The Waxman Report

by Henry Waxman; Joshua Green

  Soon after that, we received secret documents from inside Hill & Knowlton, the formidable public relations firm retained by the tobacco industry’s trade association, showing how the industry had known for decades that tobacco caused cancer and had embarked on an elaborate disinformation campaign rather than come forward with the truth. The committee released this information to the public.

  A week after that, Mississippi’s attorney general, Mike Moore, turned over internal documents from Brown & Williamson provided by an informant in the state’s class action suit against the tobacco companies. The documents revealed that the company had known about tobacco’s harmful effects and addictive nature for decades. They included a 1963 memo by Brown & Williamson’s general counsel that stated: “We are, then, in the process of selling nicotine, an addictive drug.” This blatantly contradicted the testimony given by Brown & Williamson’s CEO, Thomas Sandefur, at the April 14 hearing, prompting us to schedule another hearing to determine whether Sandefur had knowingly lied to Congress. Brown & Williamson had other ideas. The company sued me and Representative Wyden in a Kentucky circuit court to reclaim their leaked documents and shut down the investigation. A federal district court judge quashed the subpoenas, accusing Brown & Williamson of trying to “intimidate” Congress, and noting that the Constitution’s speech and debate clause protects members from legal actions stemming from their official duties. Sandefur reappeared before the subcommittee on June 24, claiming not to have read the incriminating documents, and reiterated his belief that nicotine was not addictive. “I am entitled to express that view, even though it may differ from the opinions of others,” he said.

  With every new revelation, the industry’s standing eroded a little further.

  THEN, IN NOVEMBER, WE WERE DEALT A TREMENDOUS SETBACK. It came not from the tobacco industry but from the American voters, who swept the Republican Party into power, forcing me out of the subcommittee chairmanship and bringing the tobacco hearings to a sudden, grinding halt. The new Republican chairman of the House Energy and Commerce Committee was Tom Bliley of Virginia, sometimes referred to as “the congressman from Philip Morris” because the company’s main manufacturing facility was located in his Richmond district. Bliley did not, needless to say, have a great deal of interest in carrying on our investigation.

  But the momentum against tobacco had gathered enough strength that even this substantial shift of power could not stop it. Dozens of state lawsuits against the industry were moving forward. And although we were now operating from the minority, we continued to benefit from all that we had set in motion, receiving a series of internal tobacco company documents that we in turn released to the public. These included new examples of the companies’ spiking the nicotine level in cigarettes and evidence of how they misled the Federal Trade Commission about tar levels.

  In 1995, we obtained internal documents revealing that Philip Morris had conducted studies on children and tobacco smoke, going so far as to examine hyperactive third-graders to see if they were a potential market. We had found that children were a very effective way to dramatize the overall dangers of tobacco and shame its supporters into relenting, so this was a particularly important leak. But one problem with being in the minority was that we could no longer convene a hearing to publicize this dramatic news. Simply disclosing the documents at a press conference might have put us in legal jeopardy. The Constitution’s speech and debate clause guaranteed protection for members only during sessions of Congress. It wasn’t clear that a court would agree that press conferences constituted official House business, and the proven litigiousness of the tobacco industry suggested a high likelihood that it would test the proposition. So in order to make the documents public, I went to the House floor and read their entire contents into the Congressional Record. Afterward, with the media clamoring to discuss this important new information, I had to decline all press requests since nothing I said to reporters was assured of being protected speech.

  In late 1997, we got hold of something even more explosive: internal reports and memoranda from the boardroom of R. J. Reynolds revealing that the company had for decades targeted children as young as thirteen years old to reverse its flagging sales. The documents laid out, from conception to fruition, the Joe Camel marketing campaign and the rationale behind it. In the 1970s, RJR’s board of directors was concerned that its Camel brand was paling in popularity to Marlboro among the youngest smokers. Reports stamped “RJR SECRET” described how the company set out to win the kind of fierce brand loyalty that is usually established among lifetime smokers before age eighteen. “To ensure increased and longer-term growth for Camel Filter,” warned a memo, “the brand must increase its share penetration among the 14-24 age group.” The Joe Camel campaign aimed to “youthen” the brand’s appeal—which the company’s advertising agency described as “about as young as you can get”—debuted in France before moving to the United States in 1987. That same year R. J. Reynolds also created a specialty brand for the youth market, describing “Camel Wides” in a memo as a “wider-circumference nonmenthol cigarette targeted at the young adult male smoker (primarily 13-24-year-old male Marlboro smokers).”

  At the April 1994 hearing, R. J. Reynolds’s chairman and CEO, James Johnston had attacked members of the subcommittee for questioning him about whether his company marketed to children. “The charge that’s always buried at the industry is you have to go out and recruit these new smokers, you just have to,” Johnston had thundered. “And the answer is that would be the stupidest thing we can do…. We do not market to children and will not!”

  From the very beginning, the purpose of the oversight hearings had been to build a public record and eventually create enough momentum in Congress and among the American public for legislation to mitigate the terrible health effects of tobacco. In 1979, when I became chairman of the subcommittee, the industry’s power was such that this goal was widely regarded as a bit eccentric and certainly hopeless, a view that more or less prevailed for the next fifteen years.

  But by 1996, the actions of Congress had dramatically changed public perception of the industry and made real the possibility that comprehensive tobacco legislation could soon be forthcoming. Meanwhile, the multitude of state lawsuits posed a serious financial threat. Tobacco still held enormous power in Washington. But the landscape had changed.

  At the time, Tom Bliley and I had forged a successful legislative partnership, having just negotiated major bipartisan agreements on regulating pesticides and drinking water. It was an interesting coincidence that this fruitful collaboration had arisen between two men widely regarded as being, respectively, the most pro- and anti-tobacco members of Congress. But having found common purpose on other seemingly intractable problems, we decided to give tobacco a try, too.

  Our negotiations for a comprehensive tobacco bill followed the same model as they had for the pesticide measure, utter secrecy of the proceedings guaranteeing both sides the political cover necessary to explore compromises. Only Newt Gingrich, the Republican speaker of the house, and Richard Gephardt, the Democratic minority leader, were kept apprised. Unlike pesticides, which we had resolved in a marathon three-day meeting, regulating tobacco was a subject so knotty and complex that our negotiations carried on for two years. Throughout it all, both Gingrich and Gephardt steadily encouraged us to continue.

  Negotiations were complicated by the fact that, publicly, Bliley and I represented opposite sides of a contentious issue. Anyone who watched us square off at a tobacco hearing could have been forgiven for assuming that we were mortal enemies. We were not. Bliley believed deeply in his ideological positions, as I did, and defended them vehemently. But by sitting next to each other for so long, we had developed trust and respect for each other. Once, during my chairmanship, I expressed sympathy for the toll that I imagined the hearings must be taking on him. “You do what you have to do, Henry,” he replied. Bliley didn’t wink; he wasn’t happy about the hearings. But he was a thorough profession
al who understood that you argue positions on the merits and don’t make it personal, he knew exactly why the hearings were happening, and he was a true public servant, whatever the difference in opinions.

  In 1998, we finally reached an agreement that would resolve all the major tobacco issues, including broad federal regulation, strict curbs on youth smoking, and much stronger limits on smoking in public places. The centerpiece was not some heavy-handed government mandate but a market-based enforcement mechanism designed to reduce teen smoking. Our idea was to conduct a broad survey to establish a baseline of which brands of cigarettes kids smoked and at what volume. The tobacco companies would then be required to reduce sales to kids, penalizing any brand that failed to do so with a higher tax. This would give the companies themselves the incentive to reduce sales rather than putting all their effort into finding a way around some new law. Democrats could support the idea because it would reduce smoking, especially among the most vulnerable population, along with the attendant costs to government. Republicans could support it because it was a market-based, rather than a regulatory, approach that didn’t include the $2-a-pack tax then at issue in the Senate.

  When Bliley told Gingrich, “I’ve got something with Henry,” he was invited to make a presentation to the Republican leadership a few days later. But Gingrich and I were heavily embroiled on opposite sides of Dan Burton’s ongoing crusade against President Clinton in the Government Reform Committee, and Gingrich had recently taken to the House floor to attack me for refusing to grant immunity to several witnesses Burton was eager to have testify. (I had responded with what I considered the obvious charge that Gingrich and Burton were engaged in a witch hunt.) The timing couldn’t have been worse. At the meeting, Gingrich, who always nursed grudges, led the charge against the compromise, forbidding Bliley, a major committee chairman, even to call up the bill for consideration. Our hopes for a compromise ended right there.

  WHILE THE FAILURE TO PUSH THROUGH A STRONG LAW WAS FRUStrating, the risk that Congress might settle for a weak one became a real concern. In the summer of 1997, much to my surprise, a group of anti-tobacco activists led by Mississippi attorney general Mike Moore announced that they had reached a broad settlement with the tobacco companies resolving forty state lawsuits and eighteen class actions filed on behalf of individual smokers. The industry had agreed to pay $368 billion over twenty-five years to help offset the cost of treating smoking-related illnesses and fund anti-smoking programs, and also accepted bans on advertising figures like Joe Camel and the Marlboro Man. In exchange, the deal effectively barred the FDA from regulating nicotine and gave the industry what it wanted most: immunity from further legal liability. All that was left was for Congress to ratify the deal in the form of a new law.

  The problem, as so many of us saw it, was that the agreement demanded far too little of the tobacco companies. The industry’s payout amounted to about $15 billion a year, much of which would go toward paying attorneys’ fees. Meanwhile, smoking imposed $100 billion a year in health care costs and, the National Center on Addiction and Substance Abuse at Columbia University estimated, would cost Medicare alone $800 billion over the next twenty years. By shielding the tobacco companies from liability, the agreement foreclosed the possibility of recouping these costs. The desire among plaintiffs’ lawyers for a quick and lucrative settlement had produced something that struck me as thoroughly indefensible. As former Surgeon General Koop put it, “I think we’ve been snookered.”

  This was a worrisome prospect because outside advocacy groups like the American Cancer Society and the American Heart Association can powerfully affect the legislative process when they decide to push hard for something. Were they to join forces with the tobacco industry, the resulting bill would be difficult or impossible to stop.

  Without the chairman’s gavel, it was impossible to hold a hearing that would call attention to the weakness of the agreement. Or, at least, doing so in Congress was impossible. As we debated how to proceed, some colleagues and I had an idea: Why not hold a hearing outside Congress and draw on the same prominent experts whose testimony we would have solicited had we been in the majority? Thus was established the Advisory Committee on Tobacco Policy and Public Health, an independent panel co-chaired by former FDA commissioner David Kessler and former Surgeon General Koop. A bipartisan group of legislators, myself included, asked this new panel to study the agreement and recommend a national tobacco policy. The panel would conduct a series of open hearings on Capitol Hill, just as if it were an actual congressional committee.

  Our shadow committee had precisely the intended effect. The Clinton White House and the news media recognized the enormous credibility that Kessler and Koop brought to the subject, and treated the proceedings as being vitally important to the fate of the agreement. In July, the advisory committee declared the proposed agreement “unacceptable” and laid out a much stronger alternative plan to control smoking. The White House immediately began distancing itself from the original settlement. The committee also had a powerful impact in the Senate. As details of the shortcomings became public, John McCain started insisting on changes that strengthened his bill, alarming the tobacco industry, which spent tens of millions of dollars to kill it, and prompting the Republican leadership to abandon it. By September, the settlement was effectively dead.

  OVER THE NEXT DECADE, THE TOBACCO WARS DRAGGED ON IN Congress and the courts. The industry reached a $206 billion Master Settlement Agreement in 1998 that ended the state lawsuits. The following year, the Clinton Justice Department sued for additional billions for conspiracy to defraud and mislead the public about the health effects of smoking. But even the full might of the federal government could not rob Big Tobacco of its Washington clout. In 2000, the U.S. Supreme Court ruled 5–4 that the FDA lacked the authority to regulate tobacco as an addictive drug, putting the burden on Congress to pass a law granting such authority. Here, tobacco made its stand. Where once it had barely distinguished between the parties, the industry increasingly allied with Republicans during the 1990s. When George W. Bush took office in 2001, giving the GOP full control of the White House and Congress, political progress on tobacco slowed to a crawl. That the industry could still jam the gears of government despite all we had done to weaken it was an illustration of just how entrenched it remained.

  But its legal and public relations woes continued to mount. Powerful interest groups follow a pattern as they decline. Overt political force and intimidation gradually give way to obstruction and denial. When the facts have become clear and the scrutiny overwhelming, when the last wisp of uncertainty has evaporated, then defeat looms and they scramble to salvage what they can.

  In 2004, partly as a way of trying to salvage its public image, the nation’s largest tobacco company, Philip Morris, reversed its stance on regulation and endorsed a bipartisan bill giving the FDA jurisdiction. (The rest of the industry remained opposed, charging that Philip Morris was simply seeking to lock in its favorable market position.) After marrying the regulation to a $12 billion, ten-year program to buy out tobacco growers hard pressed by a dwindling market, the Senate overwhelmingly approved the bill. Economic necessity, rather than direct political pressure, cinched the deal. But years of negative publicity, much of it generated by Congress, had brought this about by thinning the ranks of smokers. “I think FDA regulation is a bad idea,” Senator Jim Bunning, the Kentucky Republican, said. “But my growers are in dire straits and they need help.”

  House Republicans remained hostile to the idea and refused to take action on a counterpart to the Senate bill. Their relationship with tobacco was so tight that when Tom DeLay, their majority leader, was indicted on conspiracy charges by a Texas grand jury in 2005, he flew to his arraignment on a plane owned by R. J. Reynolds Tobacco. But after Republicans lost control of the House in the 2006 election, tobacco’s grip weakened. The following year, Tom Davis and I introduced the Family Smoking Prevention and Tobacco Control Act, giving the FDA regulatory authority an
d ensuring that tobacco is not advertised or sold to children. In July 2008, the bill had such strong support that it easily cleared the House. A veto threat from President Bush and Republicans’ determination to filibuster prevented the Senate from taking action. But by now, it was only a matter of time.

  ONE OF THE GREATEST TRAVESTIES THAT I HAVE WITNESSED DURing my long career was the government’s failure to assert jurisdiction over the most deadly product sold in America. From the moment I arrived in Congress anyone who cared to look could see that our nation’s health depended on congressional action to confront the threat from smoking. Year after year cigarettes killed millions of people.

  The tobacco industry operated in a realm beyond ordinary corporate responsibility. Our government forbids manufacturers of things like automobiles, food, and drugs from recklessly endangering consumers. When they do so, they’re called to account. We don’t allow them to suppress evidence, ignore scientific research, or continue following whatever pattern of behavior has caused harm, and we demand that their executives explain themselves before Congress and the public.

  Yet for decades, Big Tobacco managed to avoid these basic requirements.

  At first, its enormous power foreclosed the very possibility of major legislation. Instead, we attacked tobacco’s public image and incrementally improved the law—on warning labels, smokeless tobacco, and airplanes—however and wherever we could. But ultimately it was oversight, rather than legislation, that made the greatest impact on our nation’s relationship to tobacco.