Joint Appendix — Loveday v. Federal Communications Commission
Supreme Court brief1983
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mm THE
et UNITED STATES COURT OF APPEALS
at
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to ean
« 7
; Paul Loveday and Californians for Smoking ) 4
a and No Smoking Sections, Petitioners No. 81-2061 +
Be ) ON PETITION FOR REVIEW
i v. ) OF ORDER OF FEDERAL
* ) COMMUNICATIONS COMMISSION
ts Federal Communications Commission )
a and the United States, Respondents.
s , ,
if ; Cal P. Saunders PAUL L. LOVEDAY a
as. Counsel -
‘Federal Communications Commission Two Embarcadero Center
Washington, D.C. 20554 24th Floor
San Franciseé, CA 94111
Attorney for Petitioners
tye = $s ° ’
h: seg Attorneys for Respondents Dated: March 31, 1982
“re :
a : este at Mervin Field
Relessed August 7, 1901"
Copy of Proposition 10
News Release from California's Fair
Political Practices Commission
Richard S. Woodward
Declaration
Yes on 10's Request for
Declaratory Ruling
Tobacco Institute’s Denial of
Knowledge or Part in No
on § Campaign as reported
in New York Times
March 16, 1978
Campaign finance disclosure
statement filed by Tobacco Institute
that before March 10, 1978
Tobacco Institute had (i) spent $61,688
Proposition 5, (ii) had
No on 5 ca
and (iii) hired Dobbs & Nielsen
Official Court Reporter's
Transcript of Vigo Neilsen's
apparent perjury
Declaration re John Greenagel's
misrepresentations that he was
volunteer spokesman for No on 5
Pages from campaign finance
disclosure statement of
No on §
showing «A
Greanagel for professional services
41A
42
45-50
51
vt
"1
52-54 i
- 4
‘ Me
¥ ¥
.
aaa
Relevant Pages of "A Study
of Public Attitudes Toward
Cigarette Smoking and the
Tobacco Industry" by the
Roper Organization
Pertinent page from campaign
finance disclosure statement of
No on 5 Campaign showing $20,000
paid by No on 5 Campaign to State
Senator Bill Greene
Copy of Greene Bill
Sacramento Bee editorial
April 15, 1980 against
Greene Bill
ASH Newsletter's July-
August 1980 report of Tobacco's
Industry's equivalent to Greene
bill in Dade County, Florida
Declaration re statement
by Joe Cerrell, political
consultant to Philip Morris, that
Tobacco Industry had decided in
June 1980 to run a campaign
against Proposition 10
57
58-70
71
72-79
81
et. SP ee Wy ot eee ho” Woe
Tab
Ww 86
x 87
additional contributions to No
on 10 (in excess of $340,000
(reported contributed as of
Sept. 30, 1980) would "be
very limited". Y 88
c Robert DeVries
Declaration Zz 89
LA Times Oct. 9, 1980
No on 10
advertising on 50
TV and 105 radio
stations A 90
Text of No on 10
radio ads B 90A-90B
te Ae
Copy of No on 10 ‘
y fundraising mailer Cc 91-100
“4 re No on 10 fundraising
a mailer D 101-102
$
A, Robert Nelson
% Declaration E 103-107
fer ;
a3 93! 93
161-162
163-176
177-178
Ae ig My Nara? f
ay
: ms vi a bak ok OF TTY Fe aapae NE - # mints
oe es ‘ f
«= nit, ¥
3 Adopted: July 30, 1981 Released: August 7, 1961
| By the Comission: .
. 1. The Commission has before it an Application for Review, filed oa
_ November 28, 1980, by Paul Loveday et al, of the Broadcast Bureau's ruling of
_ October 30, 1980. '#/
wmreasonably. The information before the Bureau did not show that there was
3. Except as modified above, we believe the Bureau's ruling was
/ correct, and the Application for Review does not contain sufficient grounds to
Warrant @ reversal of the ruling. Therefore; pursuant to Section 1.115(g) of
; Is °
William J. Tricarico
Secretary
A copy. of that ruling is appended (Attachment A).
. : ay
FEDE. «L COMMUNICATIONS COMMI- ON
WASHINGTON, OC. 20534
0cT 301970 ae
8330-H
10-1275
10-1264
10-997
C10-768
In re: Request for Declaratory Ruling
by "Californians for Smoking and No
Smoking Sections."
Dear Mr. Loveday
This is in reference to the Request for Declaratory Ruling that you filed @
October 17, 1980 cn behalf ot the "Californians for Smoking and No Smoking
Sectiwns" (the "“Committee") concerning advertisements opposing Propostion 10
by "Californians Against Regulatory Excess" ("CARE"). Tne Committee states
that Proposition 10 represents "a measure placed on the November 4, 1980 Cali-
fornia election ballot by the signature initiative process" which would "create
smoking and no smoking sectians in incoor public places." Te Committee supporss
the adoption of Proposition 10; CARE opposes its adoption.
BACKGROUND *
ilieed —1———
It is the Conmittee's contention that CARE is acting es the "agent and alter ego"
of the tobacco incustry Bgvew CARE derives substantially all or “virtually :
100%" of its funds from industry 2/ and has relinquished editorial control :
over its advertisements to the indus Essentially, the Committee's contentions i
are based on the following: (1) CARE and “Cali for Common Sense,
are based © oppose a simtilar ballot proposition in 1978, msvane Siian th
geganized °o Oera*eavertising fim and further involved sintlar Pe iy
and strategies; (2) the four largest cigarette manufacturers are "acting in
and stratedies) (7) ting finds to CARE according to their respective TTT
Shares in California, as was the case in 1978) (3) the tobacco industry took
persmal credi for defeating the 1978 ballot proposition; 3/ (4) the four cigarette
manufacturers "deferred massive spending on advertisements against Proposition 10
WHAS, Inc., 385 F
Trstunt case from VOTER,
On October 27, 19
that it is a bona fide nonprofit corporation and political
Board members ,9/ organized
station licensees
that [it] is the entity,
{CARE's] political spot annow
fairly
In support of its request, the Committee cites Amendment of the Commission's
« rship Identification" 89 76.221) ,
75); in re XOOL~IVv,
2a 784 (eth Cir. 1967). ‘The Committee distinguishes the
46 RR 24 350 (B/c. Bur. 1979) and Naticnal Welfare
Rights Orcanizaticn, 41 FCC 24 187 (1973), since here the tabasco industry allecedly {
ee control cver CAFE advertisements.
that time is of the essence, im licht of CARE's “media
L119 73.289 73.7 and
4 ; Uni tates Vv.
the election which has swayed voters to
80, by its attorney, CARE filed its response. 8/ CARE represents
“have Se ed properly and within their discretion in concluding
ced the only entity, they must identify as sponsor of
cements." CARE asserts that it has “wholly and
ts under California's campaign and
and although “the four tobacco es are the major contri-
has been "widely publicized,"10/ CARE “editorial
spot ads” and “it is not the tobacco companies."
————<—— oo ae ee
CARE added that it has not retained any current employee of the tobacco companies
or the Tebacco Institute, but for the voluntary work of two employees of Ene
Institute, who assist in the "distribution of literature throughout California."
CARE states that <he Commit=ee -s askina the Commissicn *° Gerermine whether cr
j . -—_=a_ .—*
not a political curccces 15 =ncspendent, cna tice orgamcatich. CARE Sur=er
prove
Gndustay directs the campaign strategy and exercises editorial control over tis
CARE advertisements, <nith it believes is essentially demonstrated by the following
Statements concerning Proposition 10, prior to any
Board meeting, indicative of the Board's lack of
control over camapign stratedy?
At
ies > SR
-
4.
On October 27, 1980, counsel for CARE responded to the Committee's reply, during
a phone conversation with a staff attorney of this office. CARE stated that,
due to an oversight, it neglected to mention the Board's first organizational
meting which was held on June 16, 1980. (In attendence were Mr. Bergland,
Mr. Dohr and Mr. Bens). CARE also explained that a political committee which
ments. CARE denies tiet =e cobacce industry exercises any control whatsoever
over the orcanizaticn's activities or stratecies.
DISCUSSION
The thrust of this request is that the sponsorship identification statements
S ncrtisements are inadequate and improper under Section 315
Wee Be: Se. Seas
eee tn bax ss F = va Sy See Be = al
oe ee LP eee, ee IN Ce eee 4 ie + ee
rule is contained in Section 73.1212 of the Commission's Rules
The corresponding
and Regulations and provides, nertinent part, that:
(b) ‘The Licefee of each broadcast station shall exercise
reasonable diligence to obtain from its employees, and
from other persons with whom it deals directly an coniny
tion with any matter for broadcast, information to enable
toe licensee to make the announcement required by this
* + *
DY te. Pelt. lovey 8 ptt an 6.
‘ ) ;
ghe beaic prenise of the sponsorship identification requirements is that the
Public is entitled to know by whom they are being persuaded. VOTER, supra at
352; National Welfare Richts Organization, suora at 195; Applicability of Sponsor-
, 40 FCC 141, 141 (1963).
_Sectic 317 and Section 73.1212 impose a duty upon licensees to exercise reasonable
diligence to ascertain the identity of the sponsor of broadcast material. The
, Gbligation to exercise reasonable diligence to ferret out the actual spomsor |
of broadcast material, of course, does not cast licensees in the role of "insurers" ;
@s to the complete accuracy of sponsorship identification statements; they have
an affirmative obligation to ascertain and identify the sponsor, no more - no less.
onal Welfare Richts zation, supra at 195. The Conmissicn's responsi-
EGRET matters is to not to substitute its judgment for that of the
licensees' or to pass on the bona fide nature of an organization; rather the .
Commission, as a government licensing agency, reviews its licensees’ decisions
é
:
eve that the Bureau ruling in VOTER, supra, is dispositive of this request.
The case of VOTER concerned a ballot proposition (involving the establishment
of a county public power system), in which advertisements opposing the ballot
were aired as being sponsored by a political conmittee ("Westchester Citizens").
The Conmittee was funded in substantial part or completely by the Consolidated
Edison Company. The complainant argued that Con Edison should have been substituted
or added to the sponsorship identification statement. The Conmittee admitted
that it received substantial financial assistance from Con Edison, but maintained
that it exercised editorial control over all of its advertisements.
After noting that “longstanding Commission policy has been that an entity paying
for advertising time and editorial control over the message must be identified
as the sponsor of the statement," the Bureau stated that:
(W)e camnot conclude that any licensee, in evaluating |
the facts before it recardinc the acvertisement,
failed to exercise reasqmacle cilicerce cv accertine
the revcresenssticns Cr ‘jastoes<3> :=.5853. 8
substan proportion of Con s role in West-
chester Citizens funding might suggest a basis for
further inquiry to save licensees. On the other hand
the Westchester Citizens by-laws, ted asserticn
of editorial control over these t,
weight of precedent suggest that those licensees who
accepted Westchester Citizens' advertisements as offered
did so in good faith and without closing their eyes to
any attempted misrepresentation. Indeed, same licensees
may conclude, either on the facts thus far provided by the
Westchester Citizens, or additional information not now
before us, that, in its view, "Con Edison” alone is the
appropriate identification. In such a case, we would have
no basis for finding that the licensee has acted wreascn-
ably (emphasis added). Id. at 352; see also, National
Welfare Rights zation, supra (announcements paid
for by a iete corporation, but controlled and directed
by the American Academy of Pediatrics, were properly
identified as “presented as a public service announcement
by the American Academy of Pediatrics).
oe eee ee +
Mr: Paul L. Loveday ps
In the same fashion, on the basis of all the information before us, we cannot
determine that all the California broadcast station licensees acted unreasonably
by failing to exercise reasonable diligence in accepting the representations of
CARE and ultimately airing the CARE advertisements as offered. On the other
hand, if some licensees substituted the sponsorship identifcation statements
with "Paid for by the Four Major Tobacco Companies," we would have no basis for
concluding that they acted unreasonably.
The Committee submitted a rather voluminous record (consisting of studies, polls,
newspaper articles and declarations) in a attempt to demonstrate that the
tobacco companies are controlling CARE. While it has been shown that substantially
all or "virtually 100%" of CARE's fiumds have come from the four major tobacco
companies, a fact that CARE readily admits in its response, there has not been
any conclusive evidence which establishes that the tobacco companies are exercising
editorial control over CARE advertisements, or for that matter CARE's entire
campaign efforts or any other drive aimed at defeating similar legislation like
that pending in California. More importantly, there has been no evidence that
the California broadcast station licensees have dismissed this matter ~:--
without exercising reasonable diligence to ascertain the trie
sponsor in compliance with their obligations under Section 317 and Section 73.1212.
CONCLUSION
Based on all of the foregoing, we cannot conclude that any broadcast station
licensee has violated the sponsorship identification provisions of the Commmi-
‘48 Act or the Commission's Rules and Regulations. To hold otherwise would
this agency to investigate the nature of political conmittees organized
rt or oppose an election matter (e.g., whether or not corporate formalities
adhered to), to second-quess broadcast Station licensees’
judgments, to rule on the basis of hindsight, rather than reviewing licensees’
decisions to determine if they acted reasonably and in good faith.
8
F
E
Ce
:
In closing, "we continue urce caution and the exercise of reasonaple dilicence
on the part of our licensees to taxe appropriate steps to ascertain che Sullest
factual informatim as to the true identity of political and controversial issu
Sponsors." VOTER, sucra-.at 352.
Due to the inminence of the election, pertinent parts of this ruling were relayed
by phone conversation to the respective attorneys on October 30, 1980.
Staff action is taken here under delegated authority. Application for Review by
the full Commission may be requested within 30 days of the release date of this
letter by writing the Secretary, Federal Commmications Commission, Washington,
JA... 2 )
, ~ * © can 00°
a on ;
Mr. Paul L. Loveday oy = 8.
D. C. 20554, stating the factors warranting consideration and, if mailed, |
should be sent by certified mail. Copies must be sent to the parties to .
the complaint. See Code of Federal Regulations, Volume 47, Section 1.115.
Fz
cc: Counsel for care
ys contin semiay ft 2 oe Ee eee So
the country 4s canprising an “entity,” known as the "tobacco industry." Such
include Lorillard, R. J- Reynolds Tobacco, Brown and Williamson
manufacturers
Tobacco Co. and Phillip Morris. ir
ttee, approximately 99.6% of CARE'S financing comes ;
industry (the four major cigarette manufacturers and to a small
distributors; whereas approximately 99.4% of the funds came a
manufacturers). ‘The Committee's figures are derived from ‘
pufactureet that CARE filed in California pursuant 6 2
inancing osure statements coverting the per
through 9/23/80" (executed 9/29/80) and "9/24/80 through 10/20/80"
shows that the major cigarette manufacturers ’
CARE during the latter period, in the form of loans Or
’ to CARE arse does not dencnatrate that the cigarette
» ¢ oe Se oe | re 9 OR SS... ~™ )
. ’ 2.
, *
6/ The Committee atta.ued correspondence that it sent to all-the California broadcast
Station licensees, advising them of their obligation to exercise "reasonable
diligence” to ascertain the true identity of the entity on whose behalf adver-
tisements are purchased. The Committee proceeded to explain that virtually all
the funds received by CARE are from the out-of-state tobacco industry, and thus :
_ the tag line “Californians Against Regulatory Excess" is deceptive and should
be substituted with the "tobacco industry." In their response, CARE attached
correspondence that it sent to the licensees which denied allegations that it
was operating as a "front" for cny person, company or industry, admitted that
it received "tobacco" funds, but emphasized that it maintained control over CARE
advertisements and campaign strategies. The Committee forwarded letters received
by several stations which essentailly denied their request for substitution of ;
tag-lines on CARE advertisements. It should be noted that a sponsorship identi-
fication statement referring to the "tobacco industry” may be deceptive and
misleading, in that there is no particular entity known as such, and further
er ee ne
on its Board
7/ The Committee cites two studies, the Roper Poll of 1978 commissioned by the
Institute and the Fairbanks/Canapary/Maullin Poll commissioned by CARE,
which indicate that the tobacco industry's "credibility" is low. The Committee
further claims that the tobacco industry is cognizant of their low esteem, which
explains "their" desire to operate through a "front organization" like CARE.
8 ee aren 00 Sent te Soe ee & See ee
25, 1980, at her request.
9/ As mentioned before, Mr. Collins has denied that he was a member of CARE's Board
of Directors. By declaration of Eileen Padberg, of Robert Nelson and Associates
(Robert Nelson organized CARE), CARE represents that it was its understanding
that Mr. Collins was, in fact, serving on the Board and that all notices of meetings
and other informative data was forwarded to him, accordingly. Eileen Padberg
also stated that Mr. Kiker participated in one telephonic Board meeting, on
Mr. Collin's behalf and at his request.
10/ Both CARE and the Conmittee have furnished the Commission with newspapers
articles which report the influx of the tobacco industry's financial support.
YES ON 10
SMOKING AND
NO SMOKING SECTIONS ACT OF 1980
SECTION 1 Chapter 10.7 is added to the Health and Safety Code to read:
$25930
$2593)
‘Chapter 10.7 Smoking and No Smoking Sections
find
smoke for extended penods may cause disease in healthy
nonsmor.
(ats;
ee Sena hand atin ome egpantie Ge condten of mare Gan 8 1/8 alien
with heart or lung disease:
(c) Second-hand smoke, like ali tobacco smoke, contains more than 4,600 chemicais,
of which are to human health:
(d) poliunon above Federal standards can occur in enciosed places because of
1 Members, American Lung Assn of
Professor of Medicwre, UCSF)
,
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HH
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F
Wi
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1
Jesse .. Steinteid, M.D.
U.S. Surgeon General, 1960-1979
Luther Terry, M.0.
U.S. Surgeon General, 1961-1966
Gien T. Seaborg, Pn.0.
Senator Diane E Watson
Vieechau, Senate Health Committee
Theodore A. Snyder, Jr
President, Sierra Ciud
Mayor Janet Gray Hayes
San Jose
Stanton A. Glantz, Pn.O
Asst. Professor of Medicine, UCSF
(Titles and organizations used for
identification purposes onty)
ENDORSING ORGANIZATIONS
American Assen. of Retired
Allan K Jonas $25937
Jack Kruschen 925938
Jonn Mathews §25939
Gary H. Spivey, M.0., M.P.H. $25939.1
$25939.2
$25939.3
SECTION 2:
provision of this subject to a fine of $15 per viciation
(b) Enforcement of this Chapter shail be by citation. No person may be taken into custody or
Go eubygct to search by peace oMcere solely because GF the victation or violation
It is Not intended that this Chapter preempt the field of smoking legisiation. The State
ure, local governing bodies and state and local administrative agencies may enact
legisiation and regulations to protect the health. comfort and environment of
nonsmokers. This Chapter does not permit smoking where otherwise restricted by law.
’ ; those
and areas which may be designated in thew entirety as smoking areas pursuant to Section
Geeignelion of emahing and ne emoting seotene end areas in places of
(¢)
ary Chapter
No special bureaucracy shail be created within the State t of Health Services or
within any other governmental agency for the admurustration of this Chapter or the Stan-
dards
Definitions
(a) “Place of Employment” means any area under the contro! of a public or private
which employees normaily frequent during the course of employment, inciuding,
Dut not limited to, work areas, employee lounges. meeting rooms, and employee
cafeterias. A private residence is not a “place of employment.
(b) “Public Place” means any area to which the public is invited or in which the pubiic is
permitted, including, Dut Not limited to, restaurants, theatres, wailing rooms, reception
areas and instrumentaiities of public transportation. A private residence is not a “public
place”
g
6
fe
z
!
Fi
R carrying or holding of a lighted
cigarette, cigar, pipe or any other lighted smoking equipment used for the practice com-
monty known as smoking, or the intentional inhalation or exhalation of smoke from any
such ed smok '
fon“ Baae Dasasunees ot Tsai Services means such Department or any successor
or area which qualifies as both a “Place of Employment” and as a “Public
oot ona treated for purposes of this Chapter as a “Public Place.”
(g) The Standards adopted pursuant to Section 25939 shail contain such other definitions
as the State Department of Health Services shail deem appropriate.
See Ro cemeamen et tan Soston, Gaston S006) andSp prpsee and Weer onprneces
Sections Re we nee Way re eames by Ce See Sane:
provided, however, that any amendment to thus Chapter shail
If any provision of this Chapter or the thereot to any person or circumstance is
held invalid, any such invalidity shail not affect other provisions or applications of this
Cap ONES CON 08 OD EN INS TERANE POTLEA Ot OREFERIAR, OS 10 OND
end, the provisions of Chapter are severable”
Effective Date
Chapter 10.7 of the Health and Safety Code shail become effective 120 after approval
by the elnctorate: provided. Nowevee, at fe duty of tee Sinie Deperrone of tisann
Seniese the process of promuigating Standards thereunder shail become eftec-
Exhbit E
PAIR POLITICAL PRACTICES ComMsSICN
Contact: JCEN KEPLINGER FOR IMMEDIATE RELEASE
916/322-5662 Saturday, November 4
$5.6 MILLION CONTRIBUTED TO NO CN 5 CAMPAIGN
Cepenents cf Proposition 5, the smoking regulation initiative
cn Tuesday's ballot, have contributed a record $5.6 million to the campaicn to
persuade Californians to defeat the measure.
More than $700,000 was contributed to the anti-Proposition 5 effort
in the past week alone by opponents who already have spent more money than
Governor Brown and Attorney General Evelle Younger combined.
In an analysis of the most recent campaign disclosure reports, the
Pair Political Practices Comission said today that a new campaign contribution
and speriing record apparently has been established by the Propositicn 5 foes.
Frsal mports About 97 per cent of the money has been contributed by the naticn's
major tobacco companies, and they are cutspending supporters of the initiative
7.7% by a 10 to 1 ratio.
toad
In their last campaign reports, filed an Cctober 23, copmments of
ag | Propositicn 5 reported receiving $4,947,462 in contributions and spending
$4,918,370. Since then, they have filed telegrams as required by law repcrt-
ing an additional $701,000 in late contributions, for a total of $5,648,462.
Supporters of Proposizicn 5 reported receiving $578,761 in contri>ct-
ions and sperding $512,650. They received $17,030 in additional late contcribut-
ions during the past week.
J.A. 14
aks . a a 7 m
4 fae bf Snr oe, he % 8 ys OO a <N a oie
$5.6 MILLICN—2
_ The previous record for spending by cme side in any California
campaign was the $4,033,590 spent by copmments of Proposition 15, the molear
safeguards initiative on the 1976 ballot. Combined spending by both sides in
the Proposition 15 contest amounted to $5.2 million. When final post-election
reports are examined, they are likely to show that spending by the anti-Propo-
sition 5 forces will exceed the $5.2 million figure, the FPPC said. |
The FPPC report also showed that from July 1 to October 23, the -
Brown campaign raised $2,974,238 and spent $2,296,606, and had $731,960 in
cash cn hard left over. The Younger campaign raisec $1,800,753, spent
$1,751,346 and had $55,830 left over.
In late contributions received since October 23, Brown got $146,510
and Younger received $99,903.
In the lieutenant governcr's race, Republican Mike Curb was well cut
in front of incumbent Democrat Mervyn Dymally. Curb had received $1,041,765
and spent $1,016,897, while Dymally had raised $295,607 and spent $219,344.
In ancther hotly contested campaign, Proposition 6, the school
employees homoseaality initiative, supporters had raised $937,121 and spent
$956,459, while oppanents had raised $901,918 and spent $783,738.
Figures for the major candidate and balict initiative campaigns
are attached.
CS 4 we
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DECLARATION OF
RICHARD S$. WOODWARD
I, RICHARD S. WOODWARD, declare:
I am a partner of Woodward, McDowell & Larson, a San
Francisco based campaign management, public relations and consult-
ing firn.
I have read the letter from Paul L. Loveday, Esq. dated
October 16, 1980, to the Federal Communications Commission and
i have been asked to comment about statements made therein about
which I am knowledgeable.
In 1977, my firm was retained by the Tobacco Institute,
and later that year my firm was retained by Californians for Common
Sense to manage a campaign to oppose Proposition 5 on the 1978
ballot. In 1979, this firm was retained as a media consultant,
not the campaign manager, to create and produce some of the broad-
cast advertising in a campaign to oppose an anti-smoking ordinance
in Dade County, Florida. My firm has not participated in any
other campaigns involving smoking and has not received any other
fees from any tobacco companies or the Tobacco Institute after
' Our activity relating to Proposition 5 (1978) and the 1979 Dade
i er oe
County campaign. This firm is not involved at all in the 1980
anti-smoking initiative in Dade County, Florida.
This firm was the campaign manager for the Yes on Propo-
sition 10 (Rent Control) and the No on Proposition 11 (Oil) cam-
paigns on the June 3, 1980 statewide ballot, which campaign work
concluded in August after Californians Against Regulatory Excess
was formed and operational. This fall, this firm was retained
for two United States senate races in Illinois and Alabama, and
we undertook a major corporate account. We had no plans at that
time to participate in the opposition campaign to Proposition 10.
ff” sks
i.)
J. A. A J - ;
©oexneaewewnre
2 aS SS aera ee
17
SFSESSERSSRRPRRESES
"aes a” —_ > Ae ae Se et ia ws - ao "—! AS we eo. oe ek Age eee C
. > z - ¥ ASE
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f Aa)
uo
In September we agreed to assist the No on 10 Committee
and signed a written contract that requires us to draft scripts,
submit them to the Board of Californians Against Regulatory Excess
and their legal counsel for clearance, and upon receiving approved
copy, to produce and place the advertising. Robert Nelson was
on-site most of the time during casting, shooting and post produc-
tion of this advertising.
On page 12(a) of Mr. Lovedays letter, he states that
the spots produced by this firm for Californians Against Regulatory
Excess are similar to those produced this year in Dade County, ;
Florida, to oppose an anti-smoking measure. I have no personal
knowledge about any spots produced in Dade County for the 1980
campaign. I do not even know who is running either side of that
, Campaign. What Mr. Loveday submitted in his Exhibits as the Dade
=
Os et a ee Re eee i ee
County spots were spots produced by this firm in 1978 for Califor-
nians For Common Sense. The same four partners who managed the
Californians for Common Sense campaign two years ago are still
the firm's partners and the similarity between the 1978 California
spots and the present California ones are not coincidental or
without design. The spots for Californians Against Regulatory
Excess were planned to remind the voters that a similar measure
had already been defeated. (Exhibit L)
This firm contracted with a placement service to purchase
media time. At no time was anyone ever told that no tobacco compa
nies had contributed to the campaign. There has been considerable —
publicity throughout California that tobacco companies now are e
making substantial contributions to Californians Against :
Excess. The participation of this firm in the No on Propoastion
10 campaign is recent and has only involved the creation, pr
and placement of certain advertising. Consequently, I
comment on other™facts stated in Mr. Loveday's letter; n
+ eee
a 1 | conspiracy as alleged. I have no reason to believe that the cati=* 4
| s | cornians against Regulatory Excess Comittes is aot e bene <iée | ap
3 ' citizens' committee.
* I declare under penalty of perjury that the foregoing
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6 October 24, 1980.
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SFSeESsSsRBRPRRESSESENS
PAUL L. LOVEDAY
Attorney At Law
One Embarcadero Center. 28th Floor
San Francisco. CA 94111 (415) 955-0203
October 16, 1980
Federal Communications Commission
1919 M Street, N.W.
Washington, D. C. 20554
Attn: Mr. William Trigarico, Secretary
Re: Request by Paul Loveday and "Californians for Smoking and No Smoking
Sections" for Declaratory Ruling Regarding Deceptive and Unlawful
rship Identification Statements With Respect to Paid Radio and
Television Advertisements by The Tobacco Industry Against California's
Proposition 10
EXPEDITED RELIEF REQUESTED
November 4, 1980 Election
Gentlemen:
This letter is a request for a Declaratory Ruling regarding the unlawful
participation of California broadcast stations with the Tobacco Industry in acts of
affirmative deception in violation of Section 317(c) of the Federal Communications
Act (the "Act") with respect to Proposition 10, a measure placed on the November 4,
1980 California election ballot by the signature initiative process. Due to the imminence
of the election, and in light of the extraordinary facts set forth below, immediate
ed action is requested. We request that a schedule be established by the Federal
Communications Commission ("FCC") so that a ruling can be issued within seven days
of the date of this letter.
1. PARTIES
Paul Loveday is a listener of California broadcast stations and the Chairman of
Californians for Smoking and No Smoking Sections ("Yes on 10"). Yes on 10 is a
coalition of the California Divisions of the American Cancer Society, the American
Heart Association and American Lung Association, the California Medica] and Nurses
Associations, and other health organizations. Yes on 10 is funced by those organizations
and by many thousands of individual contributors.
wl. PROPOSITION 10
Proposition 10 (a copy of which is attached hereto as Exhibit A) would create
smoking and no smoking sections in Indoor public place Wt Tp states its intent
U-A. 19
SERRA Rc ony) ns
oa TT ean
Proposition 10 has an extraordinary broad and bi-partisan base of support. It
has been endorsed by the Speaker of the California Assembly, Leo McCarthy, by the
President Pro Tempore of the California Senate, James Mills, by the State Senate
Majority and Minority Leaders, and by the Chairpersons of the Health Committees of
both the State Assembly and Senate, by numerous other California legislators, mayors,
an em rygnnne: labor and business leaders. o Fropostuen 10 has the support of every
sign icant statewide health organization in ornia.
On September 11, 1980, two weeks before the Tobacco Industry commenced a
massive television, radio and billboard advertising campeign against Proposition 10,
Mervin Field's highly respected California Poll showed 59% of California smokers and
70% of the State's nonsmokers favored the measure. (See Exhibit A-2)
™. RELIEF REQUESTED
The Tobacco Industry has caused its agent and alter ego, deceptively named
Californians Against Regulatory Excess, (hereinafter sometimes called "Excess"), to
massive amounts of air time from California radio and television stations for
advertisements urging a "no" vote on Proposition 10. Virtually one hundred percent of
such air time has been paid for by moneys transferred to Excess from the four largest
cigarette manufacturers, each contributing according to its share of the tobacco sales
market. All four cigarette manufacturers are located outside of California. Because
these four largest cigarette manufacturers (representing almost 90% of total cigarette
sales) are acting in concert and contributing a to their market shares, the
campaign to defeat Proposition 10 is being inane = tre Tobacco Industry operating
in unison through its agent and alter ego Excess.
The Tobacco Industry exercises editorial control over the No on 10 advertising.
Yes on 10, by two letters from its counsel dated September 26, 1980 and October
3, 1980 (attached hereto as Exhibits B-1 and B-2), has notified al) California broadcast
stations of their duties under the FCC Sponsorship Identification Rules both (i) to use
reasonable diligence to discover the persons OF entities who are actually paying for
and controlling such advertisements, and (ii) to announce before or immediately after
the broadcast of each such advertisement that such advertisement was "paid for by
the Tobacco Industry".
The stations have refused to do 80. The response by Mr. Dan Leonard, Vice
President of Forest Broadcasting Company, Inc. (attached hereto as Exhibit B-3) is
fairly typical:
"In response to your request that we investigate the funds for Californians
Against Regulatory Excess, we have made several inquiries. Mr. Bob Hoffman
of our national rep firm, Catz radio, Los Angeles office, spoke with the agency
for No on 10, Western International Media, and he has received assurances that
no tobacco industry money was involved."
Because it can be easily ascertained that only Tobacco Industry money is mse
to pay for No on 10 broadcast advertizing, and that the Tobacco Industry is exercising
editorial control over the advertising, Forest Broadcasting Company, Inc. and all] other
broadcastors running such advertising are violating their obligations under the FCC
Instead of adequately fulfilling their obligations of reasonable diligence, the
stations have participated with the Tobacco Industry in acts of affirmative deception
by running a sponsorship identification statement ("Tag-line") stating that such
advertisements were "Paid for by Californians Against Regulatory Excess" when in fact
(i) the money to pay for such advertisements has come from outside of Californie,
and (ii) Excess is merely the alter ego of the Tobacco Industry operating on an industry
basis to influence the California electorate.
Yes on 10 hereby requests the FCC to declare (i) such a misleading Tag-line is
a violation of Section 317(c) of the Act and 47 CFR 73.1212, and (ii) that the Federal
Communications law requires each advertisement placed by Excess to contain the
Tag-line "Paid for by the Tobacco Industry”.
IV. THE FACTS DEMONSTRATE THAT EXCESS IS THE AGENT AND ALTER EGO
OF THE TOBACCO INDUSTRY
The following facts demonstrate (i) that Californians Against Regulatory Excess
is a mere conduit for the funds of the out-of-state Tobacco Industry for purchasing
air time against Proposition 10, and (ii) that the Tobacco Industry exercises editorial
control over the advertising:
A. THE 1978 PROPOSITION 5 CAMPAIGN
During the 1978 campaign on a similar California ballot measure
(Proposition 5), fully 99.7% of the almost $64 million spent against Proposition
5 7 from one source: The Tobecco Industry. (See Exhibits C-1, C-2 and
C-3.
Cognizant that widespread public knowledge of the fact that the No on
5 Campaign was financed and controlled by the Tobacco Industry would severely
damage the credibility of its campaign, the Tobacco Industry took the following
steps to disguise its involvement and to give the erroneous impression that the
No on 5 Campaign was a groundswell citizens movement by a coalition of
Californians:
(a) The Tobacco Institute, the trade association of the Tobacco
Industry, told the New York Times that it had "no direct knowledge or
part in the anti-initiative effort.” (See Exhibit D-1) However, the campaign
financing disclosure statements required by the California Fair Political
Practices Act later demonstrated that, at the time of the denial, the
Tobacco Institute had already spent $61,000 to set up the campaign against
Proposition 5. (See Exhibit D-1a)
(b) The Tobacco Institute hired Woodward, McDowell and Larson,**
a professional campaign management firm, to manage the No on 5
Campaign and to ereate "Californians for Common Sense" as the front
— and agent for the out-of-state Tobacco Industry. (See Exhibit
D-1b
° Exactly $6,413,041 was spent against Proposition 5.
= Woodward, McDowell & Larson was known only as Woodward & McDowell in
1978. The two partners promoted Larson to partnership upon the conclusion of
the No on 5 Campaign. In this Request the firm is consistently referred to as
Woodward, McDowell & Larson.
3
aa J.-A. 2)
(c) Vigo Nielsen is the Senior Partner of Dobbs and Nielsen who
personally incorporated Californians for Common Sense and who personally
prepared the campaign financing disclosure statement required by the
California Fair Political Practices Act. Such disclosure statement revealed
that virtually all moneys transferred to Californians for Common Sense
came from the out-of-state Tobacco Industry. Subsequent to the filing
of such disclosure statement, Mr. Nielsen declared under oath as a witness
in a California court of law that he did not remember who it was who
asked him to incorporate and to represent Californians for Common Sense
and that he did not know whether his client was "represented or in any
way associated with the tobacco industry." (See Exhibit D-2)
(4d) All paid advertisements against Proposition 5 contained the
deceptive Tag-line "Paid for by Californians for Common Sense".
(e) John Greenagel is a public relations professional who represented
the Tobacco Industry in six of the television and radio debates on
Proposition 5 and whose $4,500 in fees were paid by Tobacco Industry
moneys through its agent Californians for Common Sense. Greenagel
represented publicly on several occasions that he was merely a concerned
small businessman speaking against Proposition 5 as a volunteer. However,
only a few days before election day he admitted he was being paid for
his appearances. (See Exhibits D-3 and D-4)
In the 1978 No on 5 Campaign, the Tobacco Industry took the unprecedented
step of beginning its broadcast media advertising against Proposition 5 in July
of 1978 and continued its massive advertising efforts every day from then until
election day. The almost $6% million the Tobacco Industry spent against
Proposition 5 set a new record for spending in e California election that still
has not been surpassed. Indeed, the Tobacco Industry's campaign spending exceeded
the combined spending by both candidates for California Governor in the same
election. (See Exhibit E.)
Shortly after the media blitz against Proposition 5 began, Mervin Field's
California Poll demonstrated Californians favored the measure 58% to 38%. (See
Exhibit F-1.) Despite the fact that most of the newspaper, radio and television
news coverage was generally favorable to the measure, the media barrage against
it slowly eroded support among voters. Proposition 5 was ultimately defeated.
N
Research published by Mervin Field after the 1978 election found, in
t, that public knowledge of the Tobacco Industry's involvement in the No
on uced the credibility of the No on 5 Campaign. (See Exhibit G.)
Accordingly, Tobacco Industry concealed to the extent it could its involvement
in the 1978 No on 5 Campaign. In its 1980 No on 10 Campaign the Tobacco
Industry is even stronger steps to conceal from the public in California
that it is the sole source of funding for the broadcast advertising campaign
against Proposition 10.
- B. THE TOBACCO INDUSTRY'S 1980 CAMPAIGN - A MORE SOPHISTICATED
ke ml
In 1978 the Tobacco Industry's advertising campaign of unprecedented
length and market saturation resulted in a September 23, 1978 campaign finan
disclosure statement (required by the California Fair Political Practices Act
showing that more than $3 million had already been transferred to Californians
for Common Sense and that 99.6% of such money came from the Tobacco
Industry. Such revelation created a minor sensation and was widely reported.
In the 1980 Proposition 10 Campaign, the Tobacco Industry has implemented
a far more sophisticated scheme to conceal from the California voters both the
fact and the extent of the Tobacco Industry's involvement in the No on 10
Campaign. This scheme includes the following:
(a) Operating through a front organization with the deceptive name
Californians Against Regulatory Excess;
(b) Causing its professionally managed campaign to make numerous
public and private statements either to the effect that (i) the Tobacco
Industry would not be involved in the Proposition 10 Campaign or that
(ii) it was uncertain whether the Tobacco Industry would be involved, or
that (iii) if the Tobacco Industry were not involved, Californians Against
Regulatory Excess could run a viable campaign without tobacco money.
(See the Declaration, the letter from Excess and the Los Angeles Times
interview with Excess Campaign managers attached hereto as Exhibits
H-1 through H-3);
(c) Causing Woodward, McDowell and Larson to write and produce
advertisements against Proposition 10 containing a tag-line of "Paid for
by Californians Against Regulatory Excess" (See enclosed cassette tape
of No on 10 radio advertisements);
(4) Deferring massive spending on advertising against Proposition
10 until September 24, 1980, the day after the cutoff date for disclosing
campaign expenditures as required by the California Fair Political Practices
Act. On September 23, 1980, the No on 10 Campaign (i) reported receipts
of $389,099 (ii) reported that most of that money had already been spent,
and (iii) reported no expenditures for television, radio or billboard
(e) Blanketing the State promptly after September 23, 1980 with
billboards stating "No on 10. This Time It's Even Sneakier"; and
(f) Refusing to disclose further transfers from the Tobacco Industry,
stating only that they would "be very limited". Gee Exhibit H-5.)
J.-A. az
Californians are now being bombarded by broadcast advertisements against
Proposition 10 almost as frequently as they were with almost identical
calculated policy of deception, there is very little public awareness that the
advertisements against Proposition 10 are paid for by the Tobacco Industry.
©. 100% OF NO ON 10 ADVERTISING IS_ PAID FOR BY THE TOBACCO
INDUSTRY
The campaign financing disclosure statement filed by Californians Against
Regulatory Excess for the period ending September 23, 1980 (attached hereto
as Exhibit 1) disclosed that 98% of the money transferred to Excess ($381,262
of a total of $389,099) came directly from the Tobacco Industry.
The exercise of reasonable diligence by broadcast stations would determ ine
that all moneys transferred to Excess after September 23, 1980 came from the
Tobacco Industry.
The Excess Campaign spending disclosure statement as of September 23,
1980 together with the copy of the Excess mailing (attached hereto as Exhibit
J-1) reveal that the $7,837 transferred to Excess from non-tobacco sources
resulted from a mailing financed by the Tcbacco Industry. The mailing requested
each recipient to make @& contribution of only $3.00 to Excess. Direct mail
fundraising experts have advised Yes on 10 that, given the economics of direct
mail, such a mailing would cost many times more to prepare and distribute than
it raised in contributions, and that such a mailing could not be used to help
finance a campaign but could only be for the political purpose of enabling Excess
to claim it has received numerous small contributions. (See Declaration of Larry
Levine attached hereto as Exhibit J-2.)
Since the $7,837 received by Excess from small contributors is dwarfed
the moneys spent to raise that sum, it cannot be claimed that any part of
that $7,837 has been used for the purchase of air time. Thus 100% of the moneys
used for the purchase of air time has quite literally been "Paid for by the
Tobacco Industry".
THE NO ON 10 ADVERTISEMENTS _ ARE PAID FOR BY CIGARETTE
D.
The No on § advertisements were paid for and the No on 10 advertisements
are being paid for by @ distinct entity called the Tobacco Industry. The cigarette
manufacturers are acting in concert as a single entity to attempt to defeat
Propositions 5 and 10. This is evidenced by the decisions of the cigarette
manufacturers to contribute to the "No" campaigns in proportion to each
company's relative share of the tobacco market:
1980 No on 10 Campsign*
Relative 1979 Market % of Cash
Share Among Contributions Among
Company Contributing Companies Contributing Companies
Lorillard 11.4% 11.0%
R. J. Reynolds Tobacco 38.1% 40.1%
Brown & Williamson Tobacco Co. 16.8% 17.4%
Philip Morris 33.6% 31.5%
1978 No on 5 Campaign**
Relative 1977 Market % of Cash
Share Among Contributions Among
Company Contributing Companies Contributing Companies
Lorillard 10.0% 10.0%
R. J. Reynolds Tobacco 37.7% 39.9%
Liggett & Myers 4.0% 0.5%
Brown & Williamson Tobacco 18.0% 19.8%
Philip Morris 30.3% 29.8%
Stanton A. Glantz, Ph.D., the author of two books on statistics and mathematics
and who teaches statistics and mathematics at the University of California at San
Francisco has concluded that there is less than 1 chance in 10,000 that the relative
sizes of the tobacco companies monetary contributions are not in proportion to their
relative shares of the tobacco market. His thorough statistical analysis is attached
hereto as Exhibit K-1.
e See No on 10 campaign financing disclosure statement as of September 23, 1980
and market share report in the March 1980 issue of the Tobacco Reporter
attached hereto as Exhibit K-2.
oe See No on 5's final campaign financing disclosure statement and market share
report in the April 5, 1979 issue of the United States Tobacco Journal attached
hereto as Exhibit K-3.
7 -* eee
wad be Sel
The relative market shares were computed as follows:
In 1977 the five cigarette manufacturers which contributed to No on 5
accounted for 87.6% of the tobacco market. R.J. Reynolds accounted for 33.0%
of the total market, so its relative market share among the contributing companies
was 33.0% divided by 87.6% equaling 37.7%. The relative market shares of the
other companies in 1977 and 1979 was computed in the same way.
E. TAG-LINES INFLUENCE VOTERS AND ARE CRUCIAL TO THE ELECTION
ge a dene, ee eT ee hy ee
The elaborate steps taken by the Tobacco Industry in an attempt to hide
its involvement are testimony to the importance of the Tag-line issue. Two
professional public opinion polls document with precision how adversely the
credibility of the No on 10 advertisements would be affected if the Tag-lines
identified the Tobacco Industry as the sponsor.
The Roper Poll, commissioned by the Tobacco Institute in 1978, found
that "favorable attitudes toward the tobacco industry are at their lowest ebb.”
(See Exhibit L-1)
A September 1980 poll executed by Fairbanks/Canapary/Maullin (the
relevant part of which is summarized in the Declaration attached hereto as
Exhibit L-2) is even more precise. Together with 50 other questions, respondents
were asked: "If you knew very little about a California ballot proposition, would
you be more inclined or less inclined to vote for a proposition that was endorsed
by:
(a) American Cancer Society
(b) American Heart Association
(c) Lloyd Bridges
(4) The Tobacco Industry
(e) California Lung Association
(f) Nobel Prize Winners
(g) Bar Owners
(h) Doctors and Medical Associations
(i) Californians Against Regulatory Excess
(j) Chamber of Commerce
(k) National Association of Senior Citizens
Q) Local Chiefs of Police and Sheriffs
(m) United States Surgeon General
The polling firm found that 67.2% of the respondents would be less likel
to vote fan a: puepenition endoreed tar Ga Selaier Gebietes Cale CU Gaal
be more likely to vote for a Tobacco Industry endorsed measure.
On the other hand 70.9% would either be more inclined to vote for or be
indifferent to a measure endorsed by Californians Against Regulatory Excess.
Only 28.9% would be less likely to vote for an Excess endorsed measure.
° JA Qb
ee
Ri.
F. TOBACCO INDUSTRY HAS EDITO 2] L E NO ON
The Tobacco Industry and its agent a.d alter ego Excess, as part of their
calculated stra to deceive, have denied that the Tobacco Industry
editorial content of No on 10 advertising. However, the existence of such Tobacco
Industry editorial control is demonstrated by the following facts and
circumstances:
1. The Tobacco Industry Had Editorial Control Over the No on 5 Campaign
Before the 1978 election the Tobacco Industry and its alter ego,
Calif For Common Sense, vigorously denied that the Tobacco
Industry controlled the No on 5 campaign. However, immediately after
the 1978 election the Tobacco Industry readily admitted its control of
the No on 5 Campaign at a meeting in Washington D.C. of the American
Association of Political Consultants.
At that meeting Ed Grefe, Vice President for Public Affairs of
Philip Morris, disclosed the t the Tobacco Industry used to defeat
Proposition §. Richard Woe Hal Larson 0 ard, McDowell
& Larson, appeared at the side of Philip Morris' Vice President. Hal
Larson, the person who wrote the No on 5 advertising copy, was introduced
as a “campaign strategist for the industry."
The comments of Ed Grefe made it very clear whose campaign it
was. The Philip Morris Vice President said: "When we shifted the
battleground from smoking to government involvement, we were able to
use the Prop. 13 environment to our advantage.” Reports of the meeting
make it clear that the discussion focused on "the tobacco indus
ae ee a Oe ee ome, +» + conve c on
surveys, and on how "the separated its advertising campaign into
three phases." (See Exhib
2. The Prope pa ign rely One Part In The Continuation
. JN pal ing the Tobacco industry Begui
on 3
It is crucia) for the FCC to understand that tion 10 is
merely a part of a national campaign involving the Tobacco try which
was begun in September 1977 when citizens began collecting signatures
to qualify Proposition 5 and when the Tobacco Institute hired Woodward,
tion § was narrowly defeated on November 7, 1980. Promptly
Proposi
thereafter the United States Tobacco Journal, the official organ of the
Tobacco Industry, ran an a as Exhibit N congratulating
the Tobacco Industry for defeated Proposition 5 but warning that
the proponents of Proposition are likely to try again:
"The cigarette industry can breathe a sigh of relief now that
the vote is in on California's Proposition 5... .
But while the industry can breathe its sigh of relief, it is
very much aware that it cannot relax its guard. A very important
battle has been won, but the war is still on. The makers of the
so-called Clean Indoor Air Act may be disappointed with their
failure to achieve their election day objective, but there’s no reason
to suspect that they'll abandon or lessen their crusade. Not when
the margin of their defeat was so narrow. They'll be back
propositioning the electorate - if, in fact, they've ever stopped.
The entire tobacco industry . . . has an important stake in
what happens in California. What happens in the nation's most
populous state - a state which incidentally accounts for more than
9% of the nation's cigarette consumption - impacts nationally. The
nation, as was so impressively demonstrated by the aftermath of
Proposition 13, follows California's lead. So, while the defeat of
Proposition 5 was a victory for the California tobacco trade and
the cigarette manufacturers, it was also a victory for everyone in
the tobacco industry in this country and by the same token, if the
anti-bacs are successful with their next initiative in California, it
will be a defeat for everyone in the tobacco business.
It would not be ate in the least if eve in the
ind took a partici oe it In the deleat of Waornta’s
ure
Tuture Proposition 5." (Em supp
Two things are noteworthy about the editorial:
(a) The editorial congratulated the Tobacco Industry for having
defeated Proposition 5. Neither Californians For Common Sense nor
any California citizens group was even mentioned in the editorial.
The editorial correctly identified the real party in interest.
(b) The editorial insisted that the Tobacco Industry must be prepared
to go forth and actively do battle against any new California
initiatives. The editorial did not that the Tobacco Industry
should be prepared to assist Calif citizens' if and when
Oe t new proposed
ws.
In 1979 in Dade County, Florida the Tobacco Industry fought an
initiative modeled after Proposition § which was voted upon on May 8,
1979. In just one county the Tobacco Industry t $995,000 to fight
that measure. Tobacco Industry money comprised 99.4% of the $1,001,000
spent to defeat the no smoking sections initiative. Despite being outspent
ailmost“100 - 1, the citizens lost their battle against the Tobacco Industry
by only 820 votes.
10 6 JA. QF
The Dade County, Florida citizens have placed another initiative
on the November 1980 ballot. The Tobacco Industry has already spent
$321,000 against the new Dade County initiative. Every penny spent
against the 1980 Dade County initiative has come from the Tobacco
Industry.
3. The Tobacco Indust Retained the Same Agents In Its No on 5
bacco indu Hes Run ntial ; : e npal Fac
If the Tobacco Industry did not have policy making control in each
of its campaigns and if each of the "no" campaigns were truly controlled
by local citizens, the same political operatives would not work in all
campaigns nor would the campaign techniques utilized in all "no" campaigns
be virtually identical. However:
Woodward, McDowell and Larson did all the media and
billboard advertising work for the No on 5 campaign and the Dade
County campaign, and is doing the media and billboard advertising
the Tobacco Industry controls advertising policy. —
V. Lance Tarrance did the public opinion polling for No on
5 and the Dade County campaign, and is doing the polling for No
on 10. (See Exhibit P-1.)
Dobbs & Nielson did all the legal work for No on § and is
doing all the legal work for No on 10. (See Exhibits D-2 and P-2.)
The Tobacco Industry in the Proposition 10 Campaign has attempted
to obtain political benefit from the acronym of its agent's name -
Californians inst Regulatory Excess (CARE). If one is to believe the
Tobacco claim that the 1980 California and Dade County "no"
campaign's are both independent citizens’ campaigns which are free from
the Tobacco Industry's editorial control, one must be a great believer in
unusual coincidences. For in Dade County the 1980 "no" campaign calls
itself Floridians Against Increased Regulation (FAIR). It strains credulity
to belfeve that two citizens’ groups at both ends of the continent would
simultaneously and independently conceive of names that stress
Woodward, McDowell and Larson were not hired until after September
23, 1980, long after the acronyms CARE and FAIR were put into use.
il
The names CARE and FAIR, however, ere not the only similarities.
Each of the "no" campaigns has been an almost exact replica of each of
"no" campaigns:
other
(a) The "no" television and radio advertisements are almost identical
in all campaigns. They are identical in terms of themes as well as
techniques (See Exhibit P-3.);
(b) The No on 10 matchbooks distributed all over California have
the same color and typeface as the No on 5 matchbooks;
(c) Similar grapic art work has been used in all campaigns;
(4) Both the No on 5 and No on 10 campaigns sent out a phony |
"fund-losing" mailer at a net loss solely for the political purpose
of enabling the "no" campaigns to state they had some non-tobacco
money;
(e) Houston Flournoy and Peter Pitchess were the figureheads who
signed the ballot arguments against both Propositions 5 and 10 in
the California Secretary of State's Voters Pamphlet;
(g) All "no" campaigns relied on demonstratively false taxpayer cost
"studies". The Tobacco Industry produced a "study" alleging that
Proposition 5 would cost. taxpayers $20 million for signs (despite
the fact that the neutral California Legislative Analyst stated that
the study's methodology was faulty and despite the fact that the
study contained a crucial arithmetic error. When the error was
corrected, the study concluded that the taxpayer sign cost would
only be $20,000.) California Superior Court Judge Irving Perluss
held that the No on 10 governmental cost studies were "false and
org In Dade County a similar taxpayer cost" study was
(g) No on 5 continued radio and television "spots" alleging a $20
million taxpayer cost for signs even after the arithmetic error was
discovered. No on 10 produced and is now running radio
advertisements making the same taxpayer cost statements @
California court found to be “false and misleading";
(h) All campaigns spent incredibly large amounts of money and all
have been more than 99% funded by the Tobacco Industry; and
(i) All campaigns misrepresented Tobacco Industry Involvement.
S655
Excess has claimed that the fight against Proposition
10 began on July 8, 1980, the day Excess was incorporated. Excess
claims the decision by the Tobacco Industry to contribute to No on 10
was made after Excess was formed and only because of the entreaties
made by Excess. (See Exhibit P-4)
Such a claim is legally irrelevant to the instant request for
declaratory relief. The authorities cited below clearly demonstrate that
a committee which is independent of another party at the time of the
committee's formation can subsequently become the agent of the other
party. Nevertheless, evidence that the Tobacco Industry began fighting
Proposition 10 long before July 8, 1980 is also evidence of the Tobacco
Industry’ editorial control over the No on 10 campaign:
(a) Joe Cerrell, a paid political consultant to Philip Morris openly
admitted in June of 1980 before Californians Against Regulatory
Excess was ostensibly “organized” that the Tobacco Industry had
decided to "come into the Proposition 10 Campaign." (Gee
Declaration attached as Exhibit Q-1.);
(b) During the winter of 1980 the Chairman of Yes on 10 had a
conversation with an employee of Dobbs and Nielson (the law firm
which represents the Tobacco Industry's agents). The employee
informed the Yes on 10 Chairman that Dobbs and Nielson was doing
a lot of work with respect to the Yes on 10 organization and that
pepers on which the Yes on 10 Chairman's name appeared were
strewn all over the office. (See Exhibit Q-2.) Unless one is prepared
to believe that Dobbs and Nielson was doing unsolicited pro bono
work for the Tobacco Industry, one must conclude that Dobbs and
Nielson was being paid to advise the Tobacco Industry on how to
implement the Industry's plan to deceive voters regarding its No
on 10 involvement without violating California's Fair Political
Practices Act.
(c) The Greene Bill and Its Dade County Equivalent
In 1978 the Tobacco Institute commissioned the Roper
Organization to conduct a public opinion poll (the relevant parts
of which are attached as Exhibit R-1) to assist it with its political
problems. The poll found that:
(i) fears of nonsmokers about inhaling second-hand smoke
have risen sharply in recent years - a fact that"...
represents the most dangerous development to the viability
of the tobacco industry that has yet occurred";
(ii) "there is already majority sentiment for providing separate
facilities for smokers and nonsmokers"; and
(iii) in the future, "the pressure for segregated facilities will
change from a ripple to a tide."
In its analysis, the Roper Organization suggested to the Tobacco
Industry ". .. some short term tactical approaches that may slow the
efforts of the anti-smoking forces." Chief among those tactical approaches
was that whenever meaningful separate sections legislation is proposed
and seems likely to be enacted, the Tobacco Industry should lobby for
watered down legislation that appears to protect nonsmokers but in reality
does not. (See Exhibit R-1)
In 1980 the Tobacco Industry implemented the Roper Organization's
"tactical approach” in California and in Dade County.
In March of 1980 (while signatures were still being collected to
qualify Proposition 10 for the ballot and long before Excess was organized)
the Tobacco Industry caused California State Senator Bill Greene (to whom
$20,000 had been transferred by the No on 5 campaign in 1978 as shown
by Exhibit R-2) to introduce SB 2026 (the "Greene Bill"). Most of the
Greene Bill (a copy of which is attached as Exhibit R-3) was word for
word identical to Proposition 10. The Greene Bill, using language identical
to Proposition 10, provided for smoking and no smoking sections in indoor
public places and indoor places of employment, but also permitted any
place to be designated in its entirety as a smoking area, thereby taking
away with the right hand what the left hand had given. The Sacramento
Bee editorial page correctly pointed out that the Greene Bill was:
"an attempt at a pre-emptive strike, a diversionary measure which,
though worded in part precisely like the proposed initiative, is so
full of exemptions and loopholes that its net effect would be worse
than no new legislation at all." (See Exhibit R-4.)
Meanwhile in Dade County, the Tobacco Industry implemented identical
tactics by causing a “look-alike” bill to be introduced before the Board
of County Commissioners which, if passed, will cause many Dade County
citizens to vote against the 1980 initiative because falsely think the
bill hes already accomplished the same objective. Exhibit R-5.)
This evidence from Joe Cerrell, from Dobbs and Nielson, from the
Roper Poll and the identical and almost simultaneous pre-emptive strikes
both and only that the Tobacco
me J.-A. 32
5. Excess Misrepresented the Membership of Its "Board of Directors".
In its October 2, 1980 letter to Station Managers and Legal Counsel
attached hereto as Exhibit S, Excess misrepresented the membership on
its "Board of Directors" by untruthfully stating that the President of the
California Restaurant Association was an Excess Board member. On
Friday October 10, 1980 Mr. James Collins, the President of the California
Restaurant Association, stated that he was not a Board member of
Californians Against Regulatory Excess, that he had never received any
notice of any Excess Board meeting, that he had never attended an Excess
Board meeting, and that he has avoided any discussion of No on 10
strategy. Mr. Collins stated that he did allow Excess to use his name in
an Excess — to California Restaurant Association members. (See
Exhibit T-2.
Only an examination of the files and records of Excess can disclose
how many other misrepresentations there are in Excess' October 2, 1980
letter to Station Managers.
6. The Excess Board Does Not Control Advertising Policy
It is noteworthy that Excess' October 2, 1980 letter to Station
Managers did not claim that its Board of Directors controlled campaign
policy. The letter merely claimed that the "Board meets regularly to
discuss campaign activities" There is a vast difference between "discussing
campaign activities" and controlling policy.
While the October 2, 1980 letter does state that the Board of
Directors has not delegated editorial control to anyone, it does not claim
that the so-called Board ever had any such control. A transcript of a
KNXT Los Angeles television interview with Ms. Karen Peters, purportedly
fundamental issue facing campaign policymakers - campaign finance - Ms.
Peters responded that she was only a volunteer and knew little or nothing
Due diligence by broadcast stations would determine that Woodward,
McDowell and Larson, "campaign strategists for the industry", together
with Ed Grefe of Philip Morris and Ed Grefe's counterparts at R. J.
Reynolds, Brown & Williamson, Lorillard and the Tobacco Institute prepare
based on the public opinion polling of V. Lance
Tarrance, that the Board gives no direction to Woodward, McDowell and
Larson, and that the Board has made no changes in advertising copy
prepared by "the campaign strategists for the industry."
Ae ea
The Tobacco Industry can obviously afford to hire lawyers capable
of ensuring that legal formalities are followed. There is no doubl the!
oF nos is troperly incorporated or that Tobacco Industry checks go thravgh
Excess payment is made to broadeast stations. However, the FCC
Exoe™ utilize the IRS “step transaction doctrine” to ensure that form is
7. The Tobacco Institute Is Interchangeable With the No on 10 Campaign
Tobacco Institute personnel, propaganda, materials and themes are
interchangeable with No on 10 and No on 5 personnel,materials and themes.
Until a few months ago Bill Dwyer and Connie Drath were two of
the four official spokespersons for thi Tobacco Institute (See Exhibit U-1.)
These two photogenic and articulate people travelled continuously
throughout the country debating ~ advocates of smoking and no
smoking sections legislation and de ending the interests of the Tobacco
on local and national radio and television programs. Now they
neuteing paid by Excess to debate Yes on 10 spokespersons on local and
national television and radio programs. (See Exhibit V-1.)
James McKinney, @ paid staffperson of Excess, quoted extensively
from the Tobacco Institute brochure attached as Exhibit V-2 during a
KNBR radio debate in San Francisco with Yes on 10 spokespersons on
October 7, 1980.
Stu Spencer, the national political adviser to the Tobacco Institute,
is also a consultant to Excess (See Exhibit V-3)
The graphic artwork attached as Exhibit W comes from the Tobacco
Observer, the propaganda outlet for the Tobacco Institute. The {dentical
graphic artwork was displayed as & convention booth paid for by No on
S. The same graphic artwork appeared on the face of a No on § brochure
(See Exhibit X.)
While the fungibility of artwork, advertising themes and personnel
does not prove Tobacco Industry involvement, it raises a serious question
Jes aed by itself shift the burden to Excess to prove that it is not
the alter ego of the Tobacco Industry.
Vv. LEGAL DISCUSSION
———
A. THE SPONSORSHIP IDENTIFICATION RULE
ipel that "listeners are entitled to know by whom they are Den
The
persuaded” is an integral part of federal communications law. In Re Applicability
of Sponsorship Identification Rules, 40 FCC 141 (1963).
ey
The relevant perts of 47 CFR 73.1212 (the "Identification Rule") reads:
(a) when @ broadcast station transmits any matter for which money. .
is paid or promised to . . . such station, the station, at the time of
the broadcast, shall announce (1) that the matter is sponsored, paid for
or furnished . - . , and (2) by whom or on whose behalf such consideration
was supplied ....
(e) The announcement shall . . . fully and fairly disclose the true identity
of the person or persons, or corporation, comittee, association or other
unincorporated group, or other entity by whom or on whose behalf such
payment is made or promised. . . . Where an agent or other perso’ Of
entity contracts or otherwise makes arrangements with a station on behalf
of another, and such fact is known or by the exercise of reasonable
diligence .. . could be known by the station, the announcement shat
disclose the identity of the person or persons or entity on whose behalf
such agent is acting instead of the name of such agent.”
The facts set forth above make it clear that Excess, acting as the Tobacco
Indutry's alter ego, is acting as the agent for that Industry. The intent behind
the law, the clear words of the Identification Rule and case law require the
Industry's advertisements to be identified as "paid for by the Tobacco Industry"
so that listeners can know by whom they are being persuaded.
B. THE WHAS-TV_ DECISION
The Sixth Circuit's decision in United States v. WHAS-TV, Inc., 385 F 2d
784 (6th Cir. 1967) is crucial to the Instant Request since the facts of that
case are so close to the instant facts and since the FCC's Identification Rule
was amended in 1975 for the express purpose of changing the Sixth Circuit's
interpretation of the then existing rule.
Kentucky, the two leading candidates were former Governor Chandler and a
certain Mr. Breathitt. Television station WHAS-TV in Louisville carried a program
entitled "The Chandler Years in Review" critical of the former Governor's record
me eS Se are poy fw Sg ain age rah te
was no e or mittee
for Good Government", and was Sn eS WHAS-TV.
When the Committee for Good Government was formed, all legal
formalities were observed. Indeed, the Committee for Good Government was
» «6 A. STS
The FCC attempted to fine WHAS-TV ‘for violation of the
Identification Rule, but was frustrated by Sixth Circuit which held that
the then existing Sponsorship Identification Rule was too ambiguous to
permit such a fine. The Court, however, added:
announcement.”
The Court concluded:
nwhatever the difficulties may be (in promulgating such &
Regulation), it seems obvious to us that the Commission should
seek to face and resolve them in a published Regulation rather
than relying on the intuition of its licensees”
(385 F. 2d 784, 788)
C. The 1975 Amendment of the Identification Rule
In 1975 the FCC amended its Identification Rule specifically
"because of the WHAS decision." Federal R ter, Vol. 40, No. 82, 18395
(Monday, April 28, 1975) (hereinafter cometines referred to as the "1975
Notice” and attached hereto as Exhibit T.)
The purpose of the amendment was:
" to clear up any misunderstanding about whether the statute and
rules require a licensee, who knows, or has reason to know the
facts, to adequately identify the person or persons paying for. .
. the material broadcast... - Where a political broadcast is
presented . . - by & committee which is really & campaign
instrumentality for a candidate or @ political organization, the
lie be made aware of the latter fact."
34 FCC 2d at 1105)
The breadth of the FCC's requirement is indicated by its rejection
of NBC's argument against the new amendment. NBC argued that the
amendment would place an impossible burden on licensees, and asked
rhetorically how far a licensee must penetrate the political fund-raising
to ferret out the person or group whom the Commission will deem
process
to be the "principal" of the "agent".
The FCC, in reply, admitted that the new amendment would place
some administrative burdens on stations, but:
» Sh Bs
Given that the new amended rule was adopted specifically to
overrule the WHAS-TV decision, there should be little question that the
Tag-line of Excess' No on 10 spots must, in the words of the FCC
Identification Rule:
"fully and fairly disclose the true identity of the ... entity..
. on whose behalf such payment (for air time) is made or promised.
Where an agent (i.e. Californians Against Regulatory Excess)
contracts with a station on behall of another (i.e. the Tobacco
Industry), . . . the announcement shall disclose the identity of the
entity on whose behalf such agent is acting instead of the name
of such agent.”
D. Whether Or Not Excess Was Formed Before Or After The Tobacco Industry
Took Control Is Irrelevant
Excess claimed in its October 2, 1980 letter to Station Managers
that it was formed independently of the Tobacco Industry. Although the
evidence indicates this is untrue, it is irrelevant whether or not it is
true. In WHAS-TV the Committee for Good Government was originally
formed independently of the Breathitt campaign, but later became
controlled by the Breathitt organization.
The editorial control of Excess’ advertisements is now clearly
controlled by Woodward, McDowell and Larson, "the campaign strategists
for the industry", (See Exhibit M) and by Ed Grefe and his counterparts.
Whether Excess was tainted at birth is irrelevant. What is relevant is
that today, in waging @ massive media effort to influence the outcome
of an election in California, Excess is the alter ego and agent of the
Tobacco Industry.
E. Legal Formalities Are Irrelevant
The WHAS-TV case and In Re KOOL-TV, 26 FCC 2d 42 (October 15,
1970) make clear the irrelevance of the facts that:
" The Committee (Excess) is properly organized as & non-profit corporation,
(sic) we have received tax exempt status from the IRS and Californie
Franchise Tax Board, and we follow all the formal and prudent operating
procedures required of California Corporations.”
F. In Re KOOL-TV
In Re KOOL-TV, 26 FCC 2d 42 (October 15, 1970) attached hereto as
Exhibit Z is Turther authority for the Yes on 10 position. In that case television
advertisements favoring the U.S. Senate candidacy of Sam Grossman had the
Tag-line "Paid For By A Lot Of People Who Would Like To See Sam Grossman
Elected To The U. 8. Senate (hereinafter called "Lot of People”). In the course
of a FCC iveatigation, the Sam, Gross, eaDeW ert grommans candies
one of the cam organizations formed to support Mr. Grossman's candidacy
was formally named "A Lot Of People Who Would Like To See Sam
Elected To The U. S. Senate". It is clear from such response that
19 J. A. 37
the legal formalities were carefully observed. However, it was
to the FCC that the Lot of People committee was comprised of
good-hearted and honest people who had no control over advertising policy, that
all such decisions came from the Sam Grossman campaign, and that all the
The FCC held, therefore, that the use of such a name as the Tag-line
for television spots:
"does not achieve the basic purpose underlying the sponsorship
identification requirements . . . namely, that the ublic is entitled to
know za whom it is being persuaded. The language here employed for
spo ) ntification was so general that it did not convey to listeners
and viewers the fact that the announcements were sponsored by a specific
res i.e., a committee supporting Mr. Grossman's candidacy." (Emphasis
added
The FCC clearly knew that use of a Tag-line such as Lot of People would
conjure up in the minds of viewers @ false impression that a group of concerned
citizens without connection to Sam Grossman felt so strongly about his candidacy
that they independently raised the money and produced the advertisements in
question.
Use of the Tag-line "Paid for by Californians Against Regulatory Excess"
in No on 10 Advertisements similarly creates a false impression in viewers' and
listeners' minds that irate groups of Californians have organized and raised money
from California sources to combat what they as Californians perceive as being
a law which is undesirable for Californians. The contrary is of course true.
Californians have not paid for the spots. The spots, are paid for and controlled
By eastern tobacco companies.
G. V.O.T.E.R. AND NATIONAL WELFARE RIGHTS ORGANIZATION
The instant case is easily distinguishable from the complaint of V.O.T.E.R.
against fifteen New York City area broadcast stations reported in Pike and
Fisher, 46 RR 2d 350. V.O.T.E.R. alleged that Westchester Citizens Against
Government Takeover obtained "all or a a very substantial part of its funds
directly or indirectly from Consolidated edison and fail allege that
Consolidated Edison Fad editorial control of Westchester Citizens' advertising.
In the instant case Yes on 10 has demonstrated the Tobacco Industry's editorial
control of No on 10 advertising and has shown that 100%* of the cost of No
on 10 air time has been paid for by the Tobacco Industry.
*As in 1978 the Tobacco Industry may obtain some nominal additional funding
from non-tobacco sources. To date, however, as demonstrated above, non-tobacco
money is not sufficient even to pay the actual cost of raising the funds. Excess’
real operating capital, including money to pay for broadcast advertising, comes
in its entirety from the Tobacco Industry.
20
U-A. 33
National Welfare Rights nization v. Gilmore Broadcasting C
- al. 41 F early e from tant
case. In the National Welfare Rights case the American Academy of Pediatrics
pr vane initia c service message concept, drafted the copy itself and
sent it to CIBA Pharmaceutical as a method of raising production funds in the
same manner that Yes on 10 volunteer fundraisers show Yes on 10 advertisements
to potential contributors. A contributor likes to know how his or her contribution
will be expended. No CIBA Pharmaceutical control over the advertising copy
was demonstrated.
In the instant case, however, advertising copy is drafted by the "campaign
strategists for the industry." Other evidence of editorial control by the Tobacco
Industry has been presented as completely as is possible without subpoena power.
The whole story of Tobacco Industry involvement lies in the files and records
of Excess, the Tobacco Institute and the members of the Tobacco Industry.
Moreover, the National Welfare Rights case involved small sums of money
only for production of a public service message. The costs of conceiving and
writing copy and the costs of arranging for production and placement of the
message were paid for by the Americna Academy of Pediatrics. The instant
case involves millions of dollars of purchased air time for political messages,
100% of which is paid for by the Tobacco Industry.
H. EXCESS IS THE ALTER EGO OF THE TOBACCO INDUSTRY. THE FCC
SHOULD PIERCE THE CORPORATE VEIL
Professor Warner Fuller's statement in the Harvard Law Review is
particularly applicable to the instant request: Where ". . . the corporate devise
has been used to defraud creditors, to evade existing obligations, to circumvent
a statute, ... or to protect knavery... ," the courts will pierce the corporate
veil. Warner Fuller, The Incorporate Individual: A Study of the One-Man Company,
51 Harvard Law Review 1373, at 401 (1938).
The Tobacco Industry is trying to use the incorporation of Excess as a
device to circumvent a statute - Section 317 (c) of the Act - and to protect
the knavery and deceit described in these pages.
The other classic characteristics of an alter ego are present and
documented above. Although the Tobacco Industry has been very diligent in
observing legal formalities in structuring Excess, in the words of Mr. Justice
Stone, "those familiar with present day methods of corporate control will not
be so naive as to suppose that the complete domination in fact of its subsidiaries
by a holding company owning all their stock is in any way inconsistent with
scrupulous recognition of their separate corporate entities, or with the
maintenance of separate accounts and distinct personalities of officers and
directors."
21
J.A. 39
The Tobacco Industry has complete domination in fact cf its alter ego.
One of Excess' purported Board members is completely unaware of his place on
the Board and has never received a notice of any Board meeting. Another
ed Board member, when asked by a television show moderator about the
most fundamental issue facing campaign policymakers - campaign finance -
responded that she is only a volunteer and knows little or nothing about such
things.
The FCC's duty to protect the public interest requires it to pierce this
corporate veil which shrouds listener and viewer awareness of who is paying for
the Tobacco Industry advertisements.
I. U. S. SUPREME COURT DICTA Dicta
Dicta in a recent U. S. Supreme Court opinion indicate that our highest
court agrees with the Yes on 10 position in this application.
In First National Bank of Boston v. Belloti, 435 US 765 (1978) the Court struck
down a state law Limiting the amount that corporation may spend on bellot measures
such as Proposition 10. In doing so, the court expressed its belief in the people's ability
to judge and evaluate "the relative merits of conflicting arguments” even though one
set of arguments are advanced by wealthy corporations. The Court then pointed out
that the people:
"may consider in making their judgements, the source and credibility of the
advocate.” 435 US at 791.
The Supreme Court continued by stating:
"Corporate advertising, unlike some methods of participation in politica]
campaigns, is likely to be highly visible. Identification of the source of
advertising may be required as a means of disclosure, so that the people
will be able to evaluate the arguments to which they are being subjected."
435 US at 791, f.n. 32.
If the Tobacco Industry were allowed to hide behind the front "Californians
Against Regulatory Excess", the major assumption underlying the Bellotti decision wuld
be untrue. The people would not be able to judge and evaluate the relative merits of
conflicting opinions on Proscsition 10 if they are unable to consider "the source and
identity of the advocate" because of a calculated campaign strategy by the tobacco
industry to hide the involvement of the Tobacco Industry from the people of California.
Requiring the Tobacco Industry to be identified as the sponsor of No on 10 spots
will be consistent with former Justice Lewis Brandeis' advice:
22 J. A. 40
"Publicity is justly commended as a remedy for social and industrial diseases.
Sunlight is said to be the best of disinfectants; electric light the most effective
policeman."
Very truly yours,
Californians for Smoking and
No Smoking Sections
Q
by
» JA A
Exhidit D-]}
i" THE NEW YORK Times, THURSDAY MARCH ii, tine *
*S @ te. ae.
Californians Will Vote on Whether to
By GLADWIN FILL
Los ANcEeLrs
“" ALIFORNIA may decome the
al first state to restrict omaising te
: indoor pubbe laces ‘ave
1 ber et other’ lecsles Uscough
iter action,
Frevtrated by irgittative reverses,
Tpa gers fcr evoking restrictions
‘e with the Secretary of State
tative sons bearing more thea
5.0 renatures—e twice the
The todacce industry le mounting &
rge-scale compsign te defeat the
tasure, contending that it Is an en-
oachment oa personal ‘iberties and
oid 1, tmerdinately expensive te la-
clooed eread is detrimental te noe.
emokers’ health, welfare, comfort and
environment.” the proposed statute
would make it Wegel te smoke “in any
sed public place, enclosed place
employment, enclosed educational .
feciiny “— tm any enclosed health (a+ |
cdnty. enders would be subject to
& $50 fine for each violation. ‘
Eavmpted from the ben would be
ssloens, tobacce shops, prveteny teat
ed hotel fectiities, gambling and bi-
Mord — and yee gly -
ofessional sports events
e concerts,
muelc
Ld exempied would be lobbies
of publ sietes on lounges where the
management provided «@ partit
amoking area covering ne more than
SO percent of the ¢. Reasteurants
would have no-smoking areas of sizes
@ocretionary with the management
.
Recent indicete that about
A os Rational population
Some 30 states, and many cities,
have laws of some sort restricting
emeoking, but enly two states, Minneso-
te and tien, are belicved te have siat-
In both the
were bnstinuted through ee equier
legislative process.
The Calsfornia initiative campaign is
being conducted joietly by the Group
Aguinst Smoking Pollution (GASP) in
porthern California and Californians
for Cleen Indoor Ale in southern Call-
GASP |s headed by two San Prancis-
ceo lawyers, Peul Lovedsy end Peter
The southern California cam-
ls heate Les Angeles |e
bbws tem nee ew
clei |
Restrict Smoking in Publid
The clean indoor ale committee's
honorary chairman le Dr. Linus Paul-
Ing, the Nobel Prize ecientist, and the
eee = —_ 48 & supporter Dr,
nn Seaborg, former chairmen ef the
Atomic Energy Commission,
The twe groups reised and spent
about $40,000 on the 150-dey petition
campaign and estimate that 300,000
to $1 million will be im the
Coming election campaign.
Opponents of the sal have held
their fire untd now, they have set
UP & Campaign committee, Californians
for Common Sense, and engeged & Sen
Frencisce gemiteet Management con-
cern, Woodward & McDowell, which
acknowledges thet (ts principal sponser
Is tobacco manufacturers.
eS. ie industiys pri
Wace Aiiocli on Ald ieskeim
al ail to ry Devid-end-Coltery
." Mr, Love of GA
wee po “fis tabscee ndvairy i 6
advertis i"
te spend millions, Vere going te'hene
to rely o@ talent and voluateers.”
.
Apart from interpersonal anno
8nd hezerds of cmoking. Mr. Loveday
seid, experience of business operations
where amoking was senregated hed ine
— et productivity end re.
absente
pe tlm from respwatery
Woodward & McDowell's init! '
le the current circulation of aw Ag
Mation™ it lo saws Orgeatzaiions de.
sang @ections of the propos
“An economic impact survey foun
that the Iritial cost to businesses
aut with this law would be uy
boy ef 3200 million,” Jack McDowe!
4 ‘
“i woul { put big companies la his’
rise buildings im a bind.” he saic
‘They'd have te partition every Non
ba illogical ways: You can't segrege
smoking ard nonsmcking employeca n
different Noors with discegard (or nor
Mal operating arrangements. And ho:
Can you partition coin leundries, ba
bershops or bowling alleys? !
“There's we'rd inconsistency in U
prepeees he continued. “If aa aver
ed & prcfessional sports event yo
could emecke, But if you went te ti
srene the next night and tere «
On emateur contest, you coulda't.”
sada \
oom oe Og eee eee Oars © Met Bae FREE HTH ee me
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"“SDaAiSS OF TALASUAGA: NO. ANO STASET Gtr STATE aivtooL AAD ee”S”*~*C oe
-500, One Maritime Plaza San Francisco, CA 94111 ° (415) 362-1940 ~—
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31TURES AND CONTRIBUTIONS MADE TO: (Amount may be rounded off to whol dollars)
~ O=ESCAIPTION OF Name, OF CANOIOATE & OF FICE| ASACUNT * CusMU-
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@| Tne Tobacco Institute travel expenses x Ff x 705 70S
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sais : gc’ ;
: Ln «>. -<1flinlie, ok 4 ee Oe ere:
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po
wenn
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ae 1 qu THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
>
2 IN AND FOR THE COUNTY OF SACRAMENTO
3 DEPARTMENT NUMBER ONE HON. ROTHWELL G. MASON, JUDGE
. CAMPAIGN FOR CLEAN INDOOR AIR, )
an unincorporated association; )
6 PAUL LOVEDAY; EDDIE TABASH; )
PETER HANAUER; SUSAN KENNEDY ; )
~T and JAMES WHITE,
g Petitioners, )
)
9 vs. ; No: 275588
10 MARCH FONG EU, SECRETARY OF STATE, }
11 Respondent,
12 CALIFORNIANS FOR COMMON SENSE, )
a nonprofit corporation; HOUSTON I.
3 FLOURNOY; KATHERINE DUNLAP ;
13] prrer J. PITCHESS; and VINCENT } Sec f*
14 TOOLAN, State Printer, )
; sxe
15 eS SSSSSS SSS CO SSS x
16 ---000---
, 17 FRIDAY, AUGUST 11, 1978
| 18 ---000---
) 19 REPORTER'S EXCERPT TRANSCRIPT
| 20 TESTIMONY OF
: 2 VIRGO G. NIELSEN, JR.
“ 2 @--000---
| 23 | APPEARANCES:
24 For Petitioners: ROGER JON DIAMOND, Esq.,
15415 Sunset Boulevard
s Pacific Palisades, California
ya For Respondents: VIRGO G. NIELSEN, Esq.,
Suite 2500, The Alcoa Bldg.
rai 1 Maritime Plaza
San Francisco, California
zB eee
' Reported by: STEPHEN M. ROCHE, CSR €3429
|
-—-—— oe —— eo . 6& ——— -_—— errr _-. .
’
a2 ww =
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ea
So
FRIDAY, AUGUST 11, 1978
=---000---
The matter of the Campaign For Clean Indoor Air, et al.,
Petitioners, versus March Fong Eu, Secretary of State, et al.,
Respondent, Number 275588, commenced on this day before Honorable
Rothwell G. Mason, Judge of the Superior Court, in ané for the
County of Sacramento, State of California, sitting in the said
Superior Court, in Department One thereof.
The said Petitioners were represented by Roger Jon Diamond,
Esq., acting as their counsel.
The said Respondents were represented by Vigo G. Nielsen,
Jr., Esq., acting as their counsel.
The following partial proceedings were had, to wit:
MR. DIAMOND: He does have two other attorneys here to
represent him, and -- Mr. Hodgson and --
WITNESS: Mr. Hodgson, would you like to represent us in
my absence, please?
THE COURT: Will you take a seat, please?
He is being called under 776 of the Evidence Code.
THE CLERK: Do you solemnly swear that the testimony you
are about to give shall be the truth, 8° help you God?
WITNESS: Yes, I do.
THE CLERK: Please state your full name.
WITNESS: Vigo G. Wielsen, Jr-, & resident of Marin
County, California.
TESTIMONY OF
VIGO G. NIELSEN, JR.- witness called on behalf of the Petitioners
herein:
Petitioners herein:
Q Mr. Nielsen, were you retained by the petitioners in this
action to file @ lawsuit on their behalf?
a I was retained by & =~ Californians For Common Sense
to file an action on behalf of the three authors.
Q So Dunlap, Flournoy, and Pitchess have not retained your
firm to represent them in this action?
A Other than in their official capacity as opponent
signatories -- 1 don't understand your question.
Q Californians For Common Sense and not the three petitioners
have retained you ~~ oO has retained your firm to file the :
lawsuit; correct?
B The Election Code requires that persons submitting an
argument shall do it as an organization and for the -~- that
organization submit not more than three human beings to appear
as the authors in the official ballot pamphiet.
Californians For Common Sense submitted the argument and
rebuttal and had three human beings serve as their authors just
as your campaign aid and your three authors dic.
Q Now, yes or nO, Dunlap, Flournoy, pitchess -- 4id they
retain you to file a lawsuit for them? Yes OF no?
a Individually, separate from their individual capacity
within the context of being signatories, no.
As being representatives of Californians For Common Sense,
yes.
nl
F
2 am x .
oot.
’
Q are they paying you anything to represent them in this |
armen ——— a
qnseeenre severmoves y sit
ee — . ..
rs ' bon ~
Par: rR SAG ee ee Ee Th Somer
y 7 : oe -. - r - : . ob Boe ~e
‘ar ae 4 y a > a : i ee
OM ey - ‘~ ‘ a ian 4 - eee! ¢
. - igs pp Pte 2 Ny alg sae Tie cae a
» SC) \
-
a
i action?
2) * Separate from Californians For Common Sense, HO°-
Q Okay. The study that you refer to, this economic study --
who did that study?
a I believe it's done by an organization called Economic
3
4
5
~g | Research associates.
71 @ And where are they based?
8 os According to the campaign report, San Francisco.
9} @ And when was that firm retained to prepare the study?
30} * I do not know. I am the attorney for the committee. I am
11 not the campaign management firn. I am not the person that
12 | makes those decisions. I represent the committee, Mr. Diamond.
13 | @ You have no information at all upon which to make &
14 | decision or an estimate as to when approximately the firm was
15 retained?
#2} * The firm had to be yetained after -- whatever ~~ it was
17 | October, 1977, since there was no organization to retain it,
it was retained sometime before the statement to Your Honor's
Payment List, because they would have probably been paid either
a progress payment or at the completion of their study.
Q And when were they paid for their study?
aA Between May 10, 1977 and June 30 -~ excuse me ~~ 1978 and
June 30, 1978.
Q and how much was that firm paid for the study?
WITNESS: If your Honor would let me see that statement.
ghey were paid at least $3000.00.
THE COURT: Would Z interpret -- you made a previous
and similar report from earlier reporting, but you don't have tha
esxsxeees 2 8 Ss
-5-
€. 3 *
oomownw aoweweeTe *:,
here today or don't know if there was any additional payment?
WITNESS: Correct. The law requires that both sides
file a report in mid-May going through the 10th of May -- or is
it March 10th of -- March, that report was filed, and that would
have all previous income and expenditures.
THE COURT: So our record is correct, you said May 8,
May 10 a while ago. You probably meant March 107
WITNESS: I stand corrected. It was between March 10, 1978;
Mr. Diamond, and June 30, 1978, in which the $3000.00 payment
was made.
Q [MR. DIAMOND] And when was the study completed?
A I have no idea.
I assume during that same period. It was made -- it was
comple.2d prior to the submission of the opponent's official
argument.
Q You mentioned -~-
THE COURT: Prior to the submission -~-
WITNESS: <-- of the opponent's -~
THE COURT: =~ opponent's being -~
WITNESS: The Californians For Common Sense submitted &
statement based on & research document. The research document
I believe, must have been in existence by that time, or they
could not have ‘quoted it.
Q How 4id Californians For Common Sense get started?
é I am not sure I am aware.
Q All right. bid you participets in the drafting of their
articles of incorporation?
OO
ee A OO
16
eXSRRUERBE SSS S
C | . aa
Q All right. And who retained 7 to Graft the articles
ration for Sense?
xu The organization that I was about to form.
Q And who were those individuals?
a Who was the single person that made the phone call, or who
was the person who said they will be the committee?
\e Both.
a Mr. Diamond, our firm practices a specialty in Prop 9
law. We represented the “yes on 3," “Yes on 10," "No on 13"
committee.
We represent @ number of ballot measure committees. We
get called for our expertise and are asked to create campaign
committees.
Q Who contacted your office?
a i gon't semember..
Someone who was going to be part of the "No on Proposition
5" campaign.
Q Do _ you know whether they are represented or in any way
ated w tobacco industry?
a If I could remember who it is, I could answer, but since
I can't remember who it is, I don't know.
Q You mentioned this was your client, that one who hired
you to form the corporation.
a“ We're -- we're contacted regularly by people that say,
*we would like to form a campaign committee and engender support
or opposition to & measure.”
9 Okay. And who contacted yOu?
JASO
eR
: , p>) SY,
PAS ik hee 4
4 <4
' ; 4 : « 7 ba” . 4
RI tera 1” ee ae oy
Exhidie DS
DECLARATION OF PAUL LOVEDAY
J ZI, Paul Loveday, declare
1. I am an attorney licensed to practice law in all the courts of the State of
California. My business address is Two Embarcadero Center, San Prancisco,
California 94111.
1 know of my own knowledge that the facts contained in this Declaration are
true and would be willing to so testify under oath if called upon to do so.
2. I was @ supporter of Proposition 5 and as such I matched wits against. John
; Greenagel in television debates four times “uring the 1978 campaign on
Proposition 5. Ta the first two debates John Greenagel represented that:
a. he was opposing Proposition 5 merely because he as 2 small businessman 8
felt that Proposition 5 would harm small businessmen;
b. he was a volunteer and was not being paid for speaking against Proposition
5; and
c. he had no affiliation or connection whatsoever with the tobacco industry.
3. tn # debate in Fresno only a few days before election day, John Greenagel did
admit he was being paid for his appearances, but vehemently denied any
affiliation or connection whatsoever with the tobacco industry. :
a I declare under penalty of perjury that the foregoing is true and correct and
that this Declaration was executed on October VP , 1980.
’ , his xis ai
PERIOD AMOUNT
120.00
$
fey y 110000 .00
'
ie,
750.00
972.88
840.00
FIAT ASSOCIATES RENT —
46 Ratkovicn Associates
7 South Olive Street
Angeles, CA 90014
‘: — 1000 .00
West Century Blvd., Suite 618
Angeles, CA 90045
18.58
SROOKS CAMERA SHOP STAFF & REIMBURSED EXPENSES
Kearny
an Francisco, CA
by
L. REYNOLDs
Py
a
.
“3/0 Californians' for Common Sense
$151 West Century Blvd., Suite 614
: 08 Angeles, CA 90045
~ ZLEGANT FARn&R REIMBURSED EXPENSES 18.35
22 Battery Street
- San Francisco, CA 94111
: MYATT HOUSE HOTEL (LAX) REIMBURSED EXPENSES 24.98
»8s Angeles Airport
6225 West Century Boulevard
Los Angeles,, Ca 95602
San Francisco, CA 94111
. BEATt REUENCY HOTEL (SF) REIMBURSED EXPENSES 151.04
ae <yo pinenons Sales
“San Francisco, canek, ca 94111
paid by
JACK S. MCDOWELL
_ -@/0 Woodward & McDowell
22 Battery Street
Francisco, CA 94111
“SER Oy EXPENDITUKES THIS PAGE: . SUBTOTAL: 2627.91
‘im additional payee in excess of $50. '
weecl
, Greenagel & Peterson, Inc.
Street
Francisco, CA 94111
, Greenagel & Peterson, Inc.
45 Washington Street
gan Francisco, CA 94111
DLrricx & COMPANY
+0. Box 7831
jam Francisco, CA 94120
,
san FRANCISCO ALRPORT HILTON
jan Francisco, CA 94126
DELIVERY SERVICES
4 Clementina Street
Francisco, CA 94103 -
DIO VIDEO REPORTING SERVICE (SF)
« Box 31517
STAFF & REIMBURSED EXPENSES *
OFFICE SUPPLIES
CAMPAIGN PROGRAMS
OFFICE SUPPLIES
TRAVEL
OFFICE SUPPLIES
143.35
64.59
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ye tea, y At Hi Gt Hi tie Fi HE Pree |
Ht He i ii HL ane ei
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we 2 Be be.
By GRACE- MARIE ARNETT
Copley News Service
WASHINGTON —
The tobacco ie .
aus has disclosed its reci for
Selearing the anil seoeking Toliienve ta
Califurma.
First, take the hatUeground and shift
it to your advantage. Add union sup
port, and pour in big bucks. Stir public
awareness vigorously, ard spice with «
dash of humer.
Ed Grefe, vice ent for
Winning rec members of the
American Association of Political
cessful campaign techniques.
million la aa — the most expensive
a ory — by gathering
extensive survey data.
“We found this was a low-intensity
issue, but that everyone had an opinion
on secondhand smoke,” said Hichard
Woodward, a manager of the “anti-
five” campaign.
Proposition $ would have banned
smoking ia most public places and
would have required smoking and non-
smoking areas to be partitioned.
The tobacce industry began mapping
The strategy: take advantage of the’
post-Pro» 13 environment and the
language @ the ¢nU-smoking initiative
to form the basis for a campaign to
defeat the referendum.
The technique: shift the bat-
Ucground. “This was not an ise
between smokers and non-sinokers,”
Grefe said. “But it went to the heart of
how much government involvement we
want in our lives.
“When we shifted the battleground
from smoking to government in-
volvement, we were able to use the
Prop. 13 environment te our ad-
vantage.”
The advertising: the industry '
Separated its advertising campaign
into Unree phases. “Find the enemy,
focus on the — Wd and read the
fine print,”
WKiah CA
(mendeaino Ce)
The tobacco industry: How it
snuffed out Proposition 5
“In phase one, we hed te show the
enemy was no’ smoke bul government
intervention in ovr lives. We used the
catch phrase, ‘They're at it again,’ te
bring this home to voters,” Larson said,
“In phas® two, we focused on the
donger of regulation. We were asking
the voters to think what Uhe government
will try to regulate next. “Today it's
smoking; tomorrow will it be a free
preset” z
“We already have enough ua-
necessary laws,” one ad said.
Finally, the ads focused on the
wording of the initiative itself in an
effort to show it was discriminatory,
asking voters to read the fine print. A
boss can smoke in his private office, but
his secretary in the lyping pool could be
fined $50 for smoking In the common
area. A black wonen asks the
television viewer, “Can you tell me this
isn't discriminatory?” " t's tough
enough being @ secretary without this,”
another ed says.
In cond ting public opiniun surveys,
the Industry found that although vie-
tually everyone had an opinion on
secondhand smoke, thuse emotions
were not strongly held. * “Koowing Unis,
we decided not iv take the campaign too
striously,”” Larson said
One radio ad carried the effects of
Prop. $ to @ barber shop where one
chair would have to be walled off for.
smokers. Whoever heard of a barber
shop duet?” “Stupid,” the quarter
chimes,
The Intensive media campaign raised
public awareness of Prop. 5 well above
| Ure70 percent goal te nearly 9 percent, -
and eventually defeated the initiative.
by 700,000 votes out of 6.7 mulion cast.”
Grele said alliance’ ts solidifying:
between management and labor on,
such issues as smoking ordinaces and
nuclear power disputes,
| “Union lobbyists have more In
Common with corporate lobbyists (jobs
and profits) than with public interest
wd consumer groups,” Crefe .aid,'
‘and | expect to sce more and mere!
pace ‘labor alliances, ;
“We could not have won on $ in|
alifornla without union support,” he
‘ded. ,
‘<
.
*
a
we J. A. S6
Tournal :
. (Cac. oxW. 2,330
ZO UNITED STATES TOBACCO JOURNAL
CURT BROWN
Midwew Advertinung Manager
(312) 44-304
HARRY S. TRALGOTT
Presadent
Ce en a A i ee ed
Set 8) al oe enees meer ee.
ee ee
DM Dew Sh treet Nee Fe 8
Sahat 0 « hee Oe Gee ew sib tem et +
Pm eng eer ee wee tr ee
eo
Nm re
els eee BRE ee)
Fe
ah
Hil
whacco The people of the Golden Siste voted 2.5
million to 2.1 million ugninet the propose! to restrict smoking in
yar s Still On.
the backer. of the s-calle: fornia C Indoor Air
ma dinappointed with their 10 ac! Election
yay omective, Mul there s SON 10 SUSHeC t they |i
Paine their ade. Not when the marpin of their
cul Was SO Rurnn. ‘ k “pro kon t
Hectorutie= i. mm fact. ihe. ve ever stopped.
Right mow. the guspers are most likely analyzing every
axpect of their effort - Ww determine what concessions they have
to give in order to make their desired wnoking restraints pulatuble
to more Californians. Only a relatively small percentage of the
electorste has to he won over to tip the scales the other way.
Perhaps all that is required is to remove from their neu proposi-
tion the han on smoking in how ling alleys. harber shop. and
heauts parbors. Or may he the antibacs only have to say it will be
okays © smoke at 177 Concerts as well as at rock concerts. or
that it will he all night to smoke ut amateur boxing and wrestling
matches us well as at professional Routs.
What we're saving is that California's voters did not kill the
anti-smoking monster on Election Duy: they simply stunned him
and that he'll recuperate quickly. develop a modified strategy
and attack anew: perhaps with greater force.
. j seco indusin - grower. manufacturer. «hole:
important siuke in whal'’s going on in
<
suler and retailer — Pi:
Ration, us Was so eHpTressis cls msirat {
Proposition Thincen- filhws California's lead. So. while the
defeat of Propenition Five was a victor for the California
tohucco trade und the cigaretic manufacturers. it was alo a
victors for everyone im the tohuccu business in this country
And. hy the sume token. if the antihues are successful with their
neXt initiative in California. it will be a defeat for everyone in the
twhucco husiness.
“Howe really want to mancer the taterc, then bets cma
ethers tes pun ue — sherchedder, complnce, amd cuter = hem and
heiping America pein it. iemaer ay the work! . het cxample of
beoth coven canal itadit wdbecer! treed ven
**Teday will rash inte temernem aacwer. het with ingot trem
cack of as. it can he a heticr mere - hetict bot as, hottie bow
eur cmplivecs, keticr ter eocerament. amd heticr hw the dis-
advantuged ererewherr
Harr Ko Weth chesrman and prewar
McCormick & Co.
J.-A. ST
Thteves of executive time
yw
w you
chm’! renlly kee where your day
re
your
153
$f
1
c
i
Ht
t
ty
t
The real fee wesc.
© Atiomping te: mach at once
@ Unrculistiy terme estimates
A seston that Mua henzie vewersts
Dell) time tog (but mot the way
atl keep them). Commun
mistakes: (1) Filling im sheet at end
of day when memon can play tncks
(2) Listing what was done without
analy 7ing time spent im term. of
work accomplished. (2) Using log us
record af achievement insicad of
self-imprnn ement tins
Right wav: Enter everthing done
as veut as Vent ep even fon a brnef
imtierrupin = Alkw room on shect
fu comment on things done un-
Revessanh. work that could Rave
been beft te sahrdinates. things
dome poor throagh lack of prep
raton. time spent on din dicuming
feb. that tok more of less terme than
expected
“Advance” thme tog. Spend the
bast SY minutes of dav filling im a
sheet for tomers What sou plain
ter ukes How home ct stank tke Téen
compete what ateall happens
when fomernem comes. How mach
Wf plan vou Cun folkew What goes
wrong with the rest identity sour
wan “theses of time.” then muke
diols plans vou can stick te (Dent
ship thes step nist Recess tomorrom
wont Reo “inpel” diaw Most
Managers Waste time m the same
wutsecren dant
Fighting absenteeism
Comialer trving some of thew
Buls Le IMpune empknee alien:
ame
@ beset that worker talk tee super:
Vix when culling in ck Don't per-
frit beans ing Mes wuges wth Co BOrket
oF seureturs
© Chme munity atic: suring time.
havc sapersis Collect atl Medd all
time cats tha aren't punched vet.
wat the kate wewher Cunt avon com
froming tres Perse
@ When a worker is bored tell him
attendance 1s the first thing sou hak
at when it's rane um *
*
OE EY gE
fee a ee ae es 5 p
te? eet Oey ie. Oe
oe ae
A STUDY OF
PUBLIC ATTITUDES TOWARD
_ CIGARETTE SMOKING AND
THE TOBACCO INDUSTRY
IN 1978
VOLUME |
MAY 1978
— eee
Tuc ROPE® SREAWZATION bre
tp oS ESB. -
ete “
. . li
ie tee
@ te
Re aad 4
am * pt Tbs eas Lane.
. . 4; vs Sor Pao =m fae a Ys -
z (fe ae 3
ee Salo) i~ 4
° 4
‘
“Hy .
re ot.
Wee at -
Wee,
, @nis is the sixth biennial national opinion survey we have conducted
for The Tobuceo Institute. Like all its predecessors it deals with public atti-
tudes ¢overds the sucking and health issue and attitudes tovards both the tobacco
industry and government regulation of it. In the more recent surveys in the
series, 8 eeco>’ focus of the studies has been on the passive smoking/non-sxcker's
rights issue.
| This survey updates all major csi areas and breaks significant nev
ground in the passive smoking/non-smoker's rights area.
A complete description of the survey methodology, sample size, inter-
viewing dates, etc., as well as copies of the questionnaires used, may be found
in the "Methodology" section following this “Analysis” section.
-
e+ een 88 ee ee meen
THE TOBACCO oNDUSTRY
tT 1978
Z
May 1978
O | O
' RIGELICITS OF THE STUDY
Approximately forty percent of this sixth study of public attitudes
> toward cigarette s..sking consists of new questions which have never. before been
asked for The Tobacco Institute. For this reason alone, many of the research
findings contained in this report are of special interest. The study also con-
4 tains 8 systezatic review of trend data for questions which have been asked in
the past. Taken together, the large body of new material and the comprehensive :
wiew of changing attitudes over the las= ten years highlight resulis that we con- 7
: sider to be of extraordinary importance to the iidistey. |
Wot all of these findings are encouraging. In fact, the major high- |
> Lights of this report divide themselves into results which are sometimes promis- :
ing but mostly foreboding as regards the very future of the tobacco industry.
(To put it another way there are a certain number of “silver linings” to the
7 many “cleuds.") For this reason, we have decided to present the highlights of
this report in the form of a balance sheet, measuring the optimistic and pessi-
mistic entries, as it were, on opposite sides of the ledger.
: These balance sheet “entries” are presented without documentation in
the interest of conciseness. They are, however, “auditec" in the "Detaile2
Analysis" that follows.
4 _ a «-*
ae ~—
4
~ 5 >
smoking.
a =
3t-6y
<>
e
*ASSETS" : . SLIABILITIES"
1. The overall saliency of the . 1. More than nine out of every ten
*cigarette issue" is low, Compared Americans believe that smoking
x to crime, drugs, pollution, and a is hazardous to s smoker's
balf a dozen other items, smoking health.
is at the botto= of the list of
personal concerns. 2. A majority of Americans believes
that it is probably hazardous to
* 2. There is little sentiment for a be around people who smoke even
a total ban on cigarette smoking in- if they are not smoking themselves.
i, public places (but see #3 under
“Liabilities"). 3. There is majority sentiment for
separate smoking sections in all
__—s3 ‘There is overwhelming approval of public places we asked about.
Be, Placing notices outside places that
UA,
Eat “ke wal ears
‘es I . eg we al a ~ SZ
Re so eee
=
ae aad.
Fe oe tet
ie ate = wee
. 4
. oO
®ASSETS" (continved)
Tew people favor job discrimination
based on cigarette sroking.
The percentage of smokers in the 17
to 24 year old age group is up, an4
the amount smoked per day per young
emoker is also up (but see #5 under
"Liabilities").
There is broad support for FIC regu-
lation of “public service” adver-
tising sponsored by nen-profit
groups like the Cancer Society and
Ralph Nader.
There is less than majority senti-
ment in favor of a graduated tar
cigarette tax.
id
4,
10.
11.
*LIARILITIES”
(eontinue2)
There is majority acceptance
of the idea that the cisarette
warning label should be nade
stronger end more specific.
The percentage of people who
smoke cigarettes is at the low
cst level measured in the past
ten years.
A steadily increasing majority
of Americans believes that the
tobacco industry knows that the
case against cigarettes is true.
avor
Favorable attitudes toward the
tobacco industry are at their
dowest ebb.
There is widespread support for
anti-smoking education in the
schools--and at the very early
years.
Two-thirds of smokers would
like to give up smoking.
Nearly half the public thinks
that smoking is an addiction.
More people say they would vote
for than against a political can-
G@idate who takes a position
favoring a ban on smoking in pub-
lic places. -
Vw ee =
IMPLICATIONS OF THE FINOINGS
The original Surgeon General's report, followed by the first “hazard” warn-
dng on cigarette packages, the subsequent “danger” warning on packages, the removal
of cigarette advertising from television and the inclusion of the danger warning in
_ @igarette advertising were all “blows” of sorts for the tobacco industry. They
e were, however, blows that the cigarette industry could successfully weather because
they were all directed against the smoker himself. While the overwhelming majority
‘ of the public has been convinced by the anti-smoking forces that smoking is dangerous
to the smoker's health, this has not perssaded very many cuckers to give up smokin;.
The anti-smoking forces’ latest tack, however--on the passive smoking
dssue--is ancther matter. What the smoker does to himself may be his business, but
i what the smoker does to the non-smoker is quite a different matter, The anti-smoking
forces have not yet convinced anything like as many nities diel smoking harms the
health of the non-smoker as they have convinced people that smoking harms the health
‘J of the smoker. But this study shows that they are well on the way to making the
Same sale about the effects of smoking on the non-smoker as they have already made
with respect to the effects on the smoker. Nearly six out of ten believe that smok-
: ing is hazardous to the non-smoker's health, up sharply over the last four years.
More than two-thirds of non-smokers believe it, nearly half of all smokers believe
it.
This we see as the most dangerous development to the viability of the
tobacco industry that has yet occurre¢. While there is little sentiment for an out-
tight ban on smoking in public gathering places, there is already majority sentiment
for providing separate facilities for smokers ané non-smokers. As the anti-smoking
_ forces succeed in their efforts to convince non-smokers that their health is at
stake too, ated facilities will e
‘ as ve see it.
It is, of course, possible that once smokers and non-smokers alike ex-
S.A. $3.
oO o dials oe
with the restrictions as they di¢ with the Volstead Act. Smokers who wart to dine,
work or travel with non-smokers may become fed up with having to fcrego snoking.
Bon-smckers who want to dine, work or travel with smokers may become fed up with
having to endure the extra smoke that exists in pegregated cnstilng facilities. Both
coulé say “to hell with it 211" and go back to a smoking anywhere sentinent.
But if the anti-smoking forces are successful in convincing non-srokers
that their health is in dancer, it's at least as likely that the sentirent for
sesregated facilities will be strengthened. And if segregated facilities do rot
accomplish the anti-sxcking forces’ desire of making segregated smoking so untenable
that srokers will give it up, the next step could be an outright ban. If non-
gmokers are by then convinced that it's their health that is at stake, the present
sentiment for separate facilities could become support for a total ban.
The strategic and long run antidote to the passive smoking issce is, as
we see it, developing and widely publicizing clear-cut, credible, nedical evidence
that passive guckirg is not harmful to the non-smoker's health.
While that should be the fundamental objective of the tobacco industry in
our opinion, this study suggests that there are some short term tactical approaches
that may slow the «forts of the anti-smoking forces and buy the industry the
necessary time to develop what we see as the fundamental evidence needed to reverse
the trend. But they are tactical and short term in character. Among these short
Tange tactics are the following: °
2. Where Mew Jersey-tyee lecislation appears to bes.real
possibility, the inéustry might propose that operators of restaurarts,
cabs other c “institutions” be tted to estab tever
qnehheg policy they csi sen ee ee See. eee
J- A. eee
2 ae A. aa ee Po ee a Te Pa Ph Ma eae cae ee
: - Se ee Se Oe ae
permittes," "Separate facilities for emckers,“ or "Separate facilities
for non-smckers"=-but with the requirement that the smoking conditions
that apply be posted outside the premises for the convenience and pro-
tection of smokers and non-smokers alike. : °
3. In view of the widesrread public belief that public ser-
wice advertising by non-profit organizations should be subject to the sane
FTC scrutiny as commercial advertising, we think it might be desirable
to noisily file an action with the FIC the next time public service
ac¢vertising misquotes the facts about smoking and health, and to further
Genané that the FIC require the offending organization to run “corrective”
advertising as Listerine has been required to do.
4. While the public widely supports goverment programs to
Giscourage cigarette smoking, a majority opposes spending tax dollars
for such a program--which suggests such programs might be wulnerable if
people were made aware of their costs.
S. Several questions in this study suggest that where there is
substantial support for government action against cigarette smoking, there
is a discernible decline of such support when people are made aware of
the other goverrment intrusions that might follow. °Where will it all
end?" might be effective in blunting anti-smoking regulation.
6. Another short range tactic is suggested by the question
concerning “fumaphobes." The findings suggest that there is the possi-
bility of dividing those who are relatively unexcited about the passive
, smoking issue from the anti-smoking zealots, by portraying these zealots
as people with an unreasonable fear of cigarette smoking.
we. * e e } .
But we would repeat that since the anti-smoking forces have now gone a long
way in convincing the non-smoker that his health, too, is at stake, the number one
ob:
as we see it, is no lo
O Oo
ective in our opinion is to develop authoritative and credible evidence with ©
pect to the effects of passive smoking on the non-smoker's health. The issue,
nger what the gmoker does to himself, but what he does to
7
others.
_ 4
The original Surgeon General's report, fol: - g the first “hazard” warn-
dng on cigarette packages, the subsequent “danger” wa ag On packages, the removal
e of cigarette advertising fro= television ané the incl -ion of the danger warning in
cigarette advertising were all "blows" of sorts for the tobacco industry. They
were, however, blows that the cigarette industry could successfully weather because
they were all directed against the smoker himself. While the overwhelming majority
of the public has been convinced by the anti-smoking forces that smoking is dangerous
to the smoker's health, this has not persuaded very many cmokers to give up smoking.
. The anti-smoking forces’ latest tack, however--on the passive smoking
dssue--is ancther mattez. What the gnoker does to himself may be his business, Dut
e what the smoker Goes to the non-smoker is quite a Gitferent matter. The anti-smoking
forces have not yet convinced anything like as many people that smoking harms the
health of the non-smoker as they have convinced people that gmoking harms the health
ry of the smoker. But this study shows that they are well on the way to making the
game sale about the effects of smoking on the non-smoker as they have already made
with respect to the effects on the smoker. Nearly six out of ten believe that smok-
@ ing is hazardous to the non-snoker's health, up sharply over the last four years.
More than two-thirds of non-smokers believe it, nearly half of all smokers believe
at.
id This we see as the most dangerous development to the viability of the
tobacco industry that has yet occurrec. While there is little sentiment for an out~-
right ban on smoking in public gethering places, there is already majority sentiment
ad for providing separate facilities for smokers ané non-smokers. As the anti-smoking
forces succeed in their efforts to convince non-smokers that their health is at
stake too, the pressure for segregated facilities will change from a ripple to 4 tide
as we see it.
It is, of course, possible that once smokers and non-smokers alike ex-
perience all the inconveniences of separate facilities, people will become fed up
— J.-A
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with the restrictions as they did with the Volstead Act. Smokers who want to dine,
work or travel with non-smokers may become fed up with having to ferego snoking.
Mon-smokers who want to dine, work or travel with smokers may become fed up with
having to endure the extra smoke that exists in eogregated .encking facilities. Bott
could say “to hell with it all” and go back to a smoking anywhere sentinent.
But if the anti-sncking forces are successful in convincing non-smokers
that their health is in danger, it's at least as likely that the sentirent for
sesregated facilities will be strengthened. And if segregated facilities do rot
accomplish the anti-smoking forces' desire of making segregated smoking so untenable
that scokers w/1l give it up, the next step could be an outright ban. If non-
smokers are by then convinced that it's their health that is at stake, the present
sentiment for separate facilities could become support for a total ban.
The strategic and long run antidote to the passive smking issce is, as
we see it, developing and widely publicizing clear-cut, credible, nedical evidence
that passive smoking is not harmful to the non-smoker's health. “
While that should be the fundamental objective of the tobacco industry in
our opinion, this study suggests that there are sone short term tactical approaches
that may slow the efforts of the anti-smoking forces and buy the industry the
necessary time to develop what we see as the fundamental evidence needed to reverse
the trend. But they are tactical and short term in character. Among these short
Tange tactics are the following: :
1. Where outright mien on smoking are proposed and appear
likely of passage, the industry could propose separate facilities (as the
lesser of two evils).
2. Where New Jersey-type legislation appears to be a real
possibility, the industry might propose that operators of restaurants,
cabs and other public “institutions” be perai to establish whatever
smoking policy they desire--"Smoking permitted re," “%» smoking
2A, ne
tire | oy
* *
Seas ee) SR i lee on Ra ¥ C apie ie ae
= A . -
permitted,” “Separate facilities for emckers," or “Separate facilities
Zor non-emokers"--but with the requirement that the smoking conditions
that apply be posted outside the premises for the convenience ané pro-
e ; tection of smokers and non-smokers alike. : .
3. In view of the widespread public belief that public ser-
wice advertising by non-profit organizations should be subject to the same
FTC scrutiny as commercial advertising, we think it might be desirable
to noisily file an action with the FIC the next time public service
advertising misquotes the facts about smoking and health, and to further
Genand that the FTC require the offending organization to run “corrective"
advertising as Listerine has been required to do. ‘
4. While the public widely supports goverment programs to
discourage cigarette smoking, a majority opposes spending tax dollars
for such a program--which suggests such programs might be wulnerable if
people were made aware of their costs.
S. Several questions in this study suggest that where there is
substantial support for government ae against cigarette smoking, qhate
> is a discernible decline of such support when people are made aware of
the other goverment intrusions that might follow, “Where will it all
end?" might be effective in blunting anti-smoking regulation.
7 6. Another short range tactic is suggested by the sabtittans
concerning “fumaphobes." The findings suggest that there is the possi-
bility of dividing those who are relatively unexcited about the passive
smoking issue from the anti-smoking zealots, by portraying these zealots
as people with an unreasonable fear of cigarette smoking.
o . e e : .
But we would repeat that since the anti-smoking forces have now gone a long
way in convincing the non-smoker that his health, too, is at stake, the number one
JA. 69 - ere
—_— CO o
-
objective in our opinion is to develop suthoritative and credible evidence with ©
“ — gespect to the effects of passive
as we see it, ds no longer what the smoker Goes to himself, but what he does to
groking on the nor-smoker’s health. The issue,
ethers.
4 NT ge eee Ce ey, a he
OO Nee es ee! ns eee tee ee eee - a wes ’
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Exhibit K- 2
PPC SCHEOULZ £-2 Californians for Cssz0n Sense 10/24/78 TO 12/31/78 Pace 13
‘AME AND ADDAESS DESCRIPTION OF PAYMENT ° PERIOD AMOUNT
THE SUM REPORTER - METRO REPORTER GROUP MISCELLANOUS ADVERTISING 2400.90
+366 Turk Street
. an Francisco, CA 94115
J _ —
\ a
e ; -NITED DEMOCRATIC CAMPAIGN COMMITTEE DIRECT MAIL 20990 .39
=D #76-1367 Atta: Williara Murray, .
a 2/0 Senator 3111 Greene
5514 South Brcacway
-38 Angeles, CA 96903
-3 POSTMASTER DIRECT MAIL 9000 .90
-/0 Don Harris
rignal Data Corporation
1350 East Spring Street
ong Beacn, CA 95800
* $S POSTMASTER ° DIRECT MAIL 9000.00
-/0 Don Harris ;
“sgmal Data Corporation
+59 East Spring Street
2Mg Beacn, CA 90806
3 POSTMASTER DIRECT MAIL 9090.90
e ‘O Don Harris
? ~gnal Data Corporation
-50 East Spring Street
ng Beacn, CA 90806
5 POSTMASTER DIRECT MAIL 14009 .00
9 Don Harris
eg -gnal Data Corporation
-50 East Spring Street
7Ag Beach, CA 90806
- POSTMASTER DIRECT MAIL 9240.00
2 Don darris
gMal Data Corporation
* 50 East Spring Street
2g Beach, CA 90806
“BER OF EXPENDITURES THIS PAGE: 7 SUBTOTAL : 72730 .00
Echt R-3 es
AMENDED IN SENATE JUNE 12, 1980
AMENDED IN SENATE MAY 13, 1980
AMENDED IN SENATE APRIL 28, 1980
SENATE BILL No. 2026
Introduced by Senator Greene
March 19, 1980
An act to add Article 3 (commencing with Section 1401) to
Part 4 of Division 2 of the Labor Code, relating to smoking,
making an appropriation therefor, and declaring the urgency
thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 2026, as amended, Greene. Smoking.
(1) Existing law prohibits smoking in specified indoor
laces of public assembly in public Buildings. in specified
ocations in health facilities and clinics, and other public
buildings, and in food preparation portions of restaurants and
in retail food marketing establishments.
This bill would require the establishment of smoking and no
smoking sections or areas in enclosed public places, enclosed
places of employment, enclosed health facilities, and enclosed ~
clinics and would prohibit tobacco smoking in no smoking
sections or areas, as specified.
The bill would require posting with signs in no smokin
sections and areas, to be enforced by the Department of °
Industrial Relations. The department would be required to
adopt standards to implement the bill, as specified. The bill
would expressly preempt the field of smoking legislation after
specified pepitiultons adopted pursuant to the bill become
effective, excepting other state law existing on the effective
date of this bill which specifically affects tobacco smoking,
state or local law or regulations restricting smoking for fire
SB 2026 —2—
prevention, end local ordinances controlling smoking in
theaters, as and specified provisions of the Health and Safety
Code, as contained in SB 1108
Knowing violations of the provisions of the bill would be an
infraction with specified penalties,
(2) The bill would appropriate $750,000 to the
Department of Industrial Relations for the purpose of
administering the provisions of the bill
(3) Section 2231 of the Revenue and Taxation Code
requires the state to reimburse local agencies and school
districts for costs mandated by the state. The section also
specifies the manner for’ ying the reimbursement and
requires any statute man ating the costs to contain an
appropriation to pay for the costs in the initial fiscal year. This
statutory provision will be supplemented by a constitutional
requirement of reimbursement effective for statutes enacted
on or after July 1, 1980.
This bill appropriates an unspecified sum to the Controller
for allocation and disbursement to local a encies and school
districts for costs mandated by the state aad incurred by them
pursuant to this act.
(4) The bill would take effect immediately as an urgency
statute.
Vote: *4. Appropriation: yes. Fiscal committee: yes.
State-mandated loca] program: yes.
The people of the State of California do enact as follows:
1 SECTION 1. The Legislature finds and declares that
2 smoking in certain enclosed areas may annoy or irritate
3 nonsmokers, that regulation of smoking in certain areas
4 is desirable to protect the comfort aa environment of
S nonsmokers, and that it is not the intent of the
6 Legislature to deny persons the right tosmoke, but rather
7 to recognize the rights of all individuals regardless of
8 their use of tobacco products.
9 SEC. 2 The Legislature further declares that:
10 (a) The purpose of this act is to protect the health,
11 comfort, and environment of nonsmokers in certain
12 enclosed places.
JA. 73 ww
iin
— or ee.
- nae we re
oma uNhoane
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a= 3=— SB 2026
(b) The intent of this act is to strike a reasonable
balance between the needs of persons who smoke
tobacco and the needs of nonsmokers.
SEC. 3. Article 3 (commencing with Section 1401) is
added to Part 4 of Division 2 of the Labor Code, to read:
Article 3. Smoking and No Smoking Sections
1401. This article shall be known and may be cited as.
the “Smoking and No Smoking Sections Act of 1980.”
1402. (a) Subject to the criteria set forth in Section
1403, smoking and no smoking sections or areas shall be
established and designated in every enclosed public
place, enclesed place of employment, enclosed heath
facility, and euclosed clinic. Any such place, facility, or
clinic may be designated in its entirety as a smoking or no
smoking area. No person shall smoke tobacco in a no
smoking section or area.
(b) The provisions of this article shall not limit
smoking in outdoor areas, in private residences, or in any
place not established pursuant to the provisions of this
article as a no smoking section or area, nor prohibit the
sale of tobacco products.
1403. Smoking and no smoking sections or areas
established and designated pursuant to this article shall
be consistent with the purpose and intent of this article
and shall conform with the following criteria:
(a) Smoking and no smoking sections need not be
separated by walls, partitions, or other barriers. No
construction or erection of ventilation devices, walls,
partitions, or other barriers shall be required to comply
with this article.
(b) Facilities and areas_in which ii would be
inappropriate _or impractical. to limit smoking may be
designated in their entirety as smo ing areas. Impractical
Tacilities and areas may include, but not be limited to, the
following:
(1) An enclosed room normally occupied exclusively
by persons who smoke tobacco. .
(2) Hotel or motel rooms designed and used for rental
J.A. 77 +?
SB 2026 —4—
|
]
2
a
SlmMAMUN AC
to transient guests.
(3) Areas used for Private social or business functions.
(4) Vehicles and other mobile workplaces.
(S) Areas wherein employee Workstations are
transient or mobile.
(6) Any other area in which it is determined it would
be inappropriate to restrict smoking of tohacco
~~ However. the listing of impractical facilities and areas
of this subdivision shall be deemed to be illustrative only
and shall not be considered as restrictive, by an2‘ogy or
otherwise. The Le islature intends that impracticality be
a__function of com liance difficulty. economics,
cost-benefit, and similar factors.
(c) (1) Smoking sha prohibited in patient Care
areas, waiting rooms, and visiting rooms of a health
facility, except those areas specifically designated as
smoking areas, and in patient rooms as specified in
Paragraph (2).
(2) Smoking shall not be permitted in a patient room
unless all persons assigned to such room have requested
) Smoking shall be Prohibited in any elevator.
(e) Notwithstanding any other provision of this
article, any facility or area may be designated in its
entirety as a no smoking area by the owner or manager
thereof, ,
1404. (a) In any facilities subject to this article,
clearly legible signs shall be conspicuously Posted in
every no smoking section or no smoking area established
oe ee 6
hs
LL
~~
4
to
~~
RLXSP SRENCEKCRECeeuibiws occ
SREBSESBRNY
- - &
19
—5— SB 2026
of premises which are not leased may adopt signs adapted
to their business needs, decor, and the nature of clientele
or other members of the public frequenting such
premises, the number, quality, type, and size of the signs
required pursuant to this article shall not be specified by
the Department of Industrial Relations by order or
regulation, except when an alleged violation of the
Provisions of this section has occurred at the facility
which is subject to such an order or regulation, any such
order or regulation shall be issued after notice and
hearing
(b) Notwithstanding any other provision of this
section, the standards adopted pursuant to Section 1408
shall designate areas and facilities where the posting of no
smoking signs is unnecessary to fulfill the purpose of this
article. No signs shall be requii 2d to be posted in such a
designated area or facility.
(c) Notwithstanding any other provision of this
section, in any no smoking section or area in which signs
indicating that smoking is not permitted are already
conspicuously posted, signs otherwise required by this
section are not required to be posted until such
Preexisting signs are worn out or removed.
1405. (a) Knowing violation of any provision of this
article is an infraction. Any person who violates any
Provision of this article shall be subject to a fine of not
more than fifteen dollars ($15) for each violation.
(b) Enforcement of this article shall be by citation. No
person may be taken into custody or be subject to search
by peace officers solely because of the violation or
suspected violation of a provision of this article.
(c) Each day on which a knowing violation of the
sign-posting requirements provided in this article occurs
shall be a distinct and separate’ violation.
(d) The Department of Industrial Relations and local
law enforcement departments shall enforce the
sign-posting requirements provided in this article. Local
law enforcement departments shall enforce the other
Provisions of this article.
1406. No person shall discharge or refuse to hire any
% 110
J.A. 7b
>
SB 2026 —6—
Oo BMn haonwre
SSESSRLESSSBRBNERESB
employee or applicant for employment because such om
employee or applicant exercises any rights afforded in
this article.
140,. (a)° Except as provided in subdivision (b), and
notwithstanding the provisions of Section 1408, it is
intended that this article shall preempt and wholly
occupy the field of legislation, or other regulatior, of
smoking in enclosed areas. However, legislation and
other regulation of smoking in effect on the effective date
of this section shall not be preempted by this article until
the effective date of the regulations adopted pursuant to
~ Section 1408.
(b) (1) The provisions of this section shall not
invalidate any orher state law specifically affecting
tobacco smoking in effect on the effective date of this
section.
(2) The provisions of this section shall not invalidate
any state or local law or regulation which restricts
smoking for the purpose of preventing fires.
(3) The provisions of this section shall not invalidate
any local ordinance controlling smoking in any premises
devoted primarily to the production or display of motion
pictures or the performing arts.
(4) The provisions of this section shall not invalidate
Sections 1234, 1235, 1286, 1290, and 25942 of the Health
and Safety Code, as amended or added by Senate Bill No.
1108 in the 1979-80 Regular Session of the Legislature.
1408. (a) On or before July 1, 1981, the Department
of Industrial Relations shall adopt, and may therecfter
amend, revise, or repeal standards in accordance with
Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code to
implement the provisions of this article. The standards
shall, among oe things, specify those facilities and
areas which may be designated in their entirety as
smoking areas pursuant to subdivision (b) of Section
1408, provided no such standard shall be founded upon
workplace safety.
(b) The Department of Industrial Relations shall have
exclusive administrative jurisdiction under the provisions
J.-A. 7)
CMSA Rees © ae oe ee
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'
OOnNDUA ON =
31
SSERGERLEE
a )
ow Fox SB 2026
of this article with respect to the issuance of standards for
the establishment and designation of smoking and no
smoking sections and areas.
(c) Nospecial bureaucracy shall be created within the
Department of Industrial Relations or within any other
governmental agency for the administration of the
provisions of this article or the standards adopted
pursuant thereto.
14€¢9. Unless the. context otherwise requires, the
following definitions shall govern the provisions of this
article:
(a) “Place of employment” means any fully enclo.ed
area under the control of a public or private employer
which employees normally frequent during the course of
employment, including, but not limited to, work areas,
employee lounges, meeting rooms, and employee
cafeterias. A private residence is not a “place of
employment.”
(b) “Public place” means any area to which the public
is invited or in which the public is permitted, including,
but not limited to, restaurants, theaters, waiting rooms,
reception areas, and instrumentalities of public
oo A private residence is not a “public
piace.”
(c) “Smoking” or to “smoke” means and includes the
carrying or holding of a lighted cigarette, cigar, pipe or
any other lighted smoking equipment used for the
practice commonly known as smoking, or the intentional
inhalation or exhalation of tobacco smoke from any such
lighted smoking equipment.
(d) “The Department of Industrial Relations” means .
the Department of Industrial Relations or any successor
thereof.
(e) The standards adopted pursuant to Section 1408
shall contain such other definitions as the Department of |
Industrial Relations shall deem appropriate to carry out
the purposes of this article.
1409.5. If any provision of this article or the
application thereof to any person or circumstance is held
invalid, any such invalidity shall not affect other
J.-A. 79
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OmonNOA UA ONS
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2026 a
provisions or applications of this article which can be *)
given effect without the invalid provision or applicction,
and to this end, the provisions of this article are severable.
SEC. 4. The sum of dollars ($__mm) is
hereby appropriated from the General Fund as follows:
(a) Seven hundred fifty thousand dollars ($750,000) to
the Department of Industrial Relations for the purpose of
administering the provisions of this act.
(b) ___. dollars ($_) to the Controller for
allocation and disbursement to loca] agencies and school
districts to reimburse them for costs mandated by the ~
state and incurred by them pursuant to this act.
SEC. 5. This act is an urgency statute necessary for
the immediate preservation of the public peace, health,
or safety within the meaning of Article IV of the
Constitution and shall go into immediate effect. The facts
constituting such necesvity are:
Breathing of second-hand tobacco smoke for extended
periods may cause disease in healthy nonsmokers or
aggrevate the condition of the millions of Californians
with heart or lung disease. Second-hand tobacco smoke
can cause irritation of eyes, nasal passages, lungs, and skin
of allergic persons and causes unnecessary discomfort to
nonsmokers. In order to protect the public health and
safety and in order to reduce the disease of healthy
persons and eliminate aggrevation of the condition of sick
persons at the earliest possible time, it is necessary that
this act take immediate effect.
J.A. 79
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AFR 15 1$00
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=. .'; Another Smo
t first glance, SB 2026 looks like a good
step in the right direction. The bill
being carried by Sen. Bill Greene of Los
‘Angeles, would establish smoking and non- .
smoking sections in enclosed public places
‘and private places of employment. It thus
appears to be trying to accomplish by leg-
islation what Proposition 5, the smoking
initiative defeated in 1978, sought to
achieve and what the backers of Prop. 5,
who are now circulating petitions for a new
initiative, are trying to accomplish again.
. But SB 2026 is not what it seems. On clos-
er inspection, it turns out to be an attempt
at a pre-emptive strike, a diversionary
smeasure which, though worded in part .
recisely like the proposed initiative, is so
ull of exemptions and loopholes that its
‘net effect would be worse than no new leg-
islation at all. . ides
* Although the bill resembles the proposed |
initiative in establishing smoking and no-
smoking areas, it also provides that “‘facil-
ities and areas in which it would be inap-
propriate or impractical to limit smoking
may be designated in their entirety as
areas.” That provision would not
only exempt like bars — where it
may indeed “ina te” to ban
smoking — but any place whose owner
Exritit R- u
"SACRAMENTO BEE - APRIL 15, 1980"
OT eee ee nT «
king Hazard =...
doesn’t want to bother segregating smok-
ers or where management is unwilling to
ban smoking altogether. .~
There are other flaws. The bill pre-empts
all local smoking control ordinances, thus
repealing a number of local laws that are
far more stringent, fails to give adequate
protection to non-smokers in hospital
rooms, and, in general, provides that
where there is a conflict, there should be a
“reasonable balance” between the rights
of. smokers and non-smokers, a balance
which, in the light of recent medical data,
is a choice of neutrality between health
_ and sickness. If passed, SB 2026 could easi-
ly be used by the tobacco industry to prove
that the Legislature had already provided
the smoking regulations that the initiative
calls for. ef a ee
} |! would be nice if that were true, All
things considered, it would be far better
if control of smoking could be accom-
plished through legislation rather than
through the more cumbersome initiative
ess. SB 2026, however, isn't it. Unless
can be substantially amended when it
comes up before the Senaie Industria!
Relations Committee this week, it ought t
-‘bedefeated. ..
J.A FQ
Miami Initiative
Backers Charge Fraud
| Backers of a strong nonsmokers’.
rights initiative that will be pre-
sented to the voters of Miami in
November believe that a bill just
introduced before the Board of
County Commissioners (Metro
Commission) is ‘a deliberate device
to trick and confuse the voters.”
Although the bill and the initia-
tive have very similar names and
both would regulate smoking,
mitiative backers feel that the bill
was deliberately made much
weaker. If the bill is adopted by
the Metro Commission before
November, as expected, they are
afraid that citizens wil! fail to
vote for the initiative because
they think that the bill has accom-
plished the same objective or be-
cause they confuse the two.
_ Sponsors of the initiative say
that the bill is far too weak and
cite the following inadequacies:
@ The bill would permit unlimited
smoking in facilities that meet
certain minimum ventilation re-
quirements, although it has not
been shown that such systems
would eliminate the problems
experienced by nonsmokers.
The bill would permit unlimited
smoking in most facilities of
1,500 square feet or less, thus
wiping out protections that non-
smokers already have under
existing law.
The bill provides that restaurants
seating 50 or fewer people would
Mot have to provide no-smoking
sections.
The bill permits al! facilities to
establish smoking areas and does
Not limit their size.
The introduction of the bill
to some people one of the
recommendations the Roper Or-
made to the tobacco
was lesked to the public as a result
ASH. investigation of
she tobacco ir . Roper sug-
that when confronted by a
+
Exnwr Re- Ss
major
industry could promote weaker
protective legislation and thus avoid
restrictions that might really hurt.
Backers of the initiative, who are
furious about th's latest develop-
ment, urge Miami residents not to
be confused and to learn the facts
before voting in November. Fe-
more information call (305) 448-
2433 or 858-1809.
Californians To Vote on
Nonsmoker Referendum
Because proponents were able to
gather more than 500,000 valid
voter signatures in support,
Californians will have a second
chance this November to vote on
a referendum that would require
no-smoking sections in most public
areas, including places of employ-
ment. Proposition 5, a similar
proposal, was defeated in 1978,
when the tobacco industry out-
spent proponents by more than
10 to 1: $6,400,000 to $600,000.
The tobacco industry admits that it
is sensitive to charges that they
“cynically bought the election two
years ago” and reportedly is now
“studying the new proposal.”
Perhaps a more serious threat to
the initiative is a proposed law —
SB 2026, calied the “Greene
bill” after its sponsor — that is
now being considered by the
California legislature. This bill,
like the initiative, recognizes that
nonsmokers should be protected,
but proponents of the initiative
point to the following important
differences:
e@ The initiative specifies nat when
the needs of smokers and non.
smokers conflict, the needs of
nonsmokers must take priority.
The bill does not.
threat to its interests, the —
A Tale of Two Initiatives
area becomes nonsmoking, while
the bill would allow smoking.
@ The initiative guarantees to every
person who works indoors a non-
smoking work section; the bill
offers no such protection.
@ The initiative applies to educa.
tional facilities; the bill does
not.
@ The initiative permits toca!
governments to enact further
legislation to protect nonsmok.
ers, The bill preempts that
right and would -invalidate all
local legislation now in effect,
some of which is very far-
reaching.
An editorial in the Sacramento
Bee called the Greene bill “ a di-
versionary measure that, though
worded in part precisely like the
proposed initiative, is so full of
exemptions and loopholes that its
net effect would be worse than no
legislation at all.”
The initiative is sponsored by
Californians for Smoking and No
Smoking Sections, which has
offices in both Northern and
Southern California: P.O. Box
1061, Berkeley, CA 94701, (415)
841-3032; and P.O. Box 45876,
Los Angeles, CA 90045, (213)
671-1492.
* * *
Chip off the old block? President
Carter has six tobacco-grower caps,
which he often wears for photo-
graphs, and he has made state-
ments minimizing the effect of
tobacco on the health of smokers
and nonsmokers. He also fired
Joseph Califano, the antismoking
head of the old Department of
Health, Education, and Welfare.
His son Chip recently heiped
organize @ firm to defeat the
Clean indoor Air Ordinance in
Miami; a sizable chunk of the
bankroll came from the tobacco
industry.
*- * *&*
Exner Q- )
Declaration of Paul Loveday
I, Paul Loveday, declare:
I am an attorney licensed to practice law in al’ the courts of the State of
California. My business address is Two Embarcadero Center, 24th Floor, San Francisco,
California 94111. I know of my own personal knowledge that the facts contained in
this Declaration are true, and I will so testify under oath if called upon to do so.
Shortly after sufficient signatures were filed with the applicable county clerks
to guarantee that the Smoking and No Smoking Section Initiative would qualify for the
November 4, 1980 ballot, I had lunch with Don Bradley, a professional campaign
manager. We discussed the possibility of Mr. Bradley's managing the campaign favoring
such initiative. Among other things, we discussed the potential opposition to the
initiative and whether or not the Tobacco Industry would oppose th.. Initiative as
strongly as they opposed Proposition 5. Mr. Bradley told me he would speak with Mr.
Joe Cerrell to determine what the plans of the Tobacco Industry were. Mr. Bradley
informed me ‘hat Joe Cerrel] was a paid political consultant for Philip Morris.
On Tuesday July 1, 1980, I spoke with Mr. Don Bradley to inform him that the
Yes on 10 Board of Directors had selected another person as campaign manager and
to express my gratitude to him for the time he had given to me and my associates.
Mr. Bradley told me during that conversation that he had spoken with Mr. Cerrel| who
had informed him that the Tobacco Industry had decided to run a campaign in opposition
to Proposition 10.
I declare under penalty of perjury that the foregoing is true and correct and
that this Declaration was executed on October 16, 1980.
Vy te
OF
al tere,
-——e eee =
ahi os ENDORSED |
ARTICLES OF INCORPORATION JUN 12 1880
OF MARCH FONG EU, Secretary of State
Phyllis E Biaggi
CALIFORNIANS AGAINST REGULATORY EXCESS Deputy
. I
&
The name of this corporation is CALIFORNIANS
ST REGULATORY EXCESS.
Ii
bd A. This corporation is a nonprofit mutual denetit
Brporaticon orcanizecé under the Nonprofit Mutual Benefit
beperation Law. The purpose of this corporation is to
ngace in any lawful act or activity for which a corporation
y be organizec under such law.
B. The specific purpose of this corporation is to
ote the social welfare. In furtherance of this objective,
corporation shall have the following purposes:
(1) The corporation shall promote civic
terment and social improvement by attempting to lessen
he burdens of covernment. The corporation will seek to
emote these cbiectives throucsh direct communication with
public concerning ballot measures, legislation, aéminis-
tive regulations ané judicial decisions. All such communi-
tions shall be limitecé by the laws ané reculations pertainine
Organizaticns with tax-exempt status uncer Internal Revenue
pde Section 50l(c) (4).
(2) The corporation shall seek to ecucate the
blic concerning subjects which relate to covernment ané the
pmmunity. In order to accomplish this objective, the corpora-
m shall sponsor educational programs throuch public foruns,
mel lectures, radio, television, direct mail and other
lar activities.
Iii
The name ané adcéress in the State ct California of
S corporation's initial acent for service ct srocess is:
Robert Nelson
1€33 East 4th Street, Suite 144
Santa Ana, California $2702
EXEIBIT A
J. A. 33
"
» : ov . Iv “so.
A. This corporation is organized and operated
exclusively for social welfare purposes within the meaning
of Section 501(c) (4) of the Internal Revenue Code.
> B. Notwithstanding any other provision of these
Articles, the corporation shall not carry on eny other
activities not permitted to be carried on by a corporation
exempt from federal income tax under Secticn 50l(c) (4) of
the Int:xsnal Revenue Code.
. v
The property of this corporation is irrevocably
cecicated to social welfare purposes ané no part of the net
income or assets of this corporation shall ever inure to
the benefit of any director, officer of mexber thereot, or
7 te the benefiz of any private person.
vi
Upon the Gissolution or windine up of the corpora-
tion, its assets remaining after payment, cr provision for
= payment, of all debts ané liabilities of this corporation,
shail be distributed to a nonprofit funé, founéation or
corporation which has established its tax exempt status under
Section 50l1(c)(4) of the Internal Revenue Code.
ee Dateé: June ll, 1980
KENNETE SCENCLL, INCOFPORATOR
S
I hereby céeclare that I am the person whe executec
the foregoine Articles of Incorporation, which execution is
my act and deec. 4
° Kann Arban tl
KENNETH SCHNOLL, INCORPORATOR
ol
&
-_ 2-
ie Se ee
‘ ee f 4
. . urs y oe A a f 7
SES, . = aes ai eo ee: ee ee ree ee Te ee er +a
( (
- RECIPIENT COMMITTEE
CAMPAIGN STATEMENT
(Government Code Section 86200-84216)
For use by recipient committees which receive a cumulative
contribution of $100 or more from a single source.
(Type or Print in ink)
A tau .
Statement covers period from__1/1/80* through _9/23/80
Wane er commirvee a
~~ CALIFORNIANS AGAINST REGULATORY EXCESS we
ry ry ee
CA___9270) 214. S58-8100
MAME OF TREASURER:
PERMANENT =; £53 OF TREASURER: 0. an0 eTeGET ‘ivy “arate rrorryy) ase Coe8 §6Pmenes BUaeee
—202=142 Opal Balboa Island 22662 214_SS8=210
TYPE OF ELECTION (CIRCLE ONE IF APPLICABLE): j CIRCLE IF APPLICABLE: DATE OF ELECTION (me.. sar, va)! yet}
Pemaay erecias eecart SEerannvar CAmFaree STATENWERT Noverher é ‘a 1°R9 67 .
ALLOCATION OF EXPENDITURES BY CANDIDATES, OFFICEHOLDERS AND MEASURES
(Allocate expenditures from Schedules E & F bv candidates, officeholders and measures: amounts may be rounded off to whoie doilars.)
OFFICIAL NAME OF CANDIDATE OR O77!CEHOLDER AND OFFICE OR CHECK CNE | ¢ SLOUNT OF | CUMULATIVE
USE GNLY MEASURE AND 34/97 NUMSEA OR LETTER Susport_Ospose | THIS PERIOD TO OATE
Smoking and Non-Smoking Sections,
Proposition 1° x 304.252. 80.394.252 2°
*Committee formec July &, 1989
m4
Attach additional information on aporopriete/y lsoeied continuation sheets.
VERIFICATION
| deciare uncer penalty of perjury that to the best of my knowledge this statement anc its schedules are true, correc: ¢
complete and that | have used all reasonable diligence in their preparation.
Executed on 9/29/80 __ gx _Los Angeles, CA wy
TEx¥aT (ater ane we DANA, PSSS ASEISEENE Treasure:
E A candidate or officehoider who controls a committee must aiso erity the Stenebtan statula 2 > ya
1 deciare under penalty of perjury that to the best of my knowledge this statement and its schedules are true, correc: 2
complete and the treasurer of this commitzee has used all reasonabie diligence in the preparation of this statement <
F Wee sahecutes. not applicable
Executed on at by
Ld (eoare) (erty ane starve) [SSR ATURE OF CANSIOATE OF OF FE RH OLDE)
For intormetion required to be provided to you pursuant to the information Prectices Act of 1977, see “information Manual on Campaign Disciosure Provis:
ee. ee | J. A. aS
ee 25% wleip: w whi, giana iat i aes ee
th de OE fs “ Ra tae ah 7: ie sy
* x 2 2s ‘ eke | > gee ey RE ae a, ca «ieee
The campaign against Proposition 10 -- the anti-smoking initiative --
is well underway. Once again, the private sector is being subjected to
a devastating blow that would impose stringent government regulations
for compliance with this measure.
The irony is that many companies are presently dealing with the smoker/
@ non-smoker problem on a voluntary basis. You may already have expended
great effort and expense to set up segregated areas to handle this issue.
_ No matter; you are now faced with mandatory regulations and the problem
of meeting some very ambiguous bureaucratic standards.
from using media; therefore we are
ho need to express
their displeasure with more government. This becomes an education process
and, in order to achieve this, we need informed speakers who are leaders
in the community, willing to speak out against this poorly-conceived
measure.
os bits the No on 10 ‘campai
@ While we realize it is difficult for you to devote a lot of time outside
your primary work effort, we are requesting your help in one of two ways:
that you be available upon occasion to speak on this vital issue, or
that you provide us with at least two names of potential speakers with
high credibility.
s Voluntary private sector vs. mandatory public sector: the differences
are clear. Industry is known for solving problems - government is
known for perpetuating them. Help keep the control of our internal
business operations in the hands of private sector management.
m olny be contacting you in the very near future. Thank you for your
elp.
Sincerely, ;
4; D2tex/ Ferg land Y,
@ A
Jere Gilmour David Bergland Houston Flournoy
Director, Chairman, C.A.R.E. Former State Controller
Speakers Bureau
J. A. &6
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Palo Alto, Ca
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eninsula
—
(Cir. 6xW. 62,677)
i Ife9
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Allen's G8 vec 1ARK
supporters of anti-smoking proposal challenge
»pponents to disclose source of contributions
3y John Stanton “| -.
fimes Tribune statt , i] O
SACRAMENTO — Supporters of an
anti-smoking initiative on the No-
vember ballot Tuesday challenged op-
This text is long and has been trimmed here. Open the source document for the complete record.
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