A Private War

by Brenner, Marie

  THE COUNTERATTACK

  The investigator Jack Palladino met Wigand at his house on the Colonel Anderson Parkway. In the world of hardball litigation, Palladino and his wife, Sandra Sutherland, are the Nick and Nora Charles of modern criminal investigation. Palladino wears $2,000 suits and splashy Balenciaga ties and speaks with a rapid-fire polish that hints of his childhood in Boston. At one time Palladino wanted to be a psychiatrist, and he has a persuasive narrative gift. Sutherland is the daughter of an Australian academic; her strength as an investigator is an intuitive sense of when something is amiss. They operate from the former I. Magnin mansion in San Francisco; they investigated the People’s Temple in Jonestown in the 1980s and ran the counterattack against American Express’s 1988 attempt to smear the banker Edmond Safra. They worked as well for the Clinton campaign in 1992, investigating accusations of Clinton’s infidelities. The irony was that the couple usually work for Stanley Arkin, but this time they were on the other side. “I think Arkin would explain our working for Wigand as my sixties radical sympathies,” Palladino said.

  He was hired by Richard Scruggs to mount a counterattack, to disprove the charges in the dossier that B&W had hired Scanlon to disseminate to reporters. Palladino and his staff of seven investigators had to move quickly. An anonymous tip had already been sent to Joe Ward of the Louisville Courier-Journal and to Doug Proffitt, a TV personality in Louisville who specializes in tabloid investigations. The letter to Ward had a “gossipy tone,” Ward told me, and said that Wigand had beat up his wife. Ward immediately suspected that it had come from the tobacco industry, and he chose to investigate further. Ward told me that even the police report had no context that he was comfortable with. Doug Proffitt, however, was less concerned. On the evening he was preparing a report on Wigand’s marital problems, I telephoned him. He sounded elated that he had a scoop. “I got an anonymous tip which I’m sure came from the tobacco industry. . . . There’s a side of this man that has never been told before.”

  Palladino met Wigand after Proffitt had aired his report. He was surprised, he told me later, that Wigand asked him to explain to his twenty-two-year-old daughter, Gretchen, the circumstances of the case, exactly how much was at stake. “He was in a paradoxical situation. At a time when the antitobacco forces wanted to make him a hero, he had isolated himself from everyone, including his own family,” Palladino said. “Lock up all these papers and diaries before someone steals them,” Palladino told him when he visited his home office. When Palladino relayed to Wigand the charges about him being detailed in phone calls to reporters, Wigand responded angrily, “What kind of bullshit is this?” Once Palladino realized what was happening to Wigand, he instructed the entire staff to put aside whatever they were working on and check every aspect of Wigand’s past. “This is a war,” Palladino said.

  * * *

  When Wigand meets me in the Hyatt coffee shop on Saturday morning, January 27, he is carrying a stack of newspapers. The testimony from his deposition about B&W is page-one news for the Courier-Journal, the Lexington Herald-Leader, and the New York Times. “You were on CNN this morning, Jeff,” his security man says. “I bet you never thought, growing up on Bruckner Boulevard, that you would wind up on page one of the Times,” I say. “That is bullshit,” he says. “I don’t care about front pages.”

  I am flying with Wigand to New York, where he will be interviewed again for 60 Minutes. “Wallace and Hewitt outed me, all right?” he says angrily—a reference to the fact that his identity was leaked to the New York Daily News—as we walk toward the Hyatt parking garage. “And I intend to tell Mike what I think of him on the air.” (“We are mystified that he thinks that,” Wallace later said.) In the hotel driveway, as we wait in the car for the security man to join us, Wigand sees a man crossing quickly in front of us. “Holy shit, there is Kendrick Wells!” he yells. It is 8:00 a.m., and Wells, B&W’s assistant general counsel for product litigation, is heading toward the company tower. “What in the world could they be doing so early on a Saturday?” Wigand asks nervously as we leave for the airport.

  * * *

  As Wigand and I were having dinner at the Hyatt the night before, the B&W lawyers apparently made a decision to attempt to counteract the publication of parts of the leaked deposition in the Wall Street Journal. Someone on the B&W legal team suggested that their entire five-hundred-page confidential dossier be sent immediately to the Journal’s reporter, Suein Hwang. That would turn out to be a disastrous strategic error. No one at B&W had checked the accuracy of Lenzner’s report, titled The Misconduct of Jeffrey S. Wigand Available in the Public Record. The list of allegations is dense and for most reporters immediately suspect. On the Sunday that Wigand taped at 60 Minutes, Palladino met with Suein Hwang for seven hours, going over every charge in the report. “We didn’t leave the Empire Diner until the early hours of the morning,” Palladino later recalled. “The Journal editors decided they would investigate every allegation. When I got back to the hotel, I faxed my office: ‘Drop everything and work on these charges.’ ”

  The summary is divided into categories—Unlawful Activity; Possible False or Fraudulent Claims for Stolen, Lost or Damaged Property; Lies on Wigand’s Résumés; Wigand’s Lies Under Oath; Other Lies by Wigand; Mental Illness. The document is a smorgasbord of allegations, large and small. “On November 18, 1991, Wigand wrote to Coast Cutlery Company and returned an allegedly damaged knife for repair.” “On March 19, 1992, Wigand wrote to Coach for Business requesting credit to his American Express card for two returned items.” More serious for the Justice Department, the contradictions in his testimony on fire-safe cigarettes are detailed, which Wigand explains by the fact that time elapsed between his testimony in Washington, while he was still under a severance agreement with B&W, and what he was about to say about fire safety after analyzing the Hamlet project papers.

  * * *

  In Washington, even President Clinton has started to grapple with the problem of Jeffrey Wigand. Does he reach out and embrace him as he did the late Tobacco Institute lobbyist Victor Crawford? At the moment, Clinton is battle-weary, according to one source close to him. He has survived the controversy surrounding David Kessler, the vigorous head of the FDA, an inside battle in which Health and Human Services Secretary Donna Shalala and White House Deputy Chief of Staff Harold Ickes lined up for Kessler, and Patrick Griffin, the president’s liaison to Congress, and Erskine Bowles, a deputy chief of staff, questioned Clinton’s continued support of Kessler. Griffin pointed out that Kessler would bring down on Clinton the possible loss of four tobacco states—Kentucky, Virginia, and the Carolinas—and the enmity of the tobacco lobbies. Last year B&W hired the Whitewater special prosecutor, Kenneth Starr, to represent the company in its fight to prevent dissemination of the Merrell Williams documents. Recently a top White House official called the hiring of Kenneth Starr “a travesty” because of the possible conflict of interest in investigating the president as he attempts to regulate the tobacco industry.

  If Clinton were to embrace Wigand, it would signal that the Justice Department had no reservations about his credibility, but as yet there has been no clear signal from Washington. David Kessler would not be interviewed for 60 Minutes concerning his relationship with Wigand, perhaps because the FDA is careful to appear neutral as it attempts to change the laws and force tobacco to be regulated as a drug.

  * * *

  In New York we go to dinner at a Japanese restaurant with Jack Palladino. Wigand sits in a tatami room and orders baby eel in fluent Japanese. Palladino tells him, “You are a very important man at the moment. You have got to get out of Louisville. You should be at a major foundation that is doing tobacco research.” For Palladino, there is little about Wigand that reminds him of Edmond Safra, the banker—and the client of Stanley Arkin—he worked for who was also the victim of a smear. Safra was motivated by a sense of moral outrage, Palladino tells me, whereas Wigand’s level of tension is a sign of pure fear. At dinner, he is without defense
s. He says, “The only thing I have is my teaching. I will not give it up. I owe the kids.” In the car on the way back to the hotel, Wigand is irritable. “I feel I am being corralled by these guys.”

  Wigand is tired in New York, and complains of chest pains. It is his intention to get a physical, including an EKG. He checks into the Shelburne, a modest hotel at Thirty-seventh Street, although 60 Minutes has offered to put him up at the more posh Essex House, on Central Park South. “Do you know what it would be like if I were there with them?” he says. “They would be down my throat every second.”

  Wigand is scheduled for his second 60 Minutes interview Sunday afternoon. In the morning he calls and says, “I have to have a Save the Children tie. This is what the whole thing is about—smoking and kids. Where can I get one?” His tone is intense, serious. “I won’t go on the air without it,” he says. I meet Wigand in his room at the Shelburne. Palladino has already arrived, and paces back and forth trying to boost Wigand’s sense of self before he is filmed. “You are a man who is trying to tell the truth. They are trying to ruin your life. It is your story. You have to tell it the way you see it.” Palladino coaches Wigand on TV technique: “Don’t use too many nouns or proper names. Don’t be too technical. What you want is for them—the TV audience—to suddenly look up from their cheese puffs and say, ‘He is telling the truth.’ ” “I am a scientist,” Wigand responds churlishly. “That is how I speak.” “Yes,” says Palladino, “but consider it this way: You are getting a chance to tell your story in front of an audience.” While Palladino speaks, Wigand puts on a fresh shirt and takes a Save the Children tie from a Bloomingdale’s box. He knots it while looking in the mirror and then visibly relaxes. “Okay, Jack,” he says. “I feel better now.”

  “It’s simple,” Palladino says. “Just tell the truth. That is all you have.”

  * * *

  On one occasion in Louisville, I go to see the B&W public-relations man Joe Helewicz, a former reporter for the Baltimore Sun. I am brought to a reception area, a large room filled with smoke. On several tables there are containers of B&W cigarettes, Kools and Capris. Near me a salesman from Pitney Bowes smokes a Kool and says, “I am supposed to be quitting, but I like coming here, because the cigarettes are free.” After some time I am taken up to the eighteenth floor to wait for Helewicz. This is the inner sanctum of the B&W legal department, the floor that was lit until midnight five days earlier. The tension is palpable; men in suits are huddled in several corner offices. I am shown to an empty office to wait. The Wall Street Journal has scheduled an exposé of the Wigand investigation for the next day’s paper. The publication of the B&W deposition excerpt in the Journal has also lifted any restriction on CBS—now owned by Westinghouse—to air its long-delayed report. In private, the new CBS News president, Andrew Heyward, tells Wallace that the story is “a priority.” In New York, Bergman is scrambling with a CBS crew, freed at last by Ellen Kaden to complete a process he began in 1994. The crew has waited outside Scanlon’s apartment building to ambush him. Scanlon stood in the snow and said, “Wigand is a habitual liar.” Earlier, he had shouted at Bergman on the telephone, “You guys are going to hose me.”

  While I wait for Helewicz, I review my notes from the dinner I had with Wigand the night before. Wigand had been to see a divorce lawyer that afternoon, a fact that would be known twelve hours later at B&W headquarters.

  From a window I look down at the exact table where Wigand and I had dinner in the Hyatt’s revolving restaurant. Suddenly I hear loud voices coming from Room 1821, then occupied by John Kiser, a B&W lawyer:

  “Things have been a little hectic here.”

  “We need a divorce specialist . . . ”

  “Wigand said no to child support.”

  “Let’s do it all!”

  “This will be blazed in the streets and the back alleys!”

  “It has nothing to do with the law books!”

  Sometime later I see Joe Helewicz. Within moments of our meeting, he tells me that, as far as he is concerned, Wigand is a liar and cheats at golf. “He’s a paid mercenary,” he says. “Is he talking to any other media besides CBS?” I do not answer, and he continues. “Why? Because they’re not paying him. I don’t know why you and a lot of others don’t see it. Our business is out of favor. It’s not politically correct. If somebody stands up to the tobacco business, they’re a hero. Forget about the other side of the story.”

  I read to Helewicz parts of the conversation I have just overheard and ask him if that language does not indicate a smear or unethical corporate behavior. “You picked up part of a conversation, and that’s a characterization of a campaign, because you picked up a couple of sentences out of context!” he says, but he refuses to allow me to interview the lawyer whose office the conversation was held in. “I would take issue with the word ‘smear’ when what you are doing is putting out fact about a person who is lying about you and making vast allegations.”

  * * *

  Japanese class begins at 8:00 a.m. in Room 312 at DuPont Manual in downtown Louisville. Wigand teaches a group of thirty-two students, who sit quietly after the bell and the Pledge of Allegiance on a closed-circuit TV. Wigand is adamant about not wanting to talk to his students about what he is going through. “I happen to love teaching,” he says, “and I don’t want to concern them.” “Hajime masu!” he tells them. “Let’s begin! We are going to do some sumi today—calligraphy. How many of you have brought brushes?” In front of his class, Jeff Wigand is transformed. He is open and generous, and the class responds with noisy delight. At the end of the session, Wigand’s students surround him at a small table as he dips a special Japanese brush into calligraphy ink. “The maneuver is very loose, all from the shoulder—you have to relax to do it right,” he says. “It is about flow.” His shoulder loosens, and his hand begins moving the brush across a page. He makes a small box, a long line, a special dot, a flourish. “You see this symbol in Japanese restaurants. Does anyone know what it is? This is known as ‘happiness forever,’ ” he tells them. “It is all a matter of control.”

  * * *

  Soon after the Wall Street Journal published its front-page article harshly skeptical of the five-hundred-page dossier, Wigand moved into a two-bedroom apartment in Louisville. “I will feel better when I have my things around me,” he said. He was particularly concerned about his computer, which contained one version of his B&W scientific diary. During a routine FBI investigation of his most recent death threat, Wigand grew outraged that his privacy was being invaded. He had words with one agent, who reacted by obtaining a search warrant and impounding his computer, telling lawyers close to the case that Wigand was “a suspect” in the matter, although there was no evidence of any kind to suggest that Wigand had sent himself a death threat.

  “They are not going to leave me alone,” Wigand told me in early February. It was the day after the most recent episode—a break-in at the office of Joe Mobley, his divorce lawyer. “There have been a few fireworks,” Mobley told me. “Four days after my employment, I did have a ‘toss,’ as they say in the vernacular. Nothing was taken, but the contents of my desk were thrown all over the floor.” For Palladino, the break-in was “clearly a message.” The clue, he said, was unmistakable: a pile of burned matches near the door.

  * * *

  According to the American Lawyer, there are now nearly two hundred law firms working on more than twenty-five major tobacco cases, and Wigand could be an expert witness in all of them. His testimony has been sought for five ongoing investigations in the Justice Department. Wigand’s lawyers announced in early February that he is countersuing B&W for invading his privacy, and he has charged that B&W abused the legal process by seeking to block his testimony. Like a Mob witness, Wigand has entered a shadowland of litigation. For investigators and lawyers, he has lost his former identity and is now referred to as “the client”: “I am having dinner with the client.” “The client has to be in New York for a meeting.” There was recen
tly a bomb threat at DuPont Manual.

  There is no question that Wigand’s presence in the middle of the tobacco wars is an accident, without grand design. “I just wanted to get the story out,” he told Lowell Bergman after the 60 Minutes segment aired. It is possible that his testimony could cause several former CEOs to be indicted for perjury, including Thomas Sandefur and Andrew Tisch. “I can’t give you twenty-five reasons why I did it,” he told me recently, but since Wigand appeared in the arena, there has been a revolution in tobacco history. Over St. Patrick’s Day weekend, he was back in New York, far more sanguine than he had been in late January. That week Richard Scruggs had negotiated a remarkable settlement with the Liggett Group, which, in an unprecedented move, broke ranks with the other four U.S. tobacco giants and agreed to settle the states’ claims and to accept proposed FDA marketing regulations. The Liggett breakthrough was the inspiration of majority shareholder Bennett LeBow, a Wall Street buccaneer who, in alliance with corporate raider Carl Icahn, is hoping to take over RJR Nabisco. Liggett’s settlement created a selling frenzy on Wall Street, and Philip Morris’s stock plunged 16 percent in five days. Big Tobacco was suddenly like South Africa in the 1980s, as the giant structure began to crack. In March three more whistle-blowers came forward—former employees of Philip Morris. Shortly before Scruggs began negotiating with LeBow’s lawyers, Ian Uydess, a scientist, was in Washington at the FDA alleging in a twenty-four-page affidavit that Philip Morris had routinely adjusted nicotine levels. Meanwhile, the Courier-Journal reported that of the seven top executives who testified before Congress in 1994 that nicotine was nonaddictive, only one remains in place. Recently, Governor Kirk Fordice of Mississippi has gone to court to try to stop his own attorney general, Michael Moore, from pursuing antitobacco litigation, implying he was opportunistic, a captive of plaintiffs’ lawyers.