This material illustrates the transformation of the anti-smoking campaign into an anti-business campaign during the second term of the Clinton-Gore administration. I do not smoke, do not recommend smoking or nicotine use, do not have any interest in the tobacco companies, and neither like them nor defend them. The case of the tobacco companies interests me only because it created a precedent of stifling free speech and independent scientific research. This precedent was immediately used against the scientific majority opposing climate alarmism.
By 1964, it was proven that smoking cigarettes caused lung cancer and a number of other illnesses. Alerted by the news media, by the doctors, and by the tobacco companies themselves, people started quitting smoking. By 1992, smoking decreased to almost half of its highest level in the early 1960’s, and continued to drop. But the tobacco companies had money, and the government wanted that money. One should resist such temptation, but if it is irresistible, the usual route is a “sin tax.” In 1998 John McCain introduced his Tobacco Control Bill, which was estimated to raise about $500 billion from the tobacco companies in taxes over 25 years. The bill died before reaching the Senate floor. Instead, there was a Master Settlement Agreement (MSA) between 46 state Attorneys General and Big Tobacco, which was estimated to raise less than half of that amount, but still transferred billions of dollars to the trial lawyers associated with the AGs, and to the AGs themselves. Nevertheless, the MSA was a law in all but the name and conformance to Constitution. The next year, Clinton-Gore’s administration brought a federal lawsuit against the tobacco industry and its scientific research institute, demanding more than $700 billion. The suit contained multiple counts and heavily relied on a factually false narrative that can be summarized as “people died because tobacco companies lied.” In 2001, on one of its last days in office, the Clinton-Gore administration amended the complaint to include only RICO fraud allegations, entirely based on that narrative. The American Legacy Foundation, created and funded by the MSA, helped to spread the narrative and to convict the tobacco companies in the court of the public opinion.
This is the unusual set of clauses in the MSA: a) the tobacco companies agreed to open up their internal materials and even attorney-client privileged documents, b) the tobacco companies surrendered some free speech rights, and c) $1.45 billion was allocated to anti-smoking education, administered by the specially created American Legacy Foundation. Item a) allowed activists to cherry pick quotes from a huge number of documents, to falsely accuse the industry of knowing everything about cigarettes’ harm since almost 1950 and intentionally suppressing that knowledge. Item b) prevented the industry from publicly defending itself. The American Legacy Foundation used its funds to claim that the tobacco companies lied and to perform other controversial acts, rather than for the funds’ intended purpose. Using hindsight and cherry-picked documents, the federal government sued eleven tobacco companies in 1999. The initial complaint relied mostly on two case-specific statues (the Medical Care Recovery Act and some Medicare Secondary Payer provisions), and to a lesser degree on an overbroad interpretation of RICO. After the judge had thrown out the parts of the complaint related to the medical care, it became a RICO case. These political actions were mostly bipartisan.
States added additional taxes on top of the MSA payments. Smoking became an important revenue source for the state governments. In this particular case, the politicians decided not to kill the goose that laid the golden eggs. The tobacco companies have been thriving since 1999. For example, the stock price of Reynolds (RAI) has grown from below $3 in 1999 to above $50 now, all while the company was paying generous dividends. The regulatory authorities also allowed tobacco companies many liberties that were not permitted to the food industry, such as labeling cigarettes with slightly lower amounts of tobacco as “light.”
If anybody started or continued smoking because of lies, these lies were scares made up by environmentalists – lead, asbestos, Alar, etc. These lies desensitized the public to the real dangers of cigarette smoking. Also, when the environmentalists decided to take a ride on the campaign against smoking, they brought along their old habits and quickly obscured the science behind the harm of smoking. Lung cancer and most of the other harm is caused by cigarette tar, not by nicotine. In the RICO lawsuit, the Clinton-Gore administration used this confusion to blame the tobacco industry for their research aimed at decreasing the tar to nicotine ratio.
A lot of research into the health effects of smoking was funded by the tobacco industry through the Council for Tobacco Research / Tobacco Industry Research Committee, which was created in 1954. The nature of CTR activities likely changed over time, shifting into a more defensive mode in the 1970’s.
The tobacco companies expended a lot of research funding to develop safer cigarettes. These efforts were technologically successful and such cigarettes even reached the market, but the effort ultimately failed because of a combination of external factors: the 1970 tobacco advertising ban, regulatory burden, litigation risk, and a moral crusader attitude among some of the anti-smoking campaigners. See “Safer” Cigarettes: A History (PBS, 2001), or this article (NY Times, 1994).
Appendix A. Some References
Al Gore’s family was in the tobacco growing business. Al Gore took money from tobacco industry PACs through 1990.
An attorney-client memorandum for Brown & Williamson (1991) is probably representative of the real evidence and its interpretation by the tobacco companies.
Criticism of the DOJ lawsuit:
”taxation through litigation” (NY Times, 1999)
Bruce Josten, the chamber’s executive vice president, said in a statement: ”No business can feel secure in the United States when the enormous power of the Justice Department can be unleashed against them for the purpose of raising revenue and scoring political points. This is nothing more than taxation through litigation.”
An Unprecedented Case Begun by the Clinton DOJ, And Continued by the Bush DOJ (FindLaw.com, 2004)
RICO has generally been used against organized crime, as its name suggests. And initially, it was not seen as the most important part of the government’s case. But when U.S. District Judge Gladys Kessler — who has been overseeing the case since 1999 – threw out its other, Medicare-related claims, the government pressed forward with this one.
Yet no matter how the suit is resolved, it has set into motion forces which may be difficult to contain. The theory on which it has been brought, and continued, represents a potentially radical new expansion of RICO. And there is no reason this expansion will be limited to the tobacco industry.
Criticism of the American Legacy Foundation:
According to the Washington Post, in February Easley wrote a letter to American Legacy board chairman Christine Gregoire, the Democratic Attorney General of Washington State, reminding her that the foundation was created to produce “anti-smoking and health-related ads, and not for ads designed to vilify the tobacco companies.”
The federal lawsuit, filed in 1999, was amended (dropping non-RICO counts) in February 2001. After that, the George W. Bush administration continued prosecuting the suit. The court ruled in 2006, apparently in favor of the federal government, but not ordering any payment from the tobacco companies:
The ruling was upheld following appeal by the tobacco companies:
Appendix B. Comments on “A Frank Statement to Cigarette Smokers” (1954)
A large part of the public first learned about dangers of cigarette smoking from the tobacco companies themselves in 1954.
On January 4, 1954, in response to continuing scientific reports on the health effects of smoking, “the TIRC … ran a full-page promotion in more than 400 newspapers aimed at an estimated 43 million Americans,” according to papers filed in the 1995 Florida Medicaid lawsuit.
This document, titled A Frank Statement to Cigarette Smokers and published by the tobacco companies at their own expense and without any government urging, began:
RECENT REPORTS on experiments with mice have given wide publicity to a theory that cigarette smoking is in some way linked with lung cancer in human beings.
Although conducted by doctors of professional standing, these experiments are not regarded as conclusive in the field of cancer research. However, we do not believe results are inconclusive, should be disregarded or lightly dismissed. …
The emphasis is mine. Has anybody ever heard climate alarmists or environmentalists calling dissenting researchers “doctors of professional standing” or “scientists of professional standing”? I certainly have not. The scientists who performed the experiments were quite vulnerable to suspicions and accusations. For example, Dr. Doll was a member of the British Communist Party. But the corporate executives, unlike their environmental counterparts, took the high road, and treated them with respect.
The main part of the statement did argue against these provisional findings, as expected:
… At the same time, we feel it is in the public interest to call attention to the fact that eminent doctors and research scientists have publicly questioned the claimed significance of these experiments.
Distinguished authorities point out:
That medical research of recent years indicates many possible causes of lung cancer.
That there is no agreement among the authorities regarding what the cause is.
We believe the products we make are not injurious to health.
Then the statement announced the establishment of the Tobacco Industry Research Committee, and ended with
This statement is being issued because we believe the people are entitled to know where we stand on this matter and what we intend to do about it.
See the full text.
I am tempted to joke that that tobacco sin tax had no chance because Democrats were unaware of the word “sin” and Republicans hated the word “tax,” but this was certainly not the case. Opinions vary, but the most likely cause was that the bill would be too successful – more people would quit smoking and fewer taxes would be collected. Of course, the tobacco companies preferred the cheaper settlement over the more expensive law.
Finally, consider this quote from David E. Rosenbaum, “Senate Approves Limiting Fees Lawyers Get in Tobacco Cases,” New York Times, June 17, 1998, p. A1:
Defeat of the McCain bill came within one week after the Senate approved an amendment that would have limited contingency fees for the states’ private lawyers to $4,000 per hour. The fee cap apparently killed the bill, with various antitobacco groups claiming that the fee award cap would discourage plaintiffs’ lawyers from taking tobacco cases in the future. Mealey’s Litigation Report: Tobacco (King of Prussia, Pa.: Mealey, June 18, 1988), p. 4. The reason the states’ private lawyers balked at that limit was that they expected (and ultimately received) far more. Lawyers’ fees under the Texas settlement were expected to exceed $90,000 per hour.
The environmental lawyers must be salivating at the potential feeding frenzy.
This is Part II of the supplemental material for Climate Alarmism and the Muzzling of Independent Science, published in American Thinker on 04/21/2016. Part I is about Scientists and Lawyers. Part III is about Defunding Climate Realists.