Zurich Club

This article is part of the Tobacco portal on Sourcewatch funded from 2006 - 2009 by the American Legacy Foundation.

The "Zurich Club" is said to have been a European version of the Tobacco Institute formed in 1993-4 by the multinational tobacco companies to:

address environmental tobacco smoke (ETS), social acceptability and advertising issues in Europe [and to] develop pro-smoking groups in principle Italian cities.

However the tobacco archives don't bear this out; it seems to have been little more than a name applied by the collective multinational tobacco companies for a joint project of hiding media and political junkets (and laundering cash payments), very similar to those run by Philip Morris in America and Europe.[1]

It was a project which the multinationals shopped out to Toni-Muzi Falconi of the comapny SCR which the Philip Morris representative says " has been working with us for over 17 years". He was the general manager of the Shandwick Group's Rome operations, and the Shandwick subsidiary, SCR, was given the job of administering the Zurich Club. The Shandwick Group was, at that time the world's largest PR firm, and it has since become Weber Shandwick.

The Report

In 2000 Steve Milloy alerted the companies to the advent of a news story about this mysterious 'Zurich Club' organisation (based on just one document in the tobacco archive), and he included details in his Issues Watch distribution.notes [2] at the time the project was about to be exposed.

According to the 2000 news article, the Zurich Club was funded by Philip Morris (PM), R.J. Reynolds (RJR), British American Tobacco Corporation (BAT) and the Rothmans and Reemtsma tobacco companies. 20% of the cost of running the Club was divided equally among these five member-manufacturers, and the remaining 80% of the club's cost was allocated among the companies on a market-share basis. Due to PM's large market share in Europe, they picked up fully 83.8% of this cost of the Zurich Club's operations in 1994.

The report says:

It appears that this significant amount of financing gave PM significant leverage in the Club's operations, as the Club appeared to operate somewhat like a PM subsidiary, using PM rules of operations.

And this:

...covers all media and political relations initiatives, publication activities, pro-smoking groups, science programs, trade relations, researches and so forth with exclusive attention on ETS and smoking social acceptability and advertising/sponsoring restrictions.

The journalists report was based on an internal memo written in August 1994 to David Greenberg at PM. [3] The author was Aurelio Regina, the PM science-corruption specialist in Rome, who was prone to exaggeration and personal boasting. The journalist says about Regina:

The person writing this internal memo (which outlines the 1994 activities of the Zurich Club) served simultaneously as vice president of both the Italian Cultural Sponsors Association and the Italian National Association of Legislative Consultants, as well as committee board member of the General Industry Association of the Rome area and the national General Industry Association. Whether these were these were pre-existing or PM-created organizations is not clear.

Actually, these were genuine organisations in Rome that Regina joined as a member (sometimes rising to the committee leadership level). Such business, political, social and charity activity is de rigueur for any political lobbyist; this is what their "work" involves.

And, Regina's recommendation that PM "participate actively" as "ghost leaders" of associations and cultural institutes in order to "[increase our] network of political contacts and promote PM as an outstanding and socially involved company", is not the slightest bit exceptional. In fact, Philip Morris virtually invented this game.

Influence

The report claims that the Zurich Club's influence in Italy was substantial, and it says it has influenced media and government by providing politicians and journalists with:

• free trips to the Grand Prix,
• Golf World Cup Roma,
• motorcycling events,
• sailing events,
• other sports and cultural events---and also
• free visits to their cigarette factories. It also provided
• a Christmas party for all Italian journalists,
• created a book, "Sketches of Smoke" ("a photography book covering all the most popular past and present smokers, taken by the greatest photographers in the world"), and
• gave out corporate gifts.

On this basis the Zurich Club appears to be nothing more than an Italian version of Andrew Whist's American European Community Association (ACEA), and its twin, the New York Society for International Affairs (NYSIA), which Whist finally had to admit in court were no more substantial than "a chair in my apartment".

However the budget of the Club suggests it played a slightly more substantial role than this (or aspired to) -- mainly in the recruitment and running of covert scientists (Whitecoats). [4] Helmut Gaisch of Philip Morris's European science & technology division FTR, asked for enough facility funding for the Zurich Club to involve itself in survey work, suggesting that: [5]

Each project would typically be headed by a well-known scientist, who would use a market survey agency to organise the survey, a team of field workers to carry out the sampling and local laboratory facilities for the analyses.

but there is no evidence that he got his money.

The report claims for the successes for this sham organisation is only within a narrow range of activities. And the emphasis on junkets and minor political and media corruption puts it more in the same category as the American European Community Association (ACEA), the New York Society for International Affairs (NYSIA) and Libertad.

Articles and resources

• Business Objectives, Regina, A., August 24, 1992 [6]

External articles

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