A brief history of The Royal Bank of Scotland Group
The Royal Bank of Scotland Group is one of the world's leading financial services providers, and one of the oldest banks in the UK.
Following the takeover of National Westminster Bank in 2000, the Group's global business has continued to grow. In addition to a strong UK presence, we have offices in Europe, the USA and Asia. By the end of 2002, we were the second largest bank in Europe and the fifth largest in the world by market capitalisation.
In the UK, the RBS branch network covers the nation and boasts a pedigree of great variety and distinction. Our history is very much the history of banking in the British Isles for the past four centuries - we can trace our roots back to the 16th Century through the amalgamation of more than 200 private and joint-stock banks.
The Royal Bank of Scotland was founded in Edinburgh by Royal Charter in 1727 and for several decades we traded solely from our head office in the city's Old Town. However, in 1783, we opened our first branch office in Glasgow and went on to develop a large network of offices throughout Scotland during the 19th Century.
In 1874, The Royal Bank of Scotland opened a branch office in London and from the 1920s developed, by acquisition, a major presence in England. Banks which joined the Group during these years included Drummonds (established c.1712), Williams Deacon's Bank (established 1836), Glyn, Mills & Co (established 1753) and Child & Co (established c.1580), with business in London, north-west England and overseas.
By 1970, following The Royal Bank of Scotland's merger with the Edinburgh-based National Commercial Bank of Scotland (comprising the former National Bank of Scotland, established 1825) and the Commercial Bank of Scotland (established 1810), we accounted for more than 40 per cent of Scotland's banking business.
Under the Williams & Glyn's Bank banner, we also had a large and growing presence in England and Wales. In 1985, Williams & Glyn's merged fully with the Group's Scottish clearing bank which, thereafter, traded throughout Britain as a single entity - The Royal Bank of Scotland.
During the 1980s, the Group diversified. We set up the innovative car insurance company Direct Line in 1985 and acquired Citizens Financial Group (established 1828) of Rhode Island in the USA in 1988. Both were to prove highly successful ventures.
During the early 1990s, we refocused on our core business of retail banking, acquiring the private bank of Adam & Company (established 1983) in 1992. We launched Direct Banking in 1994 and it quickly became Britain's fastest growing 24-hour telephone banking operation. Then, in 1997, we announced the UK's first on-line banking service, as well as embarking on joint financial services ventures with Tesco and Virgin Direct.
In 2000, in the biggest takeover in the history of British banking, the Royal Bank acquired National Westminster Bank plc to create a huge group with a highly diversified portfolio of services for personal, business and corporate customers.
National Westminster Bank had been formed in 1968, when National Provincial Bank (established 1833), along with its subsidiary District Bank (established 1829), and Westminster Bank (established 1836), agreed to merge. This combined bank, which began trading in 1970, could also trace its history back down the centuries through its own lineage of prestigious constituent banks.
From the late 1970s, National Westminster Bank had grown rapidly, extending its activities beyond domestic retail banking by developing overseas and merchant banking interests. In 1995, the bank was restyled NatWest Group to reflect the positioning of the company as a portfolio of businesses.
After the merger of the Royal Bank and NatWest, the businesses of the two groups were combined, and the enormous task of integrating our IT systems began. Scheduled to be completed in 2003, it was the largest project of its kind ever attempted, and was actually finished in November 2002 - four months ahead of target.
NatWest's retail bank continues to operate as a distinct and separate brand on the high street.
ABB Limited (India) served utility and industry customers with the engineering, products, solutions and services in areas of automation and power technology. The Company segments includes: power systems, which offers turnkey systems and services for transmission and distributions for power grid and power plants, instrumentation, control and balance of power plants; power products, which manufactures, engineers, supplies key components to transmit and distribute electricity, and also produces transformers, high and medium voltage switchgears, circuit breakers, capacitors, distribution relays; process automation, which provides integrated solutions and served oil and gas, power, chemicals and pharmaceuticals, pulps and paper, metals and minerals, marine and turbo charging industries; automation products, which provides motors, variable speed drives, low voltage products, instrumentation and power electronics; Others consists of robotics systems.
BRIEF: For the nine months ended 30 September 2009, ABB Limited(India)'s revenues decreased 7% to RS44.03B. Net income decreased 31% to RS2.45B. Revenues reflect a decrease in income from power systems and power products segments respectively. Net income also reflects an increase in depreciation & amortization expenses, a rise in other expenditure, lower other income and increased interest expense.
BRIEF: For the nine months ended 30 September 2009, ABB Limited(India)'s revenues decreased 7% to RS44.03B. Net income decreased 31% to RS2.45B. Revenues reflect a decrease in income from power systems and power products segments respectively. Net income also reflects an increase in depreciation & amortization expenses, a rise in other expenditure, lower other income and increased interest expense.
1988
Operations begin January 5, 1988. In the first year, some 15 acquisitions are made, among them the environmental control group Fläkt AB of Sweden, the contracting group Sadelmi/Cogepi, Italy, and railway manufacturer Scandia-Randers A/S of Denmark.
1989
In December, ABB finalizes the purchase of the worldwide power transmission and distribution operations of Westinghouse Electric Corp. of the U.S. Also in December, ABB announces the agreement to buy Stamford, Ct.-based Combustion Engineering Group. In total, ABB purchases about 40 companies in 1989.
1990
ABB begins an aggressive program of expansion in Central and Eastern Europe and prepares for expansion into Asia. The rate of acquisition slows in the U.S. and Western Europe, where a period of consolidation and restructuring begins.
1991
Investments continue in Central and Eastern Europe, where ABB employs about 10,000 people by year end. Extensive restructuring positions the company to meet the demands of recession economies in North America and parts of Europe. Research & Development spending increases by 20 percent
1992
Recession management is accelerated and total employment reduced by 14,000. Employment in Central and Eastern Europe rises to 20,000 people in 30 companies. In Asia, more than 20 new manufacturing and service units are created through joint ventures, acquisitions, and greenfield investments.
1993
The Group continues its strategy of targeted expansion in Europe (including the former Soviet Union), the Americas, and Asia Pacific. ABB introduces the GT24/GT26 gas turbine technology opening new opportunities on the global market for high-efficiency, low-emission turbines.
1994
ABB emerges from a two-year consolidation phase to begin new volume and profit growth. In Western Europe and North America, the focus is on the fast-growing service and retrofit markets, while demand for new infrastructure drives demand growth in emerging markets. In Asia, ABB has 30,000 employees and 100 plants, engineering, service and marketing centers.
1995
ABB continues to expand its local presence in Asia and Central and Eastern Europe through internal growth, acquisitions and majority joint ventures. ABB announces the merger of its Transportation segment into a 50-50 joint venture with Daimler-Benz AG of Germany, effective January 1, 1996. ABB selected as Europe's best company in technology and innovation management.
1996
Demand in emerging markets continues to drive growth. Employment in these countries rises by 10,000, while selective downsizing continues in Western Europe and North America. ABB completes the merger at the Board level by integrating its parent companies' Boards into the ABB Group Board. Göran Lindahl is named ABB President and CEO, effective January 1, 1997, succeeding Percy Barnevik, who becomes non-Executive Chairman of the ABB Board of Directors.
1997
ABB continues to reduce employment in Western Europe and add employees in various emerging markets and Central and Eastern Europe. Employment also increases in growing businesses, such as oil, gas and petrochemicals, automation and service-related activities. ABB moves early to adjust its cost base in Western Europe and the U.S. - including the reduction of 12,000 jobs - and accelerates expansion in Asia to improve future competitiveness.
1998
ABB took a number of significant steps in 1998 to position itself for improved growth. ABB acquired Elsag Bailey Process Automation to position itself as a leader in the global industrial automation market. It was the biggest acquisition in ABB's history. The company made a number of other strategic acquisitions, and in early 1999 divested its 50-percent share in Adtranz, its rail transportation joint venture with DaimlerChrysler. The industrial segments were realigned to better match changing market conditions and the regional management layer was dissolved to speed decision making. The restructuring announced in late 1997 was about 90 percent complete in 1998.
1999
Shareholders accepted an offer to replace ABB’s four-class share structure with a single class share. Shares in the new Zurich-based ABB Ltd began trading on the Swiss stock exchange and stock exchanges in Stockholm, London and Frankfurt at the end of June. ABB is now preparing for a U.S. listing. ABB accelerated its shift to a knowledge and service company. Strategic acquisitions included a major Brazilian industrial service company, U.S. and European financial services companies, and an oil and gas equipment supplier in Argentina. ABB contributed most of its power generation businesses to a 50-50 joint venture with ALSTOM of France, creating the world’s largest power generation supplier—ABB ALSTOM POWER. ABB divested its 50-percent share in its rail joint venture Adtranz to DaimlerChrysler of Germany, and sold its standard cables business. In December, ABB announced its intention to divest its nuclear power activities.
Operations begin January 5, 1988. In the first year, some 15 acquisitions are made, among them the environmental control group Fläkt AB of Sweden, the contracting group Sadelmi/Cogepi, Italy, and railway manufacturer Scandia-Randers A/S of Denmark.
1989
In December, ABB finalizes the purchase of the worldwide power transmission and distribution operations of Westinghouse Electric Corp. of the U.S. Also in December, ABB announces the agreement to buy Stamford, Ct.-based Combustion Engineering Group. In total, ABB purchases about 40 companies in 1989.
1990
ABB begins an aggressive program of expansion in Central and Eastern Europe and prepares for expansion into Asia. The rate of acquisition slows in the U.S. and Western Europe, where a period of consolidation and restructuring begins.
1991
Investments continue in Central and Eastern Europe, where ABB employs about 10,000 people by year end. Extensive restructuring positions the company to meet the demands of recession economies in North America and parts of Europe. Research & Development spending increases by 20 percent
1992
Recession management is accelerated and total employment reduced by 14,000. Employment in Central and Eastern Europe rises to 20,000 people in 30 companies. In Asia, more than 20 new manufacturing and service units are created through joint ventures, acquisitions, and greenfield investments.
1993
The Group continues its strategy of targeted expansion in Europe (including the former Soviet Union), the Americas, and Asia Pacific. ABB introduces the GT24/GT26 gas turbine technology opening new opportunities on the global market for high-efficiency, low-emission turbines.
1994
ABB emerges from a two-year consolidation phase to begin new volume and profit growth. In Western Europe and North America, the focus is on the fast-growing service and retrofit markets, while demand for new infrastructure drives demand growth in emerging markets. In Asia, ABB has 30,000 employees and 100 plants, engineering, service and marketing centers.
1995
ABB continues to expand its local presence in Asia and Central and Eastern Europe through internal growth, acquisitions and majority joint ventures. ABB announces the merger of its Transportation segment into a 50-50 joint venture with Daimler-Benz AG of Germany, effective January 1, 1996. ABB selected as Europe's best company in technology and innovation management.
1996
Demand in emerging markets continues to drive growth. Employment in these countries rises by 10,000, while selective downsizing continues in Western Europe and North America. ABB completes the merger at the Board level by integrating its parent companies' Boards into the ABB Group Board. Göran Lindahl is named ABB President and CEO, effective January 1, 1997, succeeding Percy Barnevik, who becomes non-Executive Chairman of the ABB Board of Directors.
1997
ABB continues to reduce employment in Western Europe and add employees in various emerging markets and Central and Eastern Europe. Employment also increases in growing businesses, such as oil, gas and petrochemicals, automation and service-related activities. ABB moves early to adjust its cost base in Western Europe and the U.S. - including the reduction of 12,000 jobs - and accelerates expansion in Asia to improve future competitiveness.
1998
ABB took a number of significant steps in 1998 to position itself for improved growth. ABB acquired Elsag Bailey Process Automation to position itself as a leader in the global industrial automation market. It was the biggest acquisition in ABB's history. The company made a number of other strategic acquisitions, and in early 1999 divested its 50-percent share in Adtranz, its rail transportation joint venture with DaimlerChrysler. The industrial segments were realigned to better match changing market conditions and the regional management layer was dissolved to speed decision making. The restructuring announced in late 1997 was about 90 percent complete in 1998.
1999
Shareholders accepted an offer to replace ABB’s four-class share structure with a single class share. Shares in the new Zurich-based ABB Ltd began trading on the Swiss stock exchange and stock exchanges in Stockholm, London and Frankfurt at the end of June. ABB is now preparing for a U.S. listing. ABB accelerated its shift to a knowledge and service company. Strategic acquisitions included a major Brazilian industrial service company, U.S. and European financial services companies, and an oil and gas equipment supplier in Argentina. ABB contributed most of its power generation businesses to a 50-50 joint venture with ALSTOM of France, creating the world’s largest power generation supplier—ABB ALSTOM POWER. ABB divested its 50-percent share in its rail joint venture Adtranz to DaimlerChrysler of Germany, and sold its standard cables business. In December, ABB announced its intention to divest its nuclear power activities.
Altria Group, formerly Philip Morris, is the world's largest tobacco company. In the U.S. it controls about half of the tobacco market. In 2007 Altria spun off its food division Kraft Foods Inc. (Jell-O, Kool-Aid, Maxwell House). Altria brand names include cigarette brands Marlboro, Basic, Chesterfield, Lark, L&M, Parliament and Virginia Slims. Altria Corporate Services used to be known as Philip Morris Management Corporation. It provides services, including legal services, to all Altria group entities. Altria Group's primary holdings until 2007 included Philip Morris companies as well as Kraft Foods. Philip Morris International is an international tobacco company that has seven of the top 20 global cigarette brands.
On September 22, 1999, the U.S. 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
Racketeering conviction upheld on appeal
On May 22, 2009, a three-judge panel of the Washington, D.C. U.S. Court of Appeals unanimously upheld the lower court's 2006 ruling that the cigarette makers had systematically lied to the public in a 50-year conspiracy to defraud the public about the health hazards of smoking. The Court also agreed that tobacco companies must publish "corrective statements" on the adverse health effects and addictiveness of smoking and nicotine, and stop using misleading labels like "low tar," "light," "ultra light" or "mild," since such cigarettes are now known to be no safer than others, because of the way people smoke them. The court said that tobacco companies "knew about the negative health consequences of smoking, the addictiveness and manipulation of nicotine, the harmfulness of secondhand smoke, and the concept of smoker compensation, which makes light cigarettes no less harmful than regular cigarettes and possibly more."
"Light" cigarettes lawsuits
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.
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."
On December 15, 2008 the U.S. Supreme Court, ruling in a case against Philip Morris, gave a green light to smokers to sue tobacco companies over the fraudulent marketing of "light," "ultralight" and "low tar" cigarettes. Cigarette companies at the time were facing around 40 such lawsuits. For decades, advertising lulled smokers into believing that so-called "light" and "low tar" cigarettes were better for their health. Smokers in Maine, however, sued Philip Morris, charging that the company violated the Maine Unfair Trade Practices Act by fraudulently advertising that their “light” cigarettes delivered lower levels of tar and nicotine than regular brands. They also said that PM had been aware for decades that smokers compensate for lower levels of tar and nicotine by taking longer and deeper puffs. Philip Morris argued that the Federal Trade Commission's endorsement of machine testing for tar and nicotine levels in cigarettes, started in the 1960s, should relieve them of fraud charges. The FTC recently abandoned its testing method, though, after concluding that it is flawed because machines don't take into account how smokers adjust their smoking behavior when using cigarettes with lower levels of nicotine.
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 to Landor Associates, chief among the problems caused by PM's close identification with 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, possibly 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 Geoffrey 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-Marsteller. 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 becoming 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..." (NewCo being the hypothetical new name of the company). 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' efforts to boost its corporate image by 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 would be instructed to "address themselves to our business units--not NewCo."
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...
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 include 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.
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 Philip Morris Corporate Affairs, spoke at the meeting and hinted that the ASA could get more funding from PM if ASA got more members to join.
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 companies) and provide a positive public relations benefit for PM. The memo states,
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.
Puffing Wikipedia
In January 2005 someone on a computer mapping to the New York office of PM edited the Wikipedia article on Marlboro cigarettes. The edit deleted the statement that Marlboro "emerged as the number one youth-initiation brand."
The attempt at puffing Wikipedia worked until the original statement was reinstated on August 26, 2007. While the statement remains unreferenced, the evidence supports its inclusion for the U.S. In its Youth Tobacco Surveillance from 1998-1999 report, the U.S. Centers for Disease Control state that "young people have strong cigarette brand preferences. Almost half of current smokers in both middle school and high school report that they usually smoke Marlboro cigarettes." The rest of the youth market was split between several other brands.
Animal studies on tobacco products
On April 28, 2005, People for the Ethical Treatment of Animals (PETA) presented a shareholder resolution for Altria to cease animal testing for tobacco products, claiming ownership of 114 shares of common stock. PETA pointed out that animals respond very differently from humans to exposure to tobacco smoke. After decades of testing, they do not develop lung cancer; even when hooked up around-the-clock to smoke ventilation machines. Germany, Sweden and the United Kingdom have placed limits or bans on the testing of tobacco products on animals. A PETA representative attended Altria´s annual meeting in East Hanover, New Jersey to present the resolution, which failed to pass.
Covance Laboratories & Altria Group
Altria is a client of Covance Laboratories. Covance is an international contract research organization (CRO) and laboratory animal breeding company. Firms hire CROs to conduct animal toxicity tests for agrochemicals, petrochemicals, household products, pharmaceutical drugs and toxins. Covance is the largest importer of primates in the United States and the world's largest breeder of laboratory dogs. Under its former name of Hazleton Laboratories, Covance provided animal data favorable to the tobacco industry and contributed to the continued marketing of cigarettes. In the 1990s, Covance performed studies sponsored by the tobacco industry claiming that even extreme exposure to secondhand smoke was safe for humans. Covance internal documents from 2002 discuss a Philip Morris/Covance Project Team for studies. At a November 2005 tobacco trade-group conference in Manila, Philippines, Covance's presentation was entitled: How Can Covance Support Research and Development Needs of the Tobacco Industry? [9] Covance has amassed a history of gross animal welfare violations in the United States and Europe. See also Covance Laboratories.
Quotable
On December 6, 1993, the New York Times quoted sworn testimony of William Campbell, then President and CEO of Phillip Morris:
"A. To my knowledge, it has not been proven that cigarette smoking causes cancer.
Q. What do you base that on?
A. I base that on the fact that traditionally, there is, you know, in scientific terms, there are hurdles related to causation, and at this time there is no evidence that -- they have not been able to reproduce cancer in animals from cigarette smoking."
Political contributions
The Altria political action committee (PAC) gave $986,500 to federal candidates in the 05/06 election cycle - 34% to Democrats, 66% to Republicans.
Lobbying
The company spent $12,870,000 for lobbying in 2006. $4,010,000 of this total went to 24 outside lobbying firms, some of which included Lesher & Russell, Winston & Strawn, and Arnold & Porter.
Tactics
Smears
A 1985 document found in the area of Cathy Lynn Ellis of Philip Morris shows PM's top management contemplated using smear tactics to deter the most effective public health advocates. A quote from the document targets John F. Banzhaf, III, the attorney who successfully applied the Fairness Doctrine to get the first anti-smoking ads on TV in the late 1960s. In exploring ways to chill the zeal of tobacco control advocates, the document states:
"Possibly, too, we can discredit our critics. John Banzhaf for example, is alleged to be involved in the porno industry. Can't we use this somehow? If we start to dig around, we will certainly find anomalies which we can exploit..."
Another idea was to commission the writing of a book on the "anti-industry industry" to show the public how much money tobacco control advocates are making off their pursuits.
Yet another line says that PM must "work to establish a mind-set in the public at large that bankrupting huge industries such as tobacco in unthinkable ... It just has to be possible to demonstrate that large industries cannot be made to disappear without extremely grave consequences ..."
Food
One way Philip Morris (PM) curries favor among legislators is by inviting them to lavishly catered parties in nice places. A 1990 billing document shows such lobbying activity in the state of Colorado. It is an invoice from the Epicurean Catering company to Philip Morris Government Affairs office for a catered party given on Sunday, October 31, 1999 in a Penthouse Suite at Mile High Stadium during a Denver Broncos football game. Handwriting on the invoice shows that the party was attended by key Colorado legislators, as well as PM lobbyists and members of PM's legal department. The menu included spiced Jumbo shrimp, smoked baby back ribs, herb-crusted beef tenderloin, scalloped potatoes, Caesar salad, Haagen Dazs ice cream bars, mini cheesecakes and full bar service. One of the Colorado legislators who attended the party was State Senator Norma Anderson, who in the 1999/2000 legislative season introduced Colorado's bill to divvy up the Master Settlement Agreement funds. Senator Anderson's bill called for a level of funding for tobacco prevention that (at 15%) was far below the amount recommended by the U.S. Centers for Disease Control for each state (25%). Sen. Anderson's bill determined that most of the rest of the settlement funds be diverted to non-tobacco-related-programs such as a reading program for elementary school-aged children, the Veteran's Fund, nursing programs, and other non-tobacco-related causes. Similar invoices available among the documents show that Philip Morris holds such parties in Colorado fairly regularly and easily spends $3,000-$4,000 for food alone on each occasion.
Undermining legislation
* Philip Morris Undermining public interest legislation
* Donohoe MT,
Circumventing bans on cigarette ads in other countries
A 1986 Philip Morris (PM) marketing presentation about Saudi Arabia describes methods that PM uses to circumvent a total ban on cigarette advertising in Saudi Arabia. The writer begins by saying, "Saudi Arabia provides a striking example of how it is possible to grow volume, market share and income in a market where advertising is completely banned...."
PM used "creative approaches" to get around the ad ban, including strategies such as placing advertisements in "local journals from Pan Arab publications which find their way into Saudi Arabia." PM also "develop[ed] sponsorships in neighboring markets which provide good opportunities for promotion and publicity on TV." PM also teamed with car companies to sponsor motor sports in the Gulf, because "events such as these are widely televised ... Saudi networks cover some directly while neighboring countries cover others." PM also sought to "profit from the Arab interest in motor sports by exhibiting a simulator of a Formula One Marlboro car at this year's motor show in Jeddah. This attracted large crowds."
The writer also explains that, "Since both Arabic, mainly Kuwaiti and English foreign language press do get into Saudi, we use these to promote Marlboro and other brands ... " PM also says, "We've also been using cross-border television advertising in a joint program with Canon cameras. These carry shots of Marlboro Formula One cars intermingled with the main advertisement, Canon cameras."
PM made an agreement with a private home video distribution company to promote Marlboro by putting commercials on video cassette movies for home rental "to advertise the distributors extensive library of 'Westerns'."
In the same report, PM describes its vigorous fight against the Gulf Council Health Ministry's attempts to require bigger warning labels on cigarettes, as well as a proposal to restrict the nicotine content of cigarettes. The report also documents a huge increase in cigarette exports from the U.S. to Saudi Arabia by PM alone between 1975 and 1985. PM says that in 1975, the company exported three-quarters of one billion cigarettes to Saudi Arabia. By 1985 that number had jumped to fifteen billion "units" (cigarettes).
On September 22, 1999, the U.S. 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
Racketeering conviction upheld on appeal
On May 22, 2009, a three-judge panel of the Washington, D.C. U.S. Court of Appeals unanimously upheld the lower court's 2006 ruling that the cigarette makers had systematically lied to the public in a 50-year conspiracy to defraud the public about the health hazards of smoking. The Court also agreed that tobacco companies must publish "corrective statements" on the adverse health effects and addictiveness of smoking and nicotine, and stop using misleading labels like "low tar," "light," "ultra light" or "mild," since such cigarettes are now known to be no safer than others, because of the way people smoke them. The court said that tobacco companies "knew about the negative health consequences of smoking, the addictiveness and manipulation of nicotine, the harmfulness of secondhand smoke, and the concept of smoker compensation, which makes light cigarettes no less harmful than regular cigarettes and possibly more."
"Light" cigarettes lawsuits
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.
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."
On December 15, 2008 the U.S. Supreme Court, ruling in a case against Philip Morris, gave a green light to smokers to sue tobacco companies over the fraudulent marketing of "light," "ultralight" and "low tar" cigarettes. Cigarette companies at the time were facing around 40 such lawsuits. For decades, advertising lulled smokers into believing that so-called "light" and "low tar" cigarettes were better for their health. Smokers in Maine, however, sued Philip Morris, charging that the company violated the Maine Unfair Trade Practices Act by fraudulently advertising that their “light” cigarettes delivered lower levels of tar and nicotine than regular brands. They also said that PM had been aware for decades that smokers compensate for lower levels of tar and nicotine by taking longer and deeper puffs. Philip Morris argued that the Federal Trade Commission's endorsement of machine testing for tar and nicotine levels in cigarettes, started in the 1960s, should relieve them of fraud charges. The FTC recently abandoned its testing method, though, after concluding that it is flawed because machines don't take into account how smokers adjust their smoking behavior when using cigarettes with lower levels of nicotine.
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 to Landor Associates, chief among the problems caused by PM's close identification with 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, possibly 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 Geoffrey 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-Marsteller. 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 becoming 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..." (NewCo being the hypothetical new name of the company). 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' efforts to boost its corporate image by 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 would be instructed to "address themselves to our business units--not NewCo."
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...
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 include 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.
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 Philip Morris Corporate Affairs, spoke at the meeting and hinted that the ASA could get more funding from PM if ASA got more members to join.
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 companies) and provide a positive public relations benefit for PM. The memo states,
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.
Puffing Wikipedia
In January 2005 someone on a computer mapping to the New York office of PM edited the Wikipedia article on Marlboro cigarettes. The edit deleted the statement that Marlboro "emerged as the number one youth-initiation brand."
The attempt at puffing Wikipedia worked until the original statement was reinstated on August 26, 2007. While the statement remains unreferenced, the evidence supports its inclusion for the U.S. In its Youth Tobacco Surveillance from 1998-1999 report, the U.S. Centers for Disease Control state that "young people have strong cigarette brand preferences. Almost half of current smokers in both middle school and high school report that they usually smoke Marlboro cigarettes." The rest of the youth market was split between several other brands.
Animal studies on tobacco products
On April 28, 2005, People for the Ethical Treatment of Animals (PETA) presented a shareholder resolution for Altria to cease animal testing for tobacco products, claiming ownership of 114 shares of common stock. PETA pointed out that animals respond very differently from humans to exposure to tobacco smoke. After decades of testing, they do not develop lung cancer; even when hooked up around-the-clock to smoke ventilation machines. Germany, Sweden and the United Kingdom have placed limits or bans on the testing of tobacco products on animals. A PETA representative attended Altria´s annual meeting in East Hanover, New Jersey to present the resolution, which failed to pass.
Covance Laboratories & Altria Group
Altria is a client of Covance Laboratories. Covance is an international contract research organization (CRO) and laboratory animal breeding company. Firms hire CROs to conduct animal toxicity tests for agrochemicals, petrochemicals, household products, pharmaceutical drugs and toxins. Covance is the largest importer of primates in the United States and the world's largest breeder of laboratory dogs. Under its former name of Hazleton Laboratories, Covance provided animal data favorable to the tobacco industry and contributed to the continued marketing of cigarettes. In the 1990s, Covance performed studies sponsored by the tobacco industry claiming that even extreme exposure to secondhand smoke was safe for humans. Covance internal documents from 2002 discuss a Philip Morris/Covance Project Team for studies. At a November 2005 tobacco trade-group conference in Manila, Philippines, Covance's presentation was entitled: How Can Covance Support Research and Development Needs of the Tobacco Industry? [9] Covance has amassed a history of gross animal welfare violations in the United States and Europe. See also Covance Laboratories.
Quotable
On December 6, 1993, the New York Times quoted sworn testimony of William Campbell, then President and CEO of Phillip Morris:
"A. To my knowledge, it has not been proven that cigarette smoking causes cancer.
Q. What do you base that on?
A. I base that on the fact that traditionally, there is, you know, in scientific terms, there are hurdles related to causation, and at this time there is no evidence that -- they have not been able to reproduce cancer in animals from cigarette smoking."
Political contributions
The Altria political action committee (PAC) gave $986,500 to federal candidates in the 05/06 election cycle - 34% to Democrats, 66% to Republicans.
Lobbying
The company spent $12,870,000 for lobbying in 2006. $4,010,000 of this total went to 24 outside lobbying firms, some of which included Lesher & Russell, Winston & Strawn, and Arnold & Porter.
Tactics
Smears
A 1985 document found in the area of Cathy Lynn Ellis of Philip Morris shows PM's top management contemplated using smear tactics to deter the most effective public health advocates. A quote from the document targets John F. Banzhaf, III, the attorney who successfully applied the Fairness Doctrine to get the first anti-smoking ads on TV in the late 1960s. In exploring ways to chill the zeal of tobacco control advocates, the document states:
"Possibly, too, we can discredit our critics. John Banzhaf for example, is alleged to be involved in the porno industry. Can't we use this somehow? If we start to dig around, we will certainly find anomalies which we can exploit..."
Another idea was to commission the writing of a book on the "anti-industry industry" to show the public how much money tobacco control advocates are making off their pursuits.
Yet another line says that PM must "work to establish a mind-set in the public at large that bankrupting huge industries such as tobacco in unthinkable ... It just has to be possible to demonstrate that large industries cannot be made to disappear without extremely grave consequences ..."
Food
One way Philip Morris (PM) curries favor among legislators is by inviting them to lavishly catered parties in nice places. A 1990 billing document shows such lobbying activity in the state of Colorado. It is an invoice from the Epicurean Catering company to Philip Morris Government Affairs office for a catered party given on Sunday, October 31, 1999 in a Penthouse Suite at Mile High Stadium during a Denver Broncos football game. Handwriting on the invoice shows that the party was attended by key Colorado legislators, as well as PM lobbyists and members of PM's legal department. The menu included spiced Jumbo shrimp, smoked baby back ribs, herb-crusted beef tenderloin, scalloped potatoes, Caesar salad, Haagen Dazs ice cream bars, mini cheesecakes and full bar service. One of the Colorado legislators who attended the party was State Senator Norma Anderson, who in the 1999/2000 legislative season introduced Colorado's bill to divvy up the Master Settlement Agreement funds. Senator Anderson's bill called for a level of funding for tobacco prevention that (at 15%) was far below the amount recommended by the U.S. Centers for Disease Control for each state (25%). Sen. Anderson's bill determined that most of the rest of the settlement funds be diverted to non-tobacco-related-programs such as a reading program for elementary school-aged children, the Veteran's Fund, nursing programs, and other non-tobacco-related causes. Similar invoices available among the documents show that Philip Morris holds such parties in Colorado fairly regularly and easily spends $3,000-$4,000 for food alone on each occasion.
Undermining legislation
* Philip Morris Undermining public interest legislation
* Donohoe MT,
Circumventing bans on cigarette ads in other countries
A 1986 Philip Morris (PM) marketing presentation about Saudi Arabia describes methods that PM uses to circumvent a total ban on cigarette advertising in Saudi Arabia. The writer begins by saying, "Saudi Arabia provides a striking example of how it is possible to grow volume, market share and income in a market where advertising is completely banned...."
PM used "creative approaches" to get around the ad ban, including strategies such as placing advertisements in "local journals from Pan Arab publications which find their way into Saudi Arabia." PM also "develop[ed] sponsorships in neighboring markets which provide good opportunities for promotion and publicity on TV." PM also teamed with car companies to sponsor motor sports in the Gulf, because "events such as these are widely televised ... Saudi networks cover some directly while neighboring countries cover others." PM also sought to "profit from the Arab interest in motor sports by exhibiting a simulator of a Formula One Marlboro car at this year's motor show in Jeddah. This attracted large crowds."
The writer also explains that, "Since both Arabic, mainly Kuwaiti and English foreign language press do get into Saudi, we use these to promote Marlboro and other brands ... " PM also says, "We've also been using cross-border television advertising in a joint program with Canon cameras. These carry shots of Marlboro Formula One cars intermingled with the main advertisement, Canon cameras."
PM made an agreement with a private home video distribution company to promote Marlboro by putting commercials on video cassette movies for home rental "to advertise the distributors extensive library of 'Westerns'."
In the same report, PM describes its vigorous fight against the Gulf Council Health Ministry's attempts to require bigger warning labels on cigarettes, as well as a proposal to restrict the nicotine content of cigarettes. The report also documents a huge increase in cigarette exports from the U.S. to Saudi Arabia by PM alone between 1975 and 1985. PM says that in 1975, the company exported three-quarters of one billion cigarettes to Saudi Arabia. By 1985 that number had jumped to fifteen billion "units" (cigarettes).
International Business Machines Corporation was incorporated in the State of New York on June 16, 1911, as the Computing-Tabulating-Recording Co. a consolidation of the Computing Scale Co. of America, the Tabulating Machine Co. and The International Time Recording Co. of New York. Since that time, the Company has focused on the intersection of business insight and technological invention, and its operations and aims have been international in nature. The Company's business model is to help clients succeed in delivering business value by becoming more innovative, efficient and competitive through the use of business insight and IT solutions; and, provide long-term value to shareholders. The Company's global capabilities include services, software, hardware, fundamental research and related financing. The broad mix of businesses and capabilities are combined to provide business insight and solutions for the Company's clients. The major operations of the Company are comprised of: a Global Technology Services segment; a Global Business Services segment; a Software segment; a System and Technology segment; and a Global Financing segment. Global Services is a critical component of the Company's strategy of providing IT infrastructure and business insight and solutions to clients. While solutions often include industry-leading IBM software and hardware, other suppliers' products are also used if a client solution requires it. Within Global Services there are two reportable segments: Global Technology Services and Global Business Services. Global Technology Services mainly provides IT infrastructure services and business process services, delivering business value through the Company's global scale, standardization and automation. Global Business Services mainly provides professional services and application outsourcing services, delivering business value and innovation to clients through solutions which leverage industry-and business-process expertise. Software consists mainly of middleware and operating systems software. Middleware software enables clients to integrate systems, processes and applications across a standard software platform. IBM middleware is designed to open standards which allow the efficient integration of disparate client applications that might have been built internally, or provided by packaged software vendors or system integrators. Operating systems are the software engines that run computers. Systems and Technology provides clients with business solutions requiring advanced computing power and storage capabilities. Approximately 55 percent of Systems and Technology's server and storage sales transactions are through the Company's business partners; approximately 45 percent are direct to end-user clients. In addition, Systems and Technology provides leading semiconductor technology and products, packaging solutions and engineering technology services to clients and for IBM's own advanced technology needs. The Company's Sales and Distribution organization manages a strong global footprint, with dedicated country based operating units focused on delivering client value. The competitors include Hewlett-Packard Company, Accenture and Computer Sciences Corporation, Indian service providers, including Satyam Computer Services Ltd., Wipro Technologies, Accenture, Infosys Consulting, Oracle Corporation, Microsoft Corporation, EMC and CA, Inc., Dell, Inc., Sun Microsystems, EMC Corporation, non-captive companies such as General Electric Company, CIT Group, Inc. and banks or financial institutions. The Company is subject to various federal, state, local and foreign laws and regulations.
From CNN Money
From CNN Money
The History of IBM goes back further than the development of computers. It was originally a Tabulating Machine Company founded in 1896 by Herman Hollerith. It specialized in developing punched card data processing equipment. The patent for this technology was initially applied for in 1884. It began as a means for Hollerith to meet the demands in tabulating the 1890 Census. Punch cards introduced in 1896 laid the foundation for generations of equipment which would one day be known as IBM. The business was sold to Charles Flint in 1911 for 2.3 million dollars of which he received 1.2 million dollars to create Computing Tabulating Recording Corporation or CRT. Incorporation took place on June 16, 1911 in Endicott, New York.
There were three companies which merged. The computing Scale Corporation, the Time Recording Company and finally the Tabulating Machine Company. Flint was the key financier behind the merger and remained a member until 1930. In 1914 Thomas J. Watson Sr. became General Manager of CTR and in 1917 CTR entered the Canadian market using the name International Business Machines Co., Limited. Watson played an essential and key role in establishing what would later be known as IBM.
In 1928, IBM introduced a new 80 column rectangular-hole punched card, which became the standard IBM card used by tabulators and computers for many years to come. Later in the 1950’s IBM became the primary contractor in developing computers for the United States Air Force automated defense systems. While working on the SAGE interceptor control system IBM gained information critical to work being performed at Massachusetts Institute of Technology. This information spearheaded advancements for the company by learning information on digital data transition, algebraic computer language, light guns, integrated video display, analog to digital and digital to analog conversion. IMB built fifty six SAGE computers totaling thirty million dollars each and in its heyday employed more than seven thousand employees.
The 1980’s found IBM consolidating its mainframe business and expanding the breadth of mainframes with the ESA/390 and the S/390. To create the illusion that IBM’s revenues and profits were much stronger than they really were in the mid to latter part of the decade, IBM embarked upon the practice of converting its large rental base of mainframes to lease arrangements. This spending shift caused management to scramble, which threatened the monopoly which IBM had enjoyed in the technology business.
Don Estridge was hired in the IBM Entry Systems Division in Boca Raton Florida. It was at this point that he along with his team known as “Project Chess” developed the IBM PC which was then introduced to the world on August 12 1981. Initially these systems were not affordable to the average person for personal use. The hefty price tag of $1.565 left the equipment primarily in the business sector, although these were not seen as a viable computers by the corporate computer departments. Often the purchases were made by middle management as they could see the value these systems had in relation to business.
IBM operating systems have paralleled hardware development. On earlier systems, operating systems represented a modest level of investment, and were typically viewed as an addition to the hardware. By the time of the System/360, operating systems had assumed a much greater role, in terms of cost, complexity, value, and risk. IBM has widely been known for its dominant computer business. However, it has had major roles in many other industries. Today IBM enjoys continued success with systems easily applicable to businesses as well as personal use
Verizon Communications Inc., headquartered in New York, is a global leader in delivering broadband and other wireless and wireline communications services to mass market, business, government and wholesale customers. Verizon Wireless operates America’s most reliable wireless network, serving more than 91 million customers nationwide. Verizon also provides converged communications, information and entertainment services over America’s most advanced fiber-optic network, and delivers innovative, seamless business solutions to customers around the world. A Dow 30 company, Verizon employs a diverse workforce of approximately 222,900 and last year generated consolidated revenues of more than $107 billion.
The History of Verizon Communications
Verizon Communications Inc., based in New York City and incorporated in Delaware, was formed on June 30, 2000, with the merger of Bell Atlantic Corp. and GTE Corp. Verizon began trading on the New York Stock Exchange (NYSE) under the VZ symbol on Monday, July 3, 2000.
The symbol was selected because it uses the two letters of the Verizon logo that graphically portray speed, while also echoing the genesis of the company name: veritas, the Latin word connoting certainty and reliability, and horizon, signifying forward-looking and visionary.
While Verizon is truly a 21st century company, the mergers that formed Verizon were many years in the making, involving companies with roots that can be traced to the beginnings of the telephone business in the late 19th century.
Government regulation largely shaped the evolution of the industry throughout most of the 20th century. Then, with the signing of the Telecommunications Act on February 8, 1996, federal law directed a shift to more market-based policies. This promise of a new competitive marketplace was a driving force behind Verizon's formation.
The Bell Atlantic - GTE Merger
The mergers that formed Verizon were among the largest in U.S. business history, culminating in a definitive merger agreement, dated July 27, 1998, between Bell Atlantic, based in New York City, and GTE, which was in the process of moving its headquarters from Stamford, Connecticut, to Irving, Texas.
GTE and Bell Atlantic had each evolved and grown through years of mergers, acquisitions and divestitures. Each had proven history of successfully integrating business operations.
Prior to the merger, GTE was one of the world's largest telecommunications companies, with 1999 revenues of more than $25 billion. GTE's National and International Operations served approximately 35 million access lines through subsidiaries in the United States, Canada and the Dominican Republic, and through affiliates in Canada, Puerto Rico and Venezuela. (Access lines are the individual connections from a customer's premises to the phone network.) GTE was a leading wireless operator in the United States, with more than 7.1 million wireless customers and the opportunity to serve 72.5 million potential wireless customers.
Outside the 50 states, GTE operated wireless networks serving approximately 6.7 million customers with 34.8 million potential wireless customers through subsidiaries in Argentina, Canada and the Dominican Republic, and affiliates in Canada, Puerto Rico, Venezuela and Taiwan. GTE provided internetworking services, ranging from dial-up Internet access for residential and small-business consumers to Web-based applications for Fortune 500 companies. GTE was also a leader in directories and telecommunications-based information services and systems.
Bell Atlantic was even larger than GTE, with 1999 revenues of more than $33 billion. Its Domestic Telecom unit served 43 million access lines, including 22 million households and more than 2 million business customers. Its Global Wireless unit managed one of the world's largest and most successful wireless companies, with 7.7 million Bell Atlantic Mobile customers in the United States and international wireless investments in Latin America, Europe and the Pacific Rim.
Bell Atlantic's Directory Services was already the world's largest publisher of directory information, including operations in Europe. Bell Atlantic's International unit included a mix of mature and start-up wireline telecommunications investments in Europe and the Pacific Rim.
The Bell Atlantic - GTE transaction -- valued at more than $52 billion at the time of the announcement -- was designed to join Bell Atlantic's sophisticated network that served its densely-packed, data-intensive customer base in 13 states from Maine to the Virginias with GTE's national footprint, advanced data communications capabilities and long-distance expertise. The purpose was to create a combined company with the scale and scope to compete as one of the telecommunications industry's top-tier companies. This combined company would be able to provide long-distance and data services nationwide as part of a full package of other communications services (subject to regulatory restrictions).
The merger closed nearly two years later, following review and approvals by Bell Atlantic and GTE shareowners, 27 state regulatory commissions and the Federal Communications Commission (FCC), and clearance from the U.S. Department of Justice (DOJ) and various international agencies.
In the meantime, on September 21, 1999, Bell Atlantic and London-based Vodafone AirTouch Plc (now Vodafone Group Plc) announced their agreement to create a new wireless business -- with a national footprint, a single brand and a common digital technology -- comprised of Bell Atlantic's and Vodafone's U.S. wireless assets (Bell Atlantic Mobile, AirTouch Cellular, PrimeCo Personal Communications and AirTouch Paging).
This wireless joint venture received regulatory approval in six months. The new "Verizon" brand was launched on April 3, 2000, and the wireless joint venture began operations as Verizon Wireless on April 4. GTE's wireless operations became part of Verizon Wireless -- creating the nation's largest wireless company -- when the Bell Atlantic - GTE merger closed nearly three months later. Verizon then became the majority owner (55 percent) of Verizon Wireless, with management control of the joint venture.
When Verizon Communications began operations in mid-2000, the leaders of Bell Atlantic and GTE shared management responsibility for the company. Former GTE Chairman and CEO Charles R. "Chuck" Lee became Verizon's founding Chairman of the Board and co-CEO, while former Bell Atlantic CEO Ivan Seidenberg became Verizon's founding President and co-CEO. In accordance with a leadership transition plan announced at the time of the merger, Lee retired from Verizon in 2002. Seidenberg is currently Chairman and CEO.
The History of Verizon Communications
Verizon Communications Inc., based in New York City and incorporated in Delaware, was formed on June 30, 2000, with the merger of Bell Atlantic Corp. and GTE Corp. Verizon began trading on the New York Stock Exchange (NYSE) under the VZ symbol on Monday, July 3, 2000.
The symbol was selected because it uses the two letters of the Verizon logo that graphically portray speed, while also echoing the genesis of the company name: veritas, the Latin word connoting certainty and reliability, and horizon, signifying forward-looking and visionary.
While Verizon is truly a 21st century company, the mergers that formed Verizon were many years in the making, involving companies with roots that can be traced to the beginnings of the telephone business in the late 19th century.
Government regulation largely shaped the evolution of the industry throughout most of the 20th century. Then, with the signing of the Telecommunications Act on February 8, 1996, federal law directed a shift to more market-based policies. This promise of a new competitive marketplace was a driving force behind Verizon's formation.
The Bell Atlantic - GTE Merger
The mergers that formed Verizon were among the largest in U.S. business history, culminating in a definitive merger agreement, dated July 27, 1998, between Bell Atlantic, based in New York City, and GTE, which was in the process of moving its headquarters from Stamford, Connecticut, to Irving, Texas.
GTE and Bell Atlantic had each evolved and grown through years of mergers, acquisitions and divestitures. Each had proven history of successfully integrating business operations.
Prior to the merger, GTE was one of the world's largest telecommunications companies, with 1999 revenues of more than $25 billion. GTE's National and International Operations served approximately 35 million access lines through subsidiaries in the United States, Canada and the Dominican Republic, and through affiliates in Canada, Puerto Rico and Venezuela. (Access lines are the individual connections from a customer's premises to the phone network.) GTE was a leading wireless operator in the United States, with more than 7.1 million wireless customers and the opportunity to serve 72.5 million potential wireless customers.
Outside the 50 states, GTE operated wireless networks serving approximately 6.7 million customers with 34.8 million potential wireless customers through subsidiaries in Argentina, Canada and the Dominican Republic, and affiliates in Canada, Puerto Rico, Venezuela and Taiwan. GTE provided internetworking services, ranging from dial-up Internet access for residential and small-business consumers to Web-based applications for Fortune 500 companies. GTE was also a leader in directories and telecommunications-based information services and systems.
Bell Atlantic was even larger than GTE, with 1999 revenues of more than $33 billion. Its Domestic Telecom unit served 43 million access lines, including 22 million households and more than 2 million business customers. Its Global Wireless unit managed one of the world's largest and most successful wireless companies, with 7.7 million Bell Atlantic Mobile customers in the United States and international wireless investments in Latin America, Europe and the Pacific Rim.
Bell Atlantic's Directory Services was already the world's largest publisher of directory information, including operations in Europe. Bell Atlantic's International unit included a mix of mature and start-up wireline telecommunications investments in Europe and the Pacific Rim.
The Bell Atlantic - GTE transaction -- valued at more than $52 billion at the time of the announcement -- was designed to join Bell Atlantic's sophisticated network that served its densely-packed, data-intensive customer base in 13 states from Maine to the Virginias with GTE's national footprint, advanced data communications capabilities and long-distance expertise. The purpose was to create a combined company with the scale and scope to compete as one of the telecommunications industry's top-tier companies. This combined company would be able to provide long-distance and data services nationwide as part of a full package of other communications services (subject to regulatory restrictions).
The merger closed nearly two years later, following review and approvals by Bell Atlantic and GTE shareowners, 27 state regulatory commissions and the Federal Communications Commission (FCC), and clearance from the U.S. Department of Justice (DOJ) and various international agencies.
In the meantime, on September 21, 1999, Bell Atlantic and London-based Vodafone AirTouch Plc (now Vodafone Group Plc) announced their agreement to create a new wireless business -- with a national footprint, a single brand and a common digital technology -- comprised of Bell Atlantic's and Vodafone's U.S. wireless assets (Bell Atlantic Mobile, AirTouch Cellular, PrimeCo Personal Communications and AirTouch Paging).
This wireless joint venture received regulatory approval in six months. The new "Verizon" brand was launched on April 3, 2000, and the wireless joint venture began operations as Verizon Wireless on April 4. GTE's wireless operations became part of Verizon Wireless -- creating the nation's largest wireless company -- when the Bell Atlantic - GTE merger closed nearly three months later. Verizon then became the majority owner (55 percent) of Verizon Wireless, with management control of the joint venture.
When Verizon Communications began operations in mid-2000, the leaders of Bell Atlantic and GTE shared management responsibility for the company. Former GTE Chairman and CEO Charles R. "Chuck" Lee became Verizon's founding Chairman of the Board and co-CEO, while former Bell Atlantic CEO Ivan Seidenberg became Verizon's founding President and co-CEO. In accordance with a leadership transition plan announced at the time of the merger, Lee retired from Verizon in 2002. Seidenberg is currently Chairman and CEO.