Altria Group

Formerly Philip Morris, Altria brand names include cigarette brands Marlboro, Basic, Chesterfield, Lark, L&M, Parliament and Virginia Slims. Other consumer brands under Altria include Kraft, Jacobs, Maxwell House, Milka, Nabisco, Oreo, Oscar Mayer, Philadelphia, Post and Tang.

On September 22, 1999, the United States Department of Justice filed a racketeering lawsuit against Philip Morris (now a division of Altria) and other major cigarette manufacturers. Almost 7 years later, on August 17, 2006 U.S. District Court Judge Gladys Kessler found that the Government had proven its case and that the tobacco company defendants had violated the Racketeer Influenced Corrupt Organizations Act (RICO). Specifically, Judge Kessler found that PM and other tobacco companies had:

• conspired to minimize, distort and confuse the public about the health hazards of smoking;
• concealed and suppressed research data showing nicotine is addictive;
• denied that they can and do control the levels of nicotine in cigarettes to keep smokers addicted;
• marketed "light" and "low tar" brands to mislead people about their relative harmfulness compared to "full flavored" cigarettes;
• purposely marketed to young people under 21 to recruit "replacement smokers" and preserve the industry's financial future;
• publicly denied, while internally acknowledging, that secondhand tobacco smoke is harmful to nonsmokers, and
• destroyed documents relevant to litigation[1]

On December 15, 2005, the Illinois Supreme Court threw out a $10.1 billion verdict against Philip Morris and its parent company, Altria Group, saying they did not mislead consumers when advertising "light" cigarettes. [2]

The Chicago Tribune reports that Philip Morris' lawyers "contributed $16,800 to help elect a judge who cast a deciding vote" in the case. Judge Lloyd Karmeier "also received $1.2 million in campaign money from a group that filed an amicus brief supporting the cigarette-maker." The Illinois Chamber of Commerce, "which also filed an amicus brief in support of Philip Morris, contributed $269,338" to Karmeier's campaign. Yet Karmeier did not recuse himself. The court's press secretary said Karmeier "has tried to insulate himself from knowing the identities of campaign contributors and would not allow campaign contributions to have any effect on his ruling in this or any other case." [3]

Name Change to Altria: Escape from Tobacco

On Thursday, November 15, 2001 Philip Morris Companies, Inc. issued a press release saying the company intended to ask its shareholders to approve a change of the company's name to Altria Group, Inc. Philip Morris Companies operates Miller Brewing, Kraft General Foods, Bird's Eye, Louis Rich and other well-known food subsidiaries in addition to manufacturing cigarettes. PM Chairman and Chief Executive Officer, Geoffrey C. Bible, said he proposed the name change for two reasons: "a need for clarity," and "the evolution of Philip Morris Companies Inc." However, a corporate marketing strategy document was written by Landor Associates (a market positioning strategy consulting firm) for Philip Morris (PM) in December, 1993 by an "identity consultant" as part of PM's "Identity Development Program" provides early evidence that PM was attempting to escape the stigma of selling tobacco products by attempting to "re-position" its image in consumers' minds. The document concludes that the key to escaping the damaging association with tobacco was changing the name of the company.

According Landor Associates, chief among the problems caused by PM's close identification cigarettes were the following:

• "As awareness of tobacco issues increase, Philip Morris increasingly reacts/defends."
• "As 'tobacco' image of Philip Morris increases, market value of Philip Morris decreases."

The document also describes PM's "Future Business Focus" as "Away from declining, high risk, tobacco business" and towards the image of a "premier brand management company." According to the plan, the re-positioned company should be "Not tobacco related" and have "no negative connotations."[4]

Interestingly, the first "target audience" Landor listed for the corporate "re-positioning" was its employees, indicating that PM's employee morale was suffering, most likely from the stigma of working for a tobacco company.

On January 27, 2003 Philip Morris (PM) officially completed the change of its corporate name to "Altria Group." PM claimed publicly that there were two reasons for the change, the same reasons CEO Geoffry Bible had stated earlier. One was to avoid public "confusion" between its two branches (the domestic company Philip Morris USA and Philip Morris International, which sells cigarettes outside the U.S.), and the other was "to reflect the evolution of our enterprise and to set a platform for more evolution in the future." Privately, however, the name change was done for quite different reasons.

PM had contemplated changing it name for at least ten years. An untitled 1993 Philip Morris (PM) document reports on an internal corporate meeting held from December 6-8, 1993 at a conference resort in Virginia to "further the proposed repositioning of Philip Morris Co." The meeting was attended by key PM executives, senior representatives of PM corporate headquarters and PM's public relations company, Burson Marstellar. The purpose of the meeting was to address a slump in employee morale and the company's sagging credibility in general. It says that the company had to get away from being perceived as "just" a tobacco company. At this meeting, PM executives attempted to define what to do.

The repositioning sought to extract specific behaviors from downtrodden PM employees: "Engaging in good word-of-mouth about the company, selling us both inside and outside the organization, actively investing in the organization." (Which suggests that perhaps PM employees at the time were not engaging in these desired behaviors to a satisfactory extent.) Another goal of PM's repositioning was to boost the company's credibility among policy makers, universities and medical centers, who at the time were apparently reluctant to associate with PM. The report says a goal of the repositioning was to encourage "key universities and medical foundations to invest in NewCo..." It predicted that as a result of the name change, "[in 3-5 years we will be] able to secure endorsements from organizations who do not endorse us today." PM also wanted its institutional investors to "no longer [see] us as a tobacco company..." and to "see us as more than a tobacco company; as a company with a bright future and relatively low risk."

Perhaps most indicative of the attitudes (and egos) of Philip Morris executives at the time, is the brainstorming session near the end of the document, "Ideas for Launching NewCo." The list includes ideas like:

• Buy out the Superbowl
• Involve Howard Stern
• Build empty stadium...Fill stadium with Jell-O
• Own the Olympics
• Involve Rush Limbaugh
• Sponsor rave parties

...and starting an international homeless program.

Near the end of the list, it was suggested that these actions "Could tie to possible homeless charity contribution." This brings to mind Philip Morris' recent efforts to boost its corporate image by offering (and widely promoting its) philanthropic donations.

Concerns listed near the end of the document include that the repositioning "Could make the company look desperate," and that "Repositioning could hurt food [units] as it is formally linked to tobacco under NewCo."

Re-naming the company was clearly linked to boosting investor confidence, credibility and employee morale, and to diffusing attacks from "pressure groups" who, according to the document, after the repositioning woulc be instructed to "address themselves to our business units--not NewCo."[5]

The real reasons for the name change were further confirmed in a November 30, 2001 Philip Morris internal email between executives that suggests that the company's name change from "Philip Morris" to "Altria" is to divert attention away from the company's ties to tobacco and pull attention toward an image of "compliance, responsibility, philanthropy, environment...all the things we want Altria to be identified with. The email was written by James Spector, Vice President of Corporate Affairs at PM and was sent to Thomas Collamore, Vice President of Public Affairs at PM, and Steve Parrish, Senior Vice President and General Counsel for PM USA. Spector wrote:

"I know we have shied away from setting a revised purpose/role for the Altria Group, but in the current environment this seems like a perfect time for us to define the 'new' Corporation the way we want to... While on the face of it, it is just a name change, we also have the opportunity to highlight many of the initiatives that were already in place under PMCos Inc., but were unable to breakthrough because of the name confusion. We can begin to focus attention away from tobacco, and on to compliance, responsibility, philanthropy, environment, etc., all the things we want Altria to be identified with..."[6]

Philip Morris Corporate Affairs Department

Philip Morris Corporate Affairs Department is the single department most responsible for implementing a vast number of strategies, tactics and programs over the decades to undermine public health efforts to reduce smoking. Under PM's Vice President of Corporate Affairs Ellen Merlo, the department was responsible for the formation of the smokers rights front group the National Smokers Alliance, a fake "grassroots" group set up to protest public smoking laws, cigarette tax increases and other public health measures. Corporate Affairs was also responsible for implementing PM's Accommodation Program

A December 1993 PM Corporate Affairs Department presentation describes PM strategies to defeat smoking bans and excise taxes across the U.S. Strategies inlcude encouraging tighter restrictions on the operation of nonprofit health organizations (for example, restricting how much of these groups' income could go to administrative and lobbying costs, and creating minimum percentages of funding that they would be mandated to put towards research). Other goals were the strategic use of PM's "Accommodation Program" as a "tactical weapon" to support preemptive state legislation. A quote from page 80 of the presentation PM recounts the company's reasons for opposing bans:

"If smokers can't smoke on the way to work, at work, in stores, banks, restaurants, malls and other public places, they are going to smoke less. A large percentage of them are going to quit. In short, cigarette purchases will be drastically reduced and volume declines will accelerate."

Corporate Affairs was also in charge of coordinating with other tobacco companies to interfere in legislated efforts to enact smoking laws. It was in charge of setting up phone banks and pressuring employees of PM as well as employees of its food and drink subsidiaries, like Kraft and Miller Beer, to make calls and write letters to policymakers opposing smoking laws.[7]

On August 2, 1988, the Wall Street Journal reported that Philip Morris spent $10,000 to bring 40 smokers to a meeting in Atlanta, Georgia to form an early smokers rights group called the American Smokers Alliance (ASA). The Journal reported that PM had paid the participants’ round trip air fare, hotel rooms and some meals, and that Guy L. Smith, Vice President of Corporate Affairs at PM, spoke at the meeting and hinted that the ASA might get more funding from PM if ASA got more members to join. [Philip Morris calls for national smokers group. The Wall Street Journal 1988]

Arguments Against Smoking Restrictions

Internal Philip Morris documents show PM has made highly organized efforts to advance the following strategies and arguments to fight smoking restrictions:

• Slippery Slope ("Shift concern over ETS [environmental tobacco smoke]to slippery slope argumentation and/or tolerance");

• Liken secondhand smoke to perceived risks from other items of public concern, like cellular phones, chlorinated water ("identifying other risk parallels (EMFs, cellular phones, chlorinated water)";

• "Shift concern over ETS in the workplace from the health issue to one of annoyance."

• "Shift the concern over ETS in restaurants from bans to accommodation where bans are imminent."

• "Develop an 'ETS Task Force,' with global PM representation to develop strategies to combat smoking restrictions."

• "...package comprehensive improvements in ventilation to forestall tobacco specific bans and source control, shifting the debate from ETS to IAQ [indoor air quality]."[8]

Pursuit of FDA Regulation of Tobacco

Realizing that the eventual regulation of cigarettes was inevitable, in 1999 PM started an internal project to enact Food and Drug Administration (FDA) regulations on its own terms. The plan was called the Regulatory Strategy Project. The goal was to enact FDA regulations according to [5 core principles] that would assure the company retained a measure of control over advertising and marketing, and assure a future market for cigarettes. The core principles, if achieved, would have the effect of safeguarding the company's ability to market cigarettes with a minimum of restrictions, transfer responsibility for fully informing the public about the dangers of tobacco use onto the FDA and take it off the manufacturers, and transfer legal liability for the safety of tobacco products onto the FDA, while allowing cigarette companies the ability to continue to design and market cigarettes as they see fit.

A 2001 PM strategy memo shows that pursuit of FDA regulations would help complicate tobacco issues for the public (a positive for PM, since it would blur the "black and white" divisions between public health and tobacco comapnies) and provide a positive public relations benefit for PM. The memo states,

<blockquote>"Unfortunately for the industry, the tobacco debate in recent years suffered from oversimplification, perpetuated by media coverage that depicts tobacco-related issues as 'black and white,' with tobacco companies playing the predictable role as evil corporate giant..." It continues, "The debate over FDA reform has the potential to complicate this portrayal in a manner that will specifically benefit Philip Morris. The simple fact that other tobacco companies will likely come out on the opposite side of the issue--against FDA regulation--provides Philip Morris a chance to distinguish itself from its competitors as a good corporate citizen. Positioned appropriately, the campaign can actually serve two purposes: achieving Philip Morris's goal of instituting regulation of the tobacco industry while also realizing significant public affairs benefits."[9]

Personnel

• Craig L. Fuller was named Senior Vice President for Corporate Affairs at Philip Morris Companies in 1992.

• Ellen Merlo, Senior Vice President of Corporate Affairs. Merlo oversaw programs such as the Accommodation Program, Tort Reform efforts, a program to enact preemptive legislation in all 50 U.S. States(PM-drafted legislation to eliminate the ability of voters to enact smoking bans at municipal and county levels)

• Tina A. Walls, Vice President of State Government Affairs for PM circa 1996
• Geoffrey C. Bible, President and CEO
• Michael A. Miles, President and CEO

PM Projects and Operations

• Ninja Program
• Operation Downunder
• Accommodation Program
• Project Sunrise
• Project Rainbow
• Archetype Project
• Project Brass
• Places Program
• Philip Morris External Research Program

SourceWatch Resources

• Alexis de Tocqueville Institution
• Tobacco industry

Internal PM documents

Information on how Philip Morris used disinformation is available from pmdocs.com, a webized collection of documents recovered during lawsuits against them.

Legacy Tobacco Documents Library, a user-friendly "meta site" from which users can search all the major tobacco industry document databases.

External Links

• Patricia Reaney, "Philip Morris hid passive smoke data", Reuters, November 11, 2004.
• Andrew Burrell, "Philip Morris deal sets investment scene alight", Australian Financial Review, March 23, 2005.
• Jamie Doward and Lea Teuscher, "Tobacco firms' subtle tactics lure smokers to their brand: Philip Morris and other cigarette giants take to subliminal style messages after cigarette advertising is banned," The Observer (UK), September 25, 2005.
• Barbara Rose, "Philip Morris law firms, supporters backed judge", Chicago Tribune, December 16, 2005.
• David A. Vise, "Court Overturns $10 Billion Verdict Against Philip Morris", Washington Post, December 16, 2005; Page D02.
• Patricia Callahan, Jeremy Manier and Delroy Alexander, "Where there's smoke, there might be food research, too: Documents indicate Kraft, Philip Morris shared expertise on how the brain processes tastes, smells", Chicago Tribune, January 29, 2006.
• Direction for Altria - PM document about name change [10]
• Andrew Martin, "Wall Street Finds a Lot to Like About Tobacco," New York Times, January 31, 2007.