Authors: Richard Kluger
III
ALTHOUGH
the tobacco industry gradually reduced the toxic yields of cigarette smoke, the halfheartedness of the effort was vividly evidenced in the saga of an experimental project known as the palladium cigarette. It seemed so promising as a safer smoke, in the judgment of the scientists who long labored on it, that it might have rendered all other cigarettes on the market obsolete—and therefore constituted a great peril even to the company that had developed it.
No cigarette manufacturer was in greater need of such a breakthrough innovation than the company that had been known as the Liggett Group since 1973. That year, its chairmanship was turned over to Raymond Mulligan, who had successfully run the Alpo dog food line, one of Liggett’s first acquisitions when it began diversifying in the late 1960s. Almost every aspect of Liggett’s once blooming cigarette enterprise had wilted. The company proved better at diversifying than at selling cigarettes. It bought up only businesses that ranked first or second in their field and had managers who were eager to remain in place. By the mid-1970s, the Liggett Group had four other core businesses besides tobacco—pet foods, sporting goods and fitness equipment, soft drinks (several large Pepsi-Cola bottlers), and wines and spirits, including U.S. distribution rights to J&B scotch.
Indeed, it was doing so nicely in its new enterprises that Liggett had begun to shop around for a buyer for its 2 to 3 percent of the U.S. cigarette market. In 1977, it sold its overseas business to Philip Morris for $108 million, and its cigarette operations seemed to have entered their terminal phase, a cash cow to be milked as long as it lasted—except for one experimental program the company had been nursing along since the mid-’sixties. Suddenly, this plodding effort was deemed capable of rescuing its tobacco business from the brink of extinction.
Liggett’s chief scientist in this undertaking was James B. Mold, a tall, lean man reserved to the point of reticence, whose steel-framed glasses and precise manner made him seem the very model of a small-town pharmacist lifted bodily from a Norman Rockwell painting. A nonsmoker with a Ph.D. from Northwestern, Mold had joined Liggett in 1955 as head of organic chemistry research and harbored few doubts that cigarettes caused cancer; he knew from working on the development of Lark the ciliatoxic potency of smoke in attacking
the lung’s defenses. Mold eventually rose to the second-ranking post at Liggett’s R&D labs in Durham and worked regularly with Dr. Charles Kensler of the Arthur D. Little research company (ADL) in Cambridge, which tested Liggett’s experimental products.
Mold’s ongoing task was to lower the tar and nicotine yields of Liggett’s brands and to figure out how to neutralize their carcinogenic effect. In time, Mold concentrated on the propensity of the hydrocarbons in tobacco, when burned, to lose oxygen and in the process become “free radicals,” outlaw molecules with an electron missing from their atomic structure and thus marked by an instability that left them on the prowl for similarly altered molecules. When they found each other, the resulting compound was no longer structurally volatile but had become carcinogenic in the binding process.
Mold and other scientists in the tobacco industry were trying to discourage this cancer-triggering outcome by the addition of a catalyst (a substance that speeds up molecular reactions) to cigarettes in order to achieve a more complete—or, in laymen’s terms, a cleaner—burn, cutting down on the proliferation of free radicals, just as catalytic converters were coming into use in automobiles to reduce pollutants emitted during incomplete gasoline combustion. Over the years, Mold’s department tested some 200 catalytic substances before hitting on the heavy metal palladium, a relative of platinum but about a third as costly. Added to tobacco in microscopic amounts, palladium was found to reduce the crop of tumors on mouse backs by 40 percent. Beyond concerns that palladium did not exist in adequate supply—most of it came from South Africa—to meet the demand if further testing proved its value to smokers, there were fears that it might have other, unsuspected effects that could neutralize its worth as a catalyst, or perhaps make cigarettes more hazardous. But extensive testing determined that the palladium consumed in a single smoker’s lifetime would amount to no more than the smallest dot made with a pencil and, based on close examination of the skin, liver, spleen, and other organs of laboratory rats, left no residue; in short, the body apparently expelled the palladium before it had a chance to inflict damage.
A 40 percent reduction in tumor-generating activity was encouraging but not a smoker’s savior, so Mold urged that the palladium be blended with a nitrate additive since nitrates were known to cut tumorigenesis by 5 to 10 percent. His choice was salts of nitrate derived from magnesium, a substance associated with human nutrition and readily soluble in the casings sprayed on blended tobacco. The combination of palladium and salts of magnesium nitrate was tested by the Liggett and ADL scientists and was found, by interfering with the binding process of the free radicals, to reduce tumors on painted mouse backs by 95 to 100 percent. That was the good news; the not so good news was that the combined additives somewhat increased the levels of nitric oxide, corrosive to the lungs but not carcinogenic, and of nitrosamines, compounds
that promoted, if they did not cause, carcinogenesis. The solution was to further arm the palladium-treated cigarette with a charcoal filter that sharply cut down the nitric oxide in the smoke and to add air holes and improve the cellulose acetate filter—measures which effectively slashed the nitrosamines.
But Mold and his colleagues did not want to dilute the smoke so much that it was as tasteless as most ultra-low brands. Their goal, rather, was to wind up with a commercially promising cigarette that yielded in the range of 10 to 12 milligrams of tar, well within the “Light” cigarette segment, with levels of nitric oxide and nitrosamines no higher than the average for the ten top-selling brands. The tar yield of their experimental model, the Liggett scientists argued, was less important than the fact that it constituted a qualitatively reduced health hazard. Thus, by 1975 they emerged with a palladium cigarette that would probably cost five to ten cents a pack more than standard brands but might achieve a 100 percent reduction in tumorigenicity and a 50 percent drop in cocarcinogenic promoters—at least it did in laboratory rodents.
Confronted by a steadily shrinking market share for his tobacco business, Liggett chairman Mulligan decided that it was worth exploring the commercial prospects of this potential marvel and established a task force overseeing the palladium cigarette, code-named Tame. Efforts were made to improve its taste, more stringent testing of its long-range effects was undertaken at ADL’s suggestion, and the palladium-magnesium nitrate catalyst was patented, though not without serious doubts about the wisdom of this action by Liggett’s primary outside legal counsel, the New York firm of Webster & Sheffield. “They scared the shit out of Liggett about ruinous liability suits if the safer cigarette went into production,” recalled an attorney with another outside firm in Liggett’s hire at the time and privy to the thinking of Liggett’s general counsel, Joseph Greer. Even if Tame, or whatever it was finally called, was patented and never marketed, Liggett’s lawyers advised, there was possible exposure from disclosing knowledge of an apparently safer cigarette design and then negligently failing to bring it out for the public’s health benefit. But since nobody really yet knew if the palladium cigarette would prove safer for human users, as it seemed to be for lab animals, the new product might be blamed, justly or not, for future deaths by those claiming that the reputedly improved product was nothing of the sort. Finally, there was the very real question of how to market the palladium cigarette without rendering obsolete all of Liggett’s other brands.
For all of these legal concerns, Arthur Slote, head of Liggett’s tobacco operations, saw the rest of his business going nowhere and urged Mulligan to give the palladium cigarette the green light. He did so on the proviso that the marketing effort would be lawyered to the hilt. Attorneys hovered over all aspects of the project, including the scientific meetings at which, as Mold recalled, “All paper that was generated—research progress reports, memoranda, notebooks,
or what-all—were to be directed to the legal department and turned in at the end of the meeting. In other words, the legal department was imposing a privileged confidential lawyer-client relationship from then on over all our activity. … Whenever any problem came up in the project,” as it did with one test result from ADL showing less of a reduction in tumors than earlier, “the legal department would pounce on it in an attempt to kill the whole thing. This happened time and time again.”
For his part, Liggett house counsel Joe Greer, a gruff chain-smoker who would die of lung cancer, had his feet put to the fire by the house counsel of the other cigarette companies. Despite the industry’s highly competitive marketing practices, its lawyers’ ties encouraged a mutual monitoring process premised on the belief that there would be enough money in the pot for all of them if it was not shaken too hard, and so, as one outsider of counsel to the cigarette makers put it, they “forebore independent action” that might in any serious way threaten their shared-interest in the status quo. When word of the palladium cigarette patent circulated, Greer’s confreres told him Liggett would be pulling the rug out from under the rest of the industry if it proceeded with the experimental brand, and, given the collegiality among them, “Joe heard it,” one of his legal confidants recounted. Plainly, it would have been in the interests of Liggett’s competitors to discourage it from bringing the palladium brand to market and thereby possibly becoming overnight a major player in the industry once more. Added Mold: “They [competitors’ counsel] convinced him it was not in Liggett’s best interest to manufacture the palladium cigarette or to publicize its development.”
But publicizing it was the only plausible way that Liggett would be able to market the presumably safer brand within the FTC rules, which since 1955 had knocked out explicit health claims in cigarette advertising unless adequately documented. That requirement could be met in the case of the palladium brand only by citing the results of Liggett’s laboratory experiments with animals, which the tobacco companies had long argued could not be extrapolated to the human smoking experience. Even if it backpedaled in this regard, however, Liggett could hardly claim outright that, based on the evidence at hand, the new cigarette reduced lung cancer. “I would never have agreed to it,” Mold later recounted. “You [could] only say this looks like it may have a beneficial effect.” Or as Kensler put it, “This is potentially beneficial—that’s all we ever said.”
Liggett and ADL scientists thus had to set about winning a sympathetic hearing from the medical and public-health community for its palladium experiments in order not to run afoul of the FTC. Their strategy was to get their developmental findings reported in scholarly journals so they could be cited as corroborative evidence in advertisements if and when the palladium brand was marketed. Under the lawyers’ directive, the initial scientific paper was drafted
with Kensler listed as the leading author and other ADL researchers behind him, with Mold and other Liggett scientists unmentioned as the article was sent to
Cancer Research
, the journal of the American Association for Cancer Research. “It was my understanding,” said Mold, “that Liggett did not want to be associated in public with this development,” preferring ADL to get all or most of the credit, so no blame would redound to the company if it decided not to proceed with marketing the palladium brand. Forever after, Kensler would insist that Mold “had nothing to do with the palladium cigarette.” Mold would later counter that “no way” was the palladium project an ADL initiative, as Kensler and Liggett claimed, and that ADL’s role was primarily to test what Mold’s laboratory had developed. Combining magnesium nitrate salts with the palladium, Mold added, was “my idea,” though he conceded that, as project manager, he kept no notebook that might have corroborated his role.
To Kensler’s surprise and annoyance,
Cancer Research
declined the article on the palladium project but did run an abstract of it. Kensler later said he was told that the journal review committee was dominated by antismoking scientists who felt that publicizing the palladium development would serve only to encourage people to keep smoking. A veteran member of the National Cancer Institute’s Tobacco Working Group, Kensler would come to feel that prohibition-minded purists at the American Cancer Society, the Public Health Service, and in the health community at large opposed in principle all serious efforts to develop a less hazardous cigarette. Even Gio Gori, the NCI’s chief proponent of that concept, was reluctant to lend his program’s imprimatur to the palladium idea when Liggett and ADL brought it to him for corroborative tests. According to Mold, Gori said his budget would not allow such testing unless Liggett put down a million dollars for that purpose. Gori himself would later say merely, “Like many other ideas, the palladium [cigarette] was rapidly judged unpromising.”
That same concern was intensively debated now inside Liggett, where the prospect of betting heavily on the palladium project looked more and more risky. “You had to be prepared to drop the rest of your product line,” said one outside counsel on hand for the internal soul-searching. It would have been one thing to claim that the public had been warned of the smoking peril during the years the palladium cigarette was being developed and tested, “but it would have been a very [difficult] thing to claim good faith without incorporating the new health feature into the rest of the line.” Yet the company was by no means so desperate that it was ready to risk exposing its non-tobacco business, by then accounting for 80 percent of the Liggett Group’s revenues, to the uncertainties of marketing the experimental brand. And the company’s existing brands still turned a profit; that they might be killing a lot more people than the newly developed product would was not readily factored into the debate when Chairman Mulligan assembled his executive committee at Liggett’s Rockefeller
Center offices late in 1977 to decide whether to start producing the palladium brand. Mold, summoned for the occasion and confronted by “a battery of lawyers,” recalled that all of them proposed reasons why the undertaking should not proceed. “I was alone,” he said. The decision was to continue the research—if word ever got out that it had been abandoned, as Mold divined the prevailing legal wisdom, “how would you explain why you’d stopped?”—and to seek scientific endorsements, even as Liggett executives explored the possibility of licensing the palladium process to a foreign manufacturer.