MEMO TO COMMERCE COMMITTEE, DEMOCRATIC MEMBERS
FROM JOHN D. DINGELL, RANKING MEMBER
REGARDING THE SUBPOENAED TOBACCO DOCUMENTS

Today Chairman Bliley released tobacco documents subpoenaed by the Committee earlier this month. I supported both the subpoena and the release of the documents. The Chairman intends to place all of the documents on the Internet through the Committee's homepage. This memorandum presents background information and a preliminary assessment of the documents.

Summary and Introduction

On December 5, 1997, Chairman Bliley issued subpoenas to four tobacco companies for certain documents. Specifically, the subpoena requests:

"All documents in categories 1, 3, 4b, 5 and 7 of Judge Kenneth J. Fitzpatrick's May 22, 1997 Order in State of Minnesota, et al. v. Philip Morris, Inc., et al., No. C1-94-8563 (2nd Judicial Dist., MN) (attached), as to which Special Master Mark W. Gehan recommended in his September 10, 1997 Summary of Recommendation to Judge Fitzpatrick (attached) that claims of privilege be denied."

Those categories (for which various privileges had been previously claimed) are:

• 1. All documents for which any previous claim of privilege or protection has been denied (even in interim, non-final, or vacated orders) and all documents specifically designated by plaintiffs by Bates numbers.
• 3. All scientific research or research reports on smoking and health or information relating to smoking and health, and memos regarding the same, written by an employee or outside consultant researcher or research entity of any Defendant or corporate affiliate of any Defendant.
• 4.b. All documents relating to Special Projects (including CTR Special Projects and Lawyers' Special Projects) or any Special Account (Including Special Account No. 4).
• 5. All documents relating to public statements or positions taken by any Defendant or combination of Defendants relating to smoking and health.
• 7. All documents relating to persons under age 18 (or children, adolescents or young adults).

Prior to today's public release of the documents, the staff had a limited time to review the documents. The documents lacked an index, and had no apparent ordering. The topics discussed in the documents and their context are not always clear. The documents also cover a limited time frame. For example, no documents in the 1990's are included.

Some qualifications about the information contained in this memo are in order. The review of thousands of pages of documents was conducted under tight time constraints, and the minority did not have possession of its own copy of the documents until today. For those reasons, some spellings, names, and quotations taken from the documents may not be exact because they are based on staff notes. These matters can be checked by referring to the documents themselves. (Numbers in parenthesis refer to the numbering of the documents, which begin with the letter LG.)

As the public, particularly those who have followed the issues of tobacco legislation, litigation, and regulation, reviews these documents, their usefulness will become clear. The documents certainly raise more questions than they answer, and many of the documents may be rich in significance to those with more experience in the field. Most importantly, these documents represent a relatively small percentage of privileged documents held by various courts, including the "Minnesota select" documents, many of which may have far more significance than this assortment.

The Chairman's decision to make these documents available to the public is proper. The Special Master's prior determination that claims of privilege should be denied was justified. More recently, on December 16, 1997, the Minnesota judge reviewing the documents concluded that the tobacco industry engaged in "a conspiracy of silence and suppression of scientific research," and that the companies "committed numerous abuses of privilege." Most of the documents relate to a program of funding research, directed by the legal departments of the tobacco firms and outside lawyers. They are highly relevant to the complaints of the various states in litigation. To the extent that these documents give weight to claims that the industry engaged in a conspiracy to commit scientific fraud, it may complicate attempts to address questions of immunity in legislation.

The documents provide a starting point in the determination of whether or how industry research efforts were used in a manipulative fashion. They already reveal far more than was known about the extent of the role attorneys played in determining research priorities. Further investigation will be required to understand the full nature of the lawyer-directed research.

The massive funding of "helpful" researchers will certainly astound many. Beyond the hiring of expert witnesses, lawyers appeared to fund the entire livelihood of dozens of researchers. Perhaps it can be explained by the comment of one of the general counsels that "Lawyers cannot testify. We need people who can." (2000743)

A memo from Lorillard General Counsel Arthur Stevens opines about a Witness Development Plan with "percentages or quotas" of witnesses to be sought for testimony relating to specific diseases. (2001008)

In short, the documents present a glimpse of the mountainous costs that the tobacco industry paid in its search for scientific backing for its views, in a scientific community that believes the exact opposite. Consider the proposed funding of a doctor to study the beneficial effects of reducing stress through smoking. A letter from William Shinn of the law firm Shook, Hardy & Bacon to attorney Alexander Holtzman on May 19, 1967, suggests that the doctor could be helpful on television and Congressional hearings in the creation of an image of smoking "as right' for many people as a natural' act for man as a scientifically approved diversion' to avoid disease causing stress." Shinn continues, "He would not give an opinion on smoking as a cause of any disease because he does not consider himself qualified. [His private opinion is that smoking does cause some cancers to develop, may cause heart disease in some people, and does cause bronchitis he says these views are shared by all the doctors he knows but that these same doctors are willing to concede a beneficial diverting affect (sic) to smoking.] (2002520)

The remainder of this memorandum is intended to give you a general sense of the nature of the documents, based upon the staff review. This is far from an exhaustive review of the material, but rather a sampling of the information in the documents.

Special Projects

One important feature of the lawsuits brought by various State Attorneys General has been the allegation of fraud on the part of the tobacco industry in portraying their support of research into health and tobacco as intended to elicit independent scientific research, with no strings attached. The Council for Tobacco Research (CTR) was supposed to be independent, and governed by a scientific advisory board, but it appears that tobacco lawyers played a large role in determining the thrust of the research. Research which could not get the approval of CTR, but would be important to litigation, was funded as a "special project."

The preponderance of the documents received by the Committee relate to so-called Special Projects. They are referred to in various ways, as a Special Project of the CTR, a Special Project, a lawyers' special project, or Special Account #4 project. The common link was that the project would be recommended for funding by one of the company's outside firms -- most often Shook, Hardy, and Bacon -- in a letter to the General Counsels of the major tobacco firms. The general counsels presumably approved the projects, often at a meeting known as the Committee of Counsel, based upon little more than a one or two page description of the research project. Under these Special Projects, doctors would be funded for thousands to hundreds of thousands of dollars to perform research. It appears that in general, the companies would pay the outside counsel periodically (initially similar amounts, but later based upon market share) and the outside counsel would forward the money to the doctor.

Special Projects were described in memos in the following ways. In a letter from Lorillard General Counsel Arthur Stevens to outside counsel Timothy Finnegan on February 22, 1980, Stevens questioned the need for certain special projects. He stated that he knew what the "mandate" was for the counsel: "I am mindful of the continuing mandate with which your office, Shook, Hardy and others have been charged by your respective clients on behalf of the industry: that is, to find witnesses and researchers and, if necessary in order to determine the feasibility of developing a relationship with them, engage them as consultants, or as researchers on initially modest projects." ( 2006048, at 2006049)

Another memorandum from Liggett General Counsel Greer dated April 10, 1975, defines Special Projects as "scientific research projects of a quality sufficient to bear the imprimatur of the Scientific Director of CTR, approved by management, and which have the potential of arming our counsel and the industry with research helpful in court, in Congress, or elsewhere in adversary situations." ( 2000525, at 2000526)

In notes of a meeting of the Committee of Counsel on September 10, 1981, outside counsel Ed Jacob defined Special Projects as follows: "Purposes 1) Develop witness stimulate the interest of doctors; 2) develop information re: gaps in knowledge." (2000743)

This appeared to trouble Stevens, who wanted a re-evaluation, stating he was "concerned with the degree to which we make advocacy primary and science becomes secondary." He questioned why the same doctors kept coming up over and over and whether the research was worthwhile. In response, counsel Edward Jacob, stated, "If you have a doctor, you have to keep him busy or he will lose interest. Sterling has been enormously helpful. Berkson receives a small check and he has been helpful."(Ibid.)

Jacob continued, explaining the genesis of Special Projects: "When we started the CTR Special Projects, the idea was that the scientific director of CTR would review a project. If he liked it, it was a CTR Special Project. If he did not like it, then it became a lawyers' special project."(Ibid.)

An apparently attractive feature of Special Projects directed by lawyers was the argument that such research could be protected from discovery, as attorney work product. At the same meeting, Jacob noted, "With Spielberger, we were afraid of discovery for FTC, and with Aviado, we wanted to protect it under the lawyers. We did not want it out in the open."(Ibid.)

Not every company was interested in all of the Special Projects. As discussed above, the General Counsel of Lorillard expressed concern, and apparently, so did Liggett in notes of a January 10, 1983, meeting: "CTR Special Project: Things that Lgt [Liggett(?)] has never been involved in. These are scientific' or pseudo-scientific' projects that CTR has been unwilling to perform. Decker questions need for any of this." (2000788)

One unsigned document (2015011) appears to be a list of research projects of interest to the lawyers. They generally can be described as research that finds alternative factors in cancer and other diseases other than smoking, or research that attempts to refute studies linking smoking to cancer. A lengthy review of research projects follows, with CTR-financed research intermingled with special projects. All appeared to be part of an overall research strategy.

That strategy appears to be well-summarized in an interesting memo questioning the direction of the industry funding of research of nearly everything but the linkage of cancer and smoking. The Brown and Williamson memo on January 19, 1968, paraphrases the defense of the status quo research plan made by Janet Brown, an industry attorney:

"Research the disease not tobacco issues.

"1) Maintain that existing evidence of tobacco-health relationship
is inadequate to justify research more close to tobacco;
"2) Study of disease keeps constantly alive argument that until
basic knowledge of the disease advances, inappropriate to devote major effort to
tobacco." (2023842)

Despite the claim that tobacco-sponsored research would be independent, and reviewed by an independent Scientific Advisory Board (SAB), as stated above, many projects were sponsored as Special Projects precisely because the SAB rejected them. For example, in the minutes of one meeting of the Committee of Counsels, lawyer David Hardy reported, "Hockett proposed to have project referred to SAB, and if SAB turns it down to carry it out under CTR special project. Severi's good will has real value." ( 2000139, at 2000141)

Far from using science as the sole criteria for research, a large percentage of letters going to the counsels requesting funds for Special Projects refers to prior acts of helpfulness by the researcher in testimony, statements, or the like.

Finally, in a memo to Ed Jacob of December, 1979, it appeared that an administrator understood the different roles of the CTR and attorneys. The CTR was responsible for broad administrative matters, while lawyers "establish broad goals and priorities." (2024386)

Nonscientific Factors Contributing to Funding of Special Projects

Many documents appear to suggest that factors other than scientific merit were considered in the funding of special projects. Letters from attorneys in Shook, Hardy and other firms to the counsels to tobacco companies seeking approval for research funding often mentioned these other factors: (1) the doctors had conducted and would continue to conduct research with conclusions consistent with industry views; (2) the doctors were in the past or would likely be willing in the future to defend the industry before Congress, litigation, or in other settings where the industry was under attack; or (3) they held influential positions that would attract favorable attention.

For example, in an August 20, 1971, letter regarding the funding of a Dr. Louis A. Soloff for more than $100,000, William Shinn of the law firm of Shook, Hardy, & Bacon noted, "We are needless to say, impressed by Dr. Soloff. He has presented a statement to Congress, appeared on the Security Analysts' program in New York and proved himself to be an excellent courtroom witness." His funding was recommended by the firm. (2002491)

Another letter from the same firm dated June 13, 1972, illustrates the same point but for a different researcher, a Dr. Thomas F. Mancuso: "Dr. Mancuso is willing to speak up. For example, his remarks at the AAAS meeting in Philadelphia on December 28, 1971 (attached), he criticized some of the participants at the meeting (Hammond and Selikoff) for focusing too much attention on smoking and ignoring the tremendous number of variables in the microchemical environment which have not been undertaken and which have not been considered.' " David Hardy from the firm recommended that Dr. Mancuso be funded. (2002575)

Other documents appear to indicate that many of the researchers the industry funded were both prominent and in positions to exert significant influence in the scientific community. Documents detail the apparent industry funding of Dr. Eleanor Macdonald, the Director of Epidemiology for the prestigious M.D. Anderson Hospital in Houston, Texas. Dr. Macdonald not only testified on several occasions before Congress, but also apparently assisted the industry in related litigation. In an October 12, 1972, letter from the law firm of Shook, Hardy & Bacon, Mr. William Shinn recommended $46,730 in funding for Dr. Macdonald's work, noting that she "has been most helpful on several occasions in helping to develop statistics for litigation." (2002584)

Dr. Macdonald apparently remained helpful both as an industry consultant and as a scientist who could help the industry find new sources for industry research. In an April 1980 memo from the law firm of Shook, Hardy & Bacon, one lawyer notes, "Professor Eleanor Macdonald has requested a renewal of her CTR Special Project for one year... Industry support has enabled Professor Macdonald to have [had] a productive year... Professor Macdonald has been of assistance to us during the year. In addition to consulting on lung cancer epidemiology and other scientific issues, she has suggested names of researchers who might be candidates for industry funding. The amount requested is $123,121." Dr. Macdonald's funding was recommended by the firm. (2002725)

Another example of a researcher apparently funded because of views favorable to the industry, concerns Dr. David Hickey. Lawyers from the same firm wrote in 1971, "It is perhaps unnecessary to add that Hickey is convinced that smoking has been given far too much consideration and air pollution far too little." (2002677) In 1968, lawyer David Hardy said of Hickey, "In essence, Dr. Hickey is willing to prepare a statement for Congress provided he is able to complete the analysis of certain data which he has acquired. By applying methods of multivariate analysis, he is able to demonstrate that the concentration of certain air pollutants (most of which have not been identified in cigarette smoke) predicts' with considerable accuracy mortality rates of such diseases as lung cancer." (2002651)

Significance of Special Projects Documents

The Special Projects documents raise a variety of issues. At a minimum, they provide a small glimpse into the control of supposed independent research by tobacco lawyers. At the other extreme they could reflect a fraud or conspiracy to manipulate scientific research on the health effects of smoking, through the influence of money and the illegal use of attorney privilege. It is, if nothing else, startling to see hundreds of thousands of dollars in research subject to the review not of heads of university departments or hospitals, or organizations such as the National Institutes of Health, but rather only by tobacco attorneys.

The documents raise many questions that need to be answered:

• 1) How many researchers were paid through these Special Projects account, and how much was spent? The documents show dozens of projects funded each year for hundreds of thousands of dollars, but there is no single accounting. The recipients included a broad variety of institutions and hospitals.

• 2) What disclosures were made concerning these arrangements? Did researchers inform their institutions of the nature of their financial support? Was their support by tobacco industry lawyers made known in other fora, such as professional conferences or trials?

• 3) Is it appropriate for tobacco lawyers, not independent scientists, to direct millions of dollars of basic research at universities and hospitals?

• 4) If Special Projects recipients disclosed that they received money from the industry, did they improperly portray the funds as coming from the CTR, even when tobacco attorneys were making the decisions, not an independent Scientific Advisory Board?

• 5) Did the attorneys operate the program through the various general counsels in order to cloak the research under privilege? A memorandum on May 23, 1964, discusses a possible survey on consumer attitudes on smoking to be conducted not for the company, but for the lawyers, so if the results were unfavorable, the lawyers would receive the copies and there would be nothing to subpoena. (2006320)

• 6) Were any studies killed, because the results of the research were heading the wrong way, or did the lawyers seek to quash the public release of studies? One memo from Shook, Hardy lawyer William Shinn to general counsels on January 11, 1968, refers to an action taken by a Special Projects recipient: "In spite of our instructions to the contrary, Sterling has submitted these papers informally' to the Public Health Service." (2006165)

• 7) Were Special Accounts at outside law firms used to conceal industry involvement in scientific research?

• 8) What oversight did universities and hospitals exert over the nature of research conducted at their institutions and the source of funding? In no case is there any record of an institution questioning the role of tobacco industry lawyers funding research projects at the institution.

Context of the Special Projects issues --- The Huber Case

The documents alone cannot completely answer many of the above questions. Some of these have been raised in papers, but not mentioned in the documents. For example, in the fall of 1997, the Dallas Morning News and the Baltimore Sun ran several articles about one recipient of Special Project funding, Dr. Gary Huber, who received funding for various work at Harvard University, the University of Kentucky, and the University of Texas Health Clinic. Dr. Huber's name appears in a limited number of the documents we received, and the Harvard Project appears in a number of other documents.

The stories about Dr. Huber relate to his current role as a whistle-blower. The articles state that Dr. Huber received $1.68 million during his work in Texas, an amount far greater than appears to be disclosed in the documents. According to an article in the Dallas Morning News of November 15, 1997, the "money was routed through an outside account bearing a Greek code name to keep it off hospital books and make it difficult for an outsider to find." The article states that the three institutions that Dr. Huber worked for received more than $7.5 million over 25 years from tobacco lawyers, which also appears more than documented in the subpoenaed materials.

The Health Center was apparently aware that Dr. Huber was funded by industry lawyers, and agreed to their terms. According to the article, under a 1988 agreement between Dr. Huber and the Health Center, hospital officials agreed they could never review any work he did for the lawyers. In a 1994 memo, Dr. Huber warned that his continued funding hinged on avoiding public disclosure, and said the lawyers had insisted on keeping the payments off the Center's books. At that point his funds were funneled through an account named Alethia. Health Center officials let the arrangement go on because "it was either do it that way or not do it," said an associate executive director at the center.

In the articles, Dr. Huber claimed that the Harvard Project was close to establishing a link between cancer and emphysema when funding was canceled. The subpoenaed documents indicate an interest by lawyers to terminate the program, but there appeared no real mention of reasons. (See for example 2008417 discussing how tobacco lawyers considered dealing with him.) Industry lawyers in the article deny the accusation.

Most interesting in the articles is Dr. Huber's assertion of harassment by tobacco lawyers since his cooperation with plaintiffs. In the Baltimore Sun article of November 17, 1997, he says that a lawyer at Jones, Day, Reavis & Pogue threatened to bring "the full weight and power of Jones, Day and its client" -- R.J. Reynolds -- down on him. He says an attorney with Shook, Hardy & Bacon advised him there would be nothing wrong with removing from his tobacco files documents he no longer needed. The tobacco lawyers deny the accusations.

This matter is raised to point out that important follow-up investigations will be needed to determine the full meaning of the subpoenaed documents, to answer questions involving the knowledge of the institutions of the research sponsors, how the research was used, and whether research was suppressed.

Other Matters

Other documents provided to the Committee present other points of strong interest. A number of documents, for example, deal with industry responses to Safer Cigarette studies. (See for example, 2022168-9)

Other documents relate to advertising strategies. What exactly was the purpose of the proposed use of youth heroes on "Smoking being an adult custom"? (2022162) A number of lawyers were wary of that one. Other documents detail how the Tobacco Institute scripted "debates" on smoking and were wary that there be any notation of sponsorship of various doctors. (2017256)

What is the significance of the detailed computer-automated data base of health related research undertaken by the industry in mid-1960's? Or the existence of a form of clipping service of health related research from 1954-56? One May 28, 1958, memo from F.P. Haas to the general counsels discusses the development of a central file, noting that the TIRC (predecessor of the CTR) had assembled much material on health, but that it was important that future literature be collected and analyzed "under the wing" of counsel. (2017032) Is this an effort to shield unfavorable research under a claim of privilege?

Others may find legislative memos of interest. For example, at a meeting of Committee of Counsels on March 31, 1983, there was a lengthy discussion of how to answer a question concerning the hypothetical repeal of the warning label. Counsels have used the warning as a defense in lawsuits to show that smokers had adequate warning. (See 2006239) Not wanting to admit they liked the defense, they decided they would answer the question that the industry has always opposed warning legislation "based upon the assumption shared by all that it wouldn't be repealed." (2000824)

A number of the documents touch upon strategies for dealing with requests for ingredients. It is acknowledged in one memo of September 15, 1977 by lawyer William Shinn that many companies dropped numerous ingredients right before they were required to provide a list to HHS, because of possible public relations problems. (2008121)


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