Anti-tobacco Industry Plan

1 Anti-Tobacco Industry Plan

We have spent considerable time discussing the importance of developing a response to the anti's . We like to call them the Anti-Tobacco Industry because they have the economic and political resources to deserve to be called an industry. • Today, I'd like to present you with a plan that will coordinate company and external resources to diminish the effectiveness of the Anti-Tobacco Industry . • Our plan also seeks to moderate the ATI's impact on the policy process so that we can reestablish our credibility through the initiatives that we are developing . • After we have implemented these initiatives we must continue to keep pressure on the ATI so that we can restore and maintain balance in the political process and with the media . • Just as importantly, we need a plan with obtainable goals and performance measurements that can be tracked over time .

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Strategies

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There are four strategies to our plan . We want to : 1) Limit public funding sources available to the ATI -- ultimately make the ATI more accountable for both the private and public sources of revenue that its members receive .

2) Weaken the ATI's credibility by challenging their so-called "white hat" image with elected officials and the media . 3) Put the ATI on the defensive to enhance internal conflicts and cause divisions among its leadership regarding strategies and tactics -- this is a natural outgrowth of our first and second strategies . 4) Conduct a comprehensive competitive intelligence effort on the ATI to better understand its strategies and long-term goals -- just as we would address any other business adversary . Let me discuss our fourth strategy first .

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Strategy 1 : Intensify Research

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- Competitive intelligence is the bedrock of any successful business effort. We must view our effort to respond to the ATI the same way . We want to: 1) Identify and learn about the makeup of the ATI's leaders and organizations . 2) Identify emerging trends, issues and strategies 3) Analyze their potential vulnerabilities and ours as a result of their activities . - Information we gather will be warehoused ina database which we call Common Ground . - Competitive intelligence on the ATI is integral to our plan because it enables us to prioritize our near-term and longer-term strategies . - Competitive intelligence also gives us the opportunity to develop proactive and offensive responses to the ATI -- this is critical to our ability to put them on the defensive as we restore balance in the debate over our issues .

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Activities to Advance Strategy 1

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Let me drill down deeper in terms of what we want to accomplish : 1) We are currently in the process of flow charting all federal tobacco control funding and we've started this process at the state level . 2) We've also begun charting the internal make up of organizations and building bio's on groups and individuals . We will enhance our efforts in 1997, but this is clearly an ongoing task . 3) As part of Common Ground, we want to track strategic trends : - Where they are buying media and earning media - Plans and strategies being developed at forums and conferences - Monitoring their communications on the Internet 4) We are also interested in non-government contributions to the ATI by the trial lawyers and the pharmaceutical industry . And we want to know where members of the ATI are making political contributions . 5) We also want to rank ATI groups from most extreme to most moderate to identify outreach opportunities . 6) Lastly, we want to test the ATI's strategies and message points . For example: We already know "ATI" doesn't work as a means of defining the anti movement with the public, because the public doesn't see them the same way that we do . . .

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Strategy 1 Process Measuremeni

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In terms of measuring our progress for 1997 -- this is what we expect : 1) The Common Ground Database will be available on your computers by June of 1997 -- we will update the information in this database on an ongoing basis . 2) In addition to completing the "flow charting" of federal tobacco control funding, we will complete state specific studies in five to six other states this year. We've already completed a Michigan study and we're now working on Arizona (we're still determining next states) . 3) We want to complete the first phase of developing bio's on ATI organizations and leaders, as well as identify interlocking boards of directors, etc . This will also be an ongoing monitoring project . 4) We want to begin the effort to see if we can track contributions to the ATI by trial lawyers and other ATI allies . We have also developed the first phase of an FEC database and will begin to conduct research on contributions by ATI leadership . This database will also be maintained on an ongoing basis . 5) We will also complete a public opinion research protocol in the near future and begin testing ATI messages on an ongoing basis as the year progresses .

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Strategy 2 : Limit Funding

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Our second strategy focuses on limiting funding available to the ATI : We want to identify opportunities to : 1) Limit or redirect federal and state funding. - However, to do this, we also need to first decide what types of anti-tobacco programs are acceptable to us, e .g . youth education, public advertising campaigns, preventing youth access, etc . 2) In order to accomplish this effort, we will have to highlight waste and abuses in publicly funded programs . - Our primary focus will be on legislators, but we'll also have to generate media stories in order to reinforce this message . 3) We already know that the ATI receives a minimum of $600 million a year from public and private sources . This is hardly small change at a time when a number of social activists are competing for a shrinking pool of public funding . The ATI has reached the level of funding where they should be considered fair game by other social activists -- if these other activists knew just how much the ATI was receiving . Naturally, we want to make this information available . However, we also want to identify the right groups to provide this information .

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Activities to Advance Strategy 2

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To successfully implement our second strategy we want to :

1) Ensure that the ATI is subject to federal and state statutes governing the use of public funds as well as federal and state lobbying registration requirements . 2) We also want to encourage federal and state investigations where we are reasonably certain that the ATI is on the wrong side of the law . 3) Where possible, we want to identify opportunities to tighten federal and state funding and lobbying requirements that would directly impact the ATI and its allies . 4) Here again, there are opportunities to partner with other social activitists who may not be receiving their fare share of public funds, or who may question the value of what the ATI is attempting to accomplish . 5) To reinforce our efforts we want to mobilize groups that are interested in monitoring public programs and lobbying and contribution laws . There is also a select group of reporters who are interested in this subject and we want to make sure that they are aware of what the ATI is doing.

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Strategy 2 Process Measuremeni

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For 1997, we will accomplish the following :

1) The I RS is investigating the Coaltion for Tobacco Free Kids and the HHS Inspector General is auditing the ASSIST program (at the request of Congressman Bonilla [R23-TX]) . - We will identify opportunities at the federal and state level to encourage additional investigations of ATI programs . - Retailers have already attempted to challenge the ASSIST program in Washington, Maine and Minnesota -- however, these programs were not successful . We want to understand why not and implement a strategy that will rectify this situation. 2) Many of you may be aware that the U .S . House recently adopted a rule that require groups receiving federal funds to disclose this information when they appear before congressional committees . - We plan to draft model federal and state language based on the House rule and work with Howard L . . . and David L . . . to assess opportunities for further action . 3) In addition, based on the outcome of our analysis of how federal and state audit procedures and guidelines apply to the ATI, we will determine the feasibility of revising these requirements through model federal and state legislation .

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Strategy 3 : Weaken Credibility ne'ss:aF7lTiprosrant;

Our Third Strategy Focuses on weakening the Credibility of the ATI : We want to : 1) Hold the leadership of the ATI accountable for their statements and identify those anti-tobacco activists who either by words or actions are clearly pushing for tobacco prohibition . 2) We also want to challenge the sincerity and the effectiveness of ATI programs. .

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Activities to Advance Strategy 3

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We will work with PM-USA Communications to implement a plan to : 1) Challenge the credibility of the ATI : 2) Publicize ATI's involvement in the agenda of the Plaintiffs Bar 3) We also want to expose waste and abuse of publicly funded anti-tobacco programs, as well as encourage questions about the actions of Voluntary Health Organizations like the American Cancer Society and the American Lung Association . 4) Lastly, we have a real opportunity to advance the focus on tolerance for life-style choices and freedoms .

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Strategy 3 Process Measurements

We will work with Karen Daragan and her team to implement a plan to : 1) Challenge the credibility of the ATI : - The John Banhzaf s and Matt Meyer's of this world claim they don't support prohibition . But statements that they've made in the past contradict these claims -we want to make sure the media and legislators know this . - And whenever an anti-tobacco advocate makes an "eroneous statement" in public, we want a "truth squad" to call them on it . (Discuss Borelli's experience with "3,000'kids' a day . . .") 2) Mike Pertschuk's SWOT analysis from 1993 showed that the ATI was clearly uncomfortable with its ties to the plaintiff s bar . But, since 1993, this relationship has actually gotten stronger . It's important that we draw attention to this relationship and force the anti's to respond . 3) In terms of funding abuses, since 1988 the six states that have excise-tax funded tobacco control programs have spent $1 .4 billion . Yet, youth smoking is on the rise . What have they done with all this money? This question is important as we are pursuing the only course of action that everyone agrees works when it comes to youth and smoking -- preventing youth access. Its important that we continue to draw the distinction that AAA and other programs are achieving results, but the anti's are wasting money . . .We will express this point directly and we want to identify other groups that share our views .

r1a 0 4) Lastly, by raising awareness of tobacco prohibitionism, as well as funding abuses, w we have an opportunity to expand the debate over tolerance for life-style choices W and freedoms -- this message has proven particularly appealing to Gen-Xers . ~

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Strategy 4: Divide Ranks

Our Fourth Strategy focuses on efforts to cause dissention within the ATI . 1) As the tobacco company that is seeking "reasonable solutions to complex problems" we want to reach out to members of the ATI where we can potentially establish Common Ground -- such as on the issue of preventing youth access to tobacco products . 2) We also want to enhance internal conflicts that already exist within the ATI -- and possibly encourage some new ones .

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Activities to Advance Strategy 4

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To advance our fourth strategy we want to : 1) Draw information from the Common Ground database to compare our positions on major tobacco policy initiatives with those of leading anti organizations . - e .g . youth smoking and youth access to tobacco, marketing restrictions, etc . -- Are there other opportunities -- smoking restrictions?

2) We also want to expand the base of legislators who endorse our efforts. 3) Ultimately, we will want to challenge members of the Anti Tobacco Industry to join us in achieving real solutions on issues of common concern . We will invite them to join our AAA program and support our efforts to pass federal legislation . 4) We will also identify opportunities to develop model programs at the state and local levels where we reach out to selected tobacco control activists and challenge them to join our efforts .

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For 1997, we will :

1) Complete the process of comparing the company's positions with anti-tobacco control advocates . 2) We also want to see a measurable increase in the number of legislators at the federal, state and local levels who publicly endorse AAA and our Federal Initiative . 3) When we've made measurable advances on these two steps, we will then reach out to groups and individuals where Common Ground is possible .

- Combined with our advances on our second and third strategies, we have an opportunity to increase pressure on the ATI, which can be used to cause additional divisions within the ATI . - We expect, that as their funding is squeezed and investigations are launched on potential violations of state and local lobbying laws, some ATI advocates may think pragmatically about accepting our offer to work together to address the youth issue as well as other issues where we can arrive at a concensus . ~ This effort will cause further dissention between those anti groups ~ that seek prohibition at any cost and those who are truly concerned W about achieving reasonable solutions . ~

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15 Next Steps

In order to implement our plan we must now do the following : 1) Our plan calls for the establishment of a steering committee consisting of Senior Management along with specific project teams that will move forward on implementing strategies 2-4 (Limit funding, Weaken Credibility, Divide Ranks) . These project teams will draw on expertise throughout PMMC and PM-USA Corporate Affairs as well as select business functions and consultants . - We are in the process of defining the steering committee as well as the individual project teams at this time . 2) In addition to our own research budget needs, we are also in the process of assessing plan implementation costs for 1997 . - We envision the need for additional funds in order to engage the assistance of outside legal counsel, as well as provide support for third parties and other key constituencies . - For the most part, we believe that our budgetary demands will be manageable for the remainder of 1997, particularly because we will seek opportunities to draw on 501 (c)3 contributions and utilize additional administrative funding only to cover any costs beyond what we've already budgeted . While the budget will to a certain extent depend on what the Project Teams decide to do, I would conservatively estimate that we would probably want to reserve an additional $500,000 for 1997 to cover implementation of the plan .