effects, been exempted from every major health and safety law enacted by Congress?

"Why, unlike other legal products that are regulated for health and safety reasons, is there no federal agency with meaningful jurisdiction over tobacco products?

"Why do some of my colleagues repeatedly use the First Amendment as their basis for opposing restrictions on tobacco advertising when the Supreme Court has issued a ruling clearly indicating the constitutionality of placing reasonable restrictions on commercial speech?

"The answer," Synar charged, "is the tobacco lobby’s stranglehold over Congress."

"When it comes to tobacco, some of my colleagues use every excuse in the book to support the tobacco lobby at the expense of the American people," he said.

"Is it too difficult to pass a simple law to incorporate tobacco into the national drug and alcohol education strategies or to pass laws - like that defeated in a House subcommittee - requiring enforcement of laws restricting sales to minors?"

Kennedy’s Senate bill and the measure backed by Synar in the House remained bottled up in committee. That is where most anti-smoking legislation dies, never getting the chance to reach the full chamber for an up or down vote.

"If this ever gets to a vote on the floor of the House, we can win this," Synar told Multinational Monitor. "The tobacco industry can’t buy the entire floor of the House. Or they can’t massage, I think is a better word, the entire floor of the House."

"The tobacco people are perhaps one of the most pervasive special interest groups we have," he says. "There are very few activities in town - political or charitable - that they don’t serve as a sponsor. They want to divorce themselves from the issue they don’t want to talk about, which is tobacco."

There was no discussion of tobacco at the GOP fundraiser last spring - just Republican politics, George Bush and money.

The $1,500 per plate dinner was co-hosted by the National Republican Senatorial Committee and the National Republican Congressional Committee. The gala raised $7.1 million. The final $100,000 contribution, which made the political fundraiser the biggest ever, was given by U.S. Tobacco’s chair and chief executive officer, Louis Bantle. When Bantle’s donation was announced, the crowd cheered and the tobacco magnate rose and took a bow.

Sidebar

Sugar Growers $1,675,219 $995,448 $679.771 59.4% 40.6%

Tobacco Products $2,004,866 $956,296 $1,048,570 47.7% 52.3%

Other Crops $1,338,659 $712,222 $626,437 53.2% 46.8%

Dairy Production $1,853,741 $1,187,044 $666,697 64.0% 36.0%

Poultry/Livestock $865,230 $431,301 $433,929 49.8% 50.2%

Ag Serv. & Equip. $1,354,547 $601,365 $753,182 44.4% 55.6%

Food Processing $1,484,731 $437,320 $1,047,411 29.5% 70.5%

Food Whsle/Retail $803,197 $256,900 $546,297 32.0% 68.0%

Forest Products $1,444,412 $332,556 $1,111,856 23.0% 77.0%

Farm Organiz. $514,447 $280,874 $233,573 54.6% 45.4%

Commod Trding $957,261 $632,750 $324,511 66.1% 33.9%

TOTAL $14,296,310 $6,824,076 $7,472,234 47.7% 52.3%

THE U.S. CONGRESS PROHIBITED smoking on virtually all domestic passenger airline flights starting in February 1990. Now leading health-promotion organizations and flight attendants in the United States are working with supportive legislators and federal officials to eliminate smoking on all international flights.

Advocates of the international smoke-free measure say that the campaign presents a new challenge. "If we thought the battle against the U.S. tobacco lobby was tough, selling this measure on an international basis is going to be even tougher," says the Congressional champion of the domestic smoke-free policy, Rep. Richard J. Durbin, D- Illinois.

But advocates believe fighting for an international smoke-free standard will be worth the effort. Durbin says the effect of the domestic ban, which applies to all flights within the continental United States and all domestic flights of six hours or less involving Hawaii or Alaska - about 99 percent of all domestic airline travel - has extended beyond the confines of the airliner cabin and even beyond the airline industry. "Our domestic smoking ban triggered a national effort in the United States for sensible regulation of smoking in all public places," he says. "Now there are [smoke-free] policies everywhere: public buildings, schools, hospitals, you name it." When Congress first required that domestic flights of two hours or less be smoke-free in 1988, a trend already was underway to protect nonsmokers in public places and the workplace. But most advocates agree that the prominence and popularity of the first smoke-free airline measure, coupled with the more sweeping measure enacted two years later, helped power the trend by underscoring nonsmoking as the social norm.

Campaign take-off

Last May, Durbin, who founded and co-chairs the 50-member Congressional Task Force on Tobacco and Health, joined the American Lung Association, the American Heart Association and the American Cancer Society (united as the Coalition on Smoking OR Health), former U.S. Surgeon General C. Everett Koop and a national flight attendants union to announce the kick-off of the "Campaign for Smoke-Free Skies Worldwide." Since then, advocates of international smoke-free flights have gained the support of the U.S. representative to the International Civil Aviation Organization (ICAO), Donald M. Newman, Secretary of State James Baker III, Secretary of Health and Human Services Louis W. Sullivan and former Secretary of Transportation Samuel Skinner, who was recently appointed President George Bush’s chief of staff. Then-Secretary Skinner met in July 1991 at ICAO headquarters in Montreal with the ICAO council president, Dr. Assad Kotaite, to urge support for a multilateral agreement prohibiting smoking on all flights among ICAO’s 164 member states. ICAO is affiliated with the United Nations.

Smoke-free flight advocates are seeking to persuade ICAO to adopt a standard mandating elimination of all smoking in airplanes worldwide. Pointing to an increasing body of scientific evidence which shows that second-hand smoke - also known as environmental tobacco smoke (ETS) - is a carcinogen and a major cause of heart disease, former Coalition on Smoking OR Health chair and current Deputy Managing Director of the American Lung Association Fran Du Melle says that such a standard "is necessary to safeguard the health of the more than one billion passengers and hundreds of thousands of crew members who fly each year."

ETS in airplanes most severely victimizes flight attendants, since they are exposed to it on a continual basis. Patty Young, a 26-year veteran flight attendant with a major U.S. carrier, suffers from chronic bronchitis, constant headaches and other illnesses which she connects to being exposed to ETS. "We have allowed people to poison us year after year by letting them satisfy their nicotine addiction in the confines of the airplane cabin," Young says. Young is one of seven nonsmoking flight attendants who has filed a class action suit against eight U.S. tobacco manufacturers. The flight attendants are seeking more than $5 billion in punitive damages for lung cancer and other illnesses they allegedly contracted by being exposed to ETS on the job. The complaint, filed in Miami last October, says that the plaintiffs "are innocent victims who had no choice; smoke was constant in their work environment and they had to inhale it." Young says that if ICAO fails to address the problem at the global level, "many more of us will get sick and die needlessly, largely because of the power of the genocide syndicate," a reference to the tobacco industry.

Kathryn Renz, a flight attendant for 10 years with another major carrier, represents the Independent Union of Flight Attendants, which joined other unions last May in asking the Federal Aviation Administration to prohibit smoking on international flights by U.S. carriers. She says that a worldwide airline smoking ban is justified not only by health concerns, but also by safety issues. "Lit cigarettes in the airline cabin are accidents waiting to happen," says Renz. She and other flight attendants have often encountered passengers who fell asleep with lit cigarettes in hand, she says, and some flight attendants have suddenly found themselves fighting seat cushion fires started by dropped cigarettes. Flight attendant Young echoes this concern, saying she is worried about a possible repeat of the Varig Airlines flight which crashed in a fireball while trying to land in Paris in 1973, killing 133 people. The fire which led to the crash was started by a cigarette dropped carelessly by a passenger in a rear lavatory.

Prospects for success

Ambassador Newman, whose position at ICAO provides a good vantage point for assessing the prospects for adoption of a smoke-free standard, says, "We’ve got things moving in the right direction." While it may be overly ambitious to hope for adoption of a standard when ICAO next meets in plenary session in fall 1992, he adds, "We might be able to get a recommended practice [this] year." A recommended practice is voluntary, unlike the mandatory standard. Nonetheless, practices which are formally recommended by ICAO often are incorporated by member nations into their own laws, and "there is, by and large, universal compliance," says Newman.

ICAO already is working on an agreement that would eliminate or restrict smoking in the cockpit on international flights, a proposal supported by most airline pilots, according to Newman. A report expected to be released soon by ICAO’s Chief Medical Officer will recommend elimination of smoking in both the airliner cabin and the cockpit. The concern, says Newman, is one of safety, as well as health. The poisonous effect of carbon monoxide in tobacco smoke, particularly at high altitudes, hampers a pilot’s performance by impeding night vision, timing and coordination.

Now, according to Du Melle, supporters in the United States and their counterparts in Canada, where the government has already adopted a phased-in elimination of smoking on all international flights by Canadian carriers that will be completed in 1993, are spearheading a worldwide effort to lobby ICAO. "Good precedents already have been set in the 30 or more nations which have eliminated smoking on some or all domestic flights, and by the 51 major airlines which, at last count, have either partially or totally prohibited smoking in the airliner cabin for health and safety reasons," says Du Melle. "We are working closely with health leaders in those countries, as well as elsewhere, to help us take our case to [ICAO]."

There are obstacles, however. Newman and others point out that the cumbersome decision-making apparatus of a large worldwide body like ICAO is not conducive to swift consideration of even the least controversial proposals. Durbin observes that the process is further complicated by the great diversity of social mores and provincial concerns that the ICAO membership brings to the negotiating table. "Now we must deal with different countries with different values and cultures," he says, "many of which don’t have the benefit of the same health information concerning tobacco use that we do in the United States."

And all observers appear to agree on what constitutes the other major obstruction: the extraordinary political influence of the transnational tobacco conglomerates. The tobacco industry strongly opposes smoke-free policies for air travel. In response to the kick-off of the Campaign for Smoke-Free Skies, the Tobacco Institute, the U.S. industry trade association, claimed that airplane "smoking bans, either in place or proposed, are not scientifically supportable" and that separate smoking sections ensure that nonsmoker exposure to ETS is minimal on flights where smoking is permitted. Tom Lauria, a spokesperson for the Tobacco Institute, says that "anti-smoking advocates ... pretend to know what’s best for the entire world, [but] they don’t."

Because they recognize that the international smoke-free standard is not likely to be enacted quickly, advocates in the United States are pursuing the interim strategy of asking U.S. government officials to seek bilateral and multilateral agreements with those countries believed to be allies on this issue, including Canada, Australia, New Zealand and Great Britain. ICAO Ambassador Newman notes that "it’s a plus for the effort to have Skinner that close to the president," given Skinner’s strong support for the initiative while Secretary of Transportation. Supporters expect that if the United States and several other nations agree to adopt international smoke-free flying policies and show that they are workable and popular, ICAO will be more likely to adopt its own standard eliminating airplane smoking everywhere.

Sidebar

o Involuntary smoking is a cause of disease, including lung cancer, in healthy nonsmokers.

o The children of parents who smoke, compared with the children of nonsmoking parents, have an increased frequency of respiratory infections, increased respiratory symptoms and slightly smaller rates of increase in lung function as the lung matures.

o Simple separation of smokers and nonsmokers within the same air space may reduce, but does not eliminate, exposure of nonsmokers to environmental tobacco smoke.

The National Academy of Sciences report reached similar conclusions and recommended elimination of smoking on all domestic flights.

Additional evidence has since emerged. Last April, a panel of the Environmental Protection Agency’s Science Advisory Board, comprised of independent experts, formally endorsed the chief conclusions of a draft EPA report classifying ETS as a "Class A" (known human) carcinogen, the category the agency reserves for the most toxic substances, including radon, asbestos and benzene. EPA expects to release the final report this spring. In June 1991, the National Institute on Occupational Safety and Health recommended that all employers, public and private, adopt smoke-free policies in the workplace. And earlier in the year, researchers at the University of California-San Francisco School of Medicine estimated that ETS is directly responsible for 53,000 deaths each year in the United States, including more than 37,000 from heart disease.

- J.P.W. & C.E.D.

UNTIL THE MID-1980S, tobacco and the manufacturers of tobacco products had a tenacious hold on Canadian consumers. Canada has a tobacco-growing industry that is larger, on a per capita basis, than that of the United States. Ten years ago, Canada also had one of the highest levels of tobacco consumption in the industrialized world.

From 1983 to 1989, however, tobacco sales in Canada fell by 20 percent in total, and by 29 percent among the adult population. In 1989 alone, per capita tobacco sales in Canada fell by almost 7 percent (compared to 3 percent in the United States). And "the social change goes beyond sales declines," as Garfield Mahood, executive director of Canada’s Non-Smokers’ Rights Association (NSRA), told the Seventh World Conference on Tobacco and Health. "There are changed attitudes in Canada," Mahood stated. "The tobacco industry has become a social pariah. ... Tobacco executives have little credibility."

NSRA, along with a few other Canadian health organizations, has set international precedents in its campaign against the tobacco industry, pushing two of the toughest anti- industry laws ever passed through the Canadian Parliament. NSRA has become a leader in the anti-tobacco campaign by undertaking aggressive lobbying and public relations efforts that go far beyond traditional approaches to stemming tobacco use. What has made the organization so effective is its willingness to recognize and confront the root cause of tobacco-related death and disease - the manufacturers of tobacco products. Industry, not the consumer, has been the target of efforts aimed at curbing the leading form of preventable death in Canada.

Blaming the perpetrators

"Individuals don’t create epidemics," Mahood says, yet health agencies have traditionally adopted a "blame the victim" strategy that tells individuals that it is their responsibility to quit smoking or to not start in the first place. But, as staff legal counsel David Sweanor wrote in a NSRA annual report, "the tobacco industry knows that unless there is a major intervention in the way it does business, more than enough youngsters will join the tobacco market than are needed to replace most of the older smokers who quit or die." Mahood says that the key to the tobacco epidemic - responsible for 35,000 deaths every year in Canada - is prevention, and the key to prevention is strict regulation of the tobacco industry.

Many health advocacy groups, however, are hesitant to shift funds to lobbying efforts aimed at regulation. Mahood says that because Canadian health organizations are controlled by the medical establishment, they tend to direct money to research and patient- care programs rather than to new policy efforts. NSRA also discovered that many Canadian health organizations were reluctant to adopt the aggressive, controversial approaches involved in tackling industry head-on for fear it would hurt their fundraising efforts. "Physicians don’t like to offend people," says Kenneth Kyle, lobbyist for the Canadian Cancer Society.

The preventative approaches that these groups do advocate, therefore, do not usually focus on the root cause of tobacco-related death. Instead, they target individual smokers through efforts such as annual "no-smoking days." Mahood told the Conference on Tobacco and Health, "There were disproportionate resources being allocated to smoking cessation efforts and to research on cures for diseases compared to the resources allocated to health advocacy and to keeping young Canadians off of the tobacco market in the first place. The tobacco industry can live comfortably with the health community spending a generous portion of their resources on these special cessation events."

There were notable exceptions, however. A group of physicians who volunteered their services to the Canadian Ski Association (CSA) formed a group called Physicians for a Smoke-Free Canada to campaign against the CSA’s decision to accept sponsorship from RJR-Macdonald , the manufacturer of Export A, a Canadian cigarette brand. While the CSA ultimately voted to retain the sponsorship, the campaign placed the issue on the national agenda and resulted in a severe blow against tobacco sponsorship of sports events: Canada approved a new federal government policy to deduct from federal sports grants an amount equivalent to what the grant recipients receive from tobacco company sponsors.

The most active of the Canadian health agencies has been the Canadian Cancer Society (CCS), which joined in the NSRA lobbying effort early on and has shown "world- precedent-setting leadership in health advocacy," according to Mahood. Kyle says that CCS moved into lobbying out of a belief that "a change in behavior" requires a "change in the environment." He asserts that regulations which discourage smoking and make cigarettes less available are far more effective than public education in lowering rates of tobacco-related cancer.

The NSRA and the CCS have lobbied vigorously to get laws passed (securing the active support of the Canadian Minister of Health was particularly important, Mahood says) and mounted an aggressive public relations campaign that turned public sentiment against smoking and, more importantly, against the manufacturers of cigarettes. Advertising and mass mailings played a huge role in the campaign.

One especially effective advertisement appeared on page three of the prominent Canadian newspaper, The Globe and Mail of Toronto, on the day that a bill which would become the Tobacco Products Control Act was going to committee for mark-up. In response to information that industry lobbyists were working to weaken the bill (for which government officials, including the Prime Minister, had expressed support), NSRA made public the relationship between Prime Minister Brian Mulroney and Bill Neville, an influential lobbyist and the head of the Canadian Tobacco Manufacturers’ Council. Neville, a friend and advisor to Mulroney, had been in charge of setting up the Prime Minister’s office. The headline of the advertisement read: "How many thousands of Canadians will die from tobacco products may be in the hands of these two men." Mahood told the Conference on Tobacco and Health, "With the issue now having been identified as a potential patronage issue before millions of Canadians, it was impossible for the government to weaken its resolve to pass a strong bill without being perceived as granting favors to friends." The bill came out of committee stronger than it had gone in.

A mass mailing to the households of over 30,000 constituents of Conservative Member of Parliament (MP) Ron Stewart similarly sought to make public his ties to the tobacco industry. Stewart was one of a number of pro-industry MPs who hoped to gut the proposed Tobacco Control Act in committee. The flyer, written by Mahood and signed by leaders of CCS, the Canadian Council on Smoking and Health and Physicians for a Smoke-Free Canada, pointed out that Stewart was a tobacco wholesaler and accused him of putting his financial interests ahead of the health of his constituents. Stewart withdrew from the committee reviewing the bill.

Reining in the tobacco companies

In 1988, NSRA’s work paid off when Parliament passed the first laws regulating tobacco in Canada since 1908 - the Non-Smokers’ Rights Act and the Tobacco Products Control Act. The Non-Smokers’ Rights Act bans smoking in all federal and federally- funded workplaces, severely restricts smoking on public transportation and bans smoking completely on both domestic and overseas airline flights.

The Tobacco Products Control Act bans all cigarette advertising and promotion in newspapers and magazines and on billboards. Cigarette advertising at points of sale will be prohibited as of January 1993. The Act restricts brand-name tobacco promotion of arts and sports events, and prohibits distribution of free samples and the use of tobacco brand names on non-tobacco items such as t-shirts and hats.

The Control Act also requires that prominent health warnings cover at least 20 percent of both major faces of cigarette packaging. Mahood says that manufacturers have attempted to get around this requirement by printing the warning in colors that do not stand out against one another - such as white on gold. NSRA is working for a provision requiring that the warning be printed in black on white or white on black. The act further requires that the warning list toxic ingredients, and that manufacturers provide the government with data on toxins in tobacco and in tobacco smoke. Rather than reveal these additives, RJR-Macdonald stopped using them, and Philip Morris stopped selling its cigarettes in Canada.

While the two acts are far-reaching, Canadian anti-smoking advocates believe the high taxation of cigarettes in Canada has probably contributed the most to the decline in tobacco use. Since 1985, NSRA and the CCS have pressured the government to implement tax hikes on tobacco products, with considerable success. In a report on cigarette taxation in Canada, Sweanor writes that over the past six years Canada has "gone from having relatively low tobacco taxes to having the highest taxes in the world. In fact, the figures currently available to us indicate that among Canada’s 10 provinces, two have higher tobacco prices than are found anywhere else in the world, and all 10 rank within the top 15 tobacco taxing jurisdictions in the world." With federal, provincial and sales taxes figured in, a pack of cigarettes in Canada costs somewhere between C$5.13 and C$6.43.

Critics charge, however, that "sin taxes" on products such as alcohol and cigarettes disproportionately affect low-income and minority communities. Ed Meyers of the Washington, D.C.-based Citizens for Tax Justice says that cigarette taxes are "very regressive" and fall "hardest upon those with the least ability to pay." Meyers says, "We’re not convinced the tax code is the place to make social or health policy." And there does appear to be an irony in the Canadian policy - which emphasizes a focus on tobacco companies rather than individual smokers - relying heavily on consumption taxes.

But Mahood dismisses concerns about the regressive nature of high taxation of cigarettes. "I hardly think [it is] enlightened public policy ... to make tobacco more affordable for low-income people," he says, adding that the argument "taken to its absurd conclusion" would call for the distribution of free cigarettes in low-income communities. "There are other ways to assist the poor," he says, without encouraging tobacco use.

Mahood and other Canadian health activists justify their support for high cigarette taxes on the grounds that they are effective. They point, for example, to the Canadian experience between 1980 and 1984, when taxes raised the real price of cigarettes by 25 percent and Canadian per capita consumption dropped 10 percent. (The tax system was removed in 1984 as the result of industry efforts; NSRA first entered the tax campaign in 1985 in a fight to retain the tax.) Teenagers are especially price-sensitive, according to the NSRA and the CCS. If cigarettes are less affordable, "then kids don’t start smoking," says Kyle.

The effectiveness of these taxes is blunted somewhat, however, by the ready availability of much less expensive cigarettes across the border in the United States. U.S. tobacco policies in general - far less stringent than those of Canada - obviously affect the success of Canadian efforts. Magazines with cigarette advertisements cross the border, as do television broadcasts of U.S. sports events sponsored by tobacco companies which are free to display their banners, names and logos on the playing field.

Mahood says, "There is no question that [the U.S.] failure to confront the tobacco industry head-on ... can hold us back." And while he is careful to point out that his direct experience involves only the Canadian health community, Mahood does suggest that "some [U.S. health organizations] might look to the Canadian Cancer Society as a model for greater involvement."

Current CCS efforts include lobbying the Canadian Parliament to encourage the U.S. government to implement higher taxes on cigarettes. The CCS is also working to raise the Canadian federal excise tax on tobacco products even higher and to equalize taxes between cigarettes and fine-cut tobacco. Loose tobacco, which is rolled by consumers into cigarettes, contains more tar than manufactured cigarettes and is usually smoked without a filter. Since taxes are lower on fine-cut tobacco, Kyle says "people are being encouraged to substitute a more lethal product" for manufactured cigarettes.

The CCS also hopes to get stricter measures passed that would discourage young people from starting to smoke. The organization is pressuring the Canadian government to raise the minimum age for buying cigarettes from 16 to 18 or 19, to impose huge fines on store owners who sell to minors and to ban cigarette vending machines, from which it is easy for underage smokers to purchase cigarettes.

Canada has had virtually unparalleled success in slashing smoking rates. Mahood notes, however, that for the most part, "the [international] health community has had ... an abysmal record in pursuing new initiatives to tackle the tobacco industry." While he thinks it would be "presumptuous" to tell anti-smoking forces outside of Canada how to run their campaigns, Mahood says he hopes the Canadian experience can serve as a model for other countries.

MICHAEL PERTSCHUK has played a leadership role in the development of tobacco-control policies for almost 30 years. In 1965 and 1969, as chief counsel to the Senate Commerce Committee, he developed the legislation requiring warnings on cigarette labels and banning broadcast advertising of cigarettes. In 1977, he was appointed chair of the Federal Trade Commission by President Carter. Currently, Pertschuk serves as co-director of the Advocacy Institute. He helped establish Globalink, a network linking tobacco-control activists worldwide. He is the author of three manuals on tobacco control, and three books: Revolt Against Regulation, Giantkillers and The People Rising.

Multinational Monitor: Why is the U.S. tobacco industry so weakly regulated?

Michael Pertschuk: There is a series of answers, ranging from the corrupt to the banal. Cigarettes have been very much a part of our culture. And there are 50 million addicts. So even if the companies lacked the kind of political and economic power they have, it’s not likely that we would do what we should do, or what a civilized society would do, if cigarettes were a proposed new product, which is put anybody in jail who sold it.

Beyond that, you’ve got an industry with a concentrated agricultural, geographic base, a very powerful one in the South. And it is not just the simple farmers who constitute that base, but also, because of the elaborate market structure, allotment holders of tobacco farmland, who are usually doctors and lawyers and people who have never dirtied their fingers in farming.

There is, in the House of Representatives, a collection of tobacco district congressmen known as the "Tobacco Boys." There are about 50 of them, and they are senior and powerful. For them, tobacco is the single most important issue. So they are prepared to trade with congressmen from other parts of the country for tobacco votes. So you have got a very powerful phalanx.

Beyond that, the cigarette is an incredible cash cow. It is the most profitable product ever conceived of, and the reason lies in the very truthful words of the former R.J. Reynolds board member, Warren Buffet, who owns ABC television, among other things. Buffet, said, and this is in the book Barbarians at the Gate, the story of the takeover of R.J. Reynolds : "Tell you what I like about the cigarette business. Costs a penny to make, sell it for a dollar. It’s addictive."

So the cigarette companies make enormous amounts of money, and that is the major reason they are buying up the rest of the consumer goods businesses in the United States. Philip Morris has enough money that with its spare change it picks up General Foods and Kraft, and that creates and extends its network of influence, power and money. They can buy up every lobbyist in Washington. We estimated, and it was a conservative and reasonable estimate, based upon some inside information, that the industry spends about $600 million a year on lawyers. Some of that money is spent to buy up trial lawyers around the country on retainer just to make sure that they don’t ever get involved in a tobacco industry liability lawsuit. So there is tremendous depth in political representation, in paid-for political representation and in infiltrating the business community.

Another very important part of the power, and it is in some ways the most insidious part of its current focus, is that the cigarette companies have set about systematically to buy up the leadership of the very communities - the women’s community, the African-American community and the Hispanic community - that might rise up to protest cigarette advertising and promotion and exploitation. Philip Morris, which is easily the most skillful and strategic company has also set about to buy up the Left, just in case the Left would get restive about the kind of mayhem that cigarettes spread.

MM: How is Philip Morris buying up the Left?

Pertschuk: There are several examples. The Tobacco Institute is a key funder for the Coalition on Human Needs. The Food Research and Action Center, which is the most serious lobbyist for hunger programs, for school lunch programs, is underwritten by Philip Morris. Philip Morris underwrites homeless groups. It struck a bargain with ACT-UP [the AIDS Coalition to Unleash Power] and contributes substantial amounts to ACT-UP’s funding and the causes that ACT-UP supports. So it has supported AIDS research. It has supported pro-choice groups on reproductive rights, it has supported the Women’s Political Caucus and the Black Political Caucus. It supports the Eagleton Center for Women and Politics at Rutgers.

There is no other obvious explanation [for these funding choices] but that, with so much money around, the tobacco companies just thought it was probably safe to buy up political progressives.

The industry also has entered into an alliance of convenience with the American Civil Liberties Union, which fronts for it on issues of advertising and promotion and perhaps even on some issues of regulation of indoor air. Although there is some evidence that the ACLU has been supported by tobacco companies, I think that the alliance is more likely due to a moral myopia on the part of the ACLU and a lot of interrelationships among First Amendment lawyers that represent the tobacco and alcohol companies.

MM: If you were again in a regulatory position, how would you confront the tobacco companies? Do you believe they are violating existing laws?

Pertschuk: I think there is a very good argument to be made that all cigarette advertising today is both "deceptive" and "unfair," under the Federal Trade Commission’s interpretation of those legal terms. I would begin by taking up [New York City Consumer Affairs Commissioner] Mark Green’s petition to the Federal Trade Commission, which charged in effect that the Joe Camel advertising campaign is deliberately targeted at children, and that, under the Federal Trade Commission’s power to regulate unfair advertising and promotion, is inherently unlawful. I would build on that by an action against R.J. Reynolds and the other companies which would argue broadly that any imagery which graphically conveys the sense of cigarette smoking as a passage to social success, to health, to vigor, to acceptability was preying on the vulnerabilities of young people and was inherently unfair, and therefore also unlawful under the Federal Trade Commission Act. So I think there is much that could be done both under deception and unfairness authority.

MM: What prospects do you see for industry reform as a result of liability suits?

Pertschuk: Well this is not my area of expertise. It is clear that the Supreme Court, as we speak, is serious about - and split - on the question of whether Congress, in passing the legislation putting warnings on the labels and in advertising, intended to preempt any state action.

I was there. That is to say, I worked for Congress, for the Senate Commerce Committee in both 1965 and 1969, when the relevant laws were passed. I can tell you that the Court would be picking up fuzz from the universe if it found an intention in Congress to preempt the states from enforcing product liability common law. There was no intention expressed in any of the debates or by Congress at that time. The preemption - there is preemption language - was designed very simply to prevent every state from requiring a different warning than the Congress required, in the interest of uniformity.

MM: Do you support a ban on all tobacco advertisements?

Pertschuk: I do. I think that a more likely Congressional action would be a ban on advertising containing graphic imagery, limiting advertising to the so-called "tombstone advertising," just print. To the extent that there is any First Amendment argument that cigarette advertising is or ought to be protected - and that is weak - it would go to some very narrow areas of information, such as price information, information on low tar and nicotine, which can certainly be portrayed adequately in print. But anyone who thinks cigarette advertising is about information still believes in the tooth fairy. Cigarette advertising is about imagery, seductive imagery. The elimination of the imagery in advertising would result, first of all, in the elimination of most cigarette advertising, because the companies aren’t going to spend $2 billion a year on print. So tombstone advertising is desirable and, I think, achievable within the next few years.

Part of the problem is that the companies themselves are abandoning advertising to some extent, shifting their investments into promotions of various kinds. Promotions range from sponsorship of community events, such as the jazz festivals and various kinds of community celebrations, to the support of stockcar races and other kinds of events which attract the only part of the population which is holding steady or growing as smokers, which is lower-income, less-educated, younger people. So you would have to have comprehensive legislation [banning both cigarette advertising and promotion] such as is now occurring in Canada.

MM: Do you support increased tobacco excise taxes?

Pertschuk: I do. The tobacco companies have found some responsiveness among civil rights groups and minority groups through the argument that excise tax increases are regressive. There are some good arguments that in their net impact they are not regressive. Specifically, when you raise taxes, the young people who don’t take up smoking are primarily those for whom the costs become a real barrier, and those are poorer, younger people. So that the net impact on poorer communities is that less people smoke, and therefore, excise taxes do not, on the whole, take more money proportionately from poorer communities than from rich communities.

That is tough, however, for the person who is a smoker in a low-income community, and it is an issue that many people have wrestled with. Marian Wright Edelman of the Children’s Defense Fund broke with most of the poverty groups [on this question], arguing that she supported higher alcohol and tobacco taxes so long as the tax code was also changed to provide some compensatory, progressive return of tax revenues to low-income people. That would be the way to deal with it ideally, through some kind of tax credit or other tax relief for poorer families. But raise the excise taxes, because they are the single most effective means we know of discouraging young people from taking up smoking.

MM: What can people in the United States do to control the overseas activities of U.S.-based tobacco multinationals?

Pertschuk: The current outrage that is being perpetrated by the Office of the U.S. Trade Representative is with respect to Taiwan , which has already been the victim of U.S. marketing aggression. The Taiwanese have developed a comprehensive tobacco control law. Unlike some other restrictions on the marketing and import of U.S. cigarettes in some Asian countries, there isn’t even an argument that this law was designed as a trade barrier. This is health legislation that applies to all marketing of cigarettes in Taiwan and would be comprehensive. Indeed many provisions are based upon models supported by the Health and Human Services Department of the United States. It proposes public education, disclosure of activities, a ban on advertising and promotion and restrictions on such things as vending machines and smokeless tobacco.

The Office of the Trade Representative is arguing in closed sessions with the Taiwanese government that this violates an agreement which the United States forced down Taiwan’s throat in 1986 under threat of trade retaliation. At that time, Taiwan agreed, at least temporarily, to allow U.S. cigarettes to be advertised in order to permit U.S. companies to make up for the lost time in which they were excluded from the Taiwanese market.

In effect, the U.S. government is now threatening not only trade retaliation, but also to block Taiwan’s membership in GATT on the basis of an agreement that is already a piece of international blackmail.

I think that is so outrageous that publicity about it and protests about it to members of Congress, the Office of the U.S. Trade Representative and to [Secretary of Health and Human Services Louis] Sullivan might have a real impact.

MM: Are there other steps the U.S. government or citizens could take to restrict the tobacco companies’ abuses abroad?

Pertschuk: There has been an effort to require that cigarettes exported from the United States at least bear the warnings that are required for their consumption in the United States, unless the country that is importing them has imposed warnings of its own. Congressman Chet Atkins, [D-Massachusetts], has legislation pending to do that.

Probably the most useful thing the United States could do is help transfer the technology of tobacco control to Third World countries. By that I mean the tobacco control movement in this country, especially the grassroots organizations like Americans for Nonsmokers Rights, some of the GASP groups, DOC and others, have developed some pretty effective strategies for taking on the tobacco companies. There are organizations such as the American Cancer Society and the International Union Against Cancer and individuals like Greg Connolly [director of the Massachusetts Office on Nonsmoking and Health] who have been very effective in counseling Third World countries on how to resist the transnational companies.

The U.S. government, though the Institutes of Health, the Department of Health and Human Services and the Agency for International Development, and through its support of the World Health Organization (WHO), could do a lot. We are not talking about substantial amounts of money here. Up until the last couple of years, WHO had something like a $40,000 or $50,000 budget beyond a small staff to do tobacco control, whereas it had $8 million for other drug programs. So we could support the growth of the network of resources to help countries resist the tobacco companies.

MM: What should be the key elements of tobacco control programs for countries which are opening up their tobacco markets?

Pertschuk: Well, first of all, most of them - especially in Eastern Europe - have had in place some restrictions on advertising and promotion. The most important thing for them is to hang on to them, and strengthen them and enforce them.

There is an incredible struggle for the soul of Eastern Europe going on right now, and there are some forces working for [maintaining and imposing strict tobacco control regulations]. Lech Walesa and Cardinal Glemp in Poland both co-sponsored the first workshop on tobacco control in Eastern Europe and have supported legislation reaffirming the restrictions on advertising and promotion. But the tobacco companies keep sneaking in.

So what is really needed is vigilance to see that, under the guise of opening up free markets and amidst the shift to a grand and glorious market economy, advertising and promotion for tobacco doesn’t slip in in the dead of night. And that requires a network of people being alert. The Eastern European governments are open to hearing from health authorities in the United States and others to counteract the lobbying efforts and the corrupt efforts of the companies over there.

MM: What other steps would you suggest?

Pertschuk: When you talk about basic tobacco control, there are really four primary areas of focus. There is the elimination of advertising and promotion. There is the restriction of indoor smoking in public places, which in most European countries is still pretty primitive. The third element is restricting minors’ access to cigarettes, which requires not only laws but a commitment to policing, something we haven’t had very much of in this country. And then there is taxation.

For the Eastern European countries which are starved for revenues, taxation would seem to be a very good place to turn, and especially taxation based upon price, because imported cigarettes are always going to be higher priced. It is one way of preventing the companies from developing the kind of market penetration which would encourage them to try and advertise and promote and buy off officialdom in the country. Greg Connolly has done a lot of work in this area and has been very helpful to a lot of the countries.

One of the things that would be useful would be to have a traveling SWAT team of experts, not just U.S. experts, but others, available to help advise the health authorities in these countries who just haven’t had the experience of dealing with the cigarette companies.

MM: What is Globalink, and why was it developed?

Pertschuk: Historically, one of the great failures of the relatively few people working in tobacco control, both in this country and abroad, has been the failure to connect, to share strategies, to share intelligence about where the tobacco industry is going and to amass whatever forces there are in the world that are concerned about tobacco control and focus them on the most important areas of conflict.

Globalink is an international computer network developed and supported by the American Cancer Society, and its goal is to link the key resources and organizations internationally and domestically. It is really a tool of all those working, both in the United States and around the world, for tobacco control, because it is a means of not only exchanging information in a timely way but also of mobilizing people to focus on key issues and places.

THE EAST EUROPEAN TOBACCO MARKET "is there for the taking - and it will be taken" by Western tobacco multinational corporations, says Roy Burry, senior vice president with the Wall Street firm Kidder Peabody. Burry and other analysts predict that within a few years, the massive East European demand for tobacco will be met entirely by Western companies, led by Philip Morris , R.J. Reynolds and British American Tobacco (BAT). With perhaps a couple exceptions, the state-owned monopolies which once supplied more than one half trillion cigarettes to the region annually will all be privatized and bought out by Western companies, producing licensed Western brands or shut down, they believe.

For the tobacco giants, it is a dream come true. The sudden opening of a huge market with consumers who are already ardent smokers combined with the dramatic deterioration, and, in some cases, collapse, of the enterprises which once met the market’s demand has created a vacuum the Western multinationals have rushed to fill. Sir Patrick Sheehy, chair of BAT industries, told the Financial Times one year ago that because of the changes in Eastern Europe, as well as the opening of Asian markets, "These are the most exciting times I have seen in the tobacco industry in the last 40 years."

But the industry fantasy is a nightmare for health activists. East Europeans already suffer from a very high rate of smoking-related diseases due both to their high smoking rate and the high tar and nicotine content of the cigarettes they smoke. With the tobacco multinationals moving into the region and using sophisticated marketing techniques on a promotion-naive population, health activists fear the situation will only grow worse.

The health effects of smoking are poorly understood in Eastern Europe. The insufficient health warnings issued by the region’s old governments may have actually encouraged smoking, according to some observers, because it made smoking appear to be an act of defiance, however small.

The tobacco multinationals understand this situation, and believe they can profit from East Europeans’ ignorance. Their optimism about the region is predicated on East European citizens "not being well enough educated to have health" concerns about smoking, says Kelly Metcalf, a research associate with Sanford Bernstein, an investment management firm. Perhaps "fifty years from now, they will realize that it is bad for you, and consumption will drop then," she says. "Until then, [we] look for growth."

The multinationals move in

The tobacco multinationals are looking excitedly to Eastern Europe to fuel their expansion. Burry says Eastern Europe is "massively important" in terms of growth. New markets like Eastern Europe are of critical importance to the tobacco multinationals, because the tobacco market is mature in the United States and most industrialized countries, and the tobacco companies are struggling to stem declines in those countries’ smoking rates.

Metcalf says industry analysts now expect to see the tobacco multinationals’ East European sales increase 6 to 8 percent annually, a marked increase from expectations a couple years before, when analysts projected 4 to 5 percent growth. She expects that, within five years, East European sales will account for 15 percent of Philip Morris’s sales and probably that much for R.J. Reynolds as well.

The multinational tobacco corporations have quickly moved to take over, or enter into joint venture or licensing agreements with, existing East European tobacco enterprises.

o R.J. Reynolds, Philip Morris and Reemtsma, the former West Germany ’s largest cigarette producer, split the East German cigarette manufacturing plants among them.

o Poland is seeking to privatize its five cigarette factories. Philip Morris, which has licensed Marlboro to a factory in Krakow for a decade and a half, expects to participate in the privatization process, probably with the Krakow factory, according to Tobacco International magazine. R.J. Reynolds also hopes to manufacture cigarettes in Poland, reportedly at a new factory.

o The four cigarette factories in Hungary are all in the process of passing over to the control of foreign companies. Philip Morris and Austria Toabak Werke announced the acquisition of Egri Dohanygyar, which had a market share of approximately 24 percent, in November 1991. BAT announced a month later that it had purchased the Pecs Tobacco Factory, Hungary’s largest cigarette producer. Pecs makes Hungary’s most popular brand, Sopianae, which holds a 45 percent market share. BAT plans to continue marketing Sopianae and also to introduce some of its most popular brands, such as Kent and Lucky Strike. The other two factories are expected to be sold in 1992. The factory in Debrecen has an arrangement with R.J. Reynolds, and the one in Satoraljaujhely licenses a brand from the French company SEITA. Rothman’s , the British company, and Japan Tobacco are also seeking ties with Satoraljaujhely, according to Tobacco International.

Determining exactly what sort of relationships the multinationals’ will establish in Eastern Europe in the near-term is difficult because there is so much uncertainty about the region’s future. One particularly acute problem delaying investments is the region’s shortage of hard currency.

RJR sees Eastern Europe as a "very important ... area of opportunity," according to Brenda Follmer, director of public relations at R.J. Reynolds Tobacco International, but finds that it is still difficult to do business in the region. A previously announced Reynolds joint venture in Leningrad (now St. Petersburg) has fallen apart, she says. Another joint venture with Alma Ata Integrated Tobacco Works in Kazakhstan has an uncertain future. It was tied to the American Trade Consortium, a group which linked U.S. corporations with enterprises in the Soviet Union and which itself has an uncertain future. Darienne Dennis, Philip Morris manager of communications, says the situation in Eastern Europe is "so fluid we can’t adequately comment" on it.

But the long-term picture seems more focused. East Europeans "will be smoking Marlboros at the end of the day," says Burry.

With the possible exception of Bulgaria , the world’s second largest cigarette exporter (after the United States), Eastern Europe’s former state-owned tobacco enterprises are relatively feeble and likely to be privatized, falling mostly, if not entirely, into the hands of the Western multinationals. As the East European economies collapsed, the cigarette industry deteriorated along with the rest of the region’s manufacturing sector. Production and distribution systems broke down. Most countries’ factories are equipped with old and decaying machinery, and many countries are unable to meet consumer demand.

The production crisis has been most severe in the former Soviet Union, where, in summer 1990, disgruntled smokers in many cities protested the shortage of available cigarettes. Moscow Radio labeled the protests in one city, where demonstrators occupied and barricaded the town center, "the tobacco rebellion." The protests led to the personal intervention of then-president Mikhail Gorbachev and a deal to import 20 billion Philip Morris and 14 billion R.J. Reynolds cigarettes.

Eastern Europe meets Madison Avenue

Tobacco already exacts a huge toll on the citizens of East European countries. According to Richard Peto, Alan Lopez and Claire Chollat-Traquet of the World Health Organization’s (WHO) consultative group on statistical aspects of tobacco-related mortality, more than one-third of all deaths among middle-aged East European men in 1985 were due to tobacco. The rates were highest in Poland and the Soviet Union, where 40 percent of male middle-aged deaths were attributable to tobacco.

The high mortality rates are due to two factors: the high smoking rates, particularly among men (Poland has the fourth highest per capita smoking rate in the world); and the high tar content of most cigarettes produced in Eastern Europe.

Though Western cigarettes have lower levels of tar and nicotine, health advocates fear the widespread introduction of Western cigarettes will actually worsen the situation in Eastern Europe by increasing the number of cigarettes people smoke. The smoother taste of Western cigarettes may increase smokers’ tobacco consumption, and lower levels of nicotine - the addictive component of cigarettes - may also prompt them to smoke more cigarettes. Of most concern, perhaps, is that, as Greg Connolly, director of the Massachusetts Office for Nonsmoking and Health and an expert on international tobacco issues, says, "For every milligram Philip Morris reduces tobacco content, it will bring in two milligrams of advertising."

The multinationals are experiencing little difficulty introducing advertising into the region, since many of the numerous restrictions formerly placed on tobacco advertisements in East European countries have been repealed or are poorly enforced.

Advertisements for the cigarettes made by the tobacco multinationals are mushrooming throughout the region. Witold Zatonski, head of the department of Cancer Control and Epidemiology at the Maria Sklodowska-Curie Memorial Cancer Center and Institute of Oncology in Warsaw, says, "The Marlboro Man is at every corner" in Poland. A similar situation prevails in Hungary. Michael Wood, chair of the International Union Against Cancer’s Tobacco and Cancer Program, says that "in Budapest, literally every yards [a storefront] is done over as a Marlboro or Camel" advertisement. Wood reports that even the driver’s cab on a bus commissioned for a WHO seminar in Budapest displayed a Marlboro ad.

Advertising, however, is just one major component of the fundamental "transformation of the market" that Connolly says the tobacco multinationals will impose on Eastern Europe. He points to the change to lower tar cigarettes, expansion of cigarette distribution systems and the introduction of promotions as other aspects of this transformation.

One insidious example of the promotions Connolly fears occurred in December 1991 in Hungary, where Philip Morris sponsored a rock concert at which women clad in red-and-white Marlboro outfits gave away free Marlboros. Those who smoked the cigarettes in front of the women received free Marlboro designer sunglasses.

Wood says the multinationals are pursuing marketing strategies with "absolutely no constraints." The companies are even skirting laws requiring health warnings on cigarette packaging, according to Zatonski. He says that Marlboros smuggled into Poland do not carry the required health warnings or the mandated listing of dangerous ingredients (i.e., tar and nicotine).

The net effect of the influx of Western brands and promotions will be an increase in demand for tobacco, health advocates agree. The replacement of "decaying state monopolies which could barely meet demand [with multinational corporations and their] sophisticated marketing will encourage the expansion of demand," contends Connolly. Zatonski states, "There is no question that, if [a company] promotes something or advertises something, consumption will go up," and cigarettes are certainly no exception to this rule.

Of particular concern to health activists is the effect the Westernization of the industry will have on consumption by women and young people. Smoking rates among women in Eastern Europe are much lower than among men, and anti-smoking forces believe the multinationals will target women, as they have done in the United States for at least two decades.

Children, the market segment where health activists would hope to break the smoking chain in Eastern Europe, may be particularly susceptible to multinationals’ marketing techniques. The problem goes beyond the strategies the companies use to push tobacco to the young in the United States [see "Addicting the Young"]. "At the moment, young people [in Eastern Europe] are switched to Westernization," says Wood, "so the attraction is to [slickly promoted Western brands], not to the dull packaging of the state monopolies."

Unhealthy impediments

The growing influence and market penetration of the multinationals is just one of a series of obstacles facing East European health advocates who want to address the region’s epidemic of tobacco-related disease.

The public attitude and openness to the multinationals is another. Connolly contrasts the situation in Eastern Europe with Asia, the other region of the world where multinationals are seeking to expand dramatically. In Asia, he says, there is fairly widespread resistance, based on both health concerns and nationalism, to the multinationals’ efforts to enter the market and introduce new marketing techniques. In Eastern Europe, he says, "populist sentiment sees the Marlboro Man as a symbol of freedom and liberty, and power and wealth." The effort to communicate a public health message which contravenes that of the tobacco multinationals becomes that much more difficult.

Finally, health activists are underfunded and inexperienced. Government health ministries are making good-faith efforts, says Wood, but they are led by "brand new ministers who are extremely inexperienced" and operating on "very small budgets." The new government health officials cannot even adjust to their jobs by administering old programs. Old legislation was geared to control the old, state monopolies, Wood points out, and regulating the industry in its new form requires new legislation.

Poland, with probably the worst smoking problem in the region, is at the forefront of efforts to enact new tobacco controls. A bill which would ban all tobacco advertising has passed Poland’s upper chamber and is now moving to consideration by the lower chamber. Passage of the law, though beneficial, will certainly not be a panacea. Wood says he is skeptical of the government’s ability to enforce such a law. Metcalf of Sanford Bernstein says that market analysts do not pay attention to existing advertising bans and restrictions in Eastern Europe because they "have so little effect."

Non-governmental anti-smoking activities are also on the rise. Poland has had two smokeouts, modeled on the American Cancer Society’s "Great American Smokeout." And in Central Europe, groups are forming to participate in the 1992 Columbus Day project, an event planned to mark the 500th anniversary of Columbus’s voyage by symbolically returning tobacco, a plant native to the Americas, to the United States.

It seems unlikely, however, that activities like these, or even Poland’s tobacco control legislation, will substantially interfere with the eastward march of the Marlboro Man and his colleagues.

Wood acknowledges he is pessimistic about the short-term prospects for tobacco- control legislation in East Europe, but expresses more hope about the long-term. For one thing, he says, international health lobbyists are now better organized than ever before, and they can provide information and advice to their colleagues in Eastern Europe. As new health ministries and non-governmental organizations get their feet on the ground, presumably they will be able to act on this information with ever more effect.

The desire of Poland, Hungary and the Czech and Slovak Republic to join the European Community (EC) will also encourage smoking controls. Gaining admittance will require that these countries bring their regulations in line with those of the EC, including a tobacco advertising ban expected to be approved shortly and other tobacco-control regulations, and that they enforce them.

In the meantime, Philip Morris, R.J. Reynolds, BAT and the other tobacco multinationals are likely to work to expand their foothold in the Eastern European market by any and all means, with deadly consequences of immense proportions. One of the few consolations for health activists will be, as Peto, Lopez and Chollat-Traquet of the WHO consultative group on statistical aspects of tobacco-related morbidity note, that, since so many East Europeans smoke, even a minor decrease in their smoking rates will have a dramatic impact and save many thousands of lives.

ON AN EARLY SATURDAY MORNING in June 1987, Chicano vineyard workers at U.S. Tobacco’s Washington State winery took a dramatic step to protest management’s refusal to allow a union election. A caravan of workers left the vineyards near the Columbia River and drove six hours to the company’s palatial $30 million wine-tasting chateau near Seattle. During their day off, the workers and their families greeted patrons of the state’s largest winery with leaflets, placards and songs. They asked the wine drinkers at the chateau to not purchase U.S. Tobacco’s wines - Chateau Ste. Michelle and Columbia Crest wines - until the company recognized the right of its vineyard workers to elect a representative for collective bargaining. The June 1987 protest was the first of what became a weekly affair.

The weekly protests at the chateau came to a sudden halt, however, in February 1988, when U.S. Tobacco announced that Saturday was to be a mandatory work day, reversing a decade-old rule. In the following weeks, the company stepped up its assault on the burgeoning union campaign in its vineyards. Several union leaders were discharged for spurious reasons, resulting in a multi-million dollar wrongful discharge lawsuit. Others were promoted to foreman positions. The company hired management consultants and distributed a personnel manual. The Fortune 500 corporation was determined to block this attempt to extend the rudiments of workplace democracy to farm workers, despite the fact that the winery’s bottlers and truckers, who are better paid and predominantly white, were unionized.

Almost five years later, the workers’ demand for a union election persists. New leadership has surfaced again and again; if anything, the call for a union has grown louder. Last Independence Day the workers and their chosen representative, the United Farm Workers of Washington State (UFW of WS), initiated a nation-wide boycott of Chateau Ste. Michelle and Columbia Crest wines. Protests have resumed at the entrance of the chateau, but now sympathetic citizens, unionists and church members lead the picket line. Similar protests have begun to spring up across the country.

Premium wines, U.S. Tobacco and a new name

In 1986, U.S. Tobacco quietly changed its name to UST . The name change represents U.S. Tobacco’s growing discomfort with being known as "America’s Chewing Tobacco King." Its chief product - moist, smokeless chewing tobacco - had earned healthy returns for stockholders since 1911, but had gradually become an unhealthy embarrassment in the age of fitness. Despite annually achieving one of the top five profit-to-sales ratios in the United States and consistently being rated by financial analysts as one of the strongest U.S. companies, UST has been obsessed with diversifying its one-dimensional empire. (UST controls almost 90 percent of the chewing tobacco market.) However, three decades of attempts had resulted in a potpourri of failed ventures which included efforts to market pet foods, cigarette papers and pens.

This litany of failures ended when U.S. Tobacco acquired its first vineyard in Washington in 1974. From this initial purchase, UST has grown to become the major wine producer in the Northwest, the nation’s fastest growing wine region. UST now owns more than 4,000 acres of vineyards in Washington, Oregon and California, producing grapes for high-quality table wines. But that is just the beginning. Another 16,000 prime acres in Washington alone stand ready for grape cultivation. To date, UST has invested more than $100 million in the development of its wine empire.

Premium wines have supplied a justification for removing the word "tobacco" from the original corporate title. Indeed, UST’s 1991 annual report devotes nearly equal space to tobacco and wine, even though tobacco accounts for most of the company’s profits. It prominently announces: "UST is ... Tobacco, Wine and Other Businesses."

Profit and accolades ... but no trickle down

UST’s ultimate goal is to become the Gallo of premium table wines. Enormous promotional efforts, including multi-million dollar ad campaigns and the hiring of Jeff Smith, "The Frugal Gourmet," as spokesperson, have resulted in soaring sales - from $8 million in 1984 to over $55 million in 1990. UST wines are now the second most popular premium table wines in the country. Profits have grown as well, though at a slower rate than sales due to high promotional costs. In 1988, the wine division finally ended in the black; a $3 million profit in 1990 bodes well for the future. Numerous awards and accolades, including recognition as winery of the year by the Tasters Guild and Wine and Spirits magazine, have complemented the spiralling sales.

But while the wines have grown from obscurity to national prominence, the vineyard workers struggle to survive. Farm work is one of the most dangerous and strenuous jobs in the United States. The toll on the body of long hours of menial labor is severe. According to a recent Washington State Migrant Council report, the life expectancy of farm workers is 49 years, compared to the national average of 72. Farm workers at UST complain of widespread exposure to pesticides, and allege that those who speak out against careless spraying of pesticides are fired.

Despite facing hazardous workplace conditions, farm workers are poorly paid. Though they work full-time most of the year, workers’ annual incomes consistently fall below the poverty level. In fact, real wages have tumbled 25 percent since 1987. Because U.S. overtime laws exclude farm workers, UST refuses to pay its workers time-and-a-half for overtime.

The workers’ most frequently voiced complaint, however, concerns the undignified treatment they receive from UST management. "Why are bottlers and truckers allowed to unionize but not us?" asks a worker. "Must you look a certain way or speak a certain language to belong to a union? To the company we are children and so the company wants to make decisions for us."

"The best agricultural employer in the state"

Ignoring worker complaints of deplorable working conditions and compensation, UST has repeatedly called itself the "best agricultural employer" in the state. UST President Vincent Gierer, Jr. boasts, "Members of the Washington farm labor community eagerly seek employment at our company because of the benefits and progressive work policies we have instituted, and because of our ability to offer stable, full-time agricultural employment."

Farmworkers and their allies dismiss Gierer’s claims. "To call yourself the best agricultural employer is like being the best slave holder," comments George Finch, director of Centro Campesino, a farm worker advocacy group in Washington. "UST may be slightly less unconscionable than others, but this only demonstrates the gross inhumanity of most growers." For example, while UST plays up the health-care package it offers to farm workers after one year of full-time employment, workers point out it has deductibles that few can afford.

Consistent with its pretense of being benevolent, UST has couched its most recent response to the workers’ demand for a union election in what are meant to seem reasonable and compassionate terms. In a November letter to the Farm Workers Justice Coalition, Gierer purports to agree that all workers, including farm workers, should have the right to workplace democracy, but says that the fundamental problem is the lack of legislation that guarantees the rights of farm workers and employers. Without a neutral legal structure, Gierer contends, fair union elections and collective bargaining are impossible. "Fair farm labor legislation, in the final analysis, is the only solution," concludes Gierer.

Farm worker representatives express disdain for UST’s position. Tomas Villanueva, president of the UFW of WS says, "Our request is simple: UST must practice the principles in the vineyard which it allegedly preaches to the legislature. If they did, they would truly be the humanitarian leader of agricultural employers they profess to be."

Legally and practically, while farm labor legislation is desirable, it is certainly not a prerequisite for UST recognizing the vineyard workers’ right to organize. Workers organized unions and negotiated collective bargaining agreements long before labor laws were on the books. Moreover, opposing parties have been able to forge compromises in recent situations in which farm workers demanded the right to a union election in states without legal protections. For instance, a dispute between Campbell Soup and Ohio farm workers ended in the mid-1980s with the formation of an independent commission to supervise elections and collective bargaining. In addition to suggesting the formation of a similar commission, UST workers have proposed using the Washington Public Employees Commission, which regulates negotiations between employees and employers who consent to its authority. UST, without explanation, has rejected these proposals and every other effort for conciliation through a neutral third party.

Moreover, though UST now claims to be an advocate of farm worker rights, it did not begin to profess concern for such rights until after it failed to squelch the union campaign in its own vineyards. Though Grierer brags that "we are the only Washington State agricultural concern that to our knowledge has supported legislation in support of farm workers," observers question the sincerity of this commitment. In the 1990 Washington State legislative session, UST did not present testimony at the hearing on the state agricultural relations bill, much less propose a bill itself. Further, UST’s professed confidence in the passage of a bill is based on the dubious assumption that the Washington State legislature (which vetoed a minimum wage for farm workers) will reverse 50 years of intransigent resistance to farm worker labor protections.

The expanding struggle

As the vineyard workers approach the fifth anniversary of their protests outside the gates of UST’s chateau, their spirit and outlook are remarkably optimistic. "This is a struggle we will win. Eventually they will give in to the pressure," asserts one worker. This confidence stems in part from expanding support for the boycott. Dozens of unions, community and church groups, including the Washington Association of Churches, have endorsed the boycott.

In October 1991, the Farm Worker Justice Coalition launched the boycott of Chateau Ste. Michelle and Columbia Crest in the Northeast with a demonstration at a Connecticut restaurant which had refused to replace the wines. The next day the proprietor of the restaurant called an emergency meeting and agreed, as a temporary measure, to place boycott cards in the wine lists of his five local restaurants. In addition, the head of the winery held an unannounced meeting with the farm workers, promising them a share in the company’s prosperity. UST has not, however, offered a union election - at least, not yet.

Sidebar

- K.P.

by Phillip Mattera

THE DOMINANT U.S. CIGARETTE COMPANY until the early 1980s, R.J. Reynolds , - now RJR Nabisco - has been most widely known in recent years as the object of a dramatic takeover battle. That contest, which became a symbol of the financial excesses of the 1980s, resulted in the largest corporate transaction ever consummated: a $25 billion leveraged buyout. The resultant debt, critics charge, has put pressure on RJR to aggressively hawk cigarettes to vulnerable populations - African-Americans, poor women and children in the United States, and people in the Third World and Eastern Europe.

From Camels to Fig Newtons

RJR’s origins can be traced to the arrival of 25-year-old Richard Joshua Reynolds in the town of Winston, North Carolina in 1875. Winston was the production center of the new flue-cured leaf that made the best chewing tobacco. For several decades Reynolds built a prosperous chewing-tobacco business, selling the plugs under dozens of brand names.

During the 1890s, the company fell prey to the tobacco empire being assembled by James Duke, who controlled the rights to cigarette rolling machines. After the Supreme Court broke up the Tobacco Trust in 1911, R.J. Reynolds, independent once again, charged into the cigarette business. Like many "advances" in the tobacco industry, this initiative took the form of a marketing blitz. Using a massive advertising campaign announcing that "the Camels are coming," the company succeeded in creating the first national cigarette brand.

Camels became so popular during World War I - thanks in large part to the free samples given to the U.S. troops - that General Pershing himself contacted the company to be sure that the doughboys would not run out of smokes. After the war, the brand was etched onto the U.S. consciousness with the famous slogan "I’d walk a mile for a Camel." That line was most conspicuous on a billboard (which emitted real smoke rings) that stood in New York’s Times Square for many years.

RJR, like its brethren in the tobacco industry, took great pains to resist the growing realization of the hazards of smoking - an awareness that began to be created on a large scale by a 1952 article in Reader’s Digest. RJR advertised, for example: "More doctors smoke Camels than any other cigarette." While downplaying the significance of the evidence of smoking’s hazards, RJR hedged its bets in 1954 by introducing a filtered cigarette brand called Winston, which went on to become one of the perennially best- selling brands in the United States.

When the pressure on the industry became more intense in the wake of the U.S. Surgeon General’s 1964 report, Reynolds began to diversify its operations. Among its purchases were Chun King foods, Del Monte and Sea-Land shipping. In 1970, the company took the word "tobacco" out of its name and rechristened itself R.J. Reynolds Industries.

RJR accelerated its diversification strategy in the 1980s. In 1982 the target was Heublein, a distilled spirits producer founded in 1875. Heublein sold the first prepared cocktails and survived Prohibition by selling A-1 Steak Sauce. After World War II, the company transformed U.S. drinking habits by heavily promoting vodka and introducing mixed drinks, such as the Bloody Mary, that used the Russian liquor. In 1971, Heublein acquired the Kentucky Fried Chicken fast-food chain.

Once it had swallowed Heublein, Reynolds turned its appetite to a $5 billion deal: Nabisco Brands. The target was the product of the 1981 merger of Nabisco and Standard Brands. Nabisco itself was born of the merger of two rival baking groups in 1898. Originally known as the National Biscuit Company, it developed the first brand name cracker (Uneeda) and went on to dominate the cookie and cracker market with brands such as Ritz, Oreo and Fig Newton. Standard Brands was built on Fleischmann yeast and gin, Royal baking powder and Chase & Sanborn coffee.

The transformation of Reynolds continued through the 1980s. In 1986, the Kentucky Fried Chicken operation was sold to PepsiCo and the following year most of the rest of Heublein was purchased by Britain’s Grand Metropolitan for $1.2 billion. The Canada Dry and Sunkist soft drinks businesses, which had been acquired only a few years earlier, were sold to Cadbury Schweppes.

But the real drama came in 1988. A bold proposal by chief executive F. Ross Johnson to take the company private through a leveraged buyout prompted an intense bidding war, as well as a great deal of public criticism of the greed and ruthlessness of the parties maneuvering for control. In the end, the winner was Kohlberg Kravis Roberts & Co. (KKR), which acquired the firm for $25 billion, the largest takeover ever.

As part of the effort to service the company’s gargantuan debt load, nearly $6 billion in assets have been sold off since the KKR takeover. These have included several European and Asian food businesses, Chun King and much of Del Monte Foods. In 1990 and 1991, the company also engaged in an extensive recapitalization, which involved the trade of debt for equity, including the reissuance of common and convertible preferred stock.

The company’s 1990 annual report, the first in three years, tried very hard to dispel the idea that the leveraged buyout had stifled investment and promoted short-term thinking. "The impact has been just the opposite at RJR Nabisco," the report said. "We have a new sense of urgency and entrepreneurial energy." Yet the report put an inordinate emphasis on generating cash flow, vital to the company’s struggle to meet its debt payments.

This quest has made the company obsessive about cutting costs, so today’s RJR is a much less flamboyant operation than it was during the days of Ross Johnson, when millions were spent on a fleet of corporate jets. Even so, interest payments keep the company’s bottom line solidly in the red.

A pushy pusher

Through all of its turbulence and diversification efforts, RJR has maintained its core commitment to selling cigarettes, with tobacco sales accounting for 58 percent of the company’s 1990 net income. RJR and its subsidiaries and licensees manufacture cigarettes in the United States and 30 other countries. The company’s tobacco products are marketed in approximately 160 nations.

The company’s leading cigarette brands are Winston, Salem, Doral, Camel and Vantage. Nearly all of RJR’s domestic tobacco-manufacturing facilities are located in and around Winston-Salem, North Carolina. Among these is the 2 million-square-foot Tobaccoville plant that went into full operation in 1987.

Having established itself as the U.S. market leader after World War I, RJR remained the top cigarette company until 1983, when it lost the position to Philip Morris. Savvy marketing of Marlboro and other brands enabled Philip Morris to pass RJR, which market analysts came to view as being a step slower. RJR’s 1991 U.S. market share stood at 28 percent.

Entering the second half of the 1980s, RJR was losing market share to Philip Morris and cheaper, discount cigarettes on the one hand, and, on the other, facing the industry-wide problem of a shrinking market as customers quit smoking or die. The company’s problems multiplied with the KKR takeover and resultant debt accrual. Desperate to boost sales, RJR has been "extremely aggressive" since the takeover, says Greg Connolly, director of the Massachusetts state office for Nonsmoking and Health. The company has pursued, with varying degrees of success, a number of controversial marketing strategies over the last five years.

o In 1987, RJR introduced the Premier brand, designed to be a "smokeless" cigarette. The company withdrew Premier from the market in 1989 due to unfavorable consumer response.

o In 1989, RJR ran a four-page pullout advertisement for its Camel brand which offered tips on "how to impress someone at the beach." The advertisement suggested, "Run into the water, grab someone and drag her back to shore, as if you’ve saved her from drowning. The more she kicks and screams, the better." In the wake of widespread protests from women’s and health advocacy groups, RJR pulled the ad, with RJ Reynolds Tobacco chair James Johnston saying, "The ad should never have been run."

o In 1990, RJR planned to introduce a cigarette aimed at African-Americans. A wave of protest led by Health and Human Services Secretary Louis Sullivan forced RJR to cancel the brand, known as Uptown, before it was test-marketed. Sullivan blasted the company for "pursuing profits at the expense of the health and well-being of our poor and minority citizens." RJR did not give up Uptown happily. A company official stated, "We regret that a small coalition of anti-smoking zealots apparently believes that black smokers are somehow different from others who choose to smoke."

o Shortly after the cancellation of Uptown, the Washington Post disclosed RJR plans to market a new brand called Dakota, to be aimed at young, poorly educated, white females. The Dakota revelations drew criticism from Sullivan and other anti-smoking advocates, who again denounced the company for targeting vulnerable populations. The new brand also generated protests from many North and South Dakotans, who formed a group called Dakotans Against Dakota Cigarettes and collected 25,000 signatures on petitions opposing the cigarettes.

RJR denies that Dakota is aimed at women, claiming that it rejected the widely publicized marketing plans. RJR spokesperson Didi Witt says, "The cigarette was never meant to be targeted for any market other than adult male and female smokers, particularly Marlboro smokers." RJR did not withdraw the Dakota brand, and it is currently test-marketing Dakotas in Houston and Phoenix.

o In late 1990, the company began to mount an aggressive challenge to Philip Morris with the splashy introduction of super-low-tar Camel Ultra Lights. The company earned plaudits from market watchers for introducing the brand before Philip Morris began marketing its Marlboro Ultra Lights nationwide.

o One of RJR’s most successful - and most criticized - strategies has been the use of the cartoon figure "Joe Camel" to promote its Camel brand. The cartoon figure, which appears in a leather jacket and is often surrounded by admiring women, was introduced in 1987 and is credited with bolstering Camel’s market share. Joe Camel has generated intense protests from anti-smoking advocates, who claim that the character is designed to appeal to children and teens [see "Addicting the Young"].

Like the rest of the tobacco industry, RJR is also turning to international markets to bolster its sales. Although Philip Morris’s international presence is much stronger, RJR’s Tobacco International has reasonably good brand presence in much of Europe and some other key foreign markets. In late 1990, RJR and Philip Morris were asked by the Soviet Union to supply 34 billion cigarettes to alleviate a dangerous shortage of tobacco products in the country. The company has also moved to take advantage of the transformation of Eastern Europe by acquiring the Club brand, one of the best-selling cigarettes in the former East Germany. In 1991, it was exploring additional investments in Poland, Hungary and Czechoslovakia [see "The Marlboro Man Goes East"]. RJR is the only U.S. cigarette company with a manufacturing facility in China, the world’s largest cigarette market [see "China’s Tobacco Wars"].

Labor relations

R.J. Reynolds has a reputation as one of the most anti-union employers in the country. It has been on the AFL-CIO boycott list for nearly 40 years. Unions have organized the company, but they tend to get dislodged as a result of company resistance. This happened after both World War I and World War II. RJR beat back an organizing effort by the Bakery, Confectionary and Tobacco Workers (BCTW) in 1974, and a 1989 BCTW organizing drive did not lead to an election. Raymond Scannell, research director of the BCTW, says the company remains virulently anti-union, but that it has grown more sophisticated in its tactics. "It is still fair to say that RJR is one of the most anti-union employers in the country," he says. "They have become one of the premier practitioners of what is called ‘union-free’ management." Overseas, however, several of the company’s tobacco operations are unionized.

The BCTW does represent workers at Nabisco, and the union continued to have a working relationship with the company even after it was taken over by RJR, with relations improving after the KKR takeover. Helped by federal mediators, the company and the union began cooperating on projects such as a $5 million jointly administered fund to help workers learn the higher-tech skills needed in modern bakeries. In recognition of the new labor-management harmony, the company and the BCTW were given an award for "excellence in industrial relations" by the Federal Mediation and Conciliation Service in 1991. Some rank and file workers, however, are not pleased with the results of this labor- management cooperation. In September 1991, BCTW members at a local union in Portland, Oregon, concerned that seniority and job security were being eroded, voted to abandon the team concept.

Deadly hypocrisy

Any company that markets a product which causes as much death and suffering as cigarettes will naturally draw widespread condemnation. Connolly, of the Massachusetts Office for Nonsmoking and Health, uses words like "despicable," "reckless" and "irresponsible" when he speaks of RJR.

Ultimately, however, Connolly argues, RJR is most morally culpable for profiting from products that people like Henry Kravis, the main engineer of the KKR takeover of RJR Nabisco, would never use. While the health-conscious Kravis and his peers in high society have rejected smoking, they are marketing cigarettes to, and inflicting severe health problems on, poor and disadvantaged people.

Names in the News

LP’s Timber Troubles

In a December 1990 memo, Partain offered this assessment to LP’s Western Division Manager Joe Wheeler: "It is now clear to me that the environmental activists, the Department of Forestry, your contract loggers and your foresters are all correct when they say your present harvest rate cannot be continued for long and that the company must either reduce that rate significantly now or make deep and drastic cuts just a few years from now."

Morris, a 16-year employee, blamed the decimation of LP’s Western Division on a "failure to understand and apply basic business principles." The Morris memos assert that LP has been over-cutting its forests, in some cases before the trees have begun their most economically productive period of growth.

"Their intent is to cut the resources and leave, rather than sustain," says Gary Ball of the Mendocino Environmental Center. The memos surfaced as California state legislators are considering timber reform proposals.

Uniroyal Workers Bounced

To secure Justice Department approval of the 1990 sale of Uniroyal, Michelin and Uniroyal attempted to convince the public that the acquisition would be beneficial for Uniroyal employees and the communities surrounding the plant. But within a year, on January 8, 1991, Uniroyal, at the direction of Michelin, announced it would close its Eau Claire plant in mid-1992.

At the time the closing was announced, the Eau Claire plant employed more than 1,300 people. The plant is the principal heavy industrial employer in that region of Wisconsin, according to the Rubber Workers.

Michael S. Shaw, the lawyer for Local 19, says, "The people out here in Eau Claire are mad and are fighting back for what they’ve invested." While the union concessions had as a "primary objective the modernization of the Eau Claire plant in order to rank equally or better with other tire manufacturing plants," the suit charges, the plant’s equipment "has been removed and continues to be removed from the plant and shipped overseas, to Michelin plants, non-union plants, and plants in weak union states, and other locations."

Uniroyal officials did not return phone calls seeking comment on the lawsuit.

Drug Profiteers

Approved in 1983, the Orphan Drug Act was designed to encourage the development of medical drugs to treat illnesses afflicting fewer than 200,000 people. The Act allows drug companies exclusive marketing rights for the first seven years after Food and Drug Administration (FDA) approval and tax breaks on research costs. Since the law was enacted, 60 drugs have been accorded orphan drug status for 73 different rare diseases.

Metzenbaum chastised a number of companies for profiting excessively from the sale of orphan drugs. Genentech, for example, had total sales of $580 million through 1991 from Human Growth Hormone, on which it spent only $45 million on research and development. Genzyme’s total sales for Ceradase, a drug treatment for Gaucher’s disease, were $120 million in the10 months following FDA approval, compared to research and development costs of $54 million.

To address the problem of overpricing, Metzenbaum and Senator Nancy Kassebaum, R-Kansas, co-sponsored a bill which would allow competition if a company made $200 million on an orphan drug before the seven-year protected period was over. Tax incentives would remain in place.

Drug companies, such as Genentech and Genzyme, argue that a $200 million sales cap would eliminate the financial incentive to develop orphan drugs. However, the antitrust subcommittee found that the average cost of research and development for most orphan drugs is below $50 million.

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By Peter Taylor

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The Fall of RJR Nabisco

By Bryan Burrough and John Helyar

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