Names In the News

The Tobacco Mob

While tobacco manufacturers have often blamed the international smuggling of their products on organized crime, a year-long investigation by the Center for Public Integrity shows that tobacco company officials at BAT, Philip Morris and R.J. Reynolds have worked closely with companies and individuals directly connected to organized crime in Hong Kong, Canada, Colombia, Italy and the United States.

One Italian government report obtained by the Center states that Philip Morris' and R.J. Reynolds' licensed agents in Switzerland were high-level criminals who ran a vast smuggling operation into Italy in the 1980s that was directly linked to the Sicilian Mafia.

Corporate documents, court records and internal government reports - some going back to the 1970s - also show that BAT, Philip Morris and R.J. Reynolds have orchestrated smuggling networks variously in Canada, Colombia, China, Southeast Asia, Europe, the Middle East, Africa and the United States as a major part of their marketing strategy to increase profits, the report found.

"With regard to the definition of transit, it is essentially the illegal import of brands from Hong Kong, Singapore, Japan, upon which no duty has been paid," said one BAT official, in a 1989 letter to associates in Taiwan.

The report found that the companies have sought to undercut government taxes, which studies show are a key reason for smokers to quit, as well as to gain market share.

"Organized criminals, who have traditionally been involved in smuggling illicit narcotics, are suddenly realizing that tobacco is a good thing to get into, as you make just as much money, and it's perhaps not quite as anti-social," Douglas Tweddle, the outgoing director for compliance and facilitation at the World Customs Organization in Brussels, told the Center.

Japanese Antitrust Plea

A U.S. subsidiary of a Japanese manufacturer of isostatic graphite, which is used to make molds and dies, and a Japanese executive in February agreed to plead guilty and pay fines totaling more than $4.5 million for participating in an international cartel to fix the price of isostatic graphite sold in the United States and elsewhere.

The case represents the first time a Japanese business executive agreed to face a possible jail sentence for a violation of U.S. antitrust law.

Toyo Tanso USA Inc., of Troutdale, Oregon, a subsidiary of Toyo Tanso Co. Ltd, of Japan, and Takeshi Takagi, a Japanese citizen and resident, conspired with unnamed co-conspirators to suppress and eliminate competition in the non-machined and semi-machined isostatic graphite industry from as early as July 1993 until at least February 1998.

Toyo Tanso USA has agreed to pay a $4.5 million fine.

Takagi faces a possible jail sentence and has agreed to pay a fine of $10,000. Both Toyo Tanso USA and Takagi have agreed to cooperate in the Justice Department's ongoing investigation.

Isostatic graphite is a fine grain carbon product with great strength and resistance to heat and chemical reaction. It is commonly used to produce, among other products, electrodes for electrical discharge machinery, dies for the continuous casting of metals and various products used in the semi-conductor industry.

Bayer's Bacteria

Health, consumer, and public interest groups in February called on the Bayer Corporation to end its opposition to the Food and Drug Administration's (FDA) proposed ban on the use of a valuable class of human antibiotics - fluoroquinolones - in poultry production.

"The FDA has found that the use of fluoroquinolones in poultry production leads to the development of antibiotic-resistant bacteria. That public health threat must be dealt with immediately," says Dr. Tamar Barlam, an infectious disease physician and scientist with the Center for Science in the Public Interest.

The only other producer of fluoroquinolones for poultry use, Abbott Laboratories, has already agreed to stop selling its product for use in poultry. Bayer could do the same. Instead, Bayer has challenged the relationship between increasing numbers of bacterial infections in humans resistant to treatment with fluoroquinolones and the use of fluoroquinolones in poultry.

In February, Bayer filed documents with the FDA requesting a formal hearing process to challenge the proposed ban. The hearing process could take years.

Antibiotic resistance occurs when bacteria are exposed to antibiotics for either too little time or at doses too low to kill the stronger, more hardy strains. These bacteria then live to pass on their resistance to successive generations, creating a strain of "superbugs."

When humans are infected with superbugs, the infection can become life threatening, as the superbugs are not affected by antibiotic treatment.

The public interest groups alleged that Bayer's actions will accelerate the growing health threat from bacterial infections in humans that resist treatment with antibiotics.

Two factors have been associated with the growing problem of antibiotic-resistant bacterial infections in people: overprescribing and misuse of antibiotics in humans, and the inappropriate use of antibiotics in agriculture.

Because humans do not harbor Campylobacter, a bacteria, human overuse of antibiotics is not responsible for the rise in fluoroquinolone-resistant Campylobacter.

Chickens do harbor Campylobacter, making it far more likely that the resistance develops in chickens and is passed to humans through poultry products.

- Russell Mokhiber