Authors: Richard Kluger
Bush’s top health officials proved craven and impotent in the face of such boosterism. Koop’s successor as Surgeon General, Antonia Novello, occasionally flayed the tobacco companies for pursuing the youth market, but her priorities were apparent when she stated, in answer to press inquiries about why she had not opposed the USTR efforts to spread the sale of U.S. cigarettes to previously restricted markets, that such intrusiveness by the nation’s ranking public-health officer would have been “disrespectful to my party.” Traveling to Perth, Australia, in 1990 for the triennial World Conference on Tobacco and Health, Assistant HHS Secretary James O. Mason delivered a rousing keynote address, charging U.S. cigarette makers with playing “our free-trade laws and export policies like a Stradivarius violin” and calling it “unconscionable” for them “to be peddling their poison abroad.” But when summoned by Congressman Waxman to repeat the charge before his House health subcommittee, Mason canceled his appearance and a departmental letter arrived instead, explaining that it was not appropriate for a health official to discuss trade matters. When Mason’s boss, HHS Secretary Sullivan, who had approved his subordinate’s speech in Perth, was asked on “Meet the Press” to explain the apparent policy reversal, he said that the issue was “one of equity in trade. What Dr. Mason has said in Australia is entirely consistent with what I have said.”
More truthfully reflecting the smoking policies of the Bush presidency, Vice President Dan Quayle told a North Carolina audience in July 1990 that “Tobacco exports should be expanded aggressively because Americans are smoking less. … We’re not going to back away from what public health officials say and what reports say. But on the other hand, we’re not going to deny a country an export from our country because of that policy.” Thus was a generation of findings that smoking was destructive of human health degraded by two American Presidents while actively carrying the banner of U.S. tobacco companies into foreign parts when ample humanitarian grounds existed for pressing their cause less fervently, if at all.
This unseemly overseas initiative by the government compounded the injury
then being dealt to the antismoking campaign domestically by official federal indifference. The most hurtful setback at the national level was the 1989 departure of Surgeon General Koop, who had brought moral weight and a believable voice to the issue. Only Henry Waxman in Congress played a comparable, if less audible, role in the broad public airing of the hazards of smoking throughout the ’Eighties. But for all his skills in the pulpit, Koop had been unable or unwilling to persuade the White House to undertake control measures.
Eighteen months after Koop’s departure, the only other forceful antismoking advocate in the federal administration, Ronald Davis, director of the Office on Smoking and Health, ended four years of frustration in that job and soon held the ranking public-health post for the state of Michigan. A team player, Davis had nonetheless bridled under the executive branch’s disdain for his mission, typified by a budget that did not even allow him to carry out studies into the possible dangers of the tobacco additives that the industry was using, according to lists it provided to his office under the 1984 cigarette labeling law. His role was limited to cross-pollinating among the myriad of private antismoking organizations—ASH, GASP, ANR, DOC, STAT, AMA, the Advocacy Institute, the American Council on Science arid Health, the American Health Foundation, and the Coalition of the ACS, AHA, and ALA, among others, which formed a movement Davis felt was hopelessly dispersed and duplicative—and urging state and local lawmakers and health officials to deal more vigorously with smoking, even if the federal government he worked for was doing next to nothing about the peril. “Anything that would have required federal legislation was tossed out,” Davis said in recounting the strictures on him. “It was a pass-the-buck approach. It’s much easier to make recommendations to the states than to Congress.”
Practically speaking, there was no nationally coordinated smoking control movement, only a lot of groups with their own agendas, membership lists, newsletters, fund drives, and egos. Together, they generated a considerable din, orchestrated only occasionally (as in the push for the airline smoking ban), but mostly they were in disarray. The oldest entity, John Banzhaf’s ASH, was by now relatively well funded but had become peripheral and idiosyncratic in approach; younger, poorer antismoking groups wanted Banzhaf to exercise real leadership by turning ASH into the legal arm of the tobacco control movement—or get out of the way. Americans for Nonsmokers’ Rights was growing in skill and reach but lacked funding and an ongoing presence in Washington. After nearly ten years of existence, the coalition of the big three health voluntaries remained “a case of arrested development,” in the opinion of the Advocacy Institute’s Michael Pertschuk, the coach of and father confessor to the tobacco control movement but not an active lobbyist himself. The Coalition’s three parents had proven unwilling to cede to it any policymaking power of its own, kept its operating budget to a pitiable $150,000 a year, and declined to
broaden its membership, claiming that any such increase would make its workings cumbersome but in truth worrying that the large voluntaries’ identities would be submerged in the process. The Coalition’s skilled lobbyist, Matthew Myers, had his hands tied by its steering committee, and even when he proposed a modest and seemingly unexceptionable step, like a drive to outlaw the brazen circumvention of the 1970 federal ban on cigarette advertising in the broadcast media by preventing tobacco signage at arenas and stadiums where sports events were regularly televised, his overseers said no.
The one organization that might have lent meaningful muscle to the Coalition was the American Medical Association. But the AMA did not relish the prospect of seeing its star dimmed within a larger constellation, while the health voluntaries felt that the AMA’s commitment to the smoking issue was mostly lip service. In fact, it had done no follow-up lobbying in behalf of the total cigarette ad ban it had urged on Congress in 1986. To try to forge coherence within the muddled smoking control community and to fashion national legislative priorities to present to the 101st Congress, the AMA funded a weekend-long conference in Houston at the end of January 1989 attended by all the major antismoking activists and a number of enlistees in the newly formed Tobacco Task Force, composed of fifty-two congressmen. “Never before has such a broad-based coalition assembled,” declared U.S. Representative Michael Anderson, Texas Democrat and a host of the affair. After all the brave talk, though, what emerged was another long shopping list of goals; too many bills with too many unattainable provisions got introduced, and while this multiplicity kept the tobacco lobbyists scrambling, never knowing which proposal congressional sentiment might coalesce behind, it also failed to narrow the playing field to a manageable size. Particularly divisive was the high priority assigned to a ban on all tobacco advertising—an idea that split the liberal community, usually more antismoking than not, over First Amendment concerns.
The result was disastrous. Instead of seeking half a loaf or even a quarter, the usually skilled Henry Waxman loaded up an omnibus Tobacco Control and Health Protection Act that he introduced in 1990. The immense package would have limited cigarette advertising to the black-and-white-only “tombstone” format (without human or cartoon figures), banned sponsorship of cultural and sports events using cigarette brand names, added a warning label about addiction, listed the toxic content on every pack as well as the tobacco additives, and funded antismoking commercials on television. But Waxman could not muster a majority for the bill within his subcommittee. A slimmed version of the bill, including the addiction label, a ban on cigarette sampling and vending machines unless under visual supervision, and reduced funding for alcohol and drug abuse programs in states that did not seriously enforce a federal age limit of eighteen on the sale of tobacco products, did gain a subcommittee majority.
But the measure never reached the House floor, where it might well have carried, because Commerce Committee Chairman John Dingell, Waxman’s nemesis, sat on it.
Waxman’s astute aide on smoking legislation, Ripley Forbes, commented in the wake of this glaring failure by the public-health community to check the tobacco forces, “There is an almost terminal problem of focus—and there hadn’t been sufficient tactical thinking on how to mount and put through legislation.” Without genuine White House support, moreover, the prospect for substantive federal antismoking regulation was dim to invisible at the beginning of the final decade of the twentieth century.
VII
THE
cigarette makers were cheered as well by an epochal political upheaval abroad that fired up their expansionist impulses. Eastern Europe and the great Soviet Eurasian land mass had yielded capitalist tobacco manufacturers a sorry harvest despite two decades of assiduous cultivation, and then so swiftly did the old order crumble at the opening of the 1990s that the international tobacco companies at first found the situation nearly too good to be true. Although the Communist nations, which couldn’t get enough to smoke, had now sent their commissars packing, free-market corporations were naturally wary of investing in the suddenly liberated societies before the roots of political democracy and economic stability could take hold. But that metamorphosis might take years, decades, generations even; meanwhile, a lot of cigarettes could be sold by whoever got there quickly.
In contrast to East Asia, where invading U.S. cigarette makers faced widespread resentment on grounds of imperiling public health and wounding national pride, the masses within the former Soviet bloc were starved for consumer goods and welcomed the early arrival of U.S. products as symbols of their spiritual emancipation and hope for a more materially abundant future. Under the Soviet economy, cigarette production had been hampered by antiquated plants, a shortage of replacement parts, undertrained and poorly motivated labor, and inefficient manufacturing logistics—instead of going to self-contained factories, for example, harvested tobacco was sent by rail over vast distances for processing at a single site and then reshipped to widely dispersed cigarette-making facilities. Thus, even in a society desperately short of creature comforts, hungry for almost any form of solace under tyranny, and unfazed by health fears about smoking when severe environmental contaminants of every kind were rampant, the Soviet system could not sustain cigarette production at its rated 400 billion units a year. Output had fallen to about half that figure in the last years of the Red empire, causing a cigarette shortage so
severe that Soviet ruler Mikhail Gorbachev was forced to stave off rioting by emergency bulk purchases from foreign manufacturers—20 billion units from Philip Morris was the largest single order—paid for with Russian oil, gold, and diamonds.
As the Iron Curtain disintegrated, no outside tobacco manufacturer was better positioned to exploit the event than Philip Morris, which had tirelessly pursued licensing arrangements throughout the Soviet bloc, if only to show its flag and win good will. But rather than charging in to seize any advantage it could, PM moved selectively, adapting strategies to the often chaotic circumstances. The effort began in the spring of 1990 in East Germany, a market about one-quarter the size of West Germany’s, where Philip Morris had achieved the largest share. Its chief German rival, Reemtsma, anxious to reestablish its tobacco hegemony in a soon-to-be-reunified Germany, bought up the leading East German brand, Cabinet, took away jobs by moving its manufacturing to facilities in West Germany, and promptly altered its taste to the American-style blend that had gained dominance there. Sensing that East German smokers would need time to acquire a taste for the milder U.S. blend, Philip Morris formulated a different plan. It bought out the Dresden factory with which it had long had a licensing arrangement—a run-down, turn-of-the-century factory with stained-glass windows and iron stairway railings—and made it more cost-effective but kept its top brand, called f/6, intact, even its strong taste and stodgy packaging, on the premise that with the moorings torn loose from so many other aspects of their daily lives, East Germans would like to cling to at least one pleasurable part of their past. With the slogan “F/6: The Taste Remains,” Philip Morris, on a minimal investment, soon seized first place in the East German market with a 45 percent share while, slowly nurturing a taste for Marlboro and its other U.S. brands.
In Czechoslovakia, a market about the same size as East Germany, PM took a bolder tack. It paid a steep $413 million, one-third more than RJR’s bid, for AS Tabak, the state monopoly, and gained a commanding position in a Middle European locale that could give it a tactical advantage geographically if and when a large, centralized manufacturing facility became practical. Here, too, PM pushed the leading domestic brand, Start, but smartened up the package. In Hungary, however, where it faced more competition, Philip Morris let Reemtsma and BAT buy up more costly plants, settled on a $30 million outlay for its former licensee and, in that more Western-oriented society, vigorously promoted Marlboro. Kiosks all over Budapest were festooned in Marlboro red, white, and black. At a big rock concert in the Hungarian capital, girls clad in the brand’s colors merrily handed out samples—and anyone who lit up on the spot got a pair of white sunglasses as an added premium. In Poland, with the highest per capita consumption of cigarettes in Europe, RJR staked a large
claim by investing $50 million in a plant of its own; Philip Morris, meanwhile, reinforced its fifteen-year licensing agreement with a plant in Cracow, standing ready to invest in it whenever the Polish government might elect to privatize its state-owned tobacco industry. In the smaller adjacent Baltic states market, though, PM made a $40 million commitment to upgrade and control two-thirds of Lithuania’s largest cigarette factory.
In contrast to a level of euphoria in the Eastern European states over their release from thralldom under the Soviet yoke, the mood was darker and the sense of political and economic disarray deeper in the former USSR. When Philip Morris tried to fill the void left by malfunctioning local factories with imported Marlboros, it drove down the old black-market price, and soon kiosks around Moscow that were offering the top U.S. brand went up in flames—the handiwork of organized thugs who emerged as a frightening reality in the former police state. Rather than relying on extortionate payoffs to the new Russian mob, PM and other foreign companies began to invest in the struggling new market economy by buying and renovating old plants or, in a far riskier move, building new ones. Outspending all its Western rivals—BAT, Rothmans, RJR, and Reemtsma—Philip Morris allocated some $1.5 billion among eight manufacturing sites within the first four years after the breakup of the Soviet empire.