By mid-October, the Liggett Group believed it was the high bidder for the B&W cigarettes, according to a source close to the case. Just before the deal was ready to close, the general counsel for Liggett suddenly could not get the B&W lawyers on the telephone. He was stunned when he discovered that B&W had sold the cigarette brands to Lorillard. George Lowy, an attorney who represented B&W in the divestiture, has said, “Lorillard’s deal was financially superior.” Liggett is considering bringing legal action against B&W. The FTC filing on the sale is unusual; some nine pages have been blanked out. The price of purchase and number of bidders are deleted. The deal was announced in late November, three weeks after 60 Minutes killed its original story. But Tisch recently told me, “I don’t know anything about it. I have nothing to do with Lorillard. I was spending my full time at CBS.” Ironically, it is possible that the suit Liggett may bring would be for tortious interference.
In November, no one at 60 Minutes was aware of the shuffle that was going on behind the scenes with the B&W brands. “I knew all kinds of litigation was possible,” Bergman told me. “I kept saying to people, ‘You are making news decisions in a corporate atmosphere where there is no appetite for this kind of story. There is possible perjury on the part of the son of the owner trying to sell an asset at a premium price where the consequences of the story might affect the stock price. Think how history might record this!’ ”
* * *
By brushing against Big Tobacco, Tisch, Wigand, Bergman, Hewitt, and Wallace were all soon lost in a thicket of hidden dangers. Wigand was still oblivious to the gathering perplexities and the corporate forces arrayed against him. As far as Wigand was concerned, said Bergman, “I was the face of 60 Minutes. I was there holding his hand when his wife freaked out.” As for Bergman, he had worked for a year and a half to bring in one of the most important stories of his career, and by doing so he had put his employer and his future in jeopardy. Hewitt and Wallace were millionaires many times over, yet their public acquiescence to CBS’s reluctance to air their story threatened to tarnish their distinguished careers.
“In the end, I made the call to Wigand to tell him that management had made the decision to kill the show,” Mike Wallace told me. “Lowell did not have the heart to do it.” Bergman was distraught: “My work depends on my word. We had never indicated to Jeff that there would be any problem.” The decision to kill the segment, Wallace said, marked “the first time in twenty-eight years that Don and I saw something differently.” Hewitt, according to 60 Minutes sources, was attempting both to please the authorities and to act like a newsman, a position that became known as “the Hewitt straddle” in the office. However angry Wallace was, he told friends he was too old to quit on principle, and he did not understand why Hewitt was siding with management.
Hewitt called a meeting of the staff. “This is not a First Amendment issue,” he said, but several people in the room strongly disagreed with him. “General counsel believes we have broken the law.” Suddenly Mike Wallace burst in and screamed at Hewitt, “I understand you have just said we should not have pursued the story!”—which Hewitt had not in fact said. “Who told you that? If that is what you think, I am quitting!” Hewitt said, and stormed out of the room.
In November, Hewitt decided to run a version of the B&W story without a Wigand interview. Wallace prepared a news piece for the Friday before the show was to run. It was Wallace’s intention to broadcast management’s decision, but when he saw the show, he realized his work had been cut by the CBS lawyers. In the hall he confronted Ellen Kaden. “Did you tell Larry Tisch about the Wigand interview? Is that why the piece was killed?” Kaden denied it. Wallace was relentless. “It doesn’t make sense. You are his general counsel. Why would you not have told him?” Wallace later recalled that Kaden started to cry, a story she has denied. Kaden had sought advice from an outside counsel, First Amendment specialist Cameron DeVore, but she refused to show Wallace any of the memos he had written her. One former CBS executive surmised that no one at CBS management was willing to take responsibility for killing the Wigand interview, and Kaden was left to take the fall.
Hewitt told a New York Times reporter that the new version was “better, I think, than what we had before.” When an Associated Press reporter called Bergman for comment, Bergman told him angrily, “The versions are apples and oranges.” Wallace was enraged when he read a Times editorial accusing the program of betraying the legacy of Edward R. Murrow. “I don’t know if things will ever go back to normal,” one correspondent said. “The fact is,” Wallace told me, “that Don and I had a difference of opinion about whether we should or should not push to get this thing on the air. It turned bloody and icy from time to time.”
Except for Wallace, not one correspondent picked up the telephone to call Bergman. Wallace and Morley Safer were raging at each other. Safer even issued a statement to the press attacking Wallace and Bergman for making an agreement with Wigand. The feud at 60 Minutes offered a rare view inside the psychodynamics of TV news. “It became poisonous and contagious, with many people wanting to hang Lowell,” CBS producer George Crile said. In a fit of pique, Don Hewitt told several staffers to distance themselves from Bergman. Soon a reaction developed within the office. The staff felt as if it were living in a Potemkin village. Their very integrity rested on their ability to tell a story accurately, despite confidentiality agreements. Ellen Kaden would later tell friends that she was furious that Wigand’s identity had been leaked to the Daily News. She blamed 60 Minutes for it and for the attacks against her in the press. It was Kaden’s belief that she was only doing her job, trying to prevent CBS from entering the nightmare of tobacco litigation that ABC had endured. She later recalled learning of the million pages of red paper that Philip Morris had delivered to ABC—the color red could not be photocopied—and noted with alarm that a Virginia judge had ruled that this was not an abusive tactic.
In Washington for an interview with President Clinton in mid-December, five 60 Minutes correspondents rehearsed in a hotel room. Everyone agreed on areas and questions, but when the president arrived, the reporters started shouting as if it were a free-for-all. Mike Wallace demanded of one, “Why did you steal all of my lines?” The issue was Clinton, but the undercurrent was lethal, a shared understanding that tobacco and its implications were driving them apart. Soon after, the news of the CBS sale to Westinghouse was announced. Larry Tisch’s Loews Corporation made nearly $1 billion on the sale. CBS general counsel Ellen Kaden made close to $5 million. And Eric Ober would receive around $4 million from severance and stock options.
* * *
“At Christmastime, I was disinvited from going to Lucretia’s father’s place,” said Wigand. The debacle at 60 Minutes was all that was needed to make their marriage collapse. A few weeks earlier, in late November, Wigand was leaving school when he noticed a car coming at him across the parking lot. “I thought it was the end,” he later told me. In fact, it was another subpoena from B&W, demanding that he appear in court for violating his confidentiality agreement. Soon after, he flew to Mississippi to give a deposition in the state’s case. “Are you aware that when you get back to Kentucky you could very well go to jail?” his lawyer Ephraim Margolin, a criminal-defense expert, reportedly asked him. “I better think about this,” Wigand said. That afternoon Wigand was very late arriving at the courthouse in Pascagoula. Approximately fifteen lawyers from the tobacco companies were waiting, betting that he would not show up. Wigand took some time to make up his mind. “Fuck it. Let’s do it,” he finally said to Margolin. It was the real beginning of his new life, but Wigand worried about Lucretia. “She didn’t understand what I was doing. All she cared about was that it disrupted her economic system.”
* * *
“We were a quiet little company before all this happened,” an executive for B&W’s Kool brand tells me on a plane ride to Louisville. “Then we wound up on page one.” I ask him the standard question in Tobacco Land: “Do you want your children to
smoke?” He responds irritably, “I see where you are going with this. You are going to say that an unnamed Kool spokesman doesn’t want his daughter to smoke. . . . I think tobacco has been singled out unfairly.”
THE ATTACK
In late November, the litigator Stanley Arkin, one of more than a dozen lawyers working for B&W to head off the Justice Department’s investigation into the tobacco industry, recommended that B&W hire public-relations man John Scanlon and Terry Lenzner, the former Watergate deputy counsel who is the head of Investigative Group Inc., a firm that specializes in legal work for corporate takeovers. Since his days as a liberal Republican lawyer, Lenzner has traveled philosophically from being someone who out of principle forced the Nixon administration to fire him to being an ambitious investigator in his fifties who would like to compete with Jules Kroll, a leader in the field. Like Arkin, Lenzner is attracted to the game of big-time corporate litigation, but, according to several former partners, his business has suffered recently. Lenzner’s assignment was to prepare a lengthy dossier that B&W could use to torpedo Wigand’s reputation with Jimmie Warren, the innovative Justice Department prosecutor running the investigation into the tobacco executives at Central Justice, the elite unit of the Justice Department that monitors national policies. “Wigand is the major witness against them in the federal grand jury both in Washington and New York,” John Scanlon told me.
Scanlon and Arkin had worked together before. In 1989 they volunteered to help Covenant House, a shelter for teenage runaways in New York, defend Father Bruce Ritter, the director, against sexual- and financial-misconduct allegations—an ironic assignment for Scanlon, who at one time had wanted to be a priest. As part of the public-relations campaign, Covenant House held a press conference in which confidential information about Ritter’s twenty-six-year-old male accuser was made public—a classic destroy-the-accuser technique. According to Newsday, the ploy backfired, however, in a groundswell of revulsion from New York social workers and resulted in more than five other boys’ coming forward to make similar accusations against Father Ritter.
Scanlon is the foremost practitioner of what he calls “guerrilla PR.” For columnist Murray Kempton, Scanlon is this generation’s Roy Cohn—“a man proud of his infamies.” During the McCarthy period, Roy Cohn was considered a master of the art of using false statements and exaggerations to impugn someone’s reputation. As a young man, Scanlon was a passionate defender of left-wing causes, as far from the ethics of Cohn as it is possible to get. As he has gotten older, he has developed expensive tastes; he owns a million-dollar house in the Hamptons and another retreat in Ireland. Twenty years ago he began to build a business in corporate public relations. At first Scanlon’s campaigns were a model of corporate responsibility: He helped create the gentle Mobil ads in the lower corner of the New York Times op-ed page in the 1970s.
His fees have always been high—he now charges $350 an hour—but his clients became increasingly controversial. He represented both Philip Morris and Lorillard in the landmark case of the late Rose Cipollone, whose husband sued, arguing that her death had been related to cigarette smoking.
Scanlon’s friends do not pass judgment publicly on his clients, although in private many are strongly critical. “Loyalty is the vice of the New York establishment,” columnist Liz Smith explained. For some reporters, Scanlon is an unreliable apologist. For others he is a bon vivant whose motivations are not so different from Jeffrey Wigand’s when he signed up to work for B&W. (Scanlon has acted as a consultant for Vanity Fair, but is on a mutually agreed-upon leave of absence because of his relationship with B&W.)
Scanlon is part of the social network of prominent New Yorkers with country houses in the Hamptons. He occasionally hops a ride on a helicopter owned by financier Pete Peterson; the other passengers are Don Hewitt and his wife, Marilyn Berger. Very often on Sunday mornings, Scanlon, Peterson, and Hewitt have met for a catch-up conversation at the Candy Kitchen, a restaurant in Bridgehampton. Scanlon’s clients find this access attractive.
B&W’s campaign against Wigand surfaced in late December, when a Washington Post reporter phoned the office of Richard Scruggs in Pascagoula, Mississippi, and asked for a comment on Wigand’s alleged history of spousal abuse and shoplifting as well as on his contradictory statements regarding fire safety and cigarettes. Scruggs, a law-school classmate of Michael Moore, the attorney general of Mississippi, made a fortune as an architect of the plaintiffs’ suit against the asbestos companies in 1991. He flies a Learjet and has an estate in Pascagoula near his childhood home. As one of the chief lawyers representing Mississippi’s case against the tobacco companies, he has taken an interest in Wigand as a bonus witness and has become his personal lawyer, working pro bono at the invitation of Ephraim Margolin. Scruggs met Wigand in late October. “I was astonished when he told me his story,” he recalled. Until he heard from the Washington Post, he told me, “I had never been engaged in a case involving a smear.”
From Key West, Scruggs called Wigand, who was in Washington at the Justice Department. “Jeff was very, very upset,” Scruggs recalled. On the telephone, Wigand gave Scruggs his account of the “abuse” and “shoplifting” episodes, but still Scruggs realized that he had a potential catastrophe on his hands. There was nothing that would be admissible in a court, but Scruggs dreaded the sound bite “Wigand is a wife beater” and knew it could potentially scare off the Justice Department. “There is no bigger lie than a half-truth,” he later told me. Scruggs knew Wigand had few close friends, and was concerned about his growing isolated. Wigand had shut himself in his bedroom for sixteen hours. He believed he would lose his job because of the Washington Post. Later, Scruggs would say, “Jeff was despondent. I was worried he would unravel, and I didn’t know what to do.”
* * *
In New York, it was obvious to Mike Wallace and Lowell Bergman that a calculated attempt was being made to ruin Wigand’s reputation. Over the Christmas holidays, Scanlon took Don Hewitt aside at a party at the writer Avery Corman’s and told him that Wigand was “a bad guy.” Hewitt and Scanlon were not just longtime friends; Scanlon had advised CBS during the libel case brought against the network and Mike Wallace by General William Westmoreland in 1985. For weeks on the helicopter, Scanlon bombarded Hewitt and the Petersons with allegations against Wigand—he was a shoplifter, a wife beater. Hewitt was at first strongly influenced by Scanlon, he later recalled. “I hear that Wigand is a bad guy,” Hewitt told Wallace. Scanlon had temporarily succeeded in diverting the story of B&W to a narrative about Wigand’s personality. Months earlier, Bergman had run a crime check on Wigand, but since he had not been convicted of anything, neither incident had shown up on the computer. In January, Scanlon visited Wallace at 60 Minutes. “He sat in my office and told me, ‘Mike, don’t worry—B&W is not going to sue you,’ ” Wallace recalled. “That is when I knew John was working for them.” Wallace and Bergman motivated Hewitt by stoking his competitive streak. “Dateline is going to put Wigand on the air, and he is our guy,” Wallace recalled telling Hewitt. “How can we let our guy appear on NBC?”
Scanlon made a blunder by overplaying his hand. Hewitt’s and Wallace’s sense of fair play was aroused. They are known for never allowing their personal histories to get in the way of a story, but after weeks of Scanlon’s hammering at Wigand’s credibility, his strategy backfired completely, Hewitt later told me. Once, on the helicopter, Hewitt had told him, “John, you are full of shit.” Hewitt later remarked, “What I should have said to him was, ‘Look, John, if you want to go out and work for tobacco companies defending people’s right to smoke, more power to you. The next time someone calls you and asks you to break a guy’s legs, tell them to hire a capo.’ ” By mid-January, Hewitt had made up his mind that Scanlon’s campaign against Wigand had to be part of any coming 60 Minutes report. “Mike and I never even discussed whether or not we should report it,” Hewitt said.
“John was feeding me stuff all the time,” Hewitt later told me. �
��He called me and told me the man was on a watch list at the liquor store. . . . He sent me two depositions done by Wigand. One of them, to the best of my knowledge, was under lock and key and sealed. . . . I kept egging him on. He was my pipeline to Brown & Williamson.”
* * *
One night in January, I telephoned Scanlon at his house in Sag Harbor. “What can you tell me about Wigand?” I asked. Scanlon mentioned the contradictions in Wigand’s testimony about fire-safe cigarettes, then warmed to his theme: Wigand, he said, “had been arrested for wife beating” and had been “shoplifting for a long period of time.” He continued, “And then there’s about twenty-five instances which he filed . . . insurance claims on lost luggage and hotel rooms broken into. . . . He’s got a very, very shaky record.” It seemed obvious that he was recalling the details of a written memo, although at that time I did not know of the five-hundred-page dossier.
“Who has dug this up?” I asked. “Terry Lenzner’s group?”
“Yes,” he said. “They’re the investigators for B&W. . . . I have been hired to do what I always do, which is to try to find out what the story is and broker the story, and I’m convinced that without a single iota of doubt he is a liar.”
I asked Scanlon if he had ever met Wigand or posed these allegations to him. “No. I’ve read his testimony. I don’t have to ask him the questions.” Scanlon paused. “You know, I have seen tape in which he says that he was an Olympic wrestler and a Vietnam fighter pilot.” I asked him if I could see the tape. “Only off the record, and we wouldn’t want it tied to us. We would have to have that firm agreement,” he said. I said I could not enter into such an arrangement. “We may not be able to talk, then, because what they are trying to say is that this is a smear campaign.” I said I was troubled by the implications of our conversation, the way the people who had compiled the allegations about Wigand were disseminating them to destroy his credibility. “Of course they are,” Scanlon said. “I mean, he is an incredible witness. Why wouldn’t they? I mean, if you had somebody testifying against you, and you knew they weren’t credible, what would you do?”
A Private War Page 27