Opening Pandora's Box

• Drew Beam

  

• Anthony Pidgeon

  

  Oakland attorney Lee Sanders accuses Big Tobacco of subverting the law with its secret diversion plan.

Details:

The education program would become the tobacco industry's worst nightmare. Cigarette tax money was used to shape one of the most ambitious advertising campaigns ever launched against smoking.

About a dozen tobacco industry executives are congregated in a dim, smoke-filled boardroom, discussing in raspy two-pack-a-day tones their need to maintain the industry's bottom line by recruiting new smokers to replace the 3,000 who quit or die daily. "We're not in this business for our health," one silver-haired exec wheezes. Sinister chuckles erupt from around the table. And the TV screen fades to black.

Titled "Industry Spokesperson," the ad was the first Prop. 99-funded TV spot to hit the airwaves, on April 10, 1990. It launched a series of tough anti-tobacco messages aimed at exposing the manipulative nature of the tobacco industry.

The anti-tobacco ad campaign was the most visible health education expenditure of Prop. 99 funds, and was the largest such paid, public health media campaign in the country. With Prop. 99 money, the state was able to hire well-respected ad agencies to produce spots slick enough to compete with the tobacco industry. California's anti-tobacco ads continue to be highly touted, and are now being launched internationally by the United Nation's World Health Organization.

Along with local and school programs, the media campaign's aggressive, tobacco-attacking strategy proved initially successful. From 1989 to 1995 smoking among California adults declined steadily from about 27 percent to nearly 16 percent. But by 1996, the number of adult smokers in the state had risen to 18.6 percent. Annual reports by the TEOC attributed the increase in smoking in part to the continued diversion of Prop. 99 money.

Though it had been on track in the beginning, the state's Tobacco Control Program was no longer going to meet its goal of reducing smoking by 75 percent by 1999. As early as 1993, the TEOC beseeched the Legislature to follow the will of the voters and fully fund anti-tobacco education, to no avail.

"Unless full funding is restored ... this program will simply disappear or be so racked with erratic and abrupt funding shifts that the momentum will dissipate," the TEOC's 1993 annual report said.

Though the tobacco industry had successfully redirected some of Prop. 99's health education money in 1989, it had only won a small battle. The Legislature would continue to hand out Prop. 99 money in a budget session every two years, so the industry had to maintain its vigilance. The anti-tobacco media campaign would remain a major battleground.

When the first anti-tobacco media ads aired in April 1990, the tobacco industry immediately counterattacked by spending over a million dollars a day on its own advertising.

On April 11, 1990, the day after the state ad campaign was launched, Tobacco Institute President Sam Chilcote circulated a memo that bemoaned the industry's inability to eliminate the education money completely. "Despite Herculean efforts, our goal of completely eliminating the media dedication was not met," Chilcote writes. "But through our work, the media component was sliced to $14.3 million for fiscal year 1989-90."

Still, the industry hoped to do better the second time around, when lawmakers again carved up the state budget in 1991. A strategy to kill -- or at least tone down -- the advertising campaign began to emerge in industry documents. Three key allies were sought: California legislators, the governor, and "third-party allies" like medical organizations, or minority groups that the industry thought might be offended by ethnically targeted ads.

Readying for the second round, the tobacco industry began to strengthen its ties with medical organizations. An April 18 Tobacco Institute memo reveals that the industry knew it could continue to benefit from the interests of the medical groups because "the doctor and hospital segments appear to believe the media funds would be better spent to pay medical costs."

Later tobacco memos reveal how the diversion scheme was solidified. By May 1990, an internal Tobacco Institute memo to Chilcote from a staffer stated quite plainly its goal of using medical organizations such as the CMA to lead efforts to "attach an amendment to a vehicle bill to redirect the media -- and perhaps other 'educational' -- funds to pressing health care concerns."

Tobacco again planned to use the state's ever-worsening financial situation to its advantage. With California in the midst of a recession, the staffer wrote, "it is likely that the Governor will have to recommend funding cuts for many popular, existing health care and other programs. Our plan to redirect Prop 99 funds could possibly meet with greater support once health care ... providers realize that a redistribution of existing funds may be the only way to keep current budgets in place."

There was good reason for the tobacco industry to fear the state's anti-tobacco media campaign. A year after the 25-cent tax was implemented, tobacco manufacturers saw retail sales decline by 8.4 percent. By 1992, tobacco use had fallen by almost 7 percent in California, translating into a nearly $286 million drop in profits for the tobacco industry, internal documents show.