“I foresee serious criminal liability problems.”

It’s time to name and shame the corporate bosses responsible for tobacco-related diseases and deaths. And to legislate.
May 1, 2017

For over five decades Canada’s tobacco industry, operating with full knowledge that its products were addictive and deadly, caused or contributed to the deaths of over a million Canadians. This tragedy brought enormous suffering, tearing families apart and putting huge burdens on the health care system. Yet the recent deaths of influential tobacco executives elicited virtually no discussion in the media of the destructive roles they personally played in the development of the tobacco epidemic. 

This blind eye turned on tobacco’s crimes raises important questions for public health. Because after a half-century of research and “stop smoking” campaigns, tobacco industry products are still Canada’s number 1 cause of preventable illness and death. If current trends continue, it is reasonable to estimate that tobacco products will cause the premature deaths of at least another two million Canadians in this century. These deaths will occur unless governments and the health sector take extraordinary steps to address the epidemic.

Unlike influenza, polio and SARS, the cigarette epidemic is unique in that its roots lie in unparalleled unethical business conduct. So it is with good reason the provinces are now suing Canadian tobacco companies and their international parents to recover the health care costs caused by alleged industry fraud and negligence. 

The lawsuits claim the industry lied over a five-decade period about the risk of lung cancer, addiction, “light” and “mild” cigarettes, second-hand smoke and marketing to children. Claims filed to date exceed $120 billion. If the provinces’ allegations are proven in court, the conduct involved would constitute the largest and most destructive fraud in the history of Canadian business and public health. 

The chances of success at trial are good. All of the provinces have passed legislation that enacts procedural reforms allowing mass or population tort lawsuits. Such statutes take away tobacco industry defences used extensively in the past to evade responsibility. 

Last year, Quebec Superior Court Judge Brian Riordan, who examined the evidence of Canadian tobacco industry misbehaviour in the two-and-a-half-year-long Blais-Létourneau class action trial, condemned the defendants’ actions and awarded the plaintiffs $15 billion in damages. “These companies colluded among themselves in order to impede the public from learning of health-related information about smoking, a collusion that continued for many decades thereafter,” he wrote.

Judge Riordan concluded the industry’s misconduct was “particularly reprehensible,” “beyond irresponsible,” and “intentionally negligent.” He said the tobacco manufacturers marketed their products with a “ruthless disregard for the health of their customers,” adding that the companies’ actions were “egregious [and] so far outside the standards of acceptable behaviour that one could not be blamed for branding them as immoral.” Of course, the manufacturers have appealed. 

Some in the media and government sympathize with their argument that the legality of tobacco products, the taxes they raise and the laws that regulate operations combine to give the industry legitimacy. However, a look at the tantamount-to-criminal disregard for life and dishonesty at the very top of the industry should dispel this support and force us to attack this epidemic with the urgency we would other outbreaks of preventable diseases.

Executive behaviour escapes scrutiny 

While there has been some discussion in the media about tobacco corporations and the related front organizations behind their alleged illegal behaviour, rarely is a spotlight directed at the executives, many now deceased, who were responsible for the corporate policies, marketing strategies and dishonest public pronouncements that fuelled the epidemic.

Tobacco bosses like the late Purdy Crawford, Senator William Kelly and Bob Bexon, and the former heads of the Canadian Tobacco Manufacturers’ Council (CTMC), Rob Parker and Bill Neville, enjoyed wide social acceptance during their lifetimes and were treated extremely charitably in news coverage of their deaths. “Respected business leader Purdy Crawford dies,” read one obituary in the Globe and Mail, which noted the “former Imasco CEO was a nurturing influence on Bay Street helping a generation of leaders ascend in the business world.” Contrast this with a 1994 New York Times feature titled “How Do Tobacco Executives Live With Themselves?”.

Crawford was CEO of the Canadian conglomerate Imasco from 1985 to 1995 and served as its chair until 1990. Imasco, which was controlled at the time by U.K.-based British American Tobacco (BAT), owned 100% of Imperial Tobacco, Canada’s largest and most influential tobacco company. From industry documents leaked or obtained in litigation, it is clear that Crawford had “hands-on” involvement in running Imperial. In his book Smoke-Screen: The Truth Behind the Tobacco Industry Cover-Up, former Times journalistPhilip Hilts says the documents show how Crawford’s company schemed to hook first-time smokers, mostly child “starters”:  

The most complete set of papers has come from the Canadian sister companies of the U.S. giants Reynolds, Philip Morris, and Brown and Williamson…. Here there can be no doubt: it is not just that children will take up smoking, and the companies supply them with raw material inadvertently…, in the hundreds of pages of advertising documents from two companies, Imperial and RJR-Macdonald, the targeting has not been hidden. They specifically target children above all other groups.

In an address to BAT executives when he was chair of Imasco in 1989, Crawford said “Imperial Tobacco Ltd. has always focused its efforts on new smokers [almost entirely adolescent starters], believing that early impressions tend to stay with them throughout their lives.” He explained his company “clearly dominates the young adult market today, and stands to prosper as these smokers age, and as it maintains its highly favourable youthful preference.” 

The predatory activity of the company that Crawford controlled was not limited to kids. Ignoring its tort law duty to warn starters and existing users, Imperial denied its products were addictive and caused lung cancer, and that it manipulated nicotine levels in cigarettes—the focus of a major tobacco-related scandal in the United States in the 1990s. Despite industry denials, there is clear evidence this was also taking place in Canada. Crawford trumpeted the falsehood at an Imasco annual meeting when he said, “I am saying absolutely and unqualifiedly for the whole world that we do not engage in nicotine manipulation.” 

These “ruthless” management practices, in the words of Judge Riordan, did not stop Canadian institutions conferring prestigious honours on Crawford. Western University named him Ivey Business Leader of the Year in 2000. The Canada Pension Plan Investment Board later appointed him “ethics advisor.” And inexplicably, as mentioned, the media coverage of Crawford’s death in 2014 was virtually silent on the man’s role in the tragic tobacco story.

The story is much the same for Senator Kelly, who served for several years as chair of Rothmans Inc. when it owned 60% of subsidiary Rothmans, Benson & Hedges Inc. (RBH). It was an astute recruitment. In Kelly, RBH and the tobacco industry had the ultimate insider in Parliament, someone well-positioned to warn manufacturers of legislative proposals, or to obstruct or neutralize tobacco-control initiatives from both within the Tory caucus and the Senate. 

Kelly could not have been ignorant of the ugly behaviour of his company when his industry was the subject of massive lawsuits in the United States. He was part of the extensive public discussion on banning tobacco advertising in Canada, which resulted from revelations of predatory marketing by Canadian tobacco manufacturers. In annual meetings, Kelly shut down questions from shareholders about RBH flouting its duty to warn tobacco users about the full risks of lung cancer and addiction. He was not about to contradict the public position on these issues taken by his company or its parents. 

As RBH and other tobacco manufacturers were becoming increasingly marginalized in the 1990s, Kelly worked to build a veneer of social responsibility by serving as a director of the Council on Drug Abuse. Not surprisingly, the CDA artfully sidestepped the country’s largest cause of preventable drug addiction and mortality: the use of tobacco industry products. This would be comical if the tobacco drug problem was not so devastating. Kelly’s presence on the CDA board, combined with his company’s potential financial support, ensured the organization would not include tobacco addiction as one of its concerns. 

Throughout all of this, no one in government sounded fraud or conflict-of-interest alarms over the contradiction between the behaviour of Kelly’s industry and Parliament’s (including the Senate) duty to protect the health of Canadians. 

“Breathtaking candor and cynicism”

Robert Bexon, who died in a cycling accident in 2008, had a long history in marketing with Imperial Tobacco before becoming the company’s president and CEO in 2000. In a searing 1985 analysis, Robert Proctor, a court-recognized expert in the history of the tobacco industry and witness in the Quebec trial, revealed that Bexon had authored “one of the most damning documents in the entire corpus of internal industry documents,” and that the executive could be “breathtaking” in his “candor and cynicism.” 

For example, the CEO once confided, “If our product was not addictive we would not sell a cigarette next week.” Proctor described the man as “grimly realistic about the prospects for his industry, with the principal glimmer of hope being that smokers are addicted.” “Fortunately for the tobacco industry,” Bexon is quoted as saying, “not even two per cent of stop smoking attempts were successful at six months.” Yet, in the public arena, with corporate straight faces, the company Bexon headed, like the rest of his industry, professed to governments and the public that tobacco was not addictive. 

The industry’s lack of conscience was most conspicuously on display in public denials of any interest in the youth market—what Bexon referred to as “fledglings.” Proctor reported there are in fact “hundreds of [industry] documents” now in the public domain that prove “interest in selling cigarettes to kids.” 

In one of those documents, Bexon introduced his company’s strategy: “Initiate projects to insure [sic] the continued uptake of tobacco products by young Canadians.” In another “Strictly Confidential” creative brief, he said “Doing something about starting [smoking] is the most important priority for the long term.” 

The problem, Bexon explained, is how to fight “declining rates of starting” among kids, “even more disconcertingly among young females (15-19).” Of additional concern to Bexon and Imperial was “How can we make smoking financially accessible to the young starter?” Incredulously, and without his nose lengthening, Bexon would tell a Senate committee:

We have never targeted youth. I must put that out again…. We have never targeted underage smokers and I want that on the record. 

Bexon was smart enough to have known there was ample research that showed one out of every two adolescents recruited by his company, and who became long-term users of its products, would die prematurely, often with dramatic decreases in life expectancy. Yet, in an almost perfect example of sociopathy, he planned to deceive and trap kids into addiction, without any noticeable pangs of conscience about it. 

Bexon and others in the industry knew that they had to keep “the controversy” about addiction and other tobacco risks, second-hand smoke and targeting kids as a primary defence against legislation and litigation. Bexon admitted as much internally when he described himself as a “disinformationalist.” 

Evidence of fraud “overwhelming” 

When assessing the public health impacts of the spin-doctoring and deception practised by the late industry spokesmen Bill Neville and Rob Parker, former heads of the CTMC, we might gain useful perspective from, arguably, one of if not the most significant civil fraud trials in global history. The lawsuit was brought under theRacketeer Influenced and Corrupt Organizations Act. U.S. Federal Judge Gladys Kessler ruled: 

Put more colloquially, and less legalistically, over the course of more than 50 years, Defendants lied, misrepresented and deceived the American public, including smokers and the young people they avidly sought as “replacements smokers,” about the devastating health effects of smoking and environmental tobacco smoke. They suppressed research, they destroyed documents, they manipulated the use of nicotine so as to increase and perpetuate addiction, they distorted the truth about low tar and light cigarettes so as to discourage smokers from quitting, and they abused the legal system in order to achieve their goal…to make money with little, if any, regard for individual illness and suffering, soaring health costs, or the integrity of the legal system.…

[T]he evidence of Defendants’ fraud is so overwhelming that it easily meets the clear and convincing standard of proof.

With Judge Kessler’s decision, the Tobacco Institute, the American equivalent of the CTMC, and the international parents or affiliates of Canadian subsidiaries were labelled racketeers. In fact, the Tobacco Institute was shut down as part of the settlement of litigation between U.S. states and the industry. 

Why is Judge Kessler’s 1,700-page judgment relevant in the Canadian context? Because the Canadian subsidiaries of American and British owners were engaged in much if not all of the wrongful behaviour of their international parents or sister corporations. As an insider from American tobacco giant Brown & Williamson explained: 

Imperial Tobacco and the company I worked for are sister companies in the British-based BAT Group…. [W]e had a co-ordinated research program throughout the Group. We shared reports on nicotine technology, cigarette design and development, and smoking and health issues. Internal documents confirm how BAT companies set joint strategies.

It is obvious that any subsidiaries operating here could not undermine the position of their parents. They were defendants in landmark U.S. lawsuits and were still clinging to the fiction that tobacco’s risks had not been proven, along with other falsehoods condemned by Kessler.

We also know much about the wrongful behaviour of tobacco industry lobbyists Neville and Parker from documents obtained in discovery in Canadian and American litigation, especially from the historic Quebec lawsuit. 

Neville, formerly one of the most powerful lobbyists in Ottawa, was hired by Canadian tobacco manufacturers to derail or weaken the Tobacco Products Control Act and the Non-Smokers’ Health Act, two global precedent-setting tobacco-control bills being considered by Parliament in 1988. As one-time chief of staff to former prime minister Joe Clark, and head of Brian Mulroney’s election transition team, Neville was influential. The tobacco manufacturers knew their man would have critical access to the prime minister and senior staff in the Mulroney government.

Neville, who was described in one 2013 obituary as a “consummate insider,” was busy in his five years at the CTMC. Working behind the scenes, he lobbied to persuade the government not to close a loophole in the TPCA that allowed tobacco sponsorships, like Players Racing, to live on for more than another decade.

Arguably, tobacco sponsorships were more effective than the brand advertising that was clearly banned by the legislation. When Export ‘A’ backed skiing and Players sponsored auto racing it implied that cigarettes were compatible with fitness and health. And because of the dependencies they produced, the sponsorships Neville’s lobbying protected created a valuable anti-legislation insurance policy for the manufacturers. Future attempts to shut down tobacco sponsorship would and did create a huge wall of resistance from tobacco-sponsored arts and sports groups dependent upon Big Tobacco funding.

Bert Liston, a powerful former assistant deputy minister with the federal department of health and welfare (now Health Canada), was known to be opposed to classifying tobacco use as an addiction. Capitalizing on Liston’s anti-science position, Neville led the behind-the-scenes fight to kill the potentially precedent-setting addiction warning and other risk messages in Canada’s first round of legislated warnings. 

Neville argued the addiction warning “trivialized the serious drug problems faced by our society.” He even threatened legal action if such a warning was required, claiming at one point that “any attempt to brand six million Canadians who choose to smoke as ‘addicts’ is insulting and irresponsible.” Of course, there is little freedom to “choose” when many smokers suffer a serious pharmacological addiction. 

Liston, a smoker, was known to be a block on tobacco control measures in the federal health department. “Whose side is he on?” wondered those pressing for more explicit warnings. The answer came when Liston left Health Canada and became a consultant to the cigarette industry. 

Under Neville’s direction, the CTMC set up and funded fronts for the industry—organizations like the Smokers’ Freedom Society, which disseminated industry pseudo-science and testified before government committees as if they were legitimate, independent voices from the community. Years later, Neville held fast to his wilful blindness and professed ignorance of scientific findings about tobacco risks. On the stand in the Quebec courtroom, he failed to distance himself from the contents of a letter to the minister of labour in 1988, which read in part: 

I hope that you and your officials would be particularly cautious in using statements by the U.S. Surgeon General as authoritative evidence…. I think it is fair to suggest that the Surgeon General has long since ceased to be a source of reliable scientific commentary on tobacco-related issues. 

Neville opposed the virtual consensus in the scientific community that second-hand tobacco smoke was a health risk for non-smokers and that tobacco is addictive. He even accused the U.S. surgeon general of being an outlier, a “zealot” taking “extreme positions” shared by no one but himself. Neville finally admitted under oath that he did not know the surgeon general’s report was a “consensus” document endorsed internationally by hundreds of scientists. 

Parker followed Neville as head of the CTMC, and like his predecessor he continued the role of risk denier and funder of other apologists for the industry. But when queried by parliamentarians or media, Parker dodged rather than denied the existence of research, with openings like “I am unaware of” or “know of no research that proves” whatever risk was being discussed. It was the classic spin doctor’s defence. 

Thirty years after the historic U.S. surgeon general’s report established beyond any doubt that tobacco industry products cause lung cancer, Parker revealed either profound ignorance or evidence of sociopathy when he told a parliamentary committee, “I don’t believe that there is an established scientific causal link” between his industry’s products and cancer. 

People like Crawford, Bexon, Kelly, Neville and Parker will profess to never understanding the scientific literature. As Upton Sinclair famously noted, it is difficult “to get a man to understand when his salary depends upon his not understanding it.” 

Criminal responsibility for “a rogue industry” 

Given all that is known about these men, we should expect news articles of their passing to be less charitable about their professional lives than they have been. At least these accounts should include some evidence of deceit and destructiveness in the interests of tobacco industry merchants of death. Mark Twain said “Man is the only animal that blushes. Or needs to.” The media needs to make such miscreants blush before they pass into the great beyond.

To date, virtually all attempts to hold these companies and their executives to account have been based in civil or common law. Few if any efforts have been made to hold tobacco executives criminally responsible for their predatory activities. 

One of Canada’s leading experts in criminal responsibility prepared a legal opinion on the potential of charging tobacco executives with criminal negligence, an offence punishable by up to life imprisonment. He wrote that if it could be shown that tobacco manufacturers were aware of the risks of tobacco, had a duty to inform their customers of those risks but failed to perform that duty, and one or more of those customers were injured or died, a charge of criminal negligence could be made.

Judge Riordan’s decision in the Blais-Létourneau class action trial showed that all three of these conditions were met. And with 37,000 tobacco-related deaths annually in Canada, there are surely enough victims to trigger criminal charges. Is it not now time for public prosecutors or private practice lawyers to step up and file criminal charges against the industry?  

Unfortunately, many in the justice system, in government and the media believe that Big Tobacco is a legal industry, selling a legal product, just doing what other legal businesses do. To the contrary, legislators and regulators should argue that the tobacco industry is, as a New York Times editorial opined, “a rogue industry” that gives legitimate business a bad name. Tobacco should be marginalized. 

Is there another industry in the Canadian marketplace that deceives its customers and causes 30% of all deaths from cancer and heart disease, and close to 90% of chronic obstructive lung disease mortality? Had the health hazards of tobacco been known to science when it first entered the market, governments would not have allowed the product to be given legal status. Government’s failure to address the cigarette epidemic with urgently needed reforms, because tobacco is “legal,” is essentially saying society cannot correct its original mistake. 

Beyond the “legal industry” defence against the ongoing provincial health care lawsuits, tobacco industry executives argue “governments are senior partners in the tobacco industry.” Leave us alone, they say. Everything we did was “with government approval.” They charge that it is hypocritical for the provinces to “sue a legal industry they oversee and license” and tax.  

Whatever the failings of our legislators to address the tobacco epidemic—and they are legion—governments did not lie about addiction, risks and targeting kids. Nor does the collection of tobacco taxes prove government partnership in conspiracy and fraud. 

Despite the enormity of the proven misbehaviour, a national poll found that less than 1% of Canadians are aware the provinces are suing the industry for alleged fraud. This is worrisome for those in public health who understand that the lack of knowledge of the industry’s predatory pursuit of profit is a major hurdle in the way of tobacco-related reform. 

Where to now? 

Health Canada says 13% of Canadians still smoke, four million in all. These numbers are based on self-reported surveys and therefore almost certainly underestimate the problem, due to the negative public attitudes about the behaviour being measured. The people least likely to be reached by these surveys, such as the homeless and those with mental health challenges, are also much more likely to smoke. Encouraging these smokers to leave the tobacco market will not be easy. 

The federal government said earlier this year it has adopted a goal of reducing tobacco product use to 5% by 2035. But the Ontario Tobacco Research Unit (OTRU) at the University of Toronto reported recently that “There has not been a statistically significant change in the prevalence of tobacco use in the overall population over the past five years.” Even if Ontario implemented the full slate of tobacco control measures recommended by World Health Organization experts, the OTRU report estimates smoking in Ontario “would only decrease to 12% by the year 2043”! And by what magical formula will Health Canada reduce the smoking rate among Inuit of Inuit Nunangat from 73%, where it is now, to 5% in one generation? 

Health Canada must introduce the law reform needed to change the industry’s behaviour. This could include forcing the industry to take steps to eliminate the child and adolescent tobacco market or face severe financial penalties. Governments and health interests must also implement harm reduction strategies and tell smokers the truth about the dramatically reduced risks of using non-combustion nicotine delivery products such as e-cigarettes.

After all, it is the tar produced by the burning of tobacco that causes most tobacco-related illness. Public Health England has claimed “best estimates show e-cigarettes are 95% less harmful to your health than normal [combustion] cigarettes.” Even if that rate were 65%, it is clear the inclusion of harm reduction strategies in tobacco control policy has the potential to prevent tens of thousands of tobacco-caused deaths. 

Health Canada’s Bill S-5, the Tobacco and Vaping Products Act (now in the Senate), which will permit plain and standardized packaging reform, while essential, will merely produce more inadequate incremental change in the use of tobacco. The diseases caused by tobacco products will never be eradicated unless governments start to act as if they believe they have a real epidemic on their hands. 

A key part of that process is a critical evaluation of the work of the captains of the Canadian tobacco industry. Understanding the origins of the tobacco epidemic will help open the door for implementation of the strong public policies needed.

Garfield Mahood is an officer in the Order of Canada and the president of the Campaign for Justice on Tobacco Fraud. Brian Iler is a Toronto lawyer and founding partner of Iler Campbell, LLP.

This article was published in the May/June 2017 issue of The Monitor. Click here for more or to download the whole issue.