Parrish: Well, we had been thinking for some period of time about
trying to come up with a way to resolve a number of the very contentious issues
that were facing the industry. The Attorney's General lawsuits, the class
actions, there was a lot of legislative and regulatory issues that were out
there, and we were really trying to come to grips with was there a way that we
could try to resolve as many of these issues as possible, and the Attorney's
Generals cases were a part of that....because we just felt that we could
continue the litigation, whether it was the class action cases, the Attorney
General cases, and if we won the cases we would still be in litigation and we
would still be fighting and we were really....analyzed the situation. We didn't
want to keep fighting. We wanted to sit down with others, people that we had
disagreed with quite strongly on a lot of issues and see if we could find some
common ground and try to resolve some of the issues.
Q. To those of us on the outside it seemed like a great sea change. You're
a veteran of that litigation; you come from Shook, Hardy and Bacon before you
were at Phillip Morris.
Parrish: That's right, I was a trial lawyer before I came with
Q. Representing the tobacco industry.
Parrish: I represented Phillip-Morris in a case in New Jersey back in
1988, that's right.
Q. So that tobacco industry was known, if you will, for never giving up,
for spending any amount of money to defend itself. What caused the sea change?
Was there an event, or do you remember a conversation?
Parrish: Well, I think it was really a lot of different things that
came together at one point in time, which sort of led us to this almost
historic opportunity we have. We had the individual cases, which we had always
very successfully defended, we'd had a large measure of success defending the
class actions lawsuits, we felt like we had a good chance to win the AG cases.
We thought ultimately we would probably prevail in our FDA lawsuit. But it just
seemed to us that even if we won, every one of those lawsuits, how would the
situation be better? And we just felt like we owed it to our shareholders, to
our employees and our business partners, retailers, wholesalers, and our
consumers to see if there was a way to end the acrimony and try to find some
common ground with the Attorneys General, people in the public health
community, regulators and legislators.
Q. You don't remember...there wasn't a meeting or someone came in with a
memo or a proposal or a draft and said, "Hey, we've got to change the way we're
Parrish: No, not at all. Actually, at Phillip Morris, for example, we
had been talking about this issue for some time, and as it turned out the other
companies had been doing the same thing. And I think in late 1996 there was a
discussion among some of the CEOs about trying to sit down and see if we could
fashion a way to work out some differences with some of those who had been our
opponents in the past, find some common ground, and see if we could resolve
some of the issues.
Q. Was there a fear that you might lose a lawsuit?
Parrish: Well, anytime you're involved in litigation you're always
worried about whether you'll win or lose the case. But again, it was really
more than just the being concerned about winning or losing an individual case,
or a series of cases, because while the litigation was a very serious thing to
us, there was more involved. It was very obvious to us that there was more
involved. It was very obvious to us that people around the United States were
very concerned about the issue of youth smoking. We talked to people, we did
polling, and it was very obvious that people were concerned about that. We were
concerned about it, so we thought "is there a way that we could address the
'youth smoking' issue?" The Attorneys General and others in their lawsuits had
claimed that the youth smoking issue was central to their claims against the
industry, and we thought that might provide an opportunity to address the youth
smoking issue, as well some of the litigation issues.
Q. Well, Mike Moore and Dick Scruggs and others who participated in the
negotiations say to us they asked you or...Mike Moore said they asked you or
Phil Carlton....that they be serious when they come to the negotiating table.
And they all say that they were stunned, initially, when the industry said,
"we'll give up our first amendment rights" or advertising rights. Somebody must
have had a discussion about giving up that, after all the litigation and all
the money, and all the argument against doing that.
Parrish: Well, we certainly had talked about that before we sat down to
begin the negotiations. And I think there were really two key events early on
in the negotiations. One was when Jeff Bible, the Chairman of Phillip Morris,
and Steve Goldstone, the Chairman of RJR and Nabisco, sat down with the
Attorneys General, the class action lawyers and some people from the public
health community, and indicated very firmly their good faith and the fact that
they were willing to make fundamental changes in the way we do business, going
forward. I think that was very sincerely communicated to those on the other
side of the table and I think they were impressed by that. And then, very
quickly, we moved to the issue of our advertising and marketing practices, and
I think when we, early on, indicated a willingness to forgo things like the
Marlboro Man and Joe Camel in our advertising to give up billboards all across
the country, that they realized that we were there in good faith and we were
serious and we really wanted to try to work something out.
Q. Before I go back into the history here, I'm confused: are the Marlboro
Man and Joe Camel still out there, or are you guys taking them out of the
Parrish: If the comprehensive resolution that we negotiated last June
is enacted into law, then they will be gone.
Q. Because it's not a good idea?
Parrish: I'm sorry, I don't understand.
Q. Well, you're willing to take them out of your advertising campaign
because it's been alleged that it attracts kids and young people...it's not a
good idea to have that out there attracting young people.
Parrish: Well, if I understand your question correctly that is one of
the differences of opinion, if you will, that we have had with others, to
whether the Marlboro Man, for example, is what causes kids to smoke. We don't
think it is, but we were willing to give up the Marlboro Man as part of a
comprehensive resolution of all these issues that were facing us. So,
certainly, if this comprehensive resolution is enacted into law you'll never
see the Marlboro Man again in this country.
Q. But if it isn't?
Parrish: Well, if it isn't, then I think that all of the companies in
the industry have indicated that they...while we will do everything we can to
address the issue of youth smoking, that we are not going to give up our First
Amendment rights to communicate with our adult consumers. And the Marlboro Man,
for example, is one way to do that. We're perfectly willing to try to work to
eliminate youth smoking and do everything we can...we can't do it all by
ourselves, and that's why this comprehensive approach, which involves money for
education campaigns for kids as well as restrictions on advertising practices
of the industry, is a much better way to go in our view.
Q. Okay, let me go back to a little history. When the Medicaid suit was
first filed in Mississippi, and I assume you monitor litigation (related to
Phillip Morris and the industry), what was your reaction?
Parrish: Well, it was a new theory. It was something that we really
hadn't seen in the courtroom before; there had been discussions about theories
like that in the past, and any time you have a lawsuit filed against you you
take it very seriously. This one in particular we took seriously for a couple
of reasons: it was a new theory, and just because of the potential amount of
damages that was being alleged in the case.
Q. So you weren't like many of the other people we've interviewed who said
when they first heard about it they thought "ah, it's a new theory and it's
never going to go anywhere."
Parrish: Well, we took it seriously. We did our legal research and
thought that we would win the case, that the law, if you will, was on our side.
But, again, anytime you have a major lawsuit filed against you, you have to
take it seriously--you owe that to your shareholders.
Q. At one point the governor of Mississippi went into the Supreme Court of
Mississippi to try to get the whole suit and his Attorney General out of court,
and you and your colleagues joined him in that suit. Once you lost that suit,
did you really take it seriously then?
Parrish: Well, that was certainly a set-back, but we were taking it
seriously before then. We were preparing for trial and we were preparing for
trial right up until the moment we settled the case. So we were disappointed
with the court's ruling, but we were prepared for it, and we were prepared to
go forward if that's what we needed to do.
Q. So they were going forward in Pascagoula, these country lawyers in the
shopping center in Pascagoula, but you took them seriously. They weren't just
a bunch of hillbillies out there.
Parrish: The lawyers in the state of Mississippi in that case are
excellent trial lawyers. They have done very well for clients all over this
country, and as I've come to know them through the negotiation process I have a
tremendous amount of respect for their ability; they're excellent lawyers.
Q. Were you guys home cooked in Mississippi?
Parrish: Well, I don't know what you mean by "home cooked." The state
of Mississippi has a court system which functions very well. I'm not sure I
would say that we were "home cooked."
Q. You're in Chancery Court, no jury, in Pascagoula and I think that the
beauty of this comprehensive resolution was that despite our differences of
opinion, the AGs, the private class action lawyers and the representatives from
the public health community all had certain things that we could find
common ground on. I think the Attorneys General, for example, realized that
bankruptcy of the tobacco industry is not going to solve the youth smoking
issue. It's not going to solve the public health issues that are trying to be
addressed in this comprehhe law. I don't think that we thought we were going to
be treated unfairly by the judge or anybody. Any place you try a case there's
going to be a local lawyer.
Q. Well, but in Mississippi there was another case where the plaintiff
complained that your people came in and hired all the prominent citizens as
jury consultants, put them in the audience, and he wound up losing the case. He
felt he got reverse cooked, if you will. I was just wondering whether if
because the Mississippi case, in a sense, you may have felt
Parrish: No, I don't think we felt outmaneuvered. I think we thought at
the end of the day if we had chosen to litigate that case all the way through
the appellate process we ultimately would have prevailed, but at the end of the
day we would have decided that it was in the best interest of our company and
our shareholders and the industry to try to resolve that case as part of a
comprehensive resolution of all the issues. And our firm belief was that to
litigate these cases, one at a time, year after year after year, was not really
going to be a satisfactory outcome for anybody; not for us, not for the
citizens of Mississippi or the other states, and that there had to be a better
way than 50 AG cases around the country.
Q. Well, isn't there the threat that you may lose one, two, three of these
multi-billion dollar judgments and have to go into bankruptcy?
Parrish: Sure, that would be a terrible thing, and it would be not
only terrible from the industry standpoint and all the hundreds of thousands of
people around the country who depend on the industry for their livelihood, but
I would submit it would be a bad thing for the public, because if you have a
jackpot justice system where one, two, or three states get all the money, then
what happens to the rest of the states? They get nothing, and that's why the
comprehensive resolution that we negotiated with the Attorneys General, the
class action lawyers and others, is a much better approach because it insures
that the claims of all individuals and states will be satisfying.
Q. Fear of bankruptcy would have been a logical motive, though, for you to
Parrish: Well, certainly, if this industry were to be bankrupt that
would be, as I said, would be a terrible thing.
Q. When your share...the stock you own in the company would be
Parrish: It would not be worth much. And I think we owed it to our
shareholders to try to resolve not only the AG cases, but all these other
issues as well, and I think that the beauty of this comprehensive resolution
was that despite our differences of opinion, the AGs, the private class action
lawyers and the representatives from the public health community all had
certain things that we could find common ground on. I think the Attorneys
General, for example, realized that bankruptcy of the tobacco industry is not
going to solve the youth smoking issue. It's not going to solve the public
health issues that are trying to be addressed in this comprehensive resolution,
because there will just be new manufacturers, whether they're foreign-based
manufacturers or new manufacturing entities here in this country. There could
very well be a black market. And I don't think anybody wants that. So we all
said we all have the same concern here, so how can we fashion a resolution that
addresses the very legitimate interests of everybody around the table.
Q.You know, in interview after interview that we do, people continue to
refer back to the Spring of 1994 when the CEOs all were sworn in and then said
they didn't believe that nicotine was addictive. From hindsight now, how do you
look at that hearing and the strategy of that hearing?
Parrish: I think, in hindsight, that hearing in April of 1994 in front
of Congressman Waxman's Subcommittee, was one of the seminal events over the
last number of years as it relates to tobacco, and it was a very important
Q. Was it a disaster for the industry?
Parrish: I don't know if I would say it was a disaster, but it
certainly focused a lot of attention on the smoking issue in this country.
Q. Would you have done it differently today?
Parrish: I don't know with 20-20 hindsight whether I would have or not.
Not that I was the one who was making those decisions but I just don't know.
Q. Maybe, could you clarify what the industry position is now
between the 1994 testimony about nicotine addiction and risk factors related to
health and recent testimony that there's some acknowledgment that you may have
contributed to 100,000 deaths a year, and similar statements or confusing
statements from my point of view.
Parrish: I don't think you can say there's an "industry" position on
those issues. I think what you have is different companies have different
positions. The CEOs of the different companies have different views, as a
personal matter. And I think you've seen that reflected in the recent
congressional testimony, so I don't think you can say there is a industry
position on those issues.
Q. Do you believe that nicotine is addictive?
Parrish: Do I personally? Under the definition that people apply today,
I certainly do believe it is addictive.
Q. You do...
Parrish: I do!
Q. Okay, so that's no longer a controversy?
Parrish: Well, not as far as I'm concerned. And what we have said is,
we've agreed as part of this comprehensive resolution to put bold new warnings
on all packages of cigarettes, including the addiction warning. That's, again,
one of the things that we agreed to do as part of this comprehensive
resolution, to try to end the acrimony and focus on solutions to the issue,
rather than this ceaseless, endless litigation and argument.
Q. So, if I understand correctly, the industry is no longer, and you are no
longer, taking positions that have been reflected to some extent in all these
documents, that we cannot admit something, like that there is addiction
connected to nicotine?
Parrish: Well, I'm not sure what documents in particular you're
referring to, but in a way it doesn't really matter. I think what the CEOs have
said, their statements speak for themselves, and I think individual CEOs have
different views from one another. There's not an "industry" position on
addiction, for example.
Q. Do you agree that you sell a "nicotine-delivery device?"
Parrish: I'm not so sure I would characterize it as a
"nicotine-delivery device," I'm not sure I know exactly what that means. I know
that others have said that. I think the important question is: what is the
public health policy going to be in this country going forward, and what role
is the industry going to play in that policy. And as a part of the resolution
that we've agreed to we're going to put a warning on the packs that says that
cigarette smoking is addictive, that nicotine is addictive, and we as a company
have agreed that we are not going to debate this issue endlessly, that we'll
work with the public health community, not only on the nicotine addiction issue
but the other public health issues, to try to forge common ground that will
advance the public health goals or the public health community.
Q. When Benett Lebow decided that he was going to break ranks, do you
remember that, when you found about that?
Parrish: I certainly do.
Q. What was your reaction?
Parrish: I went to the train station to get on the train to go to work,
I picked up the Wall Street Journal, and read the article. And my first
reaction was that I was surprised, and as I read the article I was even more
surprised that it had been kept secret and broke in the Wall Street Journal
that day. Those were my two immediate reactions. I was surprised that there had
been a settlement with Mr. Lebow, and I was almost even more surprised that it
hadn't leaked out.
Q. "Surprised" sounds a little understated. You're a veteran of Shook,
Hardy and Bacon, you guys used to brief executives on what their stance should
be, legally and otherwise related to these issues. This was like the fall of
the Berlin Wall in terms of the success of your organization.
Parrish: It was a major event. I would say it was a major event...in
the process that led us to June 20, 1997 that I think, as I said earlier, there
were a number of things that came together. And certainly the Liggett
settlement was a part of that.
Q. Well, you've got a turncoat. You've got somebody breaking ranks!
Parrish: Well, I'm not sure....
Q. I know you teach Sunday school, but you don't curse?
Parrish: Well, I didn't curse that day...I quietly read my paper. I
don't know to this day everything that motivated Mr. Lebow to enter into that
settlement. But the fact of the matter is--it happened! I'm not sure I would
characterize him as a "turncoat" or that he broke ranks. The fact of the matter
is, it happened. And that was one of the things that led us to the June 20,
Q. By the way, why did Phillip Morris pay his legal fees? Why did Phillip
Morris pay the legal fees for Liggett?
Parrish: As I understand it, Mr. Lebow was...Liggett was in some
financial difficulty and was having trouble paying its legal fees and defending
the smoking and health litigation, and they asked us if we would assist them in
that and we did.
Q. In order to keep a united front.
Parrish: We thought it was important that defendants coordinate and
cooperate in the defense of the cases, and to that end we did agree to help Mr.
Lebow with his legal expenses.
Q. Mr. Lebow told us that his attorney then met with your attorneys and
other attorneys and one of them turned to him and said, "You just destroyed the
most beautiful legal defense ever...the most successful legal defense in
Parrish: I wasn't there. I don't know if that comment was made or
Q. What was your reaction when you heard that President Clinton was going
to give the FDA permission to promulgate their regulations?
Parrish: I wasn't surprised about that because we had heard that that
was something that was under consideration. I was disappointed. One of our main
concerns with FDA regulation in the past has been that FDA would have the
authority to ban the sale of tobacco to adults in this country. We obviously
would be concerned about that. We are concerned about that. The FDA's council,
in an argument in the 4th Circuit, recently said that under the laws that exist
today, if the FDA regulates tobacco products as drugs or devices, it could ban
the sale of tobacco to adults. So we were concerned about that.
My company, Phillip Morris, had proposed a comprehensive federal legislative
scheme to deal with the regulation of tobacco, to address the issue of youth
smoking, and we were hopeful that that legislation could have passed as opposed
to giving FDA jurisdiction under the Food, Drug, and Cosmetic Act. That didn't
work out, so we had to think about another way to do it.
Q. Well, you were pretty tough in those days about Commissioner Kessler and
the "Trojan Horse for Prohibition", "a bureaucrat out of control", "an
authoritarian," do you still feel the same way?
Parrish: I think that today I would say that one of the lessons that
I've learned (and I think one of the lessons that others on the other side have
learned) is the best way to have a dialogue is in person, face-to-face, and not
through the newspapers. And with 20-20 hindsight I would have loved to had more
substantive discussions in those days with people in Congress, with people at
the FDA, with people in the public health community; I think that's one of the
things we've learned over the last year. It's that before you can really make
progress you've got to sit down and have substantive talks one-on-one and not
through the newspapers.
Q. Again, a clarification, the original settlement on June 20th accepted
limited FDA jurisdiction with a lot of controls over that. Am I correct to
understand that the industry now accepts the idea of unfettered FDA
Parrish: No, we're still very much concerned about and opposed to
giving FDA the authority to ban the sale of tobacco products to adults in this
country. That is something that we are unalterably opposed to.
Q. Isn't that a contradiction? I mean, the FDA and many of the documents
that have come out say that nicotine is an addictive drug...the FDA will have
total authority. As it has over every other addictive drug.
Parrish: Well, again, I would say that if that means that FDA had the
unbridled authority, the discretion to ban the sale of tobacco products to
adults in this country, we are opposed to it. And I think that the overwhelming
majority of Americans would be opposed to that, despite what they may think
Q. What about regulating how much nicotine and what additives go into the
nicotine in tobacco?
Parrish: Well, the agreement that we reached with the Attorneys General
and others provides that the FDA would have authority over nicotine in the
product. It does provide some measure of protection to the industry and to
adults who want to continue to use the product.
Q. I guess the critics would say that the federal courts already
acknowledged the North Carolina FDA jurisdiction, why give that up? Why water
down what they can do and can't do?
Parrish: Well, I guess I would say to them and I have said this to them
in those one-on-one discussions that we've had that if no one wants prohibition
(and that's what they all say; everyone says "we don't want prohibition, it
won't work"), and if that's the case then let's sit down and work out a
reasonable regulatory regime for this product that doesn't run the risk of
imposing prohibition on this country. It was a miserable failure with alcohol,
and I think everybody agrees it would be a failure for tobacco products. So
let's sit down and see if we can work that out.
Q. You know, some people that participated in negotiations told us that
your side came in wanting...saying we want it to be like the beer industry. Is
the goal of this to change the image of the tobacco industry from being, if you
will, worse than a cocaine cartel, to quote Mike Moore?
Parrish: Well, I think that one of the things we'd like to see going
forward is a recognition by all, including us, that tobacco products,
cigarettes are a controversial product. I think that's always going to be the
case; there are health risks associated with using the product. I think
everybody knows that, everybody agrees with that. But if everybody agrees that
tobacco use is going continue, at least for adults, let's figure out how we're
going to regulate it, allow us to market it in responsible ways to adults under
a regulatory regime that the American public is comfortable with. That, I
think, is one of the goals that we have as a result of this negotiation
Q. If the bankruptcy really didn't worry you, and it was just this
onslaught of general litigation, was it the image that people involved in the
industry had to live with that forced you to settle?
Parrish: Sure, that was one of the concerns. As I say, it was a number
of things. It was the financial threat from the litigation, it was the image
that the companies had, it was the legislative and regulatory threats that we
were facing, as well as the private and Attorney General litigation. So it was
really all those things and I think it was a real sense on behalf of the
industry because you have to realize that within the last few years there's
really new leadership in the industry in this country, and as Jeff Bible from
Phillip Morris said, when he became CEO he felt like he had a choice to make:
am I going to rely....am I going to continue to fight about the past and defend
the litigation, fight regulation and legislative initiatives, or am I going to
look to the future and see if there's a way that I can fashion a compromise
that will allow us to remain in business selling a legal product to adults
while addressing some of the very legitimate concerns that some of our
Q.You say that you don't believe that nicotine is an addictive drug. Does
Philip Morris now say that?
Parrish: Our company was asked by the Senate Judiciary Committee, I
believe it was, last fall to state its position on that question, and we
provided a rather lengthy response, but I think it's fair to summarize it as
saying that we agree that under--at least certain definitions--nicotine is
ad...or cigarette smoking is addictive. And we also said that we think it is
more productive, rather than arguing about which is the appropriate definition
and whether smoking falls under this definition or that definition, that we sit
down and work toward a policy for regulating this product that's consistent
with the goals of the public health community. And that's really Philip
Q. Understood, but the reason why I'm asking these questions is that we're
trying to figure out what the position is now because in the past, for
instance, Philip Morris and the industry has maintained that you don't
manipulate nicotine in order to get people to smoke. Is that position
Parrish: One of the problems (and this goes back to the definition
issue), one of the problems we've always had is the term "manipulate" and
exactly what that means; it's sort of a pejorative term. And what we
Q. Engineered. Change. Move around. Use whatever words you want to use, but
do you change the impact of nicotine or its quantity in your products in order
to make sure that people want to smoke or continue to smoke?
Parrish: We have a range of products on the market that go from 0.1
milligrams of nicotine, as measured by the government testing method, all the
way up to in the...above 2.0 milligrams of nicotine. So clearly there is a wide
range of products out there with a wide range of nicotine deliveries. So,
again, I don't really see the purpose of continuing the debate over what does
the word "manipulate" mean. Let's set about trying to fashion a comprehensive
approach to the regulation of the product so that not only the FDA and the
federal government, but the public health community and the public at large
know what needs to be known about the product, and that's really what people
have asked us for, and that's what we've tried in good faith to do.
Q. I understand now that the public position, now, is that you don't
dispute the issue of nicotine addiction, basically, that's what you're saying:
you don't dispute that there's health damage created by your product.
Q. Okay, how do we deal with the past in order to trust you in the
Parrish: The agreement that we reached with the Attorneys General and
the members of the public health community and the private class action lawyers
provides for all industry information on the health risks of the product to be
made available to the public at large: to the media, to plaintiff's lawyers, to
members of the public. You put them in a document depository here in the
Washington area and anybody who wants to look at it can go in and see it. In
addition, the agreement provides for, on a continuing basis, additional
documentation and information to be disposed to the Food and Drug
Q. Let me give you an example of what I mean by "history," and you should
know this because you were a member of....what was the "Committee of
Parrish: The Committee of Council is made up of the general councils of
the domestic tobacco companies in the United States who are members of the
Q. You've attended those meetings?
Parrish: Sure, I used to be General Council of Philip Morris USA and I
would attend those meetings.
Q. You've chaired some of the meetings.
Q. We interviewed G. Robert Blakey, a law professor in Notre Dame who
worked in the Florida and Texas cases on the RICO aspects of those cases. He
describes the Committee of Council to us as almost a conspiracy of Consigliari
from a Mafia family, getting together to make policy, policy designed to
deceive the American people.
Parrish: Could not disagree with that more. Don't know what else to
Q. Did you in these meetings attempt to steer research in certain
directions that would help the industry and obfuscate the scientific
Parrish: In the limited time that I attended those meetings, we got
together to discuss common legal issues to the industry. We had updates on the
litigation, we talked about bills that were being introduced in Congress and at
the state level on things like excise taxes, and a variety of issues that the
industry faced that were legal issues.
Q. We talked with Gary Huber, you know Gary Huber.
Parrish: I've met him, yes.
Q. He's gone to your Sunday school class, apparently. He remembers going to
Kansas, he told us, going to your class. Do you remember that?
Parrish: I think he did go one time. That's right.
Q: Gary Huber says that the Committee of Council was described to him by
your mentor Mr. Hardy as an "organization set up basically to obfuscate the
Parrish: Well, as far as I know, Dr. Huber has never been at any of the
Committee of Council meetings. He certainly was never at any of the meetings
that I attended. And I don't know what anybody has told Dr. Huber about the
Committee of Council so I just, really, I don't know.
Q. He says he had discussions back in the 70s with Mr. Hardy who came to
Harvard to look at his research and Mr. Hardy told him that they also arrange
it so that one member of the industry is never there so they can get out of an
anti-trust argument that they're conspiring together.
Parrish: Never heard that before so I don't....as I said, I wasn't part
of those discussions and I've never heard that before.
Q.In reading about your Shook, Hardy experience and your background, it
sounds to me...is there another law firm in the country that has
pharmacologists, toxicologists, psychiatrists, doctors full-time on staff like
Parrish: Oh, I don't know, but I wouldn't be surprised. Shook, Hardy
for example, in addition to representing tobacco companies, has a number of
pharmaceutical clients. It's a big law firm, it may be the biggest in the state
of Missouri's; I think they may have over 300 lawyers. They are involved in a
lot of complex litigation. In my experience it wouldn't be unusual to either
have on staff or have as consultants pharmacologists or people with expertise
on issues like that.
Q.We've been told stories about the "24th Floor," that there was a secret
floor that had limited access, at Shook, Hardy, is that true?
Parrish It wasn't when I was there. Whether it is since I left, I don't
Q. By the way, Chairman Bible I believe testified the other day that he
didn't know anything about the Committee of Counsel, hadn't heard of it before.
Is that believable?
Parrish: Well, you have to realized that Jeff Bible became chairman of
Philip Morris, I believe, in 1995 and was never the head of Philip Morris USA.
He's not a lawyer...that doesn't sound unusual to me.
Q. That he wouldn't know his general counsels are meeting semi-regularly
with everyone else in the industry?
Parrish: Well, it wouldn't be his general counsel. Mr. Bible is
chairman of the holding company. He has a general counsel who is general
counsel of the holding company, so it wouldn't be Mr. Bible's general counsel
who would be attending those meetings.
Q. If you had to do it again, would you have issued the Frank Statement,
you know, in the 1950s, the statement where the industry promises to do any
research and reveal all of its results?
Parrish: I was probably about three years old when the Frank Statement
Q. But you've got to live with the consequences.
Parrish: And I've got to tell you that even by reading books and
newspaper articles and talking to people who were involved, there is no way
that I can construct in my mind what the situation was like at the time, what
was going on in the minds of the people who were involved in making that
decision. There's just no way I could make a judgment on that, even with the
benefit of 20-20 hindsight.
Q. Yeah, but you wind up at the Committee of Council, which is related to
this CTR--the Council of Tobacco Research, right?
Q. The Committee Counsel has no relationship to the Council on Tobacco
Parrish: In my....the times that I attended meetings with the Committee
of Counsel, no.
Q. Did it have anything to do with scientific research projects?
Parrish: I'm sure there were discussions of scientific research.
Q. Special projects.
Parrish: One of the key things that is a part of the smoking and health
litigation is the science that people use to claim that cigarette smoking makes
people sick. So I'm sure there was discussion about that.
Q. Didn't the Committee of Counsel consider what were called "special
projects," special scientific research projects that they wanted controlled by
the attorney-client privilege?
Parrish: I don't remember discussions like that at those meetings that
Q. There are documents and letters, some written by Bill Shin, who is an
associate of yours at Shook, Hardy.
Parrish: He was one of my partners, that's right.
Q. Which talk about that--special projects involving Gary Huber, for
Parrish: And I'm just not familiar with those documents. I'm sorry.
Q. What was Dr. Huber's role, do you know?
Parrish: As I understand it, he was a consultant to either the industry
or to Shook, Hardy, I'm not sure which, or maybe both. I'm just not sure.
Q. So if he says that he was an independent researcher who happened to get
funds through various universities, some funds came from the tobacco, you would
Parrish: No, I think Dr. Huber obviously was an independent researcher,
and maybe I'm wrong, but it was my impression that at least some points he had
consulted with the industry, but maybe I'm wrong about that. I just don't know.
I didn't really, as I said...I think I met Dr. Huber but didn't really work
with him, so I wasn't, I'm not still familiar with his relationship.
Q. You know, he says to us that he has discovered now, now that he has
access to documents about himself that...he says that now that he has access to
documents from inside the industry, that he was actually being funded in cases
to find out things that the industry already knew were true. That he was duped.
That this was all a sham.
Parrish: I don't know how to respond to that. I haven't spoken to Dr.
Huber about that. I don't know what documents he's referring to, I haven't seen
those so I just don't know how to respond. I'm sorry.
Q. Yeah, well, we may show you a document but...have you seen any documents
that describe the Council on Tobacco Research as a front?
Parrish: I may have. I know that claim has been made in the
Q. No, I mean an industry document that describes the Council on Tobacco
Research as a front, as a public relations front. It was set up by Hill and
Parrish: Well, I know that that claim has been made in the litigation
and I believe that the plaintiffs lawyers and others have tried to use industry
documents in support of that claim and in that issue the Council for Tobacco
Research was one that we talked about for a long time in our negotiations. And
as part of the June 20th agreement, we've agreed to disband the Council for
Q. I guess my question is, in order for us accept that the industry has
changed and wants to change, will there be an admission that much of
this...will there be an admission at the Council on Tobacco Research and other
entities that were set up by the industry, were set up, basically, to obfuscate
and hide documents and not have admit nicotine addiction or the health damage
caused by the industry?
Parrish: What there will be is a process by which those documents will
be made available, not just to lawyers but to the public. Anybody who wants to
look at those documents and draw whatever conclusion they want.
Q. But a judge in Minnesota has already said that. He's going to release
almost...apparently he's releasing 39,000, he may be on his way to releasing
Parrish: Fine, then those documents will be public and people, if
that's the ruling of the courts, then people will be able to look at them. But
the agreement that we've negotiated goes even further than that--there will be
a public depository for millions of pages of documents for people to look at if
they want to. And my point is that, let's make that stuff available. Let's
comply with the terms of the agreement, make that stuff available, but let's
not let that slow us down as we try to come up with a nation-wide policy on
tobacco in this country--how the product is going to be manufactured, how it's
going to be regulated, let's do something about the issue of youth smoking, and
let's make these documents available as the June 20th agreement requires.
Q. The industry opposes youth smoking.
Parrish: That's right.
Q. The industry did, on occasion, target youth, to sell tobacco products to
Parrish: Well, I have seen documents over the last few weeks and
months, and without knowing the author of those documents or in the context
under which those documents that are very troubling in that regard.
Q. I think this is one of them...
Parrish: What you have is, I believe, is sincere commitment in the
industry not to target to kids. And it's not just a commitment. The agreement
that we reached with the Attorneys General and the private lawyers provides for
strict penalties on industry, on any company that targets kids or violates that
Q. In reaction to these....allegations about youth smoking, in the past you
have said "we don't care about youth smoking, we'll give up youth smoking, it's
a very small part of our market anyway."
Parrish: I believe that to be the case.
Q. But isn't that where you lay the seeds for future smokers?
Parrish: Well, I've heard people say that and I guess...
Q. Well, every study that exists...
Parrish: There are certainly a lot of studies that suggest that, and I
guess all I can really say to you is that we are willing to abide by the rules
of the June 20th agreement, we are willing to do everything we can as a company
and as an industry to address the issue of youth smoking. We firmly believe
that we cannot do it all ourselves, there's a role here for the government,
there's a role for parents, educators, friends...we've all got to work
together, and if that means youth smoking is eliminated that will be fine with
us. If that means our business suffers over the long-term then we're prepared
to accept that.
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