Anhörungen der Tabak-Bosse

Rep. Waxman: The meeting of the subcommittee will come to order. I'd like to ask our guests to please take your seats. This is an historic hearing. For the first time ever, the chief executive officers of our nation's tobacco companies are testifying together before the United States Congress. They are here because this subcomittee has legislative jurisdiction over those issues that affect our health. And no health issue is as important as cigarette smoking.

It is sometimes easier to invent fiction than to face the truth. The truth is that cigarettes are the single most dangerous consumer product ever sold. Nearly a half million Americans die every year as a result of tobacco. This is an astounding, almost incomprehensible statistic. Imagine our nation's outrage if two fully loaded jumbo jets crashed each day, killing all aboard. Yet that's the same number of Americans that cigarettes kill every 24 hours. Sadly, this deadly habit begins with our kids. Each day 3,000 children will begin smoking. In many cases, they become hooked quickly and develop a lifelong addiction that is nearly impossible to break. For the past 30 years, a series of surgeons general have issued comprehensive reports outlining the dangers these children will eventually face. Lung cancer, heart disease, emphysema, bladder cancer and stroke are only some of the diseases tobacco causes.

And now we know that kids will face a serious health threat even if they don't smoke. Environmental tobacco smoke is a class A carcinogen and it sickens more than a million kids every year. In fact, five former surgeons general of the United States have said before this subcommittee this year that the most important legislation in diseae prevention that we could enact would be restrictions on smoking in public places. This subcommittee will soon act on that legislation and it will consider other measures as well. This hearing will aid our efforts by presenting an important perspective. But these hearings are important for another reason as well. For decades, the tobacco companies have been exempt from the standards of responsibility and accountability that apply to all other American corporations. Companies that sell aspirin, cars and soda are all held to strict standards when they cause harm. We don't allow those companies to sell goods that recklessly endanger consumers. We don't allow them to suppress evidence of dangers when harm occurs. We don't allow them to ignore science and good sense. And we demand that when problems occur, corporations and their senior executives be accountable to Congress and the public.

This hearing marks the beginning of a new relationship between Congress and the tobacco companies. The old rules are out. The standards that apply to every other company is in. We look forward to hearing the testimony this morning and to working with these companies to begin to reduce the extraordinary public health threat that their product poses. An old proverb says that a journey of a thousand miles must begin with a single step. Today is the first step. Many more are to come as we deal with the most serious health problem facing our nation.

Rep. Waxman: Thank you very much, Mr. Kreidler. Gentlemen, we welcome you to our hearing today. There's a blue pamphlet at the witness table that will inform you of the limits on the power of this subcommittee and the extent of your rights during your appearance today. You are I am sure all aware that you are entitled to be represented by counsel or advised by counsel during your appearance here today.

Do you or those who have asked to accompany you object to appearing before this subcommittee under oath? If not, I'd like you to rise, and those who will be testifying as well with you to rise.

Do raise your right hands. Do you swear that the testimony you are about to give is the truth, the whole truth and nothing but the truth?

Witnesses: I do.

Rep. Waxman: Please consider yourself to be under oath. And we would like to ask each of you to identify yourself, including those who are accompanying the witnesses, so that we can have that for the record.

Mr. Campbell: My name is William Campbell, I am President and Chief Executive of Phillip Morris USA. I am accompanied by Harold Brinley (sp) our Director of Processing and Dr. Kathy Ellis, our Director of Research.

Mr. Johnston: My name is Jim Johnston, I am Chairman and CEO of RJ Reynolds Tobacco Company. I am accompanied by Andy Schlinder, our head of manufacturing and operation; Carl Leeman (sp) our head of R&D; and Richard Cooper, our outside counsel and former general counsel of the FDA.

Mr. Taddeo: My name is Joe Taddeo, I'm President of U.S. Tobacco. I am accompanied by Robert Laurence, he's our Executive Vice President of Manufacturing and R&D.

Mr. Tisch: Mr. Chairman, I am Andrew H. Tisch, Chairman and Chief Executive Office of Lorillard Tobacco Company. With me is Dr. Alexander W. Spears Lorillard's Vice Chairman and Chief Operating Officer. Dr. Spears has senior responsibility for Lorelei's research and production operations.

Mr. Horrigan: Mr. Chairman, I'm Ed Horrigan, Chairman and Chief Executive Office of Leggett Group, and accompanying me this morning is Greg Sulan our Vice President of Operations.

Mr. Sandefur: Mr. Chairman, I'm Tommy Sandefur, Chairman and Chief Executive Officer of Brown and Williamson Tobacco Company. I'm accompanied by Dr. John Jewel who is charge of our manufacturing and production, operations, as well as Tilford Reel (sp) who is Vice President of R&D.

Mr. Johnston: Mr. Chairman, my name is Donald Johnston, I'm President, Chief Executive Officer of American Tobacco Company, and with me today is Robert S. Sprinkle Executive Vice President Research and Quality Assurance.

Rep. Waxman: I thank you all very much. Without objection your prepared statements will be a part of the record in full. We would ask that you summarize your prepared statement in approximately ten minutes or less. I want to note that at the request Mr. Bliley we've agreed to allow Mr. Campbell of Phillip Morris and Mr. Johnston of RJ Reynolds an additional five minutes to complete their presentations. I want to also note before we begin that our subcommittee received a number of requests from members of the House of Representatives who desire to present oral testimony. Although the hearing scheduled precluded expanding the witness list today, without objection the record will be held open to receive testimony from those of our colleagues who requested to testify.

Mr. Campbell, we would like to start with you. And I guess the best thing to do is to pass the microphone right in front of you.

Mr. Campbell: Thank you, Mr. Chairman, distinguished members of the subcommittee. In recent weeks a number of charges have been leveled against the tobacco industry generally, and Phillip Morris specifically. I sincerely hope that you and other members of the subcommittee are today interested in separating the facts from the rhetoric regarding issues raised a few weeks ago in Commissioner Kessler's presentation.

Be that as it may, our consumers are being mislead and when that happens Phillip Morris has and will continue to speak out loudly and clearly. Our consumers deserve to know the truth and I thank you for creating a forum that allows me the opportunity to set the record straight. I have a few charts that I would ask that they be put on the record, if you will. We have copies of them available here.

First of all, Phillip Morris does not add nicotine to our cigarettes. Phillip Morris does not manipulate nor independently control the level of nicotine in our products. There were a number of incorrect statements or assumptions in Commissioner Kessler's presentation. These issues are not new, many require a detailed rebuttal. The claim that cigarette smoking is addictive has been made for many years. The fact that tar and nicotine levels vary among our many products has been publicized for over 20 years. The process by which cigarettes are manufactured, and which at our invitation FDA representatives saw first hand several weeks ago, has been publicly known for over 50 years. And the call for FDA to assert or be given jurisdiction over cigarettes has been made and rejected by the FDA and the courts on several occasions in the past. To the extent possible in the time available today, my colleagues and I will try to answer the subcommittee's questions and will be happy to supplement the points we make in a detailed written submission.

Point one: Phillip Morris does not add nicotine to our cigarettes. The claim that Phillip Morris secretly adds nicotine during the manufacturing process to keep smokers addicted is false. The processes used to manufacture cigarettes have been a matter of public record for years in patent filing and in the public literature. The result of that processing, cigarettes with varying levels of tar and nicotine reflecting a wide variety of consumer preferences, has been closely monitored and reported by the Federal Trade Commission. The manufacturers have published the deliveries in every advertisement for the past 25 years. The fact is that tar and nicotine levels have decreased dramatically over the past 40 years. Today the market is populated with a number of ultra-low brands which deliver less than five percent of the tar and nicotine levels of popular brands just 20 years ago. Phillip Morris and other manufacturers have reduced nicotine deliveries in a number of ways. The most important is through the use of increasingly efficient filters which substantially reduce main smoke components, including both tar and nicotine.

Filtration alone reduces nicotine delivery by 35 to 45 percent, as compared to cigarettes made of simply tobacco and paper. Through a process called ventilation, which allows fresh air to be drawn through the cigarette, nicotine levels are reduced by a further 10 to 50 percent. Through the use of expanded tobacco, a process developed by which Phillip Morris puffed tobacco much like puffed rice cereal, tar and nicotine levels are reduced still further. A fourth manufacturing technique, the reconstituted tobacco process also reduces the nicotine in cigarettes. This process, which has been thoroughly described in the literature for years, does not increase nicotine levels in tobacco or in cigarettes. Through this process, 20 to 25 percent of the nicotine in the tobacco used to make reconstituted leaf is lost and is not replaced.

These processes, when combined in the cigarettes Phillip Morris sells today, reduce nicotine deliveries, for example, by 50 percent in the case of Marlboro and 90 percent in the case of Merit Ultima, again, compared to cigarettes made simply of tobacco and paper. Ignoring these reductions, some critics have focused on the minute amount of nicotine which are found in tobacco extracts and denatured alcohol. Even when used together, they have no measurable effect on the nicotine levels of our cigarettes.

Phillip Morris uses small amounts of denatured alcohol. To apply to flavors to the tobacco, the alcohol is denatured, in fact, in order to make it drinkable -non-drinkable under a formula required by the Bureau of Alcohol, Tobacco and Firearms and found in the federal register. In other words, the outside vendors who supply us with the denatured alcohol, use that tiny amount of nicotine solely to comply with the federal law. All use by Phillip Morris is reported annually to the BATF.

Phillip Morris has spent hundreds of millions of dollars to reduce tar and nicotine levels to provide the product that the marketplace demands. Why, if we were supposedly intent on adding nicotine to cigarettes, why would Phillip Morris have spent over $300 million to develop a process to de-nicotinize tobacco and launch (Next ?), a near zero nicotine brand. I'll tell you why.

Our public opinion research indicated smokers were interested in a no-nicotine cigarette. Our Maxwell House Coffee Company had pioneered processes for decaffination of coffee, and we used that technology as a spring board for de-nicotinization of tobacco. The process worked, the resulting product did not. We gambled $300 million and lost. That's business. If Phillip Morris does not drive constantly to meet consumer demands, we will fail in the American marketplace. Point two, Phillip Morris does not manipulate, nor independently control the level of nicotine in our product. We voluntarily opened our manufacturing operations to the FDA in a good faith effort to resolve the allegation that we add nicotine or control its level in our cigarettes.

As representatives of the FDA learned, nicotine levels in tobacco are measured at only two points in our manufacturing process -prior to the tobaccos being blended and then 18 months later when those leaves have been manufactured into finished cigarettes. Although Phillip Morris maintains over 400 quality control checkpoints in the manufacturing process that measure things like moisture, weight, etcetera, none -not one measure, report or analyze nicotine levels in tobacco. Mr. Kessler indicated in his testimony that the nicotine-to-tar ratio increased as tar delivery decreased. The reason for the slight increase in the nicotine ratio in lowered tar and nicotine cigarettes is not the result of intentional manipulation, but the result of the difference between filtering tar and filtering nicotine. Simply put, filters are more efficient in removing tar than nicotine. As tar and nicotine levels fall, proportionally more tar is filtered out than nicotine. This does not mean that consumers of low tar cigarettes get more nicotine, quite the contrary.

On an absolute basis, far less nicotine is delivered per cigarette in lower tar and nicotine deliveries. Commissioner Kessler suggested that during the period 1982 to '91, tar delivery levels have remained flat, while nicotine delivery levels have increased. The fact is, after substantial decreases since the 1950s, tar and nicotine deliveries both have remained relatively flat during the past decade.

Fact three, Phillip Morris has not used patented processes to increase or maintain nicotine levels. Commissioner Kessler spent a great deal of his testimony attempting to support the proposition that Phillip Morris may be using secret, patented processes to increase or maintain nicotine delivery in our cigarettes. We have not; we are not. Phillip Morris, like every other corporation, applies for and obtains patents on virtually every innovation we pioneer. That is critical to ongoing research efforts. Phillip Morris currently holds over 600 patents, only about a quarter describe processes ever used. The processes described in the patent are no more secret than the regulations of the FDA. They are publicly disclosed upon issuance through the U.S. Patent Office. In his testimony, Commissioner Kessler said he had no evidence that Phillip Morris or any of the other companies ever actually used any of these patents to increase or maintain nicotine levels.

As he correctly said, patents do not necessarily tell us what processes are currently being used in manufacturing cigarettes. To make myself perfectly clear, Phillip Morris has never used any of the patents Commissioner Kessler cited, except those to reduce nicotine levels. Fact four, cigarette smoking -- point four, cigarette smoking is not addictive. During the March 25th hearing, Commissioner Kessler and members of the sub-committee contended that nicotine is an addictive drug, and therefore, smokers are drug addicts. I strenuously object to that premise; I strenuously object to that conclusion.

Cigarettes contain nicotine because it occurs naturally in tobacco. Nicotine contributes to the taste of cigarettes and the pleasures of smoking. The presence of nicotine, however, does not make cigarettes a drug or smoking addiction. Coffee, Mr. Chairman, contains caffeine and few people seem to enjoy coffee that does not. Does that make coffee a drug? Are coffee drinkers drug addicts? I think not. People can and do quit smoking, according to the 1988 Surgeon General's report, there are more than 40 million former smokers in the United States, and 90 percent of those who quit, did so on their own, without any outside help.

Smoking is not intoxicating; no one gets drunk from cigarettes and no one has said that smokers do not function normally. Smoking does not impair judgment. In short, no one is likely to be arrested for driving under the influence of cigarettes. Our consumers smoke for many reasons. Smokers are not drug users or drug addicts, and we do not appreciate or accept being characterized as such, because yes, Mr. Chairman, I am one of the 50 million smokers in this country.

Point five, Phillip Morris research does not establish that smoking is addictive. At the March 25th hearing, Commissioner Kessler made the statement, supported by Dr. Henningfield, that in 1983, a company later identified as Phillip Morris, suppressed research by one of its own scientists who allegedly concluded that nicotine was an addictive substance; that is false. In fact, that scientist published two full papers and five abstracts related to the working question, including one published in 1982, a year prior to the creation of the manuscript in question.

The manuscript subsequently provided to the committee by Commissioner Kessler, prevented some evidence that rats will selfadminister nicotine and that nicotine, there, is a weak reinforcing agent. The researcher later concluded that nicotine is a reinforcer in the class of non-addictive chemical compounds such as saccharin and water. In addition, and Commissioner Kessler failed to note this, the manuscript itself states, and I quote, 'the termination of prolonged access to nicotine under conditions in which it functions as a positive reinforcer, does not result in physiological dependency.' The manuscript did not conclude that nicotine is addictive and both Dr. Kessler and Dr. Henningfield know that.

More importantly, the committee should know that by the time the Phillip Morris researcher was ready to publish his study in 1983, the positive reinforcing nature of nicotine had already been reported in other published literature. Indeed, the 1988 Surgeon General's report, to which Dr. Henningfield was a contributor, stated that such nicotine reinforcement was showing conclusively as early as 1981 based on government supported research.

Last month, Dr. Henningfield testified before this committee that because the manuscript was unpublished, he could not cite it in his literature reviews. In fact, Dr. Henningfield did cite the manuscript in a 1984 literature review. He wrote, finally, in that same review, Dr. Henningfield acknowledged that another abstract by the same researcher actually showed that even, and I quote, 'At high levels of tobacco smoke or nicotine intake maintained for extended periods, abrupt abstinence is not followed by the onset of withdrawal syndrome.' I'm sure Dr. Henningfield simply forgot that publication.

Point six, consumers are not mislead by the published nicotine deliveries as measured by the FTC method.

Contrary to the impression given by Commissioner Kessler that the FTC has somehow adopted a test procedure that can mislead the public as to the true levels of tar and nicotine they are inhaling, the routine analytical smoking methods derived from the FTC methods are nearly identical to those used throughout the world to measure tar and nicotine levels and accurately compare brand deliveries.

All of the tests are conducted on cigarettes obtained from the marketplace. They are therefore the same cigarettes smoked by consumers.

Commissioner Kessler suggested that the FTC figures were misleading because smokers might compensate for lower tar and lower nicotine brands by smoking those cigarettes differently. If Commissioner Kessler is also claiming that low-yield cigarette smokers smoke more cigarettes, he is simply wrong. The data shows smokers of low-yield brands smoke fewer cigarettes than smokers of high-yield brands.

Mr. Chairman, we at Phillip Morris appreciate the opportunity to respond to some of the claims made against us. We will be pleased to answer any questions you may have about these matters and to provide a more detailed written submission should that be appropriate. Further, I extend to you and the other members of your subcommittee an invitation to come see our manufacturing process first-hand, as the FDA has already done. We're proud of our company, our products and the people at Phillip Morris. Thank you, sir.

Rep. Waxman: Thank you very much, Mr. Campbell. We do have questions, but we're going to hear from all the witnesses before members on the panel ask their questions. Mr. Johnston, if you'll pull the microphone in front of you.

Mr. James Johnston: Good morning, Mr. Chairman, members of the subcommittee. Again, I am Jim Johnston, chairman and chief executive officer of R.J. Reynolds Tobacco Company.

I appreciate this opportunity to discuss a number of important issues concerning the tobacco industry. I am proud to be here today, to speak for the 45 million adults who choose to smoke and the growers, retailers, and the other 2.3 million Americans who are part of the tobacco industry. I am proud to represent the more than 10,000 people at Reynolds Tobacco who are dedicated to making the best cigarettes we can make. My company and I take very seriously the allegations that have been leveled against us. And I would like the record to clearly show that Reynolds Tobacco does not spike its products with nicotine. In fact, our process results in the loss of nicotine. We do not add or otherwise manipulate nicotine to addict smokers. Finally, there is no justification for the FDA to regulate cigarettes as a drug. I also want to talk to you about the real issue before the American people and this subcommittee. The real issue is, should cigarettes be outlawed? Let's make no mistake about it. The goal of the anti-smoking industry is to bring back prohibition. This morning I intend to show you how they hope to achieve that goal. But first I want to address the charge that Reynolds Tobacco manipulates the level of nicotine in its products. The implication is that we're somehow doing something sinister to addict smokers or to keep them addicted. We do not.

We do reduce the amount of nicotine in our products. We do monitor and measure tar and nicotine yields because we are required to publish those figures in our advertising. And we do maintain the consistent taste and quality of our brands, which our customers expect. But we do not do anything to hook smokers or to keep them hooked.

Let me repeat: We do not manipulate nicotine to addict smokers. We no more manipulate nicotine in cigarettes than coffee manufacturers manipulate caffeine in their products. There is nothing sinister about it. I think the subcommittee should also be aware that Dr. Kessler's definition of addiction would classify most coffee, cola and tea drinkers as addicts, caffeine addicts. Many people experience a strong urge for a cup of coffee each morning, and there is a welldocumented physical withdrawal syndrome associated with the consumption of coffee and caffeinated soft drinks.

Nonetheless, I seriously doubt that the American public would say that these characteristics put caffeine in the same class as addictive drugs such as cocaine and heroin. And I don't think anyone would seriously suggest that the FDA consider regulating coffee, tea or soda as drugs, even though soft drink manufacturers routinely add caffeine to their products.

In the same vein, the manufacturers of alcoholic beverages constantly monitor the alcohol content of their products through the fermentation process to precisely control the level of alcohol. In addition, some wines are fortified with added alcohol.

Nonetheless, Reynolds Tobacco is not aware of any efforts to regulate wine, beer or spirits as a drug. And we certainly don't believe that efforts of that type are necessary or desirable. Much of the recent controversy surrounding our products has focused on our use of various techniques that help us reduce the tar and nicotine yields of our products.

Let me be clear. We could stop using those techniques. We could chop up the tobacco and roll it in paper. But the consequence of doing that would be a return to the 1940s, when the average cigarette yielded 40 milligrams of tar, 2.8 milligrams of nicotine. That would increase the tar and nicotine in our cigarettes by 300 to 400 percent.

I trust this committee would not endorse such an effort as a matter of public policy, regardless of your personal views about smoking.

At the last hearing on this subject, some people asked why we don't simply eliminate nicotine from our products. Nicotine plays an essential role in the overall smoking experience. It enhances the taste of the smoke and the way it feels on the smoker's palate, and it contributes to overall smoking enjoyment. During the past several years, there have been a wide variety of attempts to convince the American public that cigarettes are addictive, and some public officials have even gone so far as to put cigarettes in the same class as cocaine and heroin. You don't need to be a trained scientist to see this isn't true. All you need to do is ask and honestly answer two simple questions. First, would you rather board a plane with a pilot who just smoked a cigarette or one with a pilot who just had a couple of beers or snorted cocaine or shot heroin or popped some pills?

Second, if cigarettes were addictive, could almost 43 million Americans have quit smoking, almost all of them on their own without any outside help? The answers are obvious, and that is precisely my point. Cigarettes are clearly not in the same class as addictive, mindaltering drugs like heroin and cocaine. I agree that for some people, cigarette smoking is habit-forming, in the same way that other pleasurable activities, such as watching TV, eating your favorite foods, sometimes overeating your favorite foods, and drinking coffee can be habit-forming. And yes, some smokers find it difficult to quit. But there is nothing about cigarette smoking that prevents a person from clearly thinking and making reasoned decisions, including the decision to quit.

The allegation that smoking cigarettes is addictive is part of a growing and disturbing trend that has destroyed the meaning of the term by characterizing virtually any enjoyable activity as addictive, whether it's eating sweets, drinking coffee, playing video games, or watching TV. This defies common sense.

Now let's go to the real issue: prohibition. The anti-smoking industry is committed to achieving what essentially amounts to prohibition. When confronted, they'll tell you they don't want prohibition, but their actions belie those claims. Regardless of what we in the tobacco industry do, our opponents in the anti-smoking industry cry foul. We produce high-tar cigarettes, and they say reduce tar and nicotine. We lower those levels, and they say it doesn't matter, regulate those products as drugs. Let me cite just two examples. When Phillip Morris introduced a cigarette that was essentially nicotine-free, the Coalition on Smoking or Health called it, quote, "the most dangerous product put on the market in the last 10 years," and they petitioned the FDA to ban it. Several years ago, our company test-marketed cigarettes that had virtually no tar and less nicotine than 97 percent of the cigarettes on the market. It virtually eliminated second-hand smoke and was essentially fire-safe. The response: the product and our company were viciously attacked and petitions were filed with the FDA to ban the product.

The bottom line is, in the eyes of the anti-smoking industry, we can do nothing right short of firing our employees and going out of business. A good example is the recent use of scare tactics concerning the ingredients used by the tobacco industry. Ingredients are added to our product to enhance the flavor and aroma of our products. And despite all the claims that have been made about our ingredients, the fact is more than 99.99 percent of this Winston cigarette and all the cigarettes we make, 99.99 percent is tobacco and ingredients that can be lawfully used in foods. The other 1/100 of one percent are ingredients that have been approved by other governments for use in tobacco products.

In addition, all the ingredients used by the industry have been thoroughly reviewed by a blue-ribbon panel of experts -scientific experts, toxicologists -who have concluded that those ingredients are, and I quote, "not hazardous under the conditions of use."

So let's be clear about the fact that the anti-smoking industries call for a smoke-free society by the year 2000 is little more than a thinly veiled attempt to achieve back-door prohibition. If you don't believe that's the case, just look at how extreme some of these efforts are -like trying to prohibit people from smoking outdoors, in public parks, in their cars, or even their own homes.

And consider this: Alcohol prohibition started with the anti-alcohol movement claiming that their goal was simply temperance.

The American public overwhelmingly opposes prohibition, whether it comes in through the front door or sneaks in through the back door, so let's be clear about the fact that back-door prohibition is prohibition nonetheless. Raising taxes to force smokers to quit is back-door prohibition. Banning smoking in all public places, indoors and outdoors, including parks, workplaces, and outdoor stadiums to further stigmatize smokers is back-door prohibition. Banning advertising so that new or better products can't be effectively communicated and introduced is censorship and it is back-door prohibition. Forcing manufacturers to produce products that smokers find unsatisfying or unacceptable is back-door prohibition. Attacking every attempt by the industry to respond to public and smoker concerns is back-door prohibition. And advocating that the FDA regulate cigarettes as a drug, which would effectively ban cigarettes from the market is clearly back-door prohibition.

If any member of this subcommittee truly believes that cigarettes are too dangerous to be sold, then stand up. Vote for prohibition, and be prepared for the consequences. But no one should try to use the back door and force prohibition by saying that cigarettes are a drug because they contain tobacco, which contains nicotine.

My company and I must speak up for smokers and for the 85 percent of all Americans who oppose prohibition, so I submit the real question before the American public and this subcommittee is this: Should cigarettes be outlawed? Will adults be allowed to choose to smoke, to afford to smoke, to smoke outside their homes, or is it time to say no, the government knows better? Thank you.

Rep. Waxman: : Thank you, Mr. Johnston. At the request, I gather, of the witnesses, we're going to call on our next speaker, Thomas E. Sandefur, chairman and CEO of Brown and Williamson Tobacco Company, rather than go down the list. Mr. Sandefur?

Mr. Sandefur: Mr. Chairman, I have a short statement to make. It's been given to the subcommittee. In the sake of time, I'll be more than happy to forego reading that, but if it's -it's your pleasure. If you want me to read my statement to you, I'll be happy to.

Rep. Waxman: If you want. It's going to be in the record, so -

Mr. Sandefur: It's in the record?

Rep. Waxman: So if you want to say something orally, you can do so. If you don't, we'll move on to the next one.

Mr. Sandefur: Right. Thank you.

Rep. Waxman: We've got a long schedule.

Mr. Sandefur: Thank you.

Rep. Waxman: Okay. Thank you. Next, we'll hear from Andrew Tisch, chairman and CEO of Lorillard Tobacco Company.

Mr. Tisch: Thank you, Mr. Chairman. At the committee's request, I have submitted for the record at this hearing a witness statement that responds to each of the questions set forth in your invitational letter.

In normal circumstances, I would be happy to summarize that statement orally and then respond to any questions you or members of the committee might have, but these are not normal circumstances, Mr. Chairman. You have made a number of very serious claims and assertions during the press conference that you called yesterday, claims and assertions that question the integrity of our company and of Dr. Alexander Speers (ph), who is with me today and testified before this committee on March 25.

When a representative of our company called your staff yesterday following the press conference to ask that Dr. Speers (ph) be given a separate opportunity to respond to the claims and assertions from yesterday's press conference that related to him, we were told that this would not be possible. More specifically, we were told that Dr. Speers's opportunity to respond would be limited to any time that might be left from the time that has been allotted to my testimony or to the question-and-answer period that is to follow.

Mr. Chairman, I frankly cannot understand the attitude conveyed by your staff. Indeed, I am left with no choice but to cede the balance of my time to Dr. Speers to ensure that he will have the adequate opportunity to correct the very serious misstatements and misconceptions that were conveyed in yesterday's press conference. Mr. Chairman, with your permission, I'd like to ask that Dr. Speers may respond during the rest of my time period.

Rep. Waxman: Mr. Tisch, we're going to have plenty of opportunity for Dr. Speers to respond. I do have a number of questions to ask of him. He will have his chance, but this is our chance to hear from you, and we want to hear from you at this point.

Mr. Tisch: Okay, fine. I must respectfully disagree with that, but you're the boss. On behalf of the more than 3,700 employees of Lorillard Tobacco Company, I am pleased to have this opportunity to address you about the issues you identified in your letter to Lorillard of March 31, 1994, announcing this hearing. You will recall that Dr. Speers testified before this subcommittee on March 25, 1994, with respect to the same subjects proposed for discussion here today. Inasmuch as Dr. Speers's and Lorillard's position on the questions raised has not changed in the past two weeks and for the sake of brevity, I have attached to my statement a copy of Dr. Speers's written submission of March 25 and ask your permission that it and his March 25 oral testimony also be entered into the record of today's hearing.

Rep. Waxman: Without objection, that will be the order.

Mr. Tisch: At the outset, I want to reaffirm and emphasize what Dr. Speers said during his appearance on March 25 and to make absolutely clear to the Congress and to the public that the level of nicotine in the products manufactured and sold by Lorillard is solely determined by the tobacco that we buy and the blending of the different tobaccos used in our manufacturing.

The tar and nicotine yields of our products are determined by a combination of the tobacco blends and the physical characteristics which constitute the construction of the cigarette, namely length, circumference, paper porosity, filter, tip ventilation, and tobacco density. Nicotine levels follow tar levels and are not raised or reduced for particular brands.

Dr. Speers previously advised you that in the course of manufacturing, we use denatured alcohol, which the Bureau of Alcohol, Tobacco, and Firearms requires be made unpotable by the manufacturer of the alcohol through the addition of a minuscule amount of nicotine. We also use a number of flavors which incorporate a tobacco extract that contains some nicotine. But it's important to understand the combined amount of nicotine from these sources is too small to be measured in the final products.

The manufacture of our brands of cigarettes also involves the use of reconstituted tobacco or tobacco sheaf. One of the processes Lorillard uses in the production of reconstituted tobacco involves the temporary separation and subsequent reapplication of water-soluble components of tobacco, including nicotine. However, and I invite your specific attention to this important fact, this process and all others, all of which are well known in published literature, result in a reduction of nicotine in the finished product.

Dr. Kessler's March 25 testimony referred to a 1980 Lorillard patent dealing with nicotine in reconstituted tobacco. I am advised that an early laboratory observation indicated a possible use for this process and, following our usual business practice and that of virtually every other company in America, we applied for and obtained the patent.

However, so there is no misunderstanding, the record should reflect that Lorillard has never practiced the patented process in any commercial manner. Moreover, even if it was to be used, the process would not result in any increase or decrease in the nicotine level. In your March 31 letter, we are asked to address any studies of the physiological or psychological effects of nicotine and related compounds which have been undertaken by Lorillard. I can respond succinctly: Lorillard has not undertaken any such research.

As regards cigarette ingredients, please note the following: The cigarette manufacturers have provided to the Department of Health and Human Services each year since 1984 a comprehensive listing of cigarette ingredients. HHS has never indicated to Lorillard at any time in response to those submissions that it had a problem with respect to any individual ingredient or groups of ingredients.

Indeed, when HHS asked the manufacturers for the quantity of each ingredient being used, the manufacturers promptly provided that information to HHS on a confidential basis. To my knowledge, HHS has no outstanding requests to this manufacturer or any others for additional information. The manufacturers, including Lorillard, have assured HHS repeatedly that we would be happy to meet with HHS officials and/or HHS scientific consultants to answer any questions about ingredients which the HHS or its consultants might have. I reaffirm that commitment now.

Finally, Mr. Chairman, allow me to sum up and to state Lorillard's position on the principal issues raised in the statement released by you when you scheduled today's hearings. In doing so, it is also my purpose to respond to Dr. Kessler's erroneous assertions, first made on February 25 and then expanded upon at your March 25 hearing. Lorillard does not take any steps to assure a minimum level of nicotine in our products. Lorillard does not add nicotine to cigarette tobacco for the purpose of manipulating or spiking the amount of nicotine received by the smoker. Lorillard makes no effort to keep secret any information about the nicotine content of our products, and, as you know, since 1971 every cigarette advertisement has carried a complete disclosure of the tar and nicotine content.

Mr. Chairman, I respectfully suggest to you that Lorillard has acted, and will continue to act, in a completely responsible manner in this as well as all our business practices. Furthermore, I state unequivocally that our manufacturing neither violate the Federal Food, Drug and Cosmetic Act, nor do they justify placing the manufacture of cigarettes under the jurisdiction of the FDA.

I thank you for your attention and for this opportunity to state Lorillard's position. At the appropriate time Dr. Spears and I will take any questions you or your colleagues might have. Thank you.

Rep. Waxman: Thank you very much, Mr. Tisch.

I want to call next on Donald Johnston, president and CEO of American Tobacco Company.

Mr. Johnston: Thank you, Mr. Chairman. Much of what I have to say is repetitive from the statements already read. But I believe the points do bear repetition, as they focus on the facts concerning the issues you raised in your letter inviting us to this hearing. Aside from tobacco itself and federally authorized use of alcohol denatured with minute amounts of nicotine, the American Tobacco Company does not use nicotine in the manufacture of its cigarette. Contrary to the implications that have been aired before this subcommittee and elsewhere, the American Tobacco Company does not spike its cigarettes with nicotine or does not use any of the patents that have been placed before this subcommittee on any other like processes or devices.

The only source of nicotine, other than that naturally occurring in tobacco, is introduced from specially denatured alcohol number four, which is used as a solvent for flavorings. SDA number four is authorized for tobacco use in accordance with the 27 code of federal regulations for alcohol, tobacco products, and firearms, which was revised as of April 1, 1993. I believe it's Section 21.118 and 21.38, and it is denatured by the alcohol manufacturer in accordance with the prescribed formula outlined in the regulations. Now, the quantity of nicotine indirectly added to tobacco from the use of SDA number four is on the order of three parts per million to five parts per million, or three ten-thousandths of a percent to five ten-thousandths of a percent by weight, which is infinitesimal in comparison to the naturally occurring nicotine of tobacco blends that generally contain two to two and a half percent by weight. Further, the American Tobacco Company does manufacture reconstituted tobacco by the (foredrenia ?) paper-making process that involves separation of water-soluble components from tobacco, formation of a tobacco cellulosic sheet, and reapplication of the water-soluble components to a sheet that is in a continuous process. American does not add nicotine to this process. The end product is tobacco material that contains only the quantity of water-soluble components, including nicotine originally removed from the tobacco. In practice, as I believe has already been mentioned, the nicotine content of the finished reconstituted tobacco material is approximately four percent less, which is owing to the processing losses, than the nicotine content of the tobacco utilized in the reconstitution process.

The American Tobacco Company uses various types of natural tobaccos, including reconstituted tobacco in the manufacture of its cigarettes. The percentages of natural tobacco types and reconstituted tobacco vary by brand. However, after processing of tobacco for cigarette manufacture, the nicotine content is on the order of five percent less than that of the various tobaccos entering into the process.

On the matter of patents. The American Tobacco Company has been issued two patents, U.S. Patent number 3428049 and number 4505282, which reference the addition of materials which could include tobacco extract and/or nicotine to cigarette filters and an innerline wrap for a tobacco -smoking article. As with any patent, the language is purposely broad in scope, with an objective of covering a wide variety of conceptual applications which may or may not be reduced to practice. While American Tobacco has been issued such patents, addition of tobacco extract, our nicotine to cigarette filters and wrapper have never been employed in a commercial cigarette produced by American Tobacco. In summary, nicotine involved in the federally regulated and authorized use of SDA number four, denatured alcohol, is negligible. Nothing is done in the tobacco processing or manufacture of cigarettes or filters by the American Tobacco Company to increase nicotine beyond that which is naturally occurring in the tobacco. I would now like to address questions that have also been raised with respect to the intent of the design of our cigarettes in relation to nicotine. In 1966, the Federal Trade Commission amended its cigarette advertising guide to encourage cigarette manufacturers to publish the tar and nicotine content expressed in milligrams of the mainstream smoke of a cigarette, declaring that to be information concerning cigarettes, which may be material and desired by the consuming public. Time has proven the FTC has been right, and that consumers have shown an interest in and differing preferences for differing levels of tar and nicotine.

Moreover, since 1971, American has been governed by, and has adhered to, an FTC consent order requiring American to publish in its advertisements of low-tar cigarettes tar and nicotine data as determined by the testing method employed by the FTC in the testing of the smoke of its domestic cigarettes. Through tobacco blends, filtration, ventilation, American Tobacco has, on a sales-weighted average, reduced tar and consequently nicotine levels as determined by the FTC method. The tar and nicotine data for each of American's products are published. American carefully monitors its finished cigarettes in the published data to assure that the tar and nicotine figures are accurate. Thus American Tobacco manufactures and sells cigarettes with different tar and nicotine content in response to the consumer demand for different types of cigarettes, and provides correct information to consumers about those amounts. American has no desire or intent to manipulate nicotine. At no time has the American Tobacco Company attempted to market a cigarette based on nicotine content; or, more generally, has it ever designed or marketed a cigarette with the purpose or intent of selling nicotine. Rather, American has always considered that it sells cigarettes, and that nicotine is one of the several intrinsic properties characteristic of the tobacco itself.

Thank you for your attention, Mr. Chairman.

Rep. Waxman: Thank you very much, Mr. Johnston. We next want to hear from Mr. Horrigan.

Mr. Horrigan: Good morning, Mr. Chairman and --

Rep. Waxman: Be sure to pull the microphone up, and --

Mr. Horrigan: Thank you. Good morning, Mr. Chairman, and fellow members of the committee. My name is Ed Horrigan, Jr., and I am chairman and chief executive officer of the Liggett Group. Although I've only somewhat recently joined Liggett, I have had the pleasure of addressing this subcommittee on a prior occasion. And for having served in the military and then in companies in other industries in this country for over 20 years, I joined the tobacco industry 16 years ago. And then, in 1989, I retired as chairman and CEO of Reynolds Tobacco, as well as vice chairman of RJR Nabisco.

I came out of retirement to rejoin the tobacco industry, mindful of the challenges presented to it at this time, and also with the knowledge borne of my experience that the tobacco industry is one of the respectable industries that make up American commerce. It acts responsibly in its business practices, and it produces a product recognized worldwide for its quality. And therefore I am pleased to have this opportunity to address the subcommittee on behalf of Liggett on the matters that were discussed during your meeting earlier on March 25th. While remarks will be somewhat redundant, repetitive from the other companies, I will highlight them to show the uniform sense of responsibility and accountability that exists in this industry, and to add our sense to the absurdity of the allegations that people continue to place against this industry.

At the outset, I would like to make it clear that Liggett does not increase the nicotine level of our cigarettes beyond the level of nicotine found naturally in the unprocessed tobacco that we use to make our cigarettes. Secondly, Liggett does not manipulate the level of nicotine in our cigarettes to hook or addict smokers. Third, Liggett does not use any of the patented technology that was referred to by Dr. Kessler before this committee last month. And, finally, I want to emphasize that we at Liggett are proud of the quality of the cigarettes that we produce, we are proud of the people who grow our tobacco that goes into our product, we are proud of the people who manufacture them for us, as well as those people who distribute and sell our product legitimately around this country.

Now, with regard to the manufacture of cigarettes, I would like to emphasize that the manufacturing process results in a reduction in the amount of nicotine in cigarettes when compared to the nicotine in the unprocessed tobacco. Secondly, the essential components of cigarette manufacturing, and specifically the use of reconstituted tobacco, has been publicly documented for decades -- so none of this this morning is new. Reconstituted tobacco is used to reduce waste and to achieve the most efficient use of the natural tobacco that we purchase for our product. Tobacco is the most expensive component of the cigarette, and therefore any loss of that tobacco would make the production of cigarettes more costly.

In brief, the reconstitution process involves the addition of water to the tobacco to separate water-soluble substances, including some nicotine, from the tobacco. The remaining tobacco cellulose can then be formed into sheets. Water-soluble substances, originally removed from the tobacco, are then once again returned to that tobacco sheet. No nicotine not found naturally in the tobacco is added in the production of the reconstituted tobacco. In fact, the reconstituted tobacco contains less nicotine than raw tobacco from which it was made because a certain amount of the natural nicotine is inevitably lost in that process.

Denatured alcohol and tobacco flavorants are the only other sources of nicotine in our cigarettes. Nicotine occurs naturally in the water-soluble extracts of tobacco used in miniscule amounts as flavorants. The use of tobacco flavorants has been a matter of public record, again, for decades. The specially denatured alcohol number 4 which is used as a carrier for flavorants is the only denatured alcohol that's approved by BATF for the manufacturing process in cigarettes. The BATF requires that that alcohol be denatured by the addition of a miniscule amount of nicotine to make it undrinkable, and it is denatured in accordance with the prescribed formulas outlined by BATF. The amount of nicotine contributed to tobacco smoke by way of tobacco flavorants and denatured alcohol is so miniscule that it cannot be measured in tobacco smoke using the FTC's standard methods.

Moreover, as I noted, the nicotine content of cigarettes manufactured by Liggett is lower than the nicotine in the unprocessed tobacco that we use to make our product. Therefore, Liggett, like the rest of us, does not manipulate or spike the amount of nicotine during the manufacture of its cigarettes to achieve an alleged addicting level of nicotine. Specifically, Liggett does not and has not used any of the patented processes described in those patents referred to in Dr. Kessler's earlier testimony.

Liggett does not believe there is any such thing as an addicting level of nicotine in cigarettes or that cigarettes are addictive like heroin or cocaine, as has been alleged. In fact, to equate cigarette smoking with actual hard drug addiction ignores the significant differences between them. It also blinks at reality.

As has been mentioned, there have been over 40 million Americans who have chosen to quit smoking and more than half of all adult smokers have quit, 90 percent of them quitting without the aid of the Betty Ford Clinic or the Hazelton Clinic or any such clinic. It's thus apparent that irrespective of the nicotine in cigarettes, consumers can and do choose to quit. In conclusion, let me say that nicotine is a naturally occurring substance in tobacco which is obviously an intrinsic characteristic of our product. Liggett does not design or manufacture its cigarettes with the intent to spike the amount of nicotine in cigarettes. There's no secret about the nicotine yields of Liggett's cigarettes, which I reiterate has been publicly disclosed for years.

In closing, I'd like to add a personal observation. Some antitobacco zealots would have the American people believe that in our manufacturing process there's a gentleman at the end of each line with a pot of nicotine making sure that we sprinkle the product as it goes out the door to be sure that there's enough nicotine to hook or addict smokers. We don't do that, and I've never heard of it being done. In all of my years in this business worldwide, I have never known of a product design objective or goal that included even the notion of spiking the amount of nicotine in a cigarette to achieve a level that would hook or addict smokers. I am pleased to be back before your committee, Mr. Chairman. We look forward to answering your questions.

Rep. Waxman: Thank you very much, Mr. Horrigan. And last, Mr. -is it Taddeo?

Mr. Taddeo: Taddeo.

Rep. Waxman: Taddeo.

Mr. Taddeo: Thank you, Mr. Chairman. U.S. Tobacco is a leading manufacturer and producer of smokeless tobacco products, including moist snuff. U.S. Tobacco does not manufacture cigarettes. U.S. Tobacco's smokeless tobacco brands include Copenhagen, which is one of America's oldest registered brand names. It was introduced in 1822. Skoal, our second-largest selling brand, was introduced in 1934. Clearly smokeless tobacco is not a new product. The use of smokeless tobacco has been a tradition in the United States since the 18th century, predating branded cigarettes by over 100 years. In fact, smokeless tobacco products dominated the American tobacco market until the early 20th century when cigarettes began to win wide public acceptance. While today smokeless tobacco products are consumed throughout the United States, per capita consumption of smokeless tobacco in the 1990s is less than 25 percent of what it was at the turn of the century.

As for U.S. Tobacco's products specifically, the makeup and manufacturing process for smokeless tobacco brands is very similar to what it was at the turn of the century, regardless of flavor, cut of the tobacco, form or packaging. I welcome, Mr. Chairman, this opportunity to set the record straight with regard to the baseless claims made before this subcommittee on March 25th concerning U.S. Tobacco's marketing practices. Before turning to those matters, however, I will comment on allegations of manipulation or control of nicotine in tobacco products. U.S. Tobacco does not in any way manipulate the nicotine level in its tobacco products, nor does U.S. Tobacco take any action to control the nicotine content of its tobacco products before, during or after the manufacturing process. In fact, an incidental effect of our manufacturing process is that the nicotine content of our smokeless tobacco products is less than that which occurs naturally in the tobacco. Other than tobacco itself, the only material used in the manufacture of U.S. Tobacco's smokeless tobacco products which contains nicotine is denatured alcohol, which is purchased from the supplier as a carrying agent for the application of certain flavorings that do not dissolve in water. The denatured alcohol used by U.S. Tobacco has been denatured by its manufacturer with small amounts of nicotine.

The use of nicotine as a denaturer for alcohol which is to be used in the processing and manufacturing of tobacco products is specifically approved by the Bureau of Alcohol, Tobacco & Firearms. The amount of nicotine that might be contributed to our smokeless tobacco products through the use of this denatured alcohol in the manufacturing process is so miniscule as to be unmeasurable by standard laboratory methodologies. Mr. Chairman, there were three serious allegations made before this subcommittee on March 25th regarding U.S. Tobacco's marketing practices; first, the allegation that U.S. Tobacco markets its smokeless tobacco products to persons under the age of 18. The second allegation was that U.S.

Tobacco has conducted scientific research for the purpose of, quote, "creating and maintaining dependence among smokeless tobacco consumers." And third, the allegation that U.S. Tobacco's products are developed on the basis of some sort of graduating levels of nicotine. As to the allegation that U.S. Tobacco markets its products to persons under the age of 18, that allegation is absolutely false. We strongly believe at U.S. Tobacco that those who enjoy our products should be adults. That is why U.S. Tobacco and other smokeless tobacco manufacturers have devoted substantial efforts and resources to discourage the sale of their products to minors. Those efforts include support of state laws mandating 18 as a minimum purchase age for smokeless tobacco products; a program to remind parents, retailers and other adults that smokeless tobacco is an adult custom not intended for use; and a national campaign in publications such as USA Today and U.S. News & World Report to communicate our adults-only policy.

I, too, am concerned about reports indicating that some individuals have tried tobacco products, including smokeless, before they are adults. Research conducted by others indicates that advertising plays little if any role in the decision to begin using smokeless tobacco. That research indicates that a variety of factors, including family and friends, appear to influence the decision to begin using various products, including smokeless tobacco. It's noteworthy that according to a recent Department of Health & Human Services report, use of smokeless tobacco by males under 18 years of age is low, decreasing and very close to HHS's target or goal for the year 2000. The 1992 healthy people review states that the reported use of smokeless tobacco, which is defined as use on at least one occasion in the last 30 days, by 12to 17-year-old males, decreased by 20 percent from 6.6 percent in '88 to 5.3 percent in '91.

Moreover, a survey published in October 1993 by the Substance Abuse & Mental Health Services Administration reported that the use of smokeless tobacco by 12to 17-year-old males had further declined in 1992 to 4.8 percent, which is very close to the 4 percent target for the year 2000 and Healthy People 2000 review. Even though these trends are encouraging, they're not good enough.

We're not going to rest until that figure is zero. U.S. Tobacco will continue its efforts with other members of the industry to discourage the sale of smokeless tobacco products to minors. As for the allegation that U.S. Tobacco has conducted scientific research for the purpose of, quote, "creating and maintaining dependence among consumers," that allegation is also false. The research in question was funded by U.S.

Tobacco and other tobacco manufacturers. However, it was neither intended nor used by U.S. Tobacco to develop or manufacture smokeless tobacco products. The research was conducted 15 years ago by a group of independent researchers in the department of pharmacology at Pennsylvania State University College of Medicine. For a number of years, the Pennsylvania State researchers have been interested in measuring extremely low levels of nicotine in tobacco consumers. And later they became interested in studying the absorption by humans of nicotine from snuffing chewing tobacco. The Pennsylvania State researchers submitted a research proposal for a three-year study to pursue this matter. Several tobacco companies, including U.S. Tobacco, funded this research during the period 1978 to 1981. The documents relied upon to support this allegation in testimony relates to the research conducted at Pennsylvania State and was prepared by those researchers. The results of that research are reflected in a 1983 publication by the Pennsylvania State researchers in the Journal of Pharmacology, therefore available in the public domain. Now this project, the funding of this research, was part of the smokeless tobacco industry's ongoing funding of research by independent investigators into questions relating to smokeless tobacco and health. Over the years such funding has totaled more than $25 million and has been acknowledged in nearly 800 scholarly articles in abstract in a wide spectrum of scientific publications.

As to the allegation that U.S. Tobacco products are developed based on graduating levels of nicotine, that allegation is false. As indicated in my written statement, the assertion that U.S. Tobacco manipulates its consumers and dictates which of its smokeless tobacco products those consumers ultimately choose to use are totally false. The key to our product development process is developing products which appeal to the taste preferences of our consumers. The taste characteristics of our smokeless tobacco products, as with all tobacco products, are inherently complex. A number of factors interacting with each other affect the ultimate taste, including leaf blend, cut of tobacco, moisture, ph, flavors, and undoubtedly, nicotine in the tobacco leaf.

U.S. Tobacco's success is based on its unique ability to develop a wide selection of flavor products incorporating blends of tobacco that have been developed over hundreds of years ago. What would I tell somebody who said you are using a graduating strategy to entice consumers to begin using low nicotine starter products, either through advertising or through nicotine dependence, to graduate them to products with higher levels of nicotine? I would tell them that our consumers do not conform to any so-called graduation theory. The oral tobacco market does not work that way. There is no set pattern of brand switching among smokeless tobacco consumers. Smokeless tobacco consumers remain loyal to a single brand or switch among a variety of brands according to their taste preferences, cut of tobacco, form and packaging. U.S. Tobacco's line of smokeless tobacco is based on the appreciation that we cannot make any part of the public like and use any one of our products if it does not appeal to their taste preferences.

Finally, Mr. Chairman, let me address the general concerns which have been raised about the ingredient standards of tobacco products. The identity of the ingredient in U.S. Tobacco's smokeless tobacco products is proprietary information. I can assure you, however, that U.S. Tobacco has a procedure in place for the evaluation of all available scientific information regarding the ingredients added to the tobacco in the manufacturing of our products. As a result of these evaluations, U.S. Tobacco believes that no ingredient which it adds to tobacco in the manufacture of its products would result in adverse health consequences to a consumer of our products. Without revealing proprietary information, I can tell you that every ingredient which U.S. Tobacco adds to tobacco in the manufacture of our products is a common food item or approved for use in food, with the one single exception of denatured alcohol, which you've heard a lot about today, which is the only substance approved by the DHEF for use in the manufacture of tobacco products.

Rep. Waxman: Thank you very much, Mr. Taddeo. The rest of that statement is going to be in the record. Well I want you to know that all my colleagues on this subcommittee appreciate your being here. Your participation in the subcommittee's ongoing investigation into tobacco is essential. This is not going to be, however, an easy day. We have a lot of substantive issues that we want to go into.

When we hear about scientific disputes we have to listen to one expert versus another. But let me tell you there are some things that we know about from our own personal experience. I was a smoker and I know how addicted I was to smoking. I know how hard it was quit, each and every time I did try to quit.

And I had to do it a number of times before I was successful. So from my own personal experience, and from people I've known and talked to, your universal comment that cigarette smoking is not addictive just doesn't ring true. Mr. Johnston, I want to start with your testimony. You and your colleagues seem to have almost a fanatical insistence that your products are the same as all these other products. This morning, in your written statement and your oral statement, you compared cigarettes to coffee, tea, sweets, sugar, warm milk, cheese, chocolate and Twinkies. That's quite a list. I'm struck by what I think is a calculated attempt to trivialize the devastating health impact of your product. You and I both know that Twinkies don't kill a single American a year. They may not add to a healthy diet, but they don't kill. The difference between cigarettes and Twinkies and the other products you mentioned is death. And I am sure you are aware that the Surgeon General and the American Medical Association estimate that cigarettes kill over 400,000 smokers every year. Putting aside your assertion that people accept this risk willingly, do you agree with this estimate?

Mr. Johnston: Do I agree with the estimate of 435,000 people? I've heard from this committee this morning three or four different numbers. My understanding of how that number is --

Rep. Waxman: If you don't agree with the number, then give us your number. How many smokers die each year from smoking?

Mr. Johnston: I will explain.

Rep. Waxman: No, I want your answer. We have a limited time.

Mr. Johnston: I do not know how many.

Rep. Waxman: You disagree with the Surgeon General's opinion?

Mr. Johnston: It is a computer generated number that makes --

Rep. Waxman: Mr. Johntson, I am going to have to ask you to respond to my question. Do you or do you not agree with the Surgeon General's estimate of over 400,000 smokers dying each year.

Mr. Johnston: I do not agree.

Rep. Waxman: Okay. Do you know how many die each year?

Mr. Johnston: I do not know.

Rep. Waxman: How can you as a chief executive officer of a company manufacturing a product that's been accused of killing so many people not know this information? How is it?

Mr. Johnston: I'm telling you that number is generated by a computer and it makes two important assumptions. The first that virtually everyone who smokes and dies, dies because they smoked, unless they got run over by a bus. And second, that model allows people to die one, two, three, four times. I don't know how that can happen, but that's what that model does.

Rep. Waxman: Well, I'm struck by the overwhelming scientific agreement on the dangers of smoking. The U.S. Public Health Service, the Surgeon General, the Food and Drug Administration, the World Health Organization, the National Cancer Institute, the American Medical Association, I guess all these groups you would call the anti- tobacco industry. But they all say it is hazardous. The experts also agree that smoking causes heart disease. Do you agree that smoking causes heart disease?

Mr. Johnston: It may.

Rep. Waxman: Okay. They agree that smoking causes lung cancer. Do you agree?

Mr. Johnston: It may.

Rep. Waxman: Do you know whether it does?

Mr. Johnston: I do not know.

Rep. Waxman: Why not?

Mr. Johnston: Because all of that is --

Rep. Waxman: Proprietary?

Mr. Johnston: -- statistically generated data. It is epidemiological as opposed to empirical. There have been no laboratory studies which have been able to confirm any statistics.

Rep. Waxman: grandfather who smoked all of his life died of lung cancer. Do you think that lung cancer was caused by smoking?

MR. Johnston: I don't know, Mr. Chairman.

Rep. Waxman: The medical experts agree that smoking causes emphysema. Do you agree?

Mr. Johnston: It may.

Rep. Waxman: They agree that smoking causes bladder cancer, stroke and low birth rate? Do you agree?

MR. Johnston: It may.

Rep. Waxman: Mr. Tisch, I want to move to you for a moment. In a deposition last year you were asked whether cigarette smoking causes cancer. Your answer was "I don't believe so." Do you stand by that answer today?

Mr. Tisch: I do, sir.

Rep. Waxman: Do you understand how isolated you are in the belief from the entire scientific community?

Mr. Tisch: I do, sir.

Rep. Waxman: You're the head of manufacturer of a product that's been accused by the overwhelming scientific community to cause cancer. You don't know? Do you have an interest in finding out?

Mr. Tisch: I do, sir, yes.

Rep. Waxman: And what have you done to pursue that interest?

Mr. Tisch: We have looked at the data and the data that we have been able to see has all been statistical data that has not convinced me that smoking causes death.

Rep. Waxman: Mr. Campbell, you were also deposed and you said "To my knowledge it has not been proven that cigarette smoking causes cancer." This is a rather passive and puzzling approach, especially in light of the consensus. Not by some, but all of the scientific community. Will you ever be convinced, and what evidence are you waiting for? And let's have the microphone passed over.

Mr. Campbell: Yes, I may be convinced. We don't know what causes cancer in general right now, so I think that we may find out what causes cancer and we may find out some relationship, which has yet to be proven.

Rep. Waxman: Well you know I must say this is rather a passive approach. Don't you feel that you have an obligation, the same obligation that every other consumer company has, to determine whether you are causing harm and to take steps to minimize that harm? You're not meeting that responsibility, and it is clear your views on the health impacts of cigarettes are out of step with an overwhelming scientific evidence. If all the medical people who don't work for you say it causes cancer, what more do you need to understand that that's the case and to accept this, and then try to work constructively to try to see if we can avoid that terrible tragedy to so many people?

Mr. Campbell: Is there a question, sir?

Rep. Waxman: That's a question.

Mr. Campbell: I'm sorry, it was too long for me to --

Rep. Waxman: Well, I think that the point I am making is that all of you have some responsibility, not simply to say you don't know, even when this overwhelming weight of scientific evidence is against you. I think you have an obligation to know.

Rep. Ron Wyden (D-OR): Thank you, Mr. Chairman. Just before we go to my questioning, I know that the witnesses want to turn this into the battle of the charts, I guess, with respect to Dr. Kessler and the FDA. We're going to get into it later, but we believe that the chart in question with respect to the FDA is an accurate one, and we'll get into it a little bit later. Let me begin my questioning on the matter of whether or not nicotine is addictive. Let me ask you first, and I'd like to just go down the row, whether each of you believes that nicotine is not addictive. I heard virtually all of you touch on it. Just yes or no. Do you believe nicotine is not addictive?

Mr. Campbell: I believe nicotine is not addictive, yes.

Rep. Wyden: Mr. Johnston?

Mr. Johnston: Congressman, cigarettes and nicotine clearly do not meet the classic definitions of addiction. There is no intoxication.

Rep. Wyden: We'll take that as a no and, again, time is short. If you can just -- I think each of you believe nicotine is not addictive. We just would like to have this for the record.

Mr. Taddeo: I don't believe that nicotine or our products are addictive.

Mr. Tisch: I believe that nicotine is not addictive.

Mr. Horrigan I believe nicotine is not addictive.

Mr. Sandefur: I believe that nicotine is not addictive.

Mr. Donald Johnston: And I, too, believe that nicotine is not addictive.