Talk:Y1 (tobacco)/Sandefur complete

Congressional Hearing Transcripts

Copyright, is not claimed as to any part of the original work prepared by a U. S. Government officer or employee as part of that person's official duties.

June 23, 1994, Thursday

REGULATION OF NICOTINE-CONTAINING TOBACCO PRODUCTS UNDER THE FEDERAL FOOD, DRUG AND COSMETIC ACT

COMMITTEE: House of Representatives, Committee on Energy and Commerce

SUBCOMMITTEE: Subcommittee on Health and the Environment, Washington, D. C.

LOCATION: Room 2123, Rayburn House Office Building

TIME: 10 a.m., in

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NAME: Hon. Henry A. Waxman, (chairman of the subcommittee) presiding.

LENGTH: 34580 words

[This transcript was prepared from a videotape recording of the proceeding.]

P R O C E E D I N G S

MR. WAXMAN: The meeting of the subcommittee will come to order. Our hearing today is with Mr. Sandefur, who is the Chief Executive Officer of Brown & Williamson Tobacco Company and, Mr. Sandefur, I want to welcome you to this hearing. I appreciate your willingness to testify, as well as your cooperation in submitting many of the documents this subcommittee has requested from you.

This hearing will provide you with an important opportunity to explain Brown & Williamson's position on the many tobacco issues that are before this subcommittee. I am very interested in your perspective and hope you will be as specific and detailed as possible in answering questions this morning.

Full and open disclosure is important because the information you and others in the industry provide is essential as we develop legislation, especially when we look at the impact of smoking and kids.

3,000 children started smoking yesterday; 3,000 children will start smoking today, and another 3,000 tomorrow, and the day after. In all, over a million kids will take the first step to addiction this year. The sad fact is that tobacco is winning the battle against common sense with many of our kids. Congress, the tobacco industry, and the public have to face this reality.

The only way this subcommittee can craft effective policies that will reduce the number of kids smoking is to know as much as possible about your industry and how to make the best policy with that knowledge. The knowledge we gain in this and other hearings about health impacts, addiction, advertising, and other issues is invaluable to our work, and I hope you will join us in this effort.

I look forward to listening to your testimony. I want to thank you for being with us.

Before I call upon you, it is the tradition of the subcommittee to recognize members for opening statements, and I want to call on Mr. Bliley first.

MR. BLILEY: Thank you, Mr. Chairman.

I, too, would like to welcome you, Mr. Sandefur to this hearing, particularly because we heard a number of -- we had a hearing a couple of days ago in which charges against your company were made regarding a tobacco plant called Y-1 and its use, and nicotine, and the like.

I hope you will use this opportunity to enlighten this Committee and this Congress on the history of Brown & Williamson and Y-1, so that we can separate fact from fiction, or maybe better say smoke from mirrors, in this debate.

I thank you for coming, and I thank you for what I know will be your candid answer to the Committee's question.

I'm also glad to see and recognize our colleague from Georgia, who represents your Macon, Georgia plant, Congressman Bishop. Mr. Sandefur, nice to see you this morning.

Thank you, Mr. Chairman.

MR. WAXMAN: Thank you, Mr. Bliley.

Mr. Synar.

MR. SYNAR: Thank you, Mr. Chairman, and Mr. Sandefur, welcome back to the committee.

America and Congress really can no longer talk about the need for health care reform and, at the same time, bury our heads in the sand when it comes to the oversight, regulation, and control of tobacco products.

It is time to stop this vicious cycle of addiction, disease, and death. The documents involved in today's hearings will bear witness to the tobacco's industry 40 years of deceptive campaign of misinformation, which has resulted in the unnecessary and premature deaths of 10 million of our fellow Americans.

We now have over 60,000 scientific studies showing that cigarettes cause death and disease. We've had over 20 Surgeon General's reports that have reached the same conclusion. The time for action is now.

As we commemorate the 30th anniversary of the release of the first Surgeon General's report, we have to ask ourselves: When we will fulfill our responsibilities to protect the health of the American public. Today's hearings will help us along that way.

Thank you, Mr. Chairman.

MR. WAXMAN: Thank you, Mr. Synar.

Mr. McMillan.

MR. McMILLAN: Thank you, Mr. Chairman, for holding yet another hearing on the issue of tobacco. I'm pleased that Mr. Sandefur of Brown & Williamson has agreed to voluntarily come before the committee, again.

It is my understanding that he is here of his own free and will, and I applaud this desire to respond to some of the allegations that has been made in hearings before this committee.

I am concerned that there not be a misunderstanding about Mr. Sandefur's testimony today, and I hope that he will not only answer the allegations that have been leveled against Brown & Williamson, and perhaps some against the industry, but also will be quite clear for any reasons that he may not be in a position to answer such questions, and I think we had some of that with Dr. Kessler here earlier this week, in which he was unable to answer questions.

I believe this committee should have a full understanding of the issues surrounding Brown & Williamson tobacco company as well as the industry.

I'm hopeful that the subcommittee will not get overly emotional today. Some of our previous hearings have been rather heated, something which I think in rather difficult circumstances does not benefit us or the public who may have an interest as well.

I would also hope that the media will not only report the loaded questions but also the answers to those questions. The process is difficult for all concerned, and it is important the committee and the public understand the facts, not just the charges.

I know that the chairman is interested in factual information as well, and we will try to get that as we proceed today.

I would merely ask that as we do this, that the public be exposed to this in a balanced manner. Not everyone is watching this on C-SPAN. Some are dependent upon the print media and the electronic media, and I would hope that we achieve the level of balance in what we do.

Finally, I hope that whatever legislation is proposed -- and I'm not sure that we have had a serious proposal on this subject yet; Dr. Kessler did not describe specifically what he would do -- that we would go ahead and pull it up and get on with it.

I think most of us are prepared to deal with something that is sensible. We've spent extensive time and resources pursuing this issue, and there are other matters before Congress. As the gentleman from Oklahoma has said, the issue of health care reform is before us; and I, for one, am in the middle of that, as is the gentleman from Virginia on my right, trying to work out satisfactory compromises, and I would rather be there than here because, frankly, I think that's more pressing at this point.

So I would urge that we get on with it and get to the bottom of the facts and the charges and consider what constructive action may be necessary and move ahead.

I thank the chair and yield back the balance of my time.

MR. WAXMAN: Thank you, Mr. McMillan.

Mr. Wyden.

MR. WYDEN: Thank you, Mr. Chairman.

Let me also say, Mr. Sandefur, we appreciate your being here. The staff has reported that you and the company have been very forthcoming with respect to giving us the documents that we need, and I appreciate that.

I am going to be very brief.

Let me start, Mr. Sandefur, by saying that if one believes the report of the U.S. Surgeon General, as a tobacco company CEO, you have your hands on the controls of an addiction machine.

Apparently, from news reports, several executives at your own company, have thought exactly the same way, as long ago as the '60s. As you know, Dr. David Kessler came to the committee here a couple of days ago, essentially said the same thing; updated us on these very serious matters.

What I'm interested in today, especially, are two substantive areas.

One: Would be any new evidence that you could give us that would contradict what the Surgeon General has said, what your own executives seem to have said in the '60s, and, finally, what Dr. Kessler said even a couple of days ago.

Second, what I would be interested in today, Mr. Sandefur, is talking about sensible regulation of cigarettes and how we're particularly going to ensure that young people in this country don't get started smoking. That's what this debate is all about for most of us, that's what this fight is all about.

I can tell you, with all due respect, I don't know of a member of this committee who thinks we ought to ban or prohibit cigarettes, but all of us feel that there must be a significantly more aggressive effort to keep young people from smoking, and I'll be exploring that with you as well this morning.

Again, we appreciation your cooperation.

MR. WAXMAN: Thank you, Mr. Wyden.

Mr. Bilirakis.

MR. BILIRAKIS: Thank you, Mr. Chairman.

Mr. Sandefur, I, too, add my welcome and I also welcome, I might add, your courage and your willingness to cooperate with what we're trying to do, whatever it is, up here.

Let me begin by saying I am not here to promote cigarette smoking. I have never been a smoker and none of my family members use tobacco products. Probably one of the reasons I never smoked is because when I was child everyone told me that smoking cigarettes wasn't good for me.

Obviously, cigarette warning labels were not required when I was growing up. Obviously, too, the public education campaign of the last three decades has had an impact on the number of people who choose to smoke. It should come as no great revelation that smoking is not beneficial to your health.

Most Americans have known this for years. I dare say, all Americans who can read and write and understand have known it for years, even before -- long before -- the initial Surgeon General's report.

This being said, I believe that we must view some of the issues before us as a matter of personal choice. We hear that word in the halls of Congress constantly, except we use it when it's convenient for us.

Millions of Americans now do smoke, with knowledge of the risk involved. They have adopted smoking as part of their lifestyle, and there is only so much government can and should do, in my opinion, to protect people from themselves.

Our government can never become so omnipotent that it tries to dictate the habits of individual Americans. Our government has no intrinsic right under the Constitution to tell people how to run their lives. Ours is a government of limited and enumerated powers, and we should be ever mindful of that fact.

We should also be wary of the slippery slope we place ourselves on when we try to regulate the food products, vitamins, drugs, and other items that people consume. Of course, we must regulate some of these items because government does have a valid role in protecting the public health and in guarding against harm. But, then, we have to ask ourselves where is the line drawn?

In the name of public health, should the government decide how much milk, butter, eggs, bacon, or hamburgers a person can consume? Can the government do this simply because those products have a high cholesterol content and we have evidence linking cholesterol to heart disease and other illnesses?

Should people be penalized because they are overweight -- I would be one of the first, probably, to be penalized for that -- and refuse to exercise?

These questions are not so absurd as they may seem. Once we begin to actively regulate products on the basis of their perceived health risks or because they may or may not meet the legal definition of a drug, we set a standard for intervention that is realistically applicable to other products.

In other words, if we regulate one substance because we have evidence it is, in some degree, harmful, how can we not regulate other items where there is evidence of significant harm.

Let me quote from a recent roll call article by Morton Condraki, and I quote: "The center for science and the public interest claims that 445,000 Americans die prematurely each year, from poor diet and lack of disease, compared with 420,000 per year from tobacco use. Guns kill around 40,000 a year. Alcohol abuse kills around 100,000. Drug abuse kills 20,000. Dangerous sexual behavior 20,000, mostly from AIDS, and auto accidents 44,000. Abortions claim 1.3 million fetuses per year. These are all many deaths too many, and the government should step in to do something about all of them, mainly to make clear to citizens what the dangers are and to invoke reasonable regulation to protect the public health and innocent lives," end quote.

Mr. Chairman, it is my belief that our citizens appreciate that there are risks associated with smoking. It is also my belief that our citizens have the ability to make choices for themselves. During the Flag Day weekend, I spoke at two different Elks Clubs, many people there, and I can't tell you how many approached and said, 'Don't take my rights to smoke away from me.'"

But continuing on, it is also my belief that our citizens have the ability to make choices for themselves and they don't want to be continuously protected by a government which thinks it knows better than they what is and is not good for them.

So let us approach these issues reasonably and hopefully without the rancor that has pervaded some of our proceedings. Let us fulfill our subcommittee's responsibility to seek the truth and let us be guided by common sense. We do not need to be a vehicle for crusades or witch hunts. Let the facts speak for themselves and let our witnesses answer the questions in a meaningful way, with time to explain fully their answers. Let us treat our witnesses with the same respect we expect from others.

Let us, in brief, act reasonably and with equal respect for both the breadth and limits of our legislative power. We should remember both the terms and import of the 10th Amendment to the Constitution. We should fully appreciate its dictate that the powers not delegated to the United States by the Constitution, nor prohibited by it, to the States, are reserved to the States, respectively, or to the people.

Thank you, Mr. Chairman. I look forward to the testimony today.

MR. WAXMAN: Thank you, Mr. Bilirakis.

Mr. Bryant: I don't wish to make an opening statement, Mr. Chairman.

MR. WAXMAN: Mr. Kreidler.

MR. KREIDLER: Thank you, Mr. Chairman.

On April 25th, this subcommittee received a statement from Brown & Williamson Tobacco Company, claiming that its product, that its processing techniques reduced the amount of nicotine in cigarettes.

On April 14th, we received a statement from Mr. Sandefur denying that Brown & Williamson adds nicotine to its cigarettes.

But this week we learned that Brown & Williamson developed a special high nicotine variety tobacco and added that tobacco to five brands of cigarettes. We have also learned that Brown & Williamson dropped that project shortly after the FDA began investigating nicotine in tobacco.

On April 14, Mr. Sandefur told the subcommittee that he does not believe nicotine is addictive. But, according to the New York Times report of May 7, the general counsel of Brown & Williamson wrote in a memo more than 30 years ago, stating that: We are in the business of selling nicotine, an addictive drug.

This is a record of distortion and deceit that should embarrass even a tobacco company. We have to cut through the fog of deception the tobacco industry is spreading across this country and get at the truth about nicotine and tobacco.

You and your staff are doing a great dedication, Mr. Chairman, and the American people should be grateful to you.

MR. WAXMAN: Thank you, Mr. Kreidler.

Mr. Paxon.

[No opening statement.]

Mr. Franks.

MR. FRANKS: Thank you, Mr. Chairman.

What we are doing in these hearings, if taken to is possible conclusion, could result in the erosion of freedom for some 50 million Americans who exercise their personal choice and who accept the responsibility of smoking cigarettes.

Whether one would think it is the most disdainful practice in the universe and some people, I believe, would believe that smokers would represent that description, we in Congress need to be very careful about removing that, or any freedom.

We have made mistakes before in this august body, the most notable of this sort probably being prohibition. That obviously was done with a great deal of zeal and, unfortunately, without a great deal of thought, obviously.

With that, I would urge all of us and all present to consider the issues being raised fairly and with an open mind and with a close eye on the possibility of diminishing unnecessarily the freedom that all of us cherish and hold so dear.

I yield back, Mr. Chairman.

MR. WAXMAN: Thank you very much.

Mr. Greenwood.

MR. GREENWOOD: No opening statement.

MR. WAXMAN: Mr. Sandefur, I do want to acknowledge the presence of your representative, Congressman Sanford Bishop, who is not only your plant's representative but I think your own personal representative in the Congress, and we're delighted to have him here.

I want to extend to you the greetings of Congressman Roy Roland, who is a very important member of this subcommittee.

We have at the table in front of you the Rules of the Committee in the blue and white pamphlets. They will inform you of the limits on the power of this subcommittee and the extent of your rights during your appearance today.

Do you desire to be represented by counsel, or advised by counsel, during your appearance here today?

MR. SANDEFUR: Yes, I do.

MR. WAXMAN: Okay. Do you, or those you have asked accompany you, object to appearing before this subcommittee under oath?

MR. SANDEFUR: No, sir.

MR. WAXMAN: If you have no objection to appearing under oath, I'd like to ask and anybody else who is going to give testimony, to rise and raise your right hand.

[Sworn.]

MR. WAXMAN: Please consider yourself to be under oath. Identify yourself for the record, and include the names of those who are accompanying you.

MR. SANDEFUR: My name is Tom E. Sandefur. I'm Chairman and Chief Executive Officer of Brown & Williamson Tobacco Company. Accompanying me is Judge Bell and Gordon Smith, a law partner of Judge Bell.

MR. WAXMAN: Before you begin, I just noticed that Congressman Ralph Hall has entered the room, and do want to give him a chance to make an opening statement, so if you'll withhold for a moment.

MR. SANDEFUR: All right.

MR. WAXMAN: Mr. Hall.

MR. HALL: Mr. Chairman, I thank you for the courtesy extended to me and to Mr. Sandefur. I just, on behalf of Congressman Roland, whose constituent Mr. Sandefur is, would welcome him to the committee, and would ask unanimous consent to put a statement submitted by J. Roy Roland into the hearings.

MR. WAXMAN: Without objection, that will be the order.

Mr. Sandefur, we have your prepared statement. We will make that part of the record in full. I want to recognize you to proceed with your testimony and to tell you that as much time as you will need to present that testimony will be accorded to you.

MR. SANDEFUR: I appreciate that, Mr. Chairman.

Mr. Chairman and Members of the Subcommittee, on behalf of Brown & Williamson Tobacco Corporation, I'm certainly glad to have the opportunity to present our views on the issues raised by this panel and to, hopefully, set the record straight.

Mr. Chairman, if I may start by addressing several issues raised by this Subcommittee on April 14, 1994, and highly publicized in the news media following those proceedings.

First: My statement on the record of April 14 that I believe nicotine is not addictive.

In a letter following my testimony, you, Mr. Chairman, advised Brown & Williamson counsel that, and I quote: "Knowingly deceived," closed quote, because I stated my belief.

I repeat: I do not believe that nicotine is addictive. I certainly believe that I'm entitled to express my views, even though they may differ from the opinions of others.

My opinion is based on my own common sense understanding of the major differences between tobacco and drugs in terms of the way people behave and how many people have been able to quit smoking.

You know, people use the "addiction" term loosely. I'm sure I have people in my company use the addiction term very loosely, much as I believe the Surgeon General did in the 1988 report addressing this particular subject.

Based on that definition in 1988, I would submit that the enjoyment derived from drinking coffee or cola could also be considered addictive.

In addition, if we were to rely on the scientific definition applied by the Surgeon General in his report of 1964, cigarettes would not be addictive. The Surgeon General, at that time, labeled cigarettes as a "habit" and I certainly agree with that.

To put the enjoyment of cigarettes on the same level as addition to drugs, in my opinion, defies common sense. If cigarettes were, in fact, addictive like cocaine and heroin, as is currently being asserted, there would be no way that more than 40 million American smokers would have been able to quit smoking, 90 percent of them with very little help at all, if any.

I might add that the mere existence of old documents in the files of a tobacco company doesn't prove addiction, either. Scientific advisors working in Brown & Williamson today advised me that none of the research -- I repeat -- none of the research, which apparently prompted the allegation that I have deceived the subcommittee, establishes that nicotine is addictive.

I have learned nothing -- nothing -- that would change my view.

One final point relating to nicotine; and, that is, the allegation that the levels of nicotine in cigarettes that we produce, or our competitors produce, are manipulated, or that the cigarettes are somehow spiked.

I want to assure this subcommittee that we do not spike our products nor do we manipulate the nicotine in our cigarettes to keep people hooked, as the FDA alleges.

In fact, over the last 40 years, nicotine levels have been reduced substantially. Why? Because that's what the marketplace wanted. That's what the consumer said. Unlike drug addicts, who require higher and higher levels of the drug to attain satisfaction, smokers require less -- they ask for less -- and we responded. And that's a fact.

Mr. Chairman, I would like to briefly address three other issues:

The relationship of smoking to health;

The regulation of the tobacco industry; and,

The accusations of Dr. Kessler and the FDA.

First: Smoking and health. I and other chief executives of tobacco companies have somehow been cast as living in the Dark Ages when it comes to being aware of studies on smoking and health.

I state for the record that I believe there are health risks statistically associated with smoking and that the same illnesses statistically associated with cigarette smoking also have been tied to other human conditions, including lifestyle, diet, and heredity. And the public has certainly been aware of the risk of smoking for a long, long time.

That leads me to my next point, and that is the regulation of the tobacco industry, and to be more precise, in my opinion, backdoor prohibition of tobacco sales because, again, in my opinion, that seems to be where we're headed.

It has been contended, and I quote: "Tobacco products are this nation's least regulated consumer product, with tobacco products being exempt from every major health and safety law," end quote.

Nothing could be further from the truth. In fact, our industry is probably the most regulated in U.S. Commerce, from the sowing of seed in the seed bed to the sale of the finished product at retail.

The following agencies regulate tobacco products or have issued reports that have the same impact as regulation:

The U.S. Department of Agriculture, the Bureau of Alcohol, Tobacco and Firearms, the Federal Trade Commission, the Environmental Protection Agency, OSHA, the U.S. Department of Health and Human Resources -- pardon me, Health and Human Services -- the Consumer Product Safety Commission, including the National Institute of Standards and Technology, as well as the Surgeon General.

In addition to these federal agencies, various states, or ever state in various counties and local municipalities, have laws on the books regulating the sale, the distribution, and the marketing of cigarettes. There are literally thousands of regulations.

Therefore, I believe it is totally misleading to paint the tobacco industry as a business that is run unbridled.

Given the fact that we are already heavily regulated, I have concern that we now are headed down a road of putting this industry out of business. There is certainly no doubt about it, in my mind. That's clearly the intent of giving the FDA superpower jurisdiction.

I recognize that the legislation, proposed by Congressman Synar, purports to prohibit the FDA from banning cigarettes outright. The words in that legislation make it perfectly clear.

My concern is that we need to keep an eye on the backdoor. Let me explain why.

Because of the FDA's jurisdiction -- because of the FDA's jurisdiction -- the Agency could make it absolutely impossible for us to sell cigarettes because of the reach of their regulatory powers.

For example, the FDA could say you can sell a cigarette but it can't have any nicotine, or they could say, it's okay to sell cigarettes, but they can't emit any secondhand smoke.

I think you understand my point. It's like telling a company it's okay to sell a beer, as long as it doesn't contain any alcohol.

The pathway to FDA regulation is a pathway to prohibition and we need only to look at the past to understand the consequences.

Over the course of 1895 to 1921, more than a dozen states enacted legislation banning tobacco products -- banning the sale of tobacco. It was not until 1925 that the last of these prohibition laws against cigarettes was repealed. People in this country -- in our country -- are against banning cigarettes.

In a recent CNN-USA Today Gallup Poll, 86 percent of the people interviewed said smoking should not be made illegal.

One final note, and this is more of a personal nature: I've been in the tobacco business for more than 30 years. I'm proud of the quality of the products we make. I'm proud of the thousands of people that we employ, and I'm proud of the livelihoods we provide to hundreds of thousands of others, from the farm families, to the mom and pop stores around the corner.

Mr. Chairman and Members of this Subcommittee, if I sound concerned or even alarmed, it's because I am, not because of the information being brought before this Committee. The issues being resurrected here relate to nicotine and so-called safer cigarettes, health risk associated with smoking, are not new issues. These issues have been played out in courts over and over again.

When we are given a formal chance, judges, juries and equitable rules, common sense is prevailed. Juries have always decided these issues in our favor when the facts are presented in a fair forum.

No, I'm not concerned about the information itself. I'm concerned about the process. Saying it's okay to steal, saying it's okay to accept stolen property, saying it's okay to violate the rights of confidentiality with legal counsel, saying it's okay to return to an age of McCarthyism, when blacklisting and vilification of honest and respectable people were sanctioned for the sake of advancing a political agenda.

I'm concerned about our government regulating the lives and lifestyles of the American citizen.

I'm not alone in my concern. Columnist Richard Baker -- Russell Baker -- writing about this Congressional proceeding said, and I quote:

"We have here a crusade in its second phase. Crusades typically start by being admirable, proceed to being foolish, and end by being dangerous. The crusade against smoking is now clearly into the second stage where foolishness abounds," end quote.

Mr. Baker later adds, and I quote again:

"This is an illustration of a crusade entering the dangerous stage," end quote.

Dr. Kessler's efforts are a perfect example of a crusade by the FDA, which is clearly in its dangerous stage.

I would now like to respond to the false allegations made against Brown & Williamson last Tuesday, by Dr. Kessler and his staff, concerning Y-1.

First, the testimony implies, or implied, that Brown & Williamson developed some new variety of a tobacco plant which we didn't want the government to know about. In fact, the U.S. Department of Agriculture actually developed the breeding line which became Y-1.

Three federal agencies responsible, or having the responsibility for public health issues: The Surgeon General, along with the USDA and the National Cancer Institute, all recognize that it was appropriate to consider the design of cigarettes which would deliver lower levels of tar in moderate levels of nicotine. The development of Y-1 was consistent with this approach.

Second: It was suggested that there was something sinister or secretive about Y-1 because it was patented in Brazil using the language of Brazil, which is Portuguese. In fact, it was grown in Brazil to prevent our competition from using it, and because the growing conditions in Brazil were very good.

I am told that the Brazilian patent application file contained a certified copy of the American patent application in English, so Dr. Kessler didn't have to go to the trouble of obtaining an English translation, as he asserted.

For Dr. Kessler to suggest that they had to uncover this secret by translating Portuguese into English, in my opinion, is nothing more than grandstanding.

B&W has never attempted to hide the existence of Y-1 and, in fact, we sought to have a U.S. patent issued, which would have made the existence of Y-1 a matter of public record.

Third: Dr. Kessler not only misled, in my opinion, this committee by what he said, but by what he failed to say. He made absolutely no reference to the actual nicotine deliveries in the B&W brands which use Y-1 in the blend. In fact, as we told the FDA, the brands that use Y-1 delivered essentially the same nicotine as the products they replaced.

Some of the brands containing Y-1 actually delivered less nicotine than the non-Y-1 for those same products, and some delivered a little higher nicotine.

Fourth: Dr. Kessler stated that B&W authorized DNAP to state that Y-1 had not been commercialized. This is false. When DNAP called Brown & Williamson earlier this month and asked if they could discuss Y-1 with the FDA, despite the confidentiality agreements with my company, Brown & Williamson gave permission to do so. We never told DNAP what to say.

In Wednesday's Washington Post, Mr. Evans at DNAP is quoted as saying that his company assumed Y-1 had not been commercialized. Now that's a far cry from Dr. Kessler's allegation that Brown & Williamson told them to make any such statement.

Once again, Dr. Kessler's exaggeration, in my opinion, of the situation fits his personal or political agenda.

Fifth: Dr. Kessler has attempted to dramatize his investigation by stating that he uncovered the Y-1 story through, quote, "painstaking investigation work over three months," end quote, which took him to Brazil to find, quote, "a needle in a haystack," end quote. Again, this is nothing more than grandstanding. If Dr. Kessler had been sincere, or sincerely interested, in getting the facts, all he had to do was ask Brown & Williamson.

In fact, the FDA never asked Brown & Williamson a single question about Y-1 and never asked Brown & Williamson to produce a single document about Y-1. When we learned through a third party that the FDA was interested in Y-1, Brown & Williamson contacted the FDA and set up a meeting, which took place this last Friday. The FDA did not confront Brown & Williamson with evidence of Y-1, instead, Brown & Williamson took the initiative to set up the meeting to discuss Y-1.

Finally, Dr. Kessler and one of his staff members, made the highly misrepresentation that a Brown & Williamson employee falsely answered questions about cross-breeding during a meeting between the Brown & Williamson representatives and the FDA.

I wasn't at that meeting, but one of Judge Bell's law partners was, Gordon Smith, and he will address those allegations.

In fact, it now appears, at least to me, that the FDA may have known about Y-1 early on and may have intentionally engaged in a course of conduct that avoided asking questions about Y-1 in an effort to set Brown & Williamson up for the assertion that we failed to disclose information about Y-1.

Dr. Kessler boasts that Brown & Williamson did not make concessions about Y-1 until after confronted with the FDA's evidence is highly misleading and grossly unfair. The FDA did not ask Brown & Williamson a single question on this topic until Brown & Williamson initiated a meeting to discuss it.

Furthermore, contrary to Dr. Kessler's allegations, Y-1 is not a genetically-engineered leaf, cross breeding techniques similar to those used with food crops were used. This was fully explained to the FDA in our meeting last Friday.

Mr. Chairman and Members of the Subcommittee, my fear is that Mr. Baker's quote about the crusade against smoking is correct. We're entering the dangerous stage where the rules are good for some but not for all; where the rights apply to some but not to all; where the freedoms to make choices apply to some but not to all.

Herein lies the danger. We've all seen it in t he past, and I certainly pray that we are not going to see it in our future.

Mr. Chairman, I'm here to answer the questions of the subcommittee. I want to be cooperative, and I will be cooperative. Please bear in mind, however, that my personal knowledge of my company, Brown & Williamson, and its history and activities are somewhat limited, given the fact that I only joined the company over 12 years ago, and that my area of expertise is marketing and sales.

I'm not a scientist and will not be able to speak to scientific issues, particularly those in 30-year-old documents; otherwise, I will do my best to answer your questions.

Thank you.

MR. WAXMAN: Thank you very much, Mr. Sandefur. We appreciate your testimony.

I want to assure you, because you mention it and others in your industry have mentioned it, that I don't know of any member of Congress that is for prohibition of cigarettes. Prohibition is a terrible idea. It failed with alcohol, it would fail with cigarettes; it would be impossible to be enforced, and, to the extent that we did enforce it, it would be a cruel punishment for millions of Americans addicted to nicotine.

There are, however, other measures that we may want to look at, and that will depend on the record of these hearings.

Then I also want to give a response to your statement that I accused you of knowingly deceiving the subcommittee, and that was based on a letter sent to your attorney, dated May 17th, 1994. I want to read the complete quote.

"According to reports in the nation's leading newspapers and television news programs, your client may have knowingly deceived the Congress, and this subcommittee in particular, about the dangers of smoking and the addictiveness of nicotine."

I did not make an accusation, as was represented in your statement.

Mr. Sandefur, when you were here on April 14th of this year, with the other CEOs from the tobacco companies, your panel of CEOs seemed to feel strongly that nicotine was in cigarettes for taste. And I want to ask you about this morning.

Does Brown & Williamson believe that nicotine is present for taste or is it in cigarettes for its drug-like qualities?

MR. SANDEFUR: Mr. Chairman, we very strongly believe that nicotine is a very important constituent in the cigarette smoke for taste; yes, sir.

I would further add that the consumer tells us that, when asked, why they didn't smoke a denicotinized cigarette that Philip Morris marketed, that the reason they didn't smoke it is because it didn't taste very good. Now that's what the consumer says.

MR. WAXMAN: Just so we have the record clear, you've submitted certain documents to us, and among those were the chronology of the relationship of Brown & Williamson to British American Tobacco.

Am I correct that BAT is the parent company of Brown & Williamson?

MR. SANDEFUR: British American Tobacco Industries is our parent, yes, sir; wholly-owned subsidiary of that company.

MR. WAXMAN: So BAT completely owns Brown & Williamson?

MR. SANDEFUR: That's correct. Yes.

MR. WAXMAN: And Brown & Williamson has input into BAT's research?

MR. SANDEFUR: Mr. Chairman, my company, along with several other sister companies, report into BAT Industries. From time to time, there will be discussions by our R&D people, our scientists with our sister company scientists, but it would be misleading you if I told you we made those decisions.

MR. WAXMAN: No, I'm not suggesting. I just want to know if you had input into that research?

MR. SANDEFUR: We do have input, yes.

MR. WAXMAN: And your employees participate in BAT research conferences?

MR. SANDEFUR: Yes, sir. That's correct.

MR. WAXMAN: In fact, in 1961, Brown & Williamson entered into an agreement with BAT to pull their research efforts.

MR. SANDEFUR: Mr. Chairman, I was in college in 1961. I can't speak to that subject; no, sir.

MR. WAXMAN: Well, although the documents you submitted to us indicate that.

MR. SANDEFUR: I haven't read those documents.

MR. WAXMAN: And in 1969, Brown & Williamson and BAT entered into a cost-sharing arrangement under which Brown & Williamson would help fund the research conducted at BAT Laboratories.

MR. SANDEFUR: Same answer, yes. I was in college during that time, I don't know.

MR. WAXMAN: Well, if it's a cost-sharing arrangement, do you know whether you're still sharing in the cost?

MR. SANDEFUR: Let me put it this way, Mr. Chairman. The parent sends me a bill, and I pay it. It's like asking me what dividend I'm going to pay. They tell me, and I pay it. Yes, sir.

MR. WAXMAN: Now, I want to evaluate this statement about nicotine being for taste and not for drug-like purposes.

In 1962, Sir Charles Ellis, who was scientific advisor to BAT, presented a lengthy paper at the BAT Research Conference in South Hampton, and Sir Ellis described the issues related to smoking and health this way -- and if we could have the statement up there.

I want to draw your attention, and I'll read the bold type provision:

"It is my conviction that nicotine is a very remarkable beneficent drug that both helps the body to resist external distress and also can, as a result, show a pronounced tranquilizing effect."

Further down, he says:

"Nicotine is not only a very fine drug, but the techniques of administration by smoking has considerable psychological advantages."

In other words, Sir Charles Ellis, who worked for your parent company, seemed to represent a view about nicotine being a drug. Do you disagree with that -- whatever that says.

MR. SANDEFUR: Whatever that says, it says, sir.

MR. WAXMAN: Would you disagree with his view that nicotine is a drug?

MR. SANDEFUR: Yes, sir, I would.

MR. WAXMAN: Okay.

MR. SANDEFUR: I absolutely would.

MR. WAXMAN: Okay.

You do acknowledge that it represents a view of an important person at BAT, at least as early as the 1960s?

MR. SANDEFUR: Sir Charles Ellis was a scientist in BATCO; yes, sir, I understand that. But we have scientists in our other sister companies as well.

MR. WAXMAN: Okay. Now, let me give you some similar quotations from people involved with your company.

Chart No. 7, if we could have that put up -- the quote was that:

"Nicotine interacts with specialized sites in the body, termed receptors, or nicotinic cholinergic receptors."

In its simplest sense, puffing behavior is the means of providing nicotine dose in a metered fashion.

Then in 1984, a further BAT researcher, at a conference on smoking and marketing, Rob Ferris said -- I think we have that also, on that statement:

"It is apparent that nicotine largely underpins the contributions through its role as a generator of central physiological arousal effects, which express themselves as changes in human performance and psychological well being."

Let me ask unanimous consent to place all of these articles and conferences on nicotine and health effects discussed at the hearing, as well as all of the charts used in the questioning, in the record.

Without objection, they will be admitted.

So that's 1984. Your company was recognizing the importance of nicotine and its pharmacological effects. Do you disagree with that?

MR. SANDEFUR: Mr. Chairman, yes, sir, I do. This is one individual's opinion in the conference. Rob Ferris has a right to his opinion, but it's not the opinion of the company.

MR. WAXMAN: Well, these are scientists that work for the company.

MR. SANDEFUR: Yes, sir.

MR. WAXMAN: I have some other documents that your company supplied to us.

MR. SANDEFUR: Yes, sir.

MR. WAXMAN: And these documents -- I'm going to put them right down here -- these documents are research projects undertaken by Brown & Williamson or BAT. And here, this one called, "The Fate of Nicotine in the Body;

Another one is called, "Nicotine in Smoke and Human Physiological Response", or

"The Effect of Puff Volume on Extractable Nicotine", or

"Effects of Nicotine on the Central Nervous System."

"The Absorption and Effects of Nicotine from Inhaled Tobacco Smoke."

"Relative Contributions of Nicotine and Carbon Monoxide to Human Physiological Response."

These are all studies that were done by your scientists.

MR. SANDEFUR: No, sir. They were done by BATCO scientists not my scientists -- BATCO scientists.

MR. WAXMAN: Well, those scientists work in cooperation with your scientists.

MR. SANDEFUR: They have views, as my scientists have views. Yes, sir, that's correct.

MR. WAXMAN: Well, these were extensive work being done by, in many cases, the joint efforts of Brown & Williamson scientists and British American Tobacco.

Here's one, for example, that's solely Brown & Williamson Tobacco Corporation. It's called: "A Human Smoking Study: Acute Effect of Cigarette Smoke on Brain Wave Alpha Rhythm".

What does brain wave alpha rhythm have to do with taste?

MR. SANDEFUR: I -- I don't -- I'm not familiar with that study, Mr. Chairman.

MR. WAXMAN: This is from Louisville, Kentucky, and it was submitted to us by your company.

MR. SANDEFUR: Mr. Chairman --

MR. WAXMAN: Um-hum.

MR. SANDEFUR: -- those documents were asked for by the committee, and it's my understanding that we were asked for any documents that we had in our file.

Our scientists are responsible for staying abreast of any work done in the area of smoking and health worldwide, no matter who does the work, and they have an opportunity to read those reports and take a view on them.

So I'm sure that we have untold documents in our library on not only nicotine but tar and flavors and any other --

MR. WAXMAN: Mr. Sandefur --

MR. SANDEFUR: Yes, sir.

MR. WAXMAN: -- excuse me for interrupting you, but these were research activities in which Brown & Williamson scientists joined with BATCO scientists in conferences. There's never an indication in any of these that the Brown & Williamson scientists disagreed with the research conclusions or even the research premises.

But what all these shows is that Brown & Williamson has had an intense interest for many decades about the pharmacological impacts of nicotine. Not a single one of these documents talk about studying the taste of nicotine, only the drug-like impact of nicotine in cigarettes in the brain, in the brain waves, in the central nervous system.

Do you imagine that you taste something --

MR. SANDEFUR: Mr. Chairman --

MR. WAXMAN: -- in your central nervous system?

MR. SANDEFUR: Mr. Chairman, I would beg to differ with you. If you would have asked for documents about taste, we would have sent you documents about taste.

If you would have asked about documents about nicotine -- I mean, about tar -- we would have sent you that.

MR. WAXMAN: We asked you for documents about nicotine.

MR. SANDEFUR: Yes, sir, I understand that.

MR. WAXMAN: If you had documents about nicotine and taste, they should have been in this file.

MR. SANDEFUR: Well, I'm sure our lawyers -- I hadn't gone through those documents, Mr. Chairman. I'm sure our lawyers complied with the request of the subcommittee.

MR. WAXMAN: I think they did.

MR. SANDEFUR: Yes, sir.

MR. WAXMAN: And what we have are documents that show a great deal of interest on nicotine as a pharmacological agent and not a single document as nicotine as a taste. And I just raise that --

MR. SANDEFUR: Yes.

MR. WAXMAN: -- to your attention because, it seems to me, it's hard to reconcile all this evidence with the statement nicotine is not a drug.

MR. SANDEFUR: I'm sure it is, and I can appreciate your concern and how you would derive it at that conclusion.

As I've said, I'm not a scientist. I rely on my scientist to give me information and to give me input.

MR. WAXMAN: Have any of them given you input that nicotine is a taste?

MR. SANDEFUR: They have told me they consider nicotine to be a taste, yes, sir. And I --

MR. WAXMAN: And have you had any scientists investigating how to improve the change, approve or change the taste, from nicotine?

MR. SANDEFUR: We've had a lot of work done on taste, and nicotine is art, is a constituency of taste. Yes, sir.

MR. WAXMAN: Mr. Sandefur, my time is up, and I want to recognize other members, but I do repeat to you, these are the documents we received. We requested all documents on research on nicotine, and all these documents indicate that your scientists were doing a lot of work, for many decades, on how nicotine acts as a drug and has pharmacologic impacts.

Mr. Bliley.

MR. BLILEY: Thank you, Mr. Chairman.

Mr. Sandefur, you said in your opening remarks, in commenting on Y-1 --

MR. SANDEFUR: Yes, sir.

MR. BLILEY: -- that, unlike was the charges that were made earlier this week by Dr. Kessler, that you developed that at the request of the federal government; to develop a low tar cigarette that still had an adequate supply of nicotine.

You also stated that you did it in Brazil because of the growing conditions and you wanted to keep this proprietary information. Is that correct?

MR. SANDEFUR: Yes. I might correct you on one part of the statement, though, Congressman Bliley.

The FDA, or the government, didn't ask us to develop this. There was suggestions that this may be a way to make or improve a cigarette. That was why we pursued it.

That was not only being done by suggestions being made by the different federal agencies here in the United States, but the Hunter Committee in the U.K. had made the same type suggestions. G.O. Gorey, for years, has made these type suggestions. So we were interested in pursuing it. That's why we pursued it.

MR. BLILEY: Who is G.O. Gorey?

MR. SANDEFUR: G.O. Gorey is a scientist -- a well-known scientist -- who's done a lot of work in the area of smoking and health.

MR. BLILEY: Did he work for the government or was he in private?

MR. SANDEFUR: I believe that at one time Dr. Gorey was, in fact, employed by the government. He has also been very helpful to my company, from a time to time basis as a consultant.

MR. BLILEY: You said in your testimony that you introduced Y-1 into the blend but that the nicotine levels remained about the same.

MR. SANDEFUR: That's correct, in terms of --

MR. BLILEY: Now, what percentage did you put in the cigarette?

MR. SANDEFUR: Well, as it turned out, when we commercialized it -- and we did, we put it in for a time in Viceroy and some of our Richland styles -- it was only, on a late basis, it was 10 percent.

Now we tested a much higher level of this leaf, I think in the range of 30 percent.

MR. BLILEY: Why didn't you use it?

MR. SANDEFUR: Well, the consumer rejected it. The consumer found it to be very harsh and irritating, and we said, look, it was a good idea, but the consumer rejected it.

I don't want you to think that when I say we put 30 percent in it and the nicotine level went up threefold; that's not the case. We had 30 percent leaf and we used Y-1 as a blending tool. We were able to deliver essentially the same nicotine level on a per-cigarette basis by using the Y-1.

MR. BLILEY: In your Viceroy cigarettes, how many -- roughly, how many -- different blends of tobacco do you use?

MR. SANDEFUR: Well, I believe -- I'm guessing now, I don't --

MR. BLILEY: But it's several.

MR. SANDEFUR: Okay. There would be several, yes, sir. I would suggest that we probably have one for the King Size, what we call the Full Flavor, and one for the Lights. But I don't want anyone to think that that would be the case with my other blends.

For instance, we have products that we'll use the same blend for the Full Flavor, the Lights, or the Ultra Lights, and we use filtration to deliver the tar and nicotine levels.

MR. WAXMAN: We were told that you manipulate the cigarette. Is it not true that the Federal Trade Commission samples your cigarettes all the time, just like it does everybody else's?

MR. SANDEFUR: We -- I don't believe the Federal Trade Commission today, in fact, picks cigarettes up and tests them. I may be wrong on that. But I can tell you that we're under the jurisdiction of the FTC, and we use the FTC methodology for measuring the deliveries on our cigarettes.

By law, if we misled the American public with regard to the deliveries, my company would be in for major fines. So we take very seriously the testing and measurement of tar and nicotine in the products that we produce and make darn sure that each and every cigarette delivers that level.

MR. BLILEY: We had testimony Tuesday about the use of ammonia in cigarettes, possibly; the charge was made to enhance the nicotine in the product.

I understand that it's used as a flavorant, and it's also used to make the shreds of tobacco adhere to one another. Does Brown & Williamson use ammonia in its cigarettes?

MR. SANDEFUR: Yes, sir, we do.

MR. BLILEY: And for what purpose?

MR. SANDEFUR: For the benefit of taste, to improve the taste characteristics of our cigarette.

Congressman Bliley, back in 1984 or 1985, when I became responsible for our domestic business, I asked our research people -- our R&D people, our Research and Development people, as well as our scientists -- I might say they're, in most cases, one and the same -- to reverse engineer for my company, the Marlboro product.

Marlboro is a very, very fine cigarette. Has very fine taste characteristics, and I wanted to find out how they were doing that, because it was important, if I was going to compete, to improve the quality of my products.

They did that, and our scientists came to me and said, we think we found one of the secrets. And it was the use of ammonia in the sheet -- reconstituted sheet. And, over time, we developed a way of doing that and, in fact, we use that in our cigarettes today to improve the smoking quality and the taste of our products.

I don't want you to think that there's something wrong with ammonia. There's not. You know, my wife said the other night to me, I guess when she read the papers about nicotine and about ammonia, said, oh, my goodness, you're putting ammonia in your cigarettes.

I said, yeah, we do that as an ingredient in our processing. And I said, but if you eat -- and she likes to eat brie cheese -- I said, you eat brie cheese, you're getting ammonia, too.

So I don't want anybody to think that there's some problem in using ammonia. It's not.

MR. BLILEY: I thank you, Mr. Sandefur.

Thank you, Mr. Chairman.

MR. WAXMAN: Thank you, Mr. Bliley.

Mr. Synar.

MR. SYNAR: Thank you, Mr. Chairman.

Mr. Sandefur, is it true that you agreed to a two-day visit by the Food and Drug Administration officials at Brown & Williamson for May 3rd?

MR. SANDEFUR: I'm sorry, Congressman. I didn't hear your question.

MR. SYNAR: Is it true that you agreed to a two-day visit by the FDA officials at Brown & Williamson, starting on May 3rd?

MR. SANDEFUR: I'm aware that we agreed to a visit. I don't know the length of time we agreed to, no, sir.

MR. SYNAR: Is it true that halfway through the first day Brown & Williamson announced there wouldn't be a second day since you had a business to run?

MR. SANDEFUR: I'm not aware of that, no, sir.

MR. SYNAR: Is it true that the Brown & Williamson officials attempted to terminate even the first day, even though the FDA officials indicated they were not finished asking their questions?

MR. SANDEFUR: It's my understanding, Congressman, that we started -- I believe I was told we started at 9:00 in the morning and went until 6:00 at night, and we said, do you have anymore questions, and they said no. That's my understanding of the situation.

MR. SYNAR: Is it true that the Food and Drug Administration requested certain documents regarding all relevant research on nicotine and psychological effects shortly after that visit on May 3rd, and that the fda still has not received a response from you all?

MR. SANDEFUR: I have no idea, but I can tell you this: I wrote Dr. Kessler -- Commissioner Kessler -- and offered, as I testified before this committee on April the 14th, offered for my company to be open and candid with them and offered any assistance that we could give him; and I can tell you that I have received not one call from the Commissioner asking for any information -- additional information.

I can also tell you, however, that Dr. Kessler and his staff have been all over Louisville, Kentucky, or anywhere else, talking to employees, which I have no problem with, and retirees, about the subject.

I have a concern about the way he's going about his investigation because he's -- some of his investigators are misleading my employees, and that upsets me, to the point of saying to them that he has knowledge that they didn't make the cut -- they weren't going to be moved to Macon, Georgia, and I have affidavits that shows that. But that's not the purpose --

MR. SYNAR: Well, Mr. Sandefur --

MR. SANDEFUR: -- of your question. I understand.

MR. SYNAR: -- we've been told that that information has not been provided by your company. Would you provide that information to the FDA and the subcommittee?

MR. SANDEFUR: Absolutely. Certainly we will. I have absolutely no problem in giving you or --

MR. SYNAR: Good.

MR. SANDEFUR: -- or this subcommittee or FDA. I might add, Congressman, that we have any number of requests for documents, and we have our people working on them --

MR. SYNAR: Good.

MR. SANDEFUR: -- and our priority was that this subcommittee came first. We've got an issue of fire safe cigarettes we're trying to supply documents on, as we sit here today.

MR. SYNAR: Mr. Sandefur, is it true that the FDA sent you a letter on June 2nd of '94, requesting a follow up visit, and that that visit was on Friday, June the 17th, at which the Y-1 was discussed?

MR. SANDEFUR: It's my understanding that we initiated the conversation. We, Brown & Williamson, initiated the conversation with the FDA. We asked for the meeting on last Friday. That's my understanding.

MR. SYNAR: Now, since the FDA's letter of February 25th, '94, it's been clear that the FDA was investigating the control and manipulation of nicotine in cigarettes.

Now, they visited your company on May 3rd, as part of the investigation. Did you tell them about Y-1 at that time?

MR. SANDEFUR: If I might ask Gordon Smith to answer that question. I wasn't at that meeting, but Mr. Smith was. And if it's all right with you, sir, I would like for him to answer that question.

MR. SYNAR: Before we do, Mr. Chairman, neither Mr. Bell nor Mr. Smith were sworn in. They did not take the oath.

[Sworn by the Chairman.]

MR. WAXMAN: Consider yourself under oath.

MR. SYNAR: Let me repeat the question.

On the May 3rd, 1994 meeting, Mr. Smith, did you tell the FDA about Y-1?

MR. SMITH: The issue of Y-1 was never raised in --

MR. SYNAR: So you did not --

MR. SMITH: -- any question.

MR. SYNAR: -- you did not volunteer that information?

MR. SMITH: It was not asked and it was not volunteered.

MR. SYNAR: Okay. You say, Mr. Sandefur, that Y-1 is not a secret. Have you ever disclosed Brown & Williamson's development of Y-1?

MR. SANDEFUR: To whom, sir?

MR. SYNAR: That's the point. Have you ever disclosed it anywhere, the development of Y-1?

MR. SANDEFUR: We applied for a patent from the U.S. Patent Office. We applied for a patent in Brazil. We've disclosed it, certainly, to our sister companies and our parent company.

MR. SYNAR: Have you ever disclosed Brown & Williamson's commercial use of Y-1 in cigarettes?

MR. SANDEFUR: Again, to whom?

MR. SYNAR: Anywhere.

MR. SANDEFUR: [No response.]

MR. SYNAR: Your point was it's not a secret, and yet we're having a hard time finding anywhere where you've disclosed its commercial use or anything else.

MR. SANDEFUR: Congressman, I look at Y-1, just as I look at leaf that comes from Zimbabwe or China, or any other offshore leaf that we might purchase, and I don't disclose that either.

There's nothing -- as I said in my statement, there's certainly nothing secret or sinister about our use of Y-1.

MR. SYNAR: But you haven't disclosed its use and its development anywhere, have you?

MR. SANDEFUR: Nor have I disclosed the grades of tobacco that I buy and produce everyday. No, sir, I didn't.

MR. SYNAR: In your news release issued yesterday, you state that the Department of Agriculture began the development of what became Y-1, and that you only continued its development.

Could you describe for the subcommittee the procedure you went through to obtain this high nicotine plant from USDA? How did you get it from the USDA if you didn't start the development?

MR. SANDEFUR: I can't answer that question. I'm the wrong person to ask. I don't know.

MR. SYNAR: Will you provide that information to the record?

MR. SANDEFUR: Certainly. Yes, sir.

MR. SYNAR: Okay. Was it obtained for experimental use only?

MR. SANDEFUR: I believe it was, initially, but I will have to supply the chronological --

MR. SYNAR: Will you provide the information --

MR. SANDEFUR: Yes, sir. Sure, I will.

MR. SYNAR: -- and the documents that will show that you moved from an experimental use to a commercial use?

MR. SANDEFUR: Certainly. I'll be more than happy to do that.

MR. SYNAR: In fact, also, would you provide for the record whether or not the terms under which you received the plant from the USDA, which it's our understanding it was for experimental purposes, whether or not that was consistent with the terms of your agreement that you moved to commercial production?

MR. SANDEFUR: I will be more than happy to give you any information you request. Yes, sir.

MR. SYNAR: You have admitted that the Y-1 was grown in Brazil at your sister company. How did you get those seeds to Brazil?

MR. SANDEFUR: I learned last Monday morning -- I was briefed on the session that our people had with the FDA on Friday. I don't know the answer to that question, but I can tell you that I have asked for a study to be done to find out --

MR. SYNAR: Will you provide it for the record?

MR. SANDEFUR: -- and as soon as I know, I'll certainly let you know. Yes.

MR. SYNAR: Will you provide for the record how many shipments you made --

MR. SANDEFUR: Sure.

MR. SYNAR: -- of Y-1 seed? And how much seed was exported to Brazil?

MR. SANDEFUR: Yes, sir. If, in fact, seed was exported. I don't know that, Congressman.

MR. SYNAR: Other shipments of Y-1 seed were made to other countries outside the United States. How many shipments were made and to where?

MR. SANDEFUR: I -- again, I'm going to have to get back to you on that. I don't know.

MR. SYNAR: You will provide that. Okay.

Now, until the end of 1991, export permits were required in order to ship tobacco seeds and plants overseas. Did you or your contractor obtain the necessary permits for those shipments?

MR. SANDEFUR: That is being looked at today. I understand that that's required. I can't answer that question.

MR. SYNAR: Will you provide that for the record?

MR. SANDEFUR: But as soon as I find out, I'll let you know. Yes.

MR. SYNAR: And will you provide all the permits that you have?

MR. SANDEFUR: Certainly. I want you to understand, Congressman, we will give you anything that we have on the subject of Y-1, or anything else that you ask for.

MR. SYNAR: Now, the export permit granted is usually on a condition that the seed or plant would be only used experimentally. There is a limit of a half ounce on how much can be exported.

But last Friday Brown & Williamson informed the FDA that several annual shipments of about a million pounds were imported by Brown & Williamson. How did you manage to grow and ship millions of pounds of Y-1 if the USDA permits only experimental quantities of seed to leave the country in the first place?

MR. SANDEFUR: That's a good question. I don't know, but I can tell you we have --

MR. SYNAR: Will you provide the subcommittee with those documents?

MR. SANDEFUR: Yes. Sure.

MR. SYNAR: Now, the FDA stated on Tuesday that the DNA Plant Technology had been authorized by your company to disclose to the FDA that Y-1 was never commercialized.

The press release that you've issued yesterday flatly denies that.

Is it your testimony today that Brown & Williamson did not provide such authorization?

MR. SANDEFUR: We had -- we told DNAP that they should cooperate with the FDA. We certainly didn't tell DNAP that they should deceive the FDA.

MR. SYNAR: What are the names of the Brown & Williamson officials who spoke to the DNA Plant Technology regarding this commercialization?

MR. SANDEFUR: I don't know, but I'll find out and let you know.

MR. SYNAR: What, specifically, did you authorize Technologies to do, to say? Anything?

MR. SANDEFUR: We told them to cooperate --

MR. SYNAR: Okay.

MR. SANDEFUR: -- is my understanding.

MR. SYNAR: Now in your press release, Brown & Williamson states that your patent application for Y-1 was rejected in 1993 for lack of uniqueness. Yet, isn't it true that on February 28th of this year you filed an appeal on the ground that, for the first time, a plant had been developed with high nicotine content that grew well and could be used commercially?

MR. SANDEFUR: That's my understanding.

MR. SYNAR: Isn't it true that before you received an answer to your appeal from the patent office, you expressly abandoned that patent on March 16th?

MR. SANDEFUR: That's my understanding, and I'd like to tell you why.

MR. SYNAR: Okay.

MR. SANDEFUR: Not that I made the decision to abandon the patent. I didn't. But I made the decision in either late February or early March that the issues regarding Y-1 would have to be reconsidered, and that was based on the most recent import laws that the Congress passed with regard to import restrictions.

Now, I understand that they may have some differences in terms of GATT, with regard to those restrictions, but I couldn't take that --

MR. SYNAR: Is it your position --

MR. SANDEFUR: Excuse me.

MR. SYNAR: Go ahead.

MR. SANDEFUR: I couldn't take that risk. So what I said was, because it's very, very important that we have the ability to bt Oriental leaf for the manufacture of our cigarettes -- Oriental leaf is bought in Turkey and Greece and Yugoslavia, and places like that -- that was part of my allotment, my allocation, if you will, and I didn't want to give that up.

I could, in fact, buy domestic flue-cured tobaccos that would replace Y-1, so I made a decision -- I and my Executive Committee made the decision -- that we were going to get out of it.

Now, I can tell you, in retrospect, that was a good decision, because it certainly wasn't worth the grief that my company would have to go through with FDA over this subject, because it's obviously of a controversial issue today when everybody thinks, because I have a leaf that has a high nicotine content, that that is delivered in my cigarette. That's not the case.

MR. SYNAR: So it is your position that you did not do this because three weeks previously the FDA announced its investigation of nicotine?

MR. SANDEFUR: That's true. Now, I can tell you that there are some people in my company that had misinterpreted that decision. And, as a matter of fact, a press release went out a couple of days and was, in fact, retracted.

MR. SYNAR: That is correct. That was the next question.

MR. SANDEFUR: Yes, sir.

MR. SYNAR: Your two press releases don't match up. You've deleted it; is that correct?

MR. SANDEFUR: That's correct. And the reason that was done is, I was in Washington, and I saw the press release, and I said, well, that's just not true. That's not why I made the decision. I can understand how some of our people might have thought that, but we retracted it.

MR. WAXMAN: Mr. Synar, your time has expired.

MR. SYNAR: Thank you.

MR. WAXMAN: I want to recognize Mr. McMillan.

MR. McMILLAN: Thank you, Mr. Chairman.

There are a lot of different opinions about whether or not tobacco is addictive, and we've heard a number have been introduced and discussed here today.

I have in my possession three additional opinions by Professor N. Heinmark of Seoul University; Dr. Theodore Blau, Clinical Psychologist from Tampa, and Dr. Steven M. Raffle, who's a practicing psychiatrist, former member of the University of California at San Francisco Medical School, who have differing opinions, to the effect that tobacco is not addictive.

I would like to ask unanimous consent that they be made a part of the record.

There being no chairman --

[Laughter]

MR. : Would the gentleman repeat his (inaudible)?

MR. McMILLAN: I have three opinions with respect to whether or not tobacco is addictive or not, expressing the professional view that it's not. I would ask unanimous consent that they may be part of the record.

MR. : Without objection, so ordered.

MR. McMILLAN: I thank the chair.

Mr. Sandefur, on Tuesday Dr. Kessler spent some time going over with me the level of nicotine in tobacco. He made very clear that he believed that tobacco companies have elevated the level of nicotine in tobacco to maintain an addiction level for smokers.

In fact, Dr. Kessler went so far as to show me a table detailing a lower nicotine level in tobacco, in the 1950s, versus the 1980s.

Can you explain for me how this could be, particularly in light of statements by both the tobacco companies and Dr. Kessler, that nicotine levels in the cigarette have decreased?

MR. SANDEFUR: Yes, sir. The -- probably what happened; I'm giving you my opinion -- is that the cigarette tested was a non-filter cigarette, in order to deliver a nicotine that's 1.66. That's what I would think.

MR. McMILLAN: When I asked him the question --

MR. SANDEFUR: Because I can tell you, over the last 40 years, with the advent of filter cigarettes and ventilation of filter cigarettes, the tar and nicotine have been reduced substantially in this industry, from levels of 25 percent tar and 1.5 percent nicotine, down to levels that are a tenth of that; or, to say it another way, down to a cigarette that might have 1 milligram of tar and .2, .3 milligrams of nicotine.

MR. McMILLAN: I think when I asked him the question, is what you have on the chart a filter tip or a non-filter tip, he couldn't answer the question, which is rather important, isn't it?

MR. SANDEFUR: Yes, I would think so.

MR. McMILLAN: The fact of the matter is, I think you've testified that the trend in the nicotine content in cigarettes over time, particularly those that have had filters, has declined enormously over that same time frame, 1950 to the present.

MR. SANDEFUR: Yes, sir. Most non-filter cigarettes, and there's still some on the market, have a high delivery of tar and nicotine, relatively speaking, and those brands have, across the board, declined significantly.

They are a major factor in this business today, and I don't think there ever will be again, because the American consumer is looking for a milder cigarette.

MR. McMILLAN: With respect to the use of any Y-R in brands, as was asserted by Dr. Kessler, in any instance, did the use of Y-R elevate the level of nicotine above that which was previously in those cigarettes?

MR. SANDEFUR: Y-1?

MR. McMILLAN: Yes.

MR. SANDEFUR: Congressman, there was some of the brands, that was actually -- when we used 10 percent Y-1, the nicotine level went down. There were other styles that the nicotine level went up marginally, but I believe in all cases the tar came down.

MR. McMILLAN: These are cigarettes -- I believe what he brought in here were Raleighs and Viceroys?

MR. SANDEFUR: Yes, sir.

MR. McMILLAN: Maybe one other. I don't recall.

MR. SANDEFUR: Right. I'll be more than happy to supply the committee with the tar and nicotine figures on the blends, pre- and post-Y-1.

MR. McMILLAN: Okay. And I think in some way to indicate if, in fact, there was one that had a slight elevation of the level of nicotine, what that proportionately was.

MR. SANDEFUR: It was insignificant, but I'll be more than happy to --

MR. McMILLAN: I think that's --

MR. SANDEFUR: Yes, I think it's very --

MR. McMILLAN: -- important that it's understood.

MR. SANDEFUR: I think t's very important because, at the end of the day, what we're talking about is what the consumer receives.

MR. McMILLAN: Well, exactly. And I think you're trying to reach a level in the production of a product that is pleasing to the consumer.

MR. SANDEFUR: If I don't do that, I won't be in business long.

MR. McMILLAN: And, as has been asserted here, it's not elevation of the level of nicotine to extraordinary levels because, number one, that's not what the consumer wants.

MR. SANDEFUR: That's correct.

MR. McMILLAN: You've outlined a number of agencies that regulate the tobacco industry, including the FTC.

MR. SANDEFUR: Yes.

MR. McMILLAN: As I understand it, all producers of cigarettes are required to file a statement that describes the nicotine content in those cigarettes.

MR. SANDEFUR: That's correct.

MR. McMILLAN: Is that precise?

MR. SANDEFUR: As the precisest measurement will allow, yes, and we use the FTC methodology.

MR. McMILLAN: Is there a follow up testing by the FTC or anyone on that?

MR. SANDEFUR: Congressman, I'm not familiar with the mechanics of that today. I do know that, in the past, the FTC did their own testing. It's my understanding that because of budget cuts that were made by the government, FTC no longer does testing and that the manufacturers do that testing, but I may be wrong. That's my impression.

MR. McMILLAN: But you adhere to that standard, and you have --

MR. SANDEFUR: Absolutely.

MR. McMILLAN: -- (inaudible).

MR. SANDEFUR: It's our obligation to do that.

MR. McMILLAN: And you have an interest in adhering to that, do you not? Because if the nicotine level varies considerably, the consumer is probably going to experience a taste difference?

MR. SANDEFUR: Yes, sir. The consumer will experience a taste difference, and that, at the end of the day, is the most important thing, to keep my consumers satisfied and pleased with the product that they're buying.

MR. McMILLAN: And there's nothing --

MR. SANDEFUR: But I have a --

MR. McMILLAN: -- more important --

MR. SANDEFUR: -- I have a monetary concern, and that's if I print something in my ads that isn't true, I'm in for substantial fines.

MR. McMILLAN: And, above all, in this business, consumer brand loyalty is most important, is it not?

MR. SANDEFUR: That is -- that's the most important thing that we have to do in terms of -- that we, as marketing and sales people, in the tobacco industry, have to concern ourselves with.

MR. McMILLAN: Wouldn't it be an enormous risk to significantly elevate the level of nicotine in one of your accepted brands in terms of the potential effect on the market?

MR. SANDEFUR: Yes, sir. I think our franchise would leave us, because they wouldn't be accustomed to it and, by and large, high levels of nicotine content and a delivery in a cigarette would be very, very harsh and irritating. And, as I've stated, that's not what the consumer prefers.

As a matter of fact, they prefer just the opposite. They want a mild and satisfying cigarette.

MR. McMILLAN: You know, discussions of taste are very subjective, and I don't know how we can really deal with that issue. I'm prepared to accept what you say about it.

If, in fact, nicotine is as addictive as has been asserted, and even some documents quoted that suggest that Brown & Williamson is in the business of selling nicotine, I think are what some lawyer stated with respect thereto, what, economically, would be the best objective?

Wouldn't it make sense -- we get into this issue not only of the content within a unit of product, which is similar to alcohol, but the manner in which it is included in that product.

I can get just as intoxicated off of beer as I can off of whiskey, but it might take more --

MR. SANDEFUR: It's according to how much you drink, yes.

MR. McMILLAN: -- to get to the same point.

Now, in the marketing of cigarettes if, in fact, one is selling nicotine, would I want to sell it in high doses or low doses?

MR. SANDEFUR: I think you'd probably want to sell it in very, very low doses, because then the consumer would want to buy a lot more, wouldn't they?

MR. McMILLAN: Right. And you make the same profit off of a cigarette --

MR. SANDEFUR: Well, absolutely.

MR. McMILLAN: -- regardless of the nicotine content.

MR. SANDEFUR: But what I'm saying is, the consumer wouldn't want the cigarette. They wouldn't buy it, because the consumer wants a good-tasting cigarette.

MR. McMILLAN: Okay. But a real cynical marketing strategy --

MR. SANDEFUR: Oh, sure. MR. McMILLAN: -- you would say, well, let's pull this thing down so that they have a --

MR. SANDEFUR: If, in fact, you believed all the allegations that have been made, that would follow, yes, sir.

MR. McMILLAN: I think my time has expired. Thank you, Mr. Sandefur.

MR. SANDEFUR: Thank you, sir.

MR. WYDEN: Mr. Sandefur, a bit ago you told Chairman Waxman that consumers don't like cigarettes that have lower nicotine levels but, according to a secret project, a secret BAT project, that's not been discussed before, to my knowledge, called Project Wheat, I think consumers have told your company a bit more.

I'd like to display a couple of charts -- Chart 12 and 13 -- to review this Project Wheat. Now, what Project Wheat was about, it was a study of smokers' inner-need for nicotine. And, according to the definition of your company, it was closely related to, and I quote:

"The anticipated difficulty in giving up smoking," unquote.

It goes on to say that inner need relates to psychological benefits, such as the relief of stress and to aid concentration, but does say specifically that this inner need study does relate to the anticipated difficulty in giving up smoking, which certainly suggests that inner need, as defined by your study, had nothing to do with taste but had quite a bit to do with drug-like effects.

Now, this project was completed in 1976. The results of it were presented at a BAT conference in South Hampton, England, and the manager of Research and Development for Brown & Williamson attended this conference.

Now let me begin by saying that, in this project, and I quote:

"In considering which product features are important in terms of consumer acceptance, the nicotine delivery is one of the more obvious candidates. The importance of nicotine hardly needs to be stressed as it is so widely recognized."

Do you agree with this quote, Mr. Sandefur, that nicotine delivery is an important product feature for consumers?

MR. SANDEFUR: Nicotine, in terms of taste -- as a constituent of taste -- is important, yes.

MR. WYDEN: Now the purpose of this project, and again I quote: "was to classify smokers into a number of categories showing distinct patterns of motivation and different levels of so-called inner needs as a first step towards testing the hypothesis that a smokers' inner need level is related to his preferred nicotine delivery."

The project had two phases. In part one, the attitudes of over a thousand smokers were surveyed to assess inner need to smoke and their attitudes towards health risks, and then in the second phase, the smokers were given three experimental cigarettes.

One had a high nicotine level, one was a medium level, one was a low level. Again, as I said, inner need was defined, in effect, as smoking to achieve psychological benefits and, certainly, it seems to me, to address a kind of craving or a hunger that does relate to people's ability to give up smoking.

Now the study reached an important conclusion because it developed a new model of the cigarette market, and that model is shown on Chart 13, that comes from this conference.

Now I'm going to walk through this chart, if I could, because, according to the chart, you can understand what type of cigarette a smoker will prefer if you know two factors.

First: The smoker's inner need for nicotine; and,

Second: The level of the smoker's concern for their personal health.

So a smoker who is very concerned about their health and who has a low inner need for nicotine would want, according to this chart, a low tar and low nicotine cigarette, and that is represented by the box on the lower left.

On the other hand, a smoker who is both concerned about their health and who has a strong inner need for nicotine, would want a low tar but high nicotine cigarette. That's illustrated up on the upper right.

The key realization that came from Project Wheat was that there was a very significant number of smokers who had both high inner needs for nicotine and high health concerns who were not being supplied a cigarette that met both their nicotine need and their health need.

So let me, if I might, again reading from this report, it states, this model leads to the conclusion. There's a substantial potential for a range of cigarettes which at present is not available.

These cigarettes range from somewhat low tar and medium nicotine deliveries to others with medium tar and high nicotine deliveries, and are visualized as attracting those smokers who combine above average inner need with above average concern for health, and the potential for this market is very large.

Let me quote again from the report:

"Consumers in these categories accounted for some 40 percent of those who took in part in the first product test. This figure is quote in order to give some idea of the possible potential for cigarettes of the types indicated in the model."

Now, it seems to me, this Project Wheat is very relevant to what Dr. Kessler has been telling us. Dr. Kessler has told us that, beginning in the early '80s, the lowest concentration in the lowest tar cigarettes began to increase.

The same point was made in a paper by Mr. Spears of Lorillard.

Now, the tobacco industry has explained this trend towards use of high nicotine blends and low tar cigarettes by saying that these blends were used for taste.

The gentleman from your company made this claim again on April 14th.

Is this still your view?

MR. SANDEFUR: I don't understand the question, sir.

[Laughter]

MR. WYDEN: The tobacco industry, Mr. Sandefur, has explained a trend towards use of high nicotine blends and low tar cigarettes by saying that these blends were used for taste. Is that still your view?

MR. SANDEFUR: Yes. That's why we produce -- any blend that we have is for taste.

MR. WYDEN: Well, it seems to me that Project Wheat presents a very different rationale. Project Wheat recommends that nicotine levels in low tar cigarettes be increased not for taste but to satisfy smokers' inner need for nicotine.

Project Wheat, in our view, has central relevance to the question of whether nicotine containing cigarettes are a drug.

If Project Wheat is correct and your company designs cigarettes with deliberately high nicotine levels in order to satisfy smokers' inner need for nicotine, it sure looks to me like you all are in the drug-making business.

My question to you, Mr. Sandefur, is what specific actions did Brown & Williamson take to follow up on Project Wheat?

MR. SANDEFUR: I have absolutely no idea. This is the first time I've ever heard of Project Wheat. I can tell you that we don't design our cigarettes that way. As I stated previously, I've been in this business for 30 years, and most of the time in marketing, and the cigarettes aren't designed that way.

We give specifications to our cigarettes. We fill a target in terms of the taste characteristics we want, and that's the way we manufacture -- produce and manufacture -- our cigarettes.

MR. WAXMAN: Mr. Wyden, will you yield?

MR. WYDEN: This document, Mr. Sandefur, was submitted by your company to this subcommittee while you were CEO, and you have no knowledge of it?

MR. SANDEFUR: Congressman, we submitted all the documents we had on the subject that you asked for. There's absolutely no way that I could be knowledgeable about all these documents. This was done in 1976, Congressman, and I've never heard of it.

MR. WYDEN: I think it's kind of interesting. You seem to recall things from quite some time ago, for Mr. Bliley --

MR. SANDEFUR: Right.

MR. WYDEN: -- but you cannot recall a document that your company gave to this subcommittee while you were CEO. And I have to tell you, I think that this is a very interesting coincidence. Because, after Project Wheat was completed and showed that there was a very significant market for this kind of cigarette, the company developed the Barclay cigarette.

And I would also say, subsequent to Project Wheat, we had a situation that I think Congressman Synar got into, that you went forward with bio-engineering situation so you could have plants, in effect, with high nicotine and still meet this low tar situation.

I think Project Wheat is something of a linchpin that ties together much of what we've been learning over the last few months.

High nicotine, low tar cigarettes are being developed for the specific purpose of satisfying the nicotine cravings of smokers, who have a high inner need for nicotine, and you're just saying all this kind of thing, like the Barclay and the Y-1 genetic engineering, was something of a coincidence, that you know nothing about, even though you submitted this document to the subcommittee.

And I guess that's a little hard for me to swallow, but my time has expired.

MR. WAXMAN: Well, Mr. Wyden, I think we ought to give Mr. Sandefur an opportunity to respond.

MR. WYDEN: He said --

MR. SANDEFUR: I'd like to, Mr. Chairman.

MR. WYDEN: -- Mr. Chairman, that he hasn't heard of this document.

MR. WAXMAN: No. You've just made some serious charges, and I think he ought to respond.

MR. WYDEN: Fine.

MR. WAXMAN: He's the Chief Executive Officer of the company.

MR. SANDEFUR: Thank you, sir. Congressman Wyden, if you'll look on the front page of this document, you'll see that it's been stamped, "Brown & Williamson, February the 26th, 1976, Research Library".

Now there's absolutely no way that a CEO of this company or, I would submit, any CEO of any company, knows what's in the research library of his company. There's just no way. CEOs don't do that.

We rely --

MR. WAXMAN: Well, Mr. Sandefur --

MR. SANDEFUR: -- excuse me; I'm sorry. We rely on our scientists to tell us what they know and what they recommend, and then we make decisions based on that.

I don't know, I wasn't at the company, when Barclay was developed. I can tell you that there was a great deal of controversy over the filter used on Barclay.

And I can also tell you that, at the end of the day, the FTC decided on what levels of tar and nicotine that we could say that Barclay delivered.

So I can't speak to anything other than that.

MR. WYDEN: Mr. Sandefur, again, my time is up, but let me say that this really requires an extraordinary set of coincidences that I think are hard to believe.

You have a study that shows there is a very large market out there for high nicotine, low tar cigarettes because they would satisfy the craving of smokers with a very significant inner need, a hunger for nicotine.

We have the Barclay that comes after it, in order to try to fulfill that kind of need.

We've got genetic engineering, which again meets that sort of need.

You tell us that all is a coincidence, and we'll inquire further about this. My time --

MR. WAXMAN: Mr. Wyden, your time is expired.

But I want to say to you, Mr. Sandefur, before I recognize the next member in line: You're the Chief Executive Officer of this company. You've given us these documents. You've had weeks to prepare -- in fact, we even postponed the hearing to give you more time to prepare, and why is it that you would come here and not know about the scientists' research or the recommendations by the scientists and marketing people for a higher nicotine cigarette to satisfy this so-called inner need, and act as if you had nothing to do with it?

That's a question that's in my mind, and it's very perplexing.

MR. BELL: I'd like to answer that.

MR. WAXMAN: Well, I addressed it to Mr. Sandefur. He's the CEO.

MR. BELL: I understand that, but I'm his lawyer.

MR. WAXMAN: Well, you can advise him on how to answer it.

MR. BELL: You're treating him unfairly.

MR. WAXMAN: Mr. Bell -- Mr. Bell, if you want to consult with your client, I'll give you an opportunity to do it.

MR. BELL: I don't need to consult with him.

MR. WAXMAN: Well, then, why --

MR. BELL: I'm hearing how you --

MR. WAXMAN: -- can't he answer the question directed to him?

MR. BELL: -- how you treat him. I heard your statement and I also heard Mr. Wyden's statement, inferring that he is in some way not telling the truth. You say he's not --

MR. WAXMAN: No, I did not say --

MR. BELL: -- (inaudible).

MR. WAXMAN: -- he was not telling the truth. I'm saying it's hard to believe he doesn't know about the documents that he submitted to us when he's the Chief Executive Officer of the corporation.

He knew about this hearing, he knew the inquiry was about nicotine, he knew that his scientists had been working for decades on this research, and then this particular Project Wheat was based on a marketing strategy, based on the science, which was implemented by the company.

It's hard to believe he doesn't know about it.

MR. BELL: I told this witness to prepare himself on anything that would help him on his watch. This happened before he came to work for the company, and we have produced almost 7,000 pages of documents. That's very unreasonable to say that he should have studied all those documents and be prepared here today. That's --

MR. WAXMAN: He's the Chief Executive Officer of the corporation. He's responsible for what the corporation has been doing and is doing today, and he should be the one to know the strategy, particularly as a marketing expert, why they have undertaken, what they have done in terms of the nicotine content of the cigarette.

I don't think we're treating him unfairly, and I leave that as something we'll return to later.

I think it's Mr. Greenwood's turn for questioning.

MR. GREENWOOD: Thank you, Mr. Chairman.

I would like to yield 30 seconds to Mr. McMillan. MR. McMILLAN: Real briefly, if the Chairman will permit, I don't think that Mr. Sandefur should be held to a standard that's different than we held Dr. Kessler on Tuesday, who is a scientist, I think, and came prepared to deliver supposedly informed testimony, yet he couldn't tell us in a chart that he presented whether the information referred to filter tip cigarettes or not; nor could he give us any evidence that, in the three brands of cigarettes he presented, as including the tobacco leaf in question, whether or not the nicotine level was elevated.

So I think if we're going to apply rigid standards, let's apply them across the board, and most particularly to our own governmental expert.

I thank the gentleman for yielding.

MR. GREENWOOD: Mr. Sandefur, I'm sure that it's difficult to recall, as we traipse through Y-1 and Project Wheat, and whether or not you should have memorized the 7,000 pages you delivered to us before you got here, but the alleged purpose of this hearing is really not so much about any of those things as it is about whether the FDA ought to assert some regulatory responsibilities or duties over tobacco products and, particularly, I guess, cigarettes; and whether the Congress -- rather, we, this Congress -- ought to give them additional powers that they don't have now.

So I would like to ask you specifically what you think the impacts might be of the FDA regulating the product that you manufacture? The FDA, when it regulates products, does things like it requires that the product display its contents. There are labeling requirements that might require you to list all of your contents.

They might stipulate your contents. They might say to you that the FDA had regulation that you shall have this much nicotine in the product and no more, and this much tar and no more. That's something that they could do.

They could control the dosage of the nicotine.

Or they could simply certify that this product has a lot of nicotine; this product has less nicotine, and then I suppose you could advertise your products accordingly.

You could advertise Big Nic, and you could say this is a high nicotine, certified by the FDA, as Big Nicotine cigarette here, or Little Nic, whatever it might be.

So I'm interested to know what you think the influences or the outcome might be of the FDA regulating your product.

Dr. Kessler, for instance, suggested that maybe it would be a good idea to require cigarettes to have such a low nicotine level that teenagers might be able to smoke them with impunity and not become addicted.

I would like your reactions.

MR. SANDEFUR: Well, Congressman, I can't agree with Dr. Kessler, obviously, because I don't believe there's addiction, so that's where we break down. And I certainly don't market my cigarettes to teenagers, and I know that there are laws on the books that prohibit teenagers from purchasing cigarettes.

As far as what would happen if we give FDA jurisdiction, it seems to me that what we're talking about is taking the jurisdiction away from everybody else and giving it all to Dr. Kessler, because the fact of the matter is that our ingredients today -- or, I assume, because we certainly supply them -- are reviewed by the U.S. Department of Health and Human Services. We've been doing that, I believe, since 1984.

The FTC takes jurisdiction over the advertising and labeling of our products.

So I don't -- if Congress sees fit to pass a law that we have to put on our packs the ingredients, I'm sure we'll comply with that, just as the Congress has done with the warning statements that we have on our packs and cartons today.

MR. GREENWOOD: What if the FDA were to stipulate the contents? In other words, they were to design a government-designed cigarette, that was to have this much of this product, and this much nicotine and this much tar?

You've talked a lot about the lengths to which your company --

MR. SANDEFUR: Sure.

MR. GREENWOOD: -- goes to meet the consumer demand.

MR. SANDEFUR: Yes.

MR. GREENWOOD: What would happen if the FDA --

MR. SANDEFUR: It's according to what Dr. Kessler and his staff would recommend or would tell us to do.

In my opinion, if we make a cigarette that's not satisfying to the American smoker, they're going to find a cigarette that does satisfy.

Congressman, this country manufacturers about 12 percent of the annual consumption of cigarettes worldwide. If my figures are correct, there's something like 4 percent of the cigarettes worldwide consumed in the United States.

Now, I must tell you, if we market, if we manufacture, FDA forces us to manufacture and sell cigarettes that aren't satisfying the demands of the American smoker, we're going to have a massive black market cigarettes in this country. A massive black market.

We already know that there is black market between states on taxation in cigarettes moving across state lines. Can you imagine what would happen if tomorrow morning every cigarette manufacturer had to produce a cigarette that wasn't satisfying to the 50 million smokers, or 47 million smokers, in the U.S., what would happen? The crime element around the world would have a heyday in this country.

Forget the fact that we don't derive any benefit from the federal excise tax. Forget that. We'd have a situation where we aren't controlling anything.

MR. GREENWOOD: I remember in, I guess it was maybe the early '70s, there was kind of a fad of roll your own. They had little machines --

MR. SANDEFUR: Sure. Our company produced some. Yes, sir.

MR. GREENWOOD: And I would assume that if the FDA were to say every cigarette must be the Ultra Light varieties so that we control the nicotine, you might see a resurgence of that.

MR. SANDEFUR: Well, that's not my concern, because FDA could take jurisdiction over that as well, depending on what Congress decides.

My concern is where a Congress won't have jurisdiction or FDA won't have jurisdiction, and that's in other countries around the world, where you cannot tell the manufacturer in those countries what, in fact, they produce. Those products will find their way into this market -- this U.S. market.

MR. GREENWOOD: Can you tell us much about the difference between domestically produced cigarettes and foreign cigarettes? Do you know much about the difference in their standards?

MR. SANDEFUR: Yes, I know a lot about it -- I think I know a lot about it.

I know that cigarettes produced offshore generally have high tar and nicotine than cigarettes produced and consumed in the United States.

For instance, the products produced in China, a lot of those products don't have filters. They have high nicotine deliveries.

It wasn't until the advent of the U.S. manufacturer being able to market our cigarettes in Japan that some of the type low tar products became available in the Japanese market, and they're doing very well. And the Japanese Government, who runs the tobacco industry in Japan has, in fact, responded. They're making products now with lower tar and nicotine to respond to the U.S. manufacture.

Now, I don't want you to get the impression that the U.S. manufacturer owns much of the Japanese market. We don't. I think last week I saw it was somewhere around between 10 and 15 percent of the cigarettes sold in Japan, are manufactured by what we call U.S. manufacturers, or making a U.S. blended cigarette.

But I think we're dealing with a subject here, and I can understand how there can be an honest disagreement of individuals who have the best interest of the American citizen in mind. But I can tell you that our company tries to market things that are to the best of our ability, that we know what we're doing, and try to market things that the consumer -- the American public -- makes the choice to use.

MR. GREENWOOD: You've addressed some of the concerns that I have, because I can't quite imagine the FDA designing cigarettes for the American public. It seems an absurdity, it seems contrary to the purpose of the FDA for them to say, we will design cigarettes, and we will certify them to be relatively safe.

I don't think that's where they belong. I think that's a consumer choice. Consumers can choose to smoke zero cigarettes, a lot of cigarettes, low nicotine cigarettes, high nicotine cigarettes. They have a lot of choices. The choices that they're making, frankly, if they want to be safest, minimize the risk, would be to smoke no cigarettes at all.

But I certainly have a hard time imagining the FDA inserting itself in here and saying we'll start designing cigarettes, anymore than I imagine the FDA going to all of the California wineries and tell them, we're going to tell you how to blend your wine.

I think they'd run into a lot of resistance there as well, and it wouldn't be a proper place for them to be.

MR. SANDEFUR: Yes, sir.

MR. GREENWOOD: Thank you, Mr. Chairman.

MR. WAXMAN: Thank you, Mr. Greenwood.

Mr. Bryant?

MR. BRYANT: Mr. Sandefur, you were just talking about foreign brands a moment ago and speaking about the fact that, unfortunately, in foreign countries, that levels of nicotine and tar are very high. Why does that concern you?

MR. SANDEFUR: It didn't concern me.

MR. BRYANT: Why did you comment on it?

MR. SANDEFUR: Well, I commented on it to suggest that if the intent of the FDA -- our Congress and the FDA -- is to reduce the levels of nicotine in the cigarettes smoked in the United States, there's a risk involved, because nicotine is an important constituent in the taste of cigarettes, and if you take it out, the consumer won't like, and they will find cigarettes outside the jurisdiction of the FDA to smoke.

MR. BRYANT: I see. You're not concerned about the health effects of high tar and nicotine content? You're not expressing the opinion that high tar and nicotine has anything to do with health risks?

MR. SANDEFUR: No, sir. I'm not suggesting that. I was responding to what I believe to be the intent of the FDA. I have stated my opinion on the risk of smoking and health. There's a physical association with it. I accept that. I think our obligation is to make sure that the American public has been duly warned about the risk of smoking, which we do.

We put that on every pack of cigarettes and every carton of cigarettes, because that's what Congress has told us to do.

MR. BRYANT: Mr. Smith, you were in a meeting on May 3rd with some FDA people who were looking into a number of questions. At that time, I understand they asked you -- asked your people -- whether or not Brown & Williamson manipulates the levels of nicotine in your tobacco. Do you recall that?

MR. SMITH: I do not recall that. I was at the meeting. I heard -- I have read Ms. Witt's testimony that we were asked about breeding of tobacco for high or low nicotine levels. I further heard Dr. Kessler on Nightline the night after the Tuesday hearing. I think he said the same thing, that we were asked the question whether the company was engaged in any plant breeding for a higher or lower nicotine level.

I do not recall that question, in either form, being asked at the meeting, and I was there. I've inquired of others at the meeting, and they do not recall that question being asked.

But I do recall a question being asked related to genetic engineering, and I recall a question involving breeding work with farmers. There now may appear to be some confusion in somebody's mind about what those questions may have meant.

At the time, however, they were isolated, single questions over a 9-hour day. At the time, they were not perceived to relate to any of the issues being talked about at this hearing today.

MR. BRYANT: Okay. In order to make clear, some of the, sort of, veiled suggestions that you were misled by the FDA, ought to be responded to.

We have evidence from four of the FDA personnel who were in the room at the time saying that they specifically asked the question, does Brown & Williamson manipulate the level of nicotine or attempt to breed tobacco products for the purpose of getting a higher or lower level of nicotine.

I would like to submit those affidavits for the record, Mr. Chairman, if I might do so.

MR. WAXMAN: Without objection, they will be put into the record.

MR. BRYANT: They disagree with your interpretation of what took place in that meeting.

My next question would have been, what was your answer to those questions, but say the question wasn't asked, so I won't ask that question.

Mr. Sandefur, you say cigarettes are not addictive, and you also say that there's no pharmacological effects from the use of cigarettes. That is to say, from nicotine. There's a stack of studies indicating that there are pharmacological effects. The chairman referred to them in his questioning a few moments ago. Do you have studies that indicate there are no pharmacological effects from nicotine?

MR. SANDEFUR: Congressman Bryant, I rely on my scientists to give me input on that subject, and they advise me that they agree that nicotine is not addictive.

MR. BRYANT: I asked you about pharmacological effects of nicotine. Leaving aside the question of addiction, you've made clear your opinion about that, with which I disagree. But --

MR. SANDEFUR: We --

MR. BRYANT: -- with regard to pharmacological effects, there's a stack of studies that indicate that there are significant, dramatic pharmacological effects as a result of nicotine entering their body due to smoking.

You say -- or I'm not clear on your position on that. I think you said that there's no pharmacological effects a few moments ago, and --

MR. SANDEFUR: I don't -- I don't think I said that, Congressman. If I did I misspoke.

MR. BRYANT: Well, then, I'll ask you to --

MR. SANDEFUR: I don't --

MR. BRYANT: -- (inaudible).

MR. SANDEFUR: I don't know the answer to that question. The studies say what the studies say.

I can tell you that my scientists, after reviewing all of the research, tell me that they don't believe that nicotine is addictive.

MR. BRYANT: Yes, but you're obscuring my question. My question is not about addiction.

MR. SANDEFUR: Yes, sir.

MR. BRYANT: We've already argued about that one. My question is about pharmacological effects, which include a variety of things, such as feeling more relaxed, a variety of feelings that are discussed in these studies. That's the effect a drug has on a person. Any kind of a drug has some type of a -- and the term is pharmacological effect.

All the studies seem to indicate that nicotine has that effect. My question is does your company have studies that indicates that it does not have pharmacological effects?

MR. SANDEFUR: I can't answer the question. I don't know.

MR. WAXMAN: Will the gentleman yield to me?

MR. BRYANT: Yes, I yield.

MR. WAXMAN: You have submitted, I presume, all of the studies that you have in your files --

MR. SANDEFUR: Absolutely.

MR. WAXMAN: -- related to nicotine.

MR. SANDEFUR: You're right. You're right, Mr. Chairman. If we had the study, you have it.

MR. WAXMAN: So you rely on your scientists. If all of your scientists' studies over the decade say that nicotine has a pharmacological effect, wouldn't you rely on that conclusion to be correct?

MR. SANDEFUR: It's depending on which scientists that we're talking about.

MR. WAXMAN: Well, how about the ones that work for you?

MR. SANDEFUR: The ones that work for me. You're right. Yes, I listen to those.

MR. WAXMAN: Well, all of those studies point to different pharmacological effects of nicotine, so would you acknowledge the fact that they have found that there is a pharmacological effect from nicotine, that causes the body to respond --

MR. SANDEFUR: If you have --

MR. WAXMAN: -- and the brain waves and the central nervous system.

MR. SANDEFUR: -- documents that are Brown & Williamson studies --

MR. WAXMAN: Or British American Tobacco?

MR. SANDEFUR: -- no, that are Brown & Williamson studies, then my scientists have endorsed that concept, certainly I agree.

MR. WAXMAN: Well, I did --

MR. SANDEFUR: I have not discussed that specific subject with my scientists, but I'll be more than happy to.

MR. WAXMAN: Well, we do have specific Brown & Williamson studies, and one of which was with regard to the alpha rhythms -- the impact of cigarette smoke on the brain, the wave alpha rhythm, and this was prepared by R.F. Brodski and Dr. J.E. Kennedy for Brown & Williamson.

But I can't see why you could distinguish between your Brown & Williamson researchers and your parent company's researchers, and your sister company's researchers when, after all, you did work with this Y-1 plant with your sister company in Brazil. Why wouldn't you take the word of your researchers that work for your company and your parent company?

MR. SANDEFUR: Because I rely on my scientists.

MR. WAXMAN: Thank you, Mr. Bryant.

MR. BRYANT: Well, you said a moment ago that you don't believe that nicotine is addictive, that you think it's just a very important factor in taste to the consumer.

If, indeed, nicotine only affects taste, why do you take offense at suggestions that you might raise or lower the levels of nicotine in your cigarettes?

MR. SANDEFUR: The nicotine is a very important -- as I understand it, is a very important constituent of taste. The lowering of nicotine or the raising of nicotine would have to be tested to determine if, in fact, the blend is acceptable to the smoker.

MR. BRYANT: But you have denied extensively, increasing or lowering the levels of nicotine in your products. You said, we do not spike our cigarettes --

MR. SANDEFUR: Right.

MR. BRYANT: -- with more nicotine.

MR. SANDEFUR: That's correct.

MR. BRYANT: Why do you --

MR. SANDEFUR: That's correct.

MR. BRYANT: -- why do you go to great lengths to defend against the suggestion if, in fact, nicotine, as you have said, only affects taste?

MR. SANDEFUR: Well, Congressman, the reason we deny that is because we don't do it. That's the important aspect of it.

MR. BRYANT: Well --

MR. SANDEFUR: It has nothing do with --

MR. BRYANT: -- then my question --

MR. SANDEFUR: -- do we think it's --

MR. BRYANT: -- would be why don't you do it, if it only affects taste?

MR. SANDEFUR: Because there are other ways to -- you know, I could go out, or our people, I assume, could go out and buy nicotine and put it in our cigarettes, but we don't do that.

MR. BRYANT: But the question is this. If it only affects taste, it would only be logical that you would do it and no one would object to it if you did it, much like a candy bar producer could add more or less sugar.

If it only affects taste, why don't you do it?

MR. SANDEFUR: Well -- well, Congressman, my concern is that we don't do it, so why should we say it's nothing wrong with doing it?

MR. BRYANT: Well, I think --

MR. SANDEFUR: We don't do it.

MR. BRYANT: -- the implication of my question is that it doesn't seem to me to make much sense for you to tell us that it is not addictive, that it has no pharmacological effects; it only affects taste, and we don't increase or lower the amounts of it.

If it only affected taste, you would increase or lower the amounts of it to meet consumer demand for a particular type of taste.

MR. SANDEFUR: Congressman --

MR. BRYANT: So that seems to indicate to me that --

MR. SANDEFUR: Congressman, we market any number of blends with different varying tar and nicotine levels. We don't have one tar and nicotine level that we market all of our cigarettes together. Because the taste varies. The demand varies by the consumer.

MR. WAXMAN: Mr. Bryant --

MR. BRYANT: I yield.

MR. WAXMAN: -- if would permit.

You say you wouldn't go out and buy nicotine and add it, but you went out and genetically-engineered a new tobacco plant that had a higher nicotine level. Why did you do that?

MR. SANDEFUR: Well, Congressman, because I was looking, or we were looking, for a steady supply of nicotine leaf, or leaf with high nicotine. As I've said, we can buy Zimbabwe leaf with the same levels of nicotine in the leaf or Chinese leaf, but we wanted a steady supply, and we were trying to adhere to what many, many people were saying that you needed t think about doing, to reduce the tar and maintain the nicotine.

This was a blendless tool -- potentially -- a blendless tool that would allow us to do that. That was why we did it. It wasn't because we said we wanted to create Y-1 and put all the Y -- make 100 percent Y-1 cigarette to have a sixfold increase in nicotine.

We didn't -- that's not what --

MR. WAXMAN: Well, why did you act so negatively at the idea that you might just add nicotine if you, after all, have reduced the nicotine in cigarettes through the process; you're putting in a higher blend, a blend of higher nicotine to get that nicotine back up?

What difference does it make how you get it back up? If you think it's important to get it up --

MR. SANDEFUR: Well, I don't --

MR. WAXMAN: -- you're getting the --

MR. SANDEFUR: -- think it does.

MR. WAXMAN: -- nicotine (inaudible).

MR. SANDEFUR: The implication is that's what we're doing. We're not doing that. We're not doing that.

MR. WAXMAN: But you are using a higher -- or have used -- a higher nicotine plant to blend in with the tobacco so that the nicotine levels would be higher than otherwise would be the case so that the consumers, in your view, will taste it then.

MR. SANDEFUR: No, sir, that's not the case.

MR. WAXMAN: How am I wrong?

MR. SANDEFUR: All right. Let me tell you.

The nicotine level in a Viceroy, pre-Y-1 and post-Y-1, was essentially the same.

MR. WAXMAN: If nicotine follows tar --

MR. SANDEFUR: We're talking --

MR. WAXMAN: -- and you take the tar out, doesn't the nicotine drop?

MR. SANDEFUR: The --

MR. WAXMAN: That's been your testimony. Do you disagree with --

MR. SANDEFUR: The filtration -- the filtration system does take out tar and nicotine. Yes.

MR. WAXMAN: Okay. So the tar is reduced and the nicotine is reduced as well, don't you blend in order to control the nicotine levels and have them where they otherwise would have been or higher than they would have been if they were removed when the tar was removed?

MR. SANDEFUR: We blend in terms of quality control to allow us to meet specific tar and nicotine deliveries that we report to the FTC.

MR. BLILEY: If I may make an inquiry, Mr. Chairman, who has the time?

MR. WAXMAN: Well, Mr. Bryant's time has expired and, Mr. Bryant, did you have one last word, because I did interrupt you. The indulgence of the committee.

MR. BRYANT: I have good deal more than a list word. I think --

MR. WAXMAN: Then we'll wait until the second round.

MR. SANDEFUR: Mr. Chairman --

MR. WAXMAN: Yes.

MR. SANDEFUR: -- I'd like to take a break, if I might.

MR. WAXMAN: That's fine. Let's take a break for five minutes.

MR. SANDEFUR: Five minutes. Thank you.

[Recess]

MR. WAXMAN: Mr. Bilirakis, I want to recognize you for your turn.

MR. BILIRAKIS: Thank you, Mr. Chairman.

Mr. Sandefur, there is not much question, I guess, that this hearing is about further, additional regulation of the tobacco industry. You've called it back door prohibition of tobacco sales, and I'm not sure that anybody in this committee could honestly disagree with that.

You've also emphasized in your testimony -- and I'm glad that you did, because I'm not sure how many members of the committee were aware of it, how heavily regulated, and you call it the most regulated in the U.S. Commerce.

And you refer to the following agencies regulate tobacco products, or have issued reports which have the same impact as regulations: The USDA, Department of Agriculture, Bureau of Alcohol, Tobacco, Firearms, Federal Trade Commission, et cetera, et cetera, OSHA, EPA, HHS, Consumer Products Safety Commission, including a National Institute of Standards and Technology, and the Surgeon General.

I wonder if -- and I think that's very significant, because there is no question that in the minds of many members of this committee, we're talking about further regulation. I just wonder if the committee adequately knows how much it already is regulated.

Could you, in writing, furnish to the Committee, maybe within a week, further details about the -- and then you went on, also, about -- very interesting -- every state, various counties, local municipalities, et cetera, et cetera. I would personally like to see that, and I think that every member of the Committee is open-minded enough to pay attention to that, and realize that there is a heck of a lot of regulation already now of the tobacco industry. Will you do that for the subcommittee, sir?

MR. SANDEFUR: Be glad to do it. Yes, sir.

MR. BILIRAKIS: All right. Great.

Now, we're talking about further regulation, and obviously that further regulation would be the Food and Drug Administration. Under that statute, the term drug is defined.

I realize there is some emphasis here on pharmacology and things of that nature, but the term "drug" means: Articles recognized in the official United States Pharmacopeia. I'm told that tobacco is not listed in that Pharmacopeia, so it certainly wouldn't meet that test, would it?

Official homeopathic pharmacopeia of the United States. I don't know whether it's listed therein or not. I think it's something that this committee ought to know.

Or official national formulary or any supplement to any of them.

Then it goes on to talk about intent, which I think is really key here. We talk about addiction and whatnot, and I suppose, to some degree, maybe addiction could be related to intent, depending on, of course, what the evidence is.

But it says: Articles intended for us in the diagnosis, cure, or prevention of disease in man or other animals.

And you're under oath, sir, and I ask you: Has there ever been any intent on the part of Brown & Williamson, or as far as you know -- you may not want to answer this portion of the question -- or anybody in the tobacco industry that has in any way intended to use this product for any of these particular reasons?

MR. SANDEFUR: No, sir, not that I know of.

MR. BILIRAKIS: Not that -- so as far as Brown & Williamson is concerned, you are aware of that? Is that correct?

MR. SANDEFUR: That's correct.

MR. BILIRAKIS: And would you say that that answer precedes your 12 years with the company? I mean, going back, let's say, to the dates of some of this documentation, 30-year-old, et cetera?

MR. SANDEFUR: I can tell you that that's my belief, yes.

MR. BILIRAKIS: And you're saying that to us under oath?

MR. SANDEFUR: Yes, sir.

MR. WAXMAN: Mr. Bilirakis, will you yield to me?

MR. BILIRAKIS: Yes, sir.

MR. WAXMAN: First of all, I think you've incorrectly stated the definition of a drug, under the Food and Drug Act, and the drug, as I understand it, is any substance that is intended to affect the structure and function of the body.

MR. BILIRAKIS: Mr. Chairman --

MR. WAXMAN: Maybe you could ask him that question.

MR. BILIRAKIS: Well, now, wait a minute. That was Subchapter C of this, and I planned to go into it.

MR. WAXMAN: Okay.

MR. BILIRAKIS: Okay?

MR. WAXMAN: Thank you.

MR. BILIRAKIS: And C, articles, other than food, intended to affect the structure or any function of the body of man or other animals. And I would ask you about that, in terms of intent.

MR. SANDEFUR: Not that I know of, no.

MR. BILIRAKIS: And I have not misstated because I've been reading right from the book.

MR. SANDEFUR: No, sir. That is not part and parcel to the sale and marketing of our cigarettes and the design of our cigarettes; no, sir.

MR. BILIRAKIS: Okay. So, again, you say that Brown & Williamson --

MR. SANDEFUR: That's correct.

MR. BILIRAKIS: -- has never had any intent insofar as that area is concerned.

MR. SANDEFUR: Yes.

MR. BILIRAKIS: Can you speak for any other members of the tobacco industry or would you rather not?

MR. SANDEFUR: I would -- I would --

MR. BILIRAKIS: You'd rather not.

MR. SANDEFUR: I would rather not.

MR. BILIRAKIS: Okay. Then, of course, it goes on --

MR. SANDEFUR: But, Congressman, my suspicion -- I mean -- I shouldn't say suspicion -- we've had a lot of that floating around, but that they won't -- they wouldn't disagree with what I just said.

MR. BILIRAKIS: All right. Just to continue on: D, articles intended for use as a component of any articles specified in Clause A, B, or C, and I would assume that your answer is the same to that.

It might be interesting to you, and I expect you've probably seen the C-SPAN of the hearing Tuesday, when I asked the same questions of Dr. Kessler, and he, at that time, said that the investigation is ongoing, and he could not, at this time, come up with an opinion or any type of a decision as to whether or not intent was within the scope of the act.

MR. SANDEFUR: I saw that, yes, sir.

MR. BILIRAKIS: You saw that. All right.

Now, you also mentioned, by the way, something about black market. And, as I understand it, I think in his March remarks to this Committee, Dr. Kessler also stated something about black market, and in the list of questions that I gave to him -- I read to him, basically, into the record -- and asked him to respond within a couple of days -- I mean, a couple weeks --

MR. SANDEFUR: Yes.

MR. BILIRAKIS: -- the chairman gave him two weeks. One of those questions had to do with his comments about black market and had to do with any memorandums and anything of that nature involving that, so we're all going to be very interested to see the responses to those questions.

Mr. Sandefur, I haven't missed too very much of your testimony. I guess when we were called to vote, I did go to vote and was on the telephone for a couple minutes. But I don't think you've said anything at all about -- I'm going to use the term harassment of Brown & Williamson employees by whomever.

I don't say it was the FDA, although I have some affidavits here, which we made copies of, and I had intended those copies go to ever member of the subcommittee.

There's an affidavit from Mr. James L. Barnett, who was employed with your company from 1961 to 1990, and he tell us about two agents who identified themselves as being FDA investigators arrived at this place, where he's got this farm, where apparently he now resides.

They asked primarily about experimental tobacco raised for Brown & Williamson, et cetera.

And then on the second page, he says:

"I had heard through media reports and the like that the FDA was alleging that Brown & Williamson and other tobacco companies had added or spiked their tobacco products with nicotine additives. I told the agents in very clear terms that I had not heard or seen any such thing in all of my years at Brown & Williamson.

By the way, this gentleman was an engineer with the company and served in that capacity in every manufacturing plant operated by Brown & Williamson in the Continental United States, he says here in his affidavit.

"I told the agents in very clear terms that I had not heard or seen any such thing in all of my years at Brown & Williamson. I also told them that I designed much of the equipment and was familiar with the rest of the equipment which was used in making the cigarettes, and I would know if any spiking or the like was being done. The agent, Jim Hunter, told me in response that yes, we know that now."

Yes, we know that now. I'm wondering whether this documentation or any memorandums of these conversations are going to be some of the stuff that is going to be furnished to the committee within a couple of weeks, because we asked for any memorandums, or whatnot, and I would imagine something like this is on record with them.

This seemed to end the conversation about the nicotine additive issue.

I asked Jim Hunter how he found --

Are we getting five minutes or ten minutes, Mr. Chairman?

MR. WAXMAN: Ten minutes.

MR. BILIRAKIS: Ten minutes. And ten minutes has gone by?

MR. WAXMAN: It has.

MR. BILIRAKIS: Well, may I just ask one further question, unanimous consent?

MR. WAXMAN: Go ahead.

MR. BILIRAKIS: Mr. President, I'm not sure we're going to have a second round or not. We're never sure we're going to be here for the second round. I guess the chairman's always sure but the rest of us aren't.

In case I vote on the floor -- in case, for some reason, I'm not here to go further into this, I wonder if you would furnish information for the record regarding some of these things that have taken place regarding Brown & Williamson employees.

I used the term "harassment." I'm not sure that it applied to the one that I talked about, but there's affidavits here from Susan Beasley and some others that would indicate that that was the case.

MR. SANDEFUR: Congressman, I would be more than happy to supply that. As a matter of fact, there's a young lady here today, in this conference room, who was the subject of this investigation, and I asked her to come before this committee, if you all are interested in having her testify, as to what happened.

I find it highly unusual that a federal agency would go about an investigation in this manner, particularly given the fact that my company has stated, time and time again, to this subcommittee and to the FDA, that we would be more than happy to cooperate and answer any questions they might have, but they chose not to do it that way.

MR. BILIRAKIS: And I know the committee chairman and most members of this committee, ordinarily, when they're aware that something like this might be happening are very concerned, and certainly sometimes hold hearings right on point, right on that particular issue, so I would expect that the committee chairman certainly would be concerned about that.

MR. WAXMAN: And, Mr. Sandefur --

MR. BILIRAKIS: -- to know more about it.

MR. WAXMAN: -- may I ask you on that very point --

MR. SANDEFUR: Yes, sir.

MR. WAXMAN: -- if there has been a Brown & Williamson employee who has cooperated with the Food and Drug Administration or this subcommittee or any other governmental agency, I'd like to have you assure us that you will not retaliate against any of your employees for talking to the Food and Drug Administration.

MR. SANDEFUR: Well, you have my -- you have my assurance, Mr. Chairman. I'm not in the habit of doing that. I want my people to be open and honest, absolutely.

MR. WAXMAN: And let me ask you --

MR. SANDEFUR: And I would encourage them to do so.

MR. WAXMAN: You encourage them to respond to government?

MR. SANDEFUR: Absolutely.

MR. WAXMAN: And would you be willing, as well, to release your employees from any confidentiality agreements that prevent them from being available to talk to the FDA or any other government agencies?

MR. SANDEFUR: Mr. Chairman, the answer to that question is yes, if I can have the assurance by you and the subcommittee that what you are told will be held in confidence. Because the majority of the confidentiality agreements -- I would say all of the confidentiality agreements -- that we have with our current, our previous employees, are done so for security or proprietary information reasons.

That's why we have them, and I would be more than happy to release anyone if I have your assurance and the subcommittee's assurance that it will be treated in that fashion.

MR. WAXMAN: What we would like to do is to have you release your employees, notwithstanding any confidentiality agreement that you have with them, to talk to us or with the FDA, on matters that are not confidential.

MR. SANDEFUR: Certainly.

MR. WAXMAN: And not proprietary, as I guess, the --

MR. SANDEFUR: Absolutely. I have absolutely no problem. As a matter of fact, Mr. Chairman, if you want to come to Louisville, and I'll take you to Macon, I'll take you to Lancaster, where we do our sheet tobacco, I'll take you anywhere in my company and show you anything you want to see.

MR. WAXMAN: I thank you for the generous offer.

MR. BILIRAKIS: Mr. Chairman --

MR. WAXMAN: Yes.

MR. BILIRAKIS: -- would you yield further on that?

MR. WAXMAN: Yes.

MR. BILIRAKIS: We discussed this yesterday a little bit with Dr. Kessler, and he was pleading that he couldn't reveal certain information because of confidentiality, and I wondered if it would please the chair to perhaps apply the same standards to Dr. Kessler and the FDA with respect to furnishing us with copies of the same testimony, according to the same standard that we are requesting of Mr. Sandefur.

MR. WAXMAN: I think that we ought to expect that Dr. Kessler would supply us with any information that's not proprietary and not confidential.

MR. BILIRAKIS: Mr. Chairman --

MR. WAXMAN: Yes, Mr. Bilirakis.

MR. BILIRAKIS: -- may I, with your indulgence; and, again, additional to that, we're hopeful that any of that that takes place that the minority staff will also be made aware of it and so they could be a part of it all.

MR. WAXMAN: I think that's a reasonable request.

MR. BILIRAKIS: And your reasonable response?

[Laughter]

MR. WAXMAN: I'm a reasonable man.

MR. BILIRAKIS: I take that as a yes.

MR. WAXMAN: Yes. You could take it as yes.

Mr. Sandefur, we have two votes on the House floor.

MR. SANDEFUR: Yes.

MR. WAXMAN: We're going to take a recess. It's not a very long one, but we do have --

MR. SANDEFUR: I understand.

MR. WAXMAN: -- committee members who have questions and we're going to go second around, so I would like to have us come back here at 1:00.

MR. SANDEFUR: Yes. I have one request of you, Mr. Chairman. I have a plane to catch tonight at 6:00, and I'd like to make that. I need to be in London tomorrow morning.

MR. WAXMAN: Well, I certainly hope we'll be able to accommodate you.

MR. SANDEFUR: I thank you, sir.

MR. WAXMAN: Yes. Thank you.

We'll recess until 1:00.

[Recess]

MR. WAXMAN: The meeting of the subcommittee will come back to order.

It's unfortunate we're meeting at a time when the House is also in session, and we may be interrupted occasionally by votes, and they're unpredictable.

Mr. Kreidler, you were next, and I want to recognize you now for your first round of questions.

MR. KREIDLER: Thank you, Mr. Chairman.

Mr. Sandefur, I want to begin by just commending you for the way you've conducted yourself before this committee. I think you've done a very capable and able job, and I commend you for that. I know it's not easy.

Let me begin by asking a series of questions here about what are generally labeled as enhancers. The ingredient list that has been released recently, like ammonia and urea, as ingredients that are added to ammonia, does B&W add ammonia or urea to their tobacco?

MR. SANDEFUR: It's my understanding we do, yes, in terms of the process. Yes.

MR. KREIDLER: Do you have knowledge as to whether this is a common practice in the industry?

MR. SANDEFUR: It's my understanding that a number of tobacco manufacturers do use ammonia. I don't know about urea.

MR. KREIDLER: What other companies would add ammonia that you might know of, if you don't know about urea?

MR. SANDEFUR: I've testified previously about the reverse engineering project we took forward in terms of Philip Morris' product, Marlboro.

I believe they do, I believe RJ Reynolds does to a certain extent. I don't think Liggett does. And I'm recalling.

MR. KREIDLER: Sure.

MR. SANDEFUR: Please understand. I don't want to be held in contempt because I'm trying to answer your question. I'm recalling this from memory. I think RJ Reynolds, Philip Morris, I believe Lorillard does -- I can't be certain of that -- and Brown & Williamson does. I don't know about -- I believe American does as well. I don't know about Liggett.

MR. KREIDLER: Thank you. Does B&W have any patents on the use of either of these ingredients in tobacco, to the best of your knowledge?

MR. SANDEFUR: I'll have to get back to you, Congressman, on that. I don't know the answer to that question. I assume we do, but I can't be sure of that.

MR. KREIDLER: Dr. Kessler also presented an excerpt from a tobacco company document that stated that ammonia can liberate free nicotine from the blend, and that it is associated with an increase in impact and satisfaction reported by smokers.

Does B&W use ammonia compounds to increase nicotine transfer efficiency or nicotine impact or satisfaction in any of its cigarettes?

MR. SANDEFUR: It's my understanding -- and, again, I'm not a scientist, I'm giving you a layman's view, and I'll be more than happy, if you'll give me a question, to ask my scientists to give you a written answer.

But it's my understanding that ammonia does have the ability to provide for free nicotine, but it's further my understanding that no more nicotine is absorbed in the smoker than is if the nicotine is bound. There's a free and bound nicotine and, again, I'm getting in way over my head because I don't know what I'm talking about, to tell you the truth. I'm giving you what my understanding of it is.

MR. KREIDLER: Do you know if B&W uses urea or any other compounds for that purpose?

MR. SANDEFUR: I believe that we use ammonia, and one of the characteristics of ammonia is it provides an ability to make sure that the smoke is more full-bodied and also reduces irritation.

MR. KREIDLER: I'm curious. Do you know if B&W has done research on methods to increase nicotine transfer efficiency or nicotine impact in any of their cigarettes?

MR. SANDEFUR: If we've done that, you have the studies. I'm confident that our people have complied with the request of the committee.

MR. KREIDLER: Okay. Other than Y-1 or methods of increasing nicotine transfer efficiency, does your company use any technology to control or manipulate nicotine levels?

MR. SANDEFUR: If I might, I have a great deal of trouble with the word "manipulation," because, in my terminology, that implies that we are spiking cigarettes. So that's my interpretation of it.

I can tell you that we have to have quality control of both tar and nicotine in order to meet the FTC requirements, that we have to state what the tar and nicotine deliveries are on each and every cigarette that we sell. We're required by law to do that.

MR. KREIDLER: I guess I go back and I think about that that was part of the testimony that we've had before the committee, that that would still mean -- the word "manipulate" would certainly mean that you at least tend to have some degree of consistency.

MR. SANDEFUR: Well, I can tell you, if that's your definition of manipulation, I can tell you that we blend for taste, and obviously a factor in that is based on the different grades of tobacco that we put in a particular blend. We are able to determine what the tar and nicotine deliveries are. Yes, sir.

MR. WAXMAN: Will the gentleman yield to me?

MR. KREIDLER: Certainly.

MR. WAXMAN: Let's understand what we are saying.

You don't like the word "manipulate," but you blend, which means you adjust upward the nicotine levels, you say, for taste, but nevertheless, adjust the nicotine levels upward, so that the cigarettes will be at this controlled level.

MR. SANDEFUR: Mr. Chairman, they adjust up or down, depending on the particular taste characteristics that the blender has in mind when he's blending the cigarettes. Yes, sir.

MR. WAXMAN: When you would blend downward?

MR. SANDEFUR: In an Ultra Low cigarette, or Lights, or mild cigarette.

MR. WAXMAN: If the nicotine level --

MR. SANDEFUR: And you're blending down --

MR. WAXMAN: -- is too high, you blend it so it would be less?

MR. SANDEFUR: We -- that would be possible, certainly, in terms of the -- as I testified on April the 14th, I believe my testimony was, if the constituents of the blend are available we, in fact, can do that.

Now, one of the problems that you have is that -- I think Mr. Schindler from RJ Reynolds explained -- with the mercy of an agricultural product, we can't determine only if it's going to rain, or how much it's going to rain. If we have a very dry growing season, the concentration of a small leaf -- a smaller leaf -- in mass has a greater nicotine. Yes.

MR. WAXMAN: Is the Barclay cigarette a low tar, low nicotine cigarette?

MR. SANDEFUR: It's a -- yes, I would characterize it as a low tar, low nicotine cigarette. The issue -- and Barclay is a very small selling brand, unfortunately, but that's the case. It's less than 3/10ths of 1 percent market share.

MR. WAXMAN: Well, that wasn't really why -- I wasn't interested in buying any stock in this.

MR. SANDEFUR: Right.

[Laughter]

MR. WAXMAN: But I asked it because there's an interesting data from Dr. Neal Benowitz. Have you ever heard of him? He's the Professor of Medicine, Chief, Division of Clinical Pharmacology, Experimental Therapeutics, and he, in the New England Journal of Medicine in 1982, identified Barclay as having one of the highest nicotine content levels in the total cigarette, 12.80 milligrams.

But then on the FTC, it yielded one of the lowest nicotine yields, and I found that pretty remarkable.

He also indicated that, per weight, the nicotine was 2.69 -- this is a chart that shows it. It really is pretty remarkable, because the Barclay cigarette is called low tar, low nicotine, yet it's very high in nicotine content. It just doesn't show up on the FTC machine. Why is that?

MR. SANDEFUR: Well, as I understand it -- and, again, I wasn't involved, or I wasn't at the company when Barclay was developed -- but, as I understand it, that initial blend had a high alkaloid content, and a great deal of the tobacco was Maryland grown tobacco.

The characteristics -- the taste characteristic --

MR. WAXMAN: That's a euphemism for nicotine levels, right?

MR. SANDEFUR: No, sir, it's more than nicotine.

MR. WAXMAN: All right.

MR. SANDEFUR: But it's -- and I don't mean to be disrespectful, but it is more than nicotine.

We were looking for a high impact -- a cigarette that would taste like a cigarette that had high tar --

MR. WAXMAN: And higher nicotine?

MR. SANDEFUR: Higher tar.

MR. WAXMAN: And higher nicotine?

MR. SANDEFUR: No, not higher nicotine. We were -- what we were doing was trying to have a competitive product that would appeal to smokers who were looking for lower tar cigarettes.

Up until very recently, Mr. Chairman, the American public has believed, because I would submit that the Congress and any number of experts in this area have said that tar was the problem, you see, with cigarettes. So the industry has constantly been trying to reduce tar, so what was --

MR. WAXMAN: When you reduce the tar, the nicotine levels go down, as well.

MR. SANDEFUR: The nicotine comes down, yes.

MR. WAXMAN: So, therefore, you have to blend to get the nicotine level back up.

MR. SANDEFUR: No. What we were trying to do was maintain a certain amount of nicotine which gives us better taste character --

MR. WAXMAN: Which you wouldn't be able to maintain, because so much of that nicotine had been reduced along with the tar.

MR. SANDEFUR: What it would do was affect the taste characteristics of the cigarettes. So what we tried to do was blend --

MR. WAXMAN: But that's because the nicotine level had been reduced, so you need to have it back to where --

MR. SANDEFUR: That's part of it, yes.

MR. WAXMAN: -- you would want it.

MR. SANDEFUR: The nicotine being a very important constituent of the taste characteristics of cigarettes.

MR. WAXMAN: I'm going to ask unanimous consent to give Mr. Kreidler another four minutes, because I took his time and I regret it.

MR. KREIDLER: Thank you very much, Mr. Chairman.

Let me just follow, and then I want to go back to an earlier asked question, just for some clarification.

When I asked about 1-Y or other methods for increasing nicotine transfer efficiency, are you aware that BAT, your parent company, has done studies in this area?

For example, in 1966, BAT's major research arm issued a report called Further Work on Extractable Nicotine. Perhaps you know, or maybe could define for me, what "extractable nicotine" means.

MR. SANDEFUR: No, sir, I don't. But let me make an offer to this committee. There's a great deal of questions in, obviously, your minds, about research documents that I can't answer the questions to -- research documents that were done prior to my joining the company, that I'm not familiar with.

MR. KREIDLER: I can appreciate that particular aspect --

MR. SANDEFUR: But if I might make a suggestion.

MR. KREIDLER: Sure.

MR. SANDEFUR: If this committee would like to know about this research, I'll be more than happy to have my scientists, in writing, respond to your questions with regard to the research.

MR. KREIDLER: I'm an optometrist. I haven't worked in the tobacco industry. But I thought perhaps extractable nicotine was a term of art that was perhaps fairly commonly used in the business.

MR. SANDEFUR: I don't have any knowledge of what that means. No, sir.

MR. KREIDLER: Okay. Let me go back, because I understood your answer to mean one thing and the staff was not sure that I was understanding exactly the way it was said.

You know, my question was, does B&W use urea or other compounds for these purposes, and the those were to increase nicotine transfer efficiency and nicotine impact or satisfaction.

Now, you answered about ammonia, but do they use urea or any other compounds for those purposes?

MR. SANDEFUR: Congressman, I hesitate, even though I've said I think we use urea, I'm going to have to double-check that, and I will be more than happy to let you know what we do use. Urea or any other compounds that would do that, I just don't know.

MR. KREIDLER: Okay. Fair enough.

The report stated in its summary and conclusion -- that being the one that BAT did, and I'll pull up some specific information -- in fact, if I could pull up Chart 14 right now; it's already here. Good.

It states: The reaction of a smoker to the strength of smoke from a cigarette could be correlated to the amount of extractable nicotine in the smoke rather than the total nicotine content. In other words, extractable nicotine increases the impact of nicotine on the smoker.

A subsequent report, listed on Chart 14, said that nicotine retention appears to be dependent principally on the smoke pH and nicotine content. These statements are particularly interesting in light of Commissioner Kessler's testimony Tuesday, as I'm sure you recall.

He said that ammonia is a base that also affects the pH of smoke. It appears that Dr. Kessler's testimony about ammonia correlates directly with the work that BAT did and was doing in 1968.

In light of this information, can you tell us if you are aware of any other tobacco ingredients that affect the pH or the base or the acidity of nicotine?

MR. SANDEFUR: I'm aware that there are other ways to do that. I can tell you that some of my sister companies, in fact, have other ways of doing that. I can't give you the technical aspects of it. I can't even give you the name of what they call it, but I'll be more than happy to provide that to you.

MR. KREIDLER: I appreciate that. I would like to see that information, if I could, please.

MR. SANDEFUR: Yes.

MR. KREIDLER: Now I want to ask you about filters, and if we could pull up Chart 16.

Are you aware that BAT has studied the feasibility of adding a substance called PEI to cigarette filters?

MR. SANDEFUR: No, sir, I'm not aware of that.

MR. KREIDLER: Okay.

MR. SANDEFUR: Congressman, I can tell you that I was told by our legal counsel at the break that we have two patents -- or we have one patent, and I don't know who the other is assigned to -- with regard to PEI. I don't know what it is. But I am also told that our experts in this area, our scientists, say that we don't use this patent technology in any of our products.

MR. KREIDLER: Okay. A study on this project found that the treatment of a filter with PEI increased the delivery of extractable nicotine. So what you're saying, then, is that B&W, as far as you know right now, is not adding that to the delivery --

MR. SANDEFUR: We do not practice that at all, is my understanding.

MR. KREIDLER: Do you know if you did in the past?

MR. SANDEFUR: No, sir, I don't.

MR. KREIDLER: Could you let us know?

MR. SANDEFUR: I'll be more than happy to look into it and answer your questions. Yes.

MR. KREIDLER: Okay.

MR. WAXMAN: Thank you, Mr. Kreidler.

MR. KREIDLER: Thank you very much, Mr. Chairman.

MR. WAXMAN: Mr. Paxon.

MR. PAXON: The terms genetic engineering and genetic manipulation were thrown around rather loosely on Tuesday.

Mr. Sandefur, did B&W use genetic engineering to develop Y-1 or did it use -- did you use -- cross-breeding methods?

MR. SANDEFUR: It's my understanding that we used cross-breeding methods, not genetically engineered process.

MR. PAXON: I think that's a very important point to make certain that you repeat it again.

MR. SANDEFUR: I think it is. Yes, sir.

MR. PAXON: Thank you.

Mr. Sandefur, Dr. Kessler suggested that there was something unique or unusual about Y-1 because it contained approximately 6 percent nicotine. Are there other tobacco plants with nicotine levels in this same range?

MR. SANDEFUR: Yes, sir. There are other plants with higher nicotine -- high nicotine leaf. I've seen a list that would have 7 percent nicotine in the leaf.

MR. PAXON: Thank you. Last line of questions.

Mr. Sandefur, we've heard a lot about, in the past, documents stolen from your company that are apparently in the possession of this subcommittee -- at least the chairman of the subcommittee.

Would you explain it happened that your documents were stolen?

MR. SANDEFUR: I will do that to the best of my ability. We are still involved in an investigation on this subject.

We hired a local law firm in Louisville, Kentucky, to put our files in order so that we could respond to congressional inquiries, such as we're having here, but, equally important, is litigation -- smoking and health litigation.

The categorization of those files have taken a number of years to do, because I can tell you, Congressman, that we haven't thrown away anything since 1954.

MR. PAXON: Sounds like Congress.

MR. SANDEFUR: And I literally mean that, in terms of anything related to smoking and health.

In the process of categorizing these files, the law firm hired paralegals to do the work. There was an individual named Merrill Williams who was hired to participate in that. It's my understand that after Mr. Williams was terminated from the law firm as a paralegal, he continued to work on this project for approximately two weeks. And one Sunday morning he came into our facilities at Brown & Williamson, and between 8:00 and 11:30 at night, he copied our files, and he took them from the company.

As soon as we found out about this -- and it's my understanding we found out about it because there was some discussion with his lawyer who was saying, I'll give you your files back if you pay me some money. That's my understanding.

And we and our law firm in Louisville said, no, that's not what we're going to do. And we went to a Kentucky judge -- Judge Wye -- and got a restraining order to have our files returned.

Now, we don't have -- we don't have the physical files, I don't believe, but the restraining order said that they were not to be used, they were not to be publicized, because a great many of those files were attorney-client privilege files.

And we were absolutely alarmed when we found out that this restraining order had been violated, that the press had our files, that members of Congress had our files, and, quite honestly, I didn't think my company was being treated very fairly, because it seemed to be all right for this individual to steal from me, and people to accept stolen property.

Now I understand that we've taken that to court, and I understand Judge Green's ruled on that. MR. PAXON: Thank you.

Have you taken any action against the individual in question, Mr. Sandefur -- any legal action?

MR. SANDEFUR: We are still in the process of determining what the situation is. We still have that under consideration.

MR. PAXON: Thank you very much. Yield back.

MR. WAXMAN: Thank you, Mr. Paxon.

Mr. Wyden, we're going to have to go to respond to a vote, but do you want to be recognized at this point to take your second round, so far as the time will permit?

MR. WYDEN: Mr. Chairman, thank you very much. I've got a hearing on a bill important to the State of Oregon in a minute.

Mr. Sandefur, when I listen to you, I feel a little bit like a conductor at Union Station, having to inform you that your train has left the platform.

You know, it seems to me that Dr. Kessler is building an administrative record that's very clear -- that the tobacco industry has the technology to control nicotine.

They, of course, have informed us about the matter of bioengineering plants -- and you can call it something else, but this is how he sees it.

They are moving relentlessly towards treating tobacco as a drug. I think it's also fair to say that the vast majority of Americans believe that tobacco is addictive. The number of people who probably disagree with that, you can fit into the phone booths in the front lobby.

So it seems to me that this path, apart from any Congressional action, is really going forward. My question to you is, are you willing to support any changes in the regulatory system of tobacco, or is it just going to be business as usual?

Because, it seems to me, my first and foremost interest is keeping young people from getting started. The evidence shows that the majority of the smokers are, in effect, involved even before the age of 18. So I want to make the focus young people.

We've got other people who are saying what we ought to be doing is gradually lowering the nicotine levels. That seems to me to be an idea worth exploring. It's got its pros and cons.

My question to you is: Are you willing to support any changes in the regulatory system with tobacco, or are you just going to say, we're going to keep doing business as usual, even though the vast majority of Americans disagree with your proposition and believe that nicotine is addictive, even though the Food and Drug Administration is moving inexorably towards treating your product as a drug?

Are you still going to say it's business as usual, or will you support some of the changes, possibly in areas I mentioned or in others?

MR. SANDEFUR: Congressman, I certainly don't want to be unreasonable or take the position of being close-minded at all. I don't want to be perceived that way, because I don't believe I am.

I think that the laws that are on the books today are adequate in terms of my industry. I can categorically say that my company and other members of the tobacco industry -- all of my competitors -- have the same opinion with regard to attracting young adults or children to this product. We don't want that to happen.

We believe that we are dealing with a legal product, but a product that does have a health risk and each individual should be fully informed before they make that decision.

I believe that the FTC, which Congress put in charge of warning statements has, in fact, done that. I don't think there's a -- certainly not an adult around today that isn't aware of the risk of smoking.

So, to answer your question, if there's something that can be done over and above what's already on the books, it may be reasonable. But I can't think of anything that needs to be done. That's the reason I take the position I do with regard to FDA.

MR. WYDEN: Well, Mr. Sandefur, the laws on the books, according to the medical experts, produce more than 400,000 deaths a year.

The laws on the books find that most of the smokers are, in effect, addicted before the age of 18.

So if you're saying the laws on the books and the regulatory system are working, the medical authorities, of course, dispute that.

I think, even more important, you are all are going to be left on the platform, and these trains are going to be leaving.

It seems to me what would really be in the public interest is that we get to work advising a sensible, new regulatory system. The centerpiece ought to be to keep young people from starting smoking.

What we're doing with respect to the young people is not working. 3,000 young people are staring everyday.

I must say that, until the tobacco industry shows some willingness to look at a new kind of regulatory approach, I think you all are going to get more and more marginalized. You will become more and more irrelevant in this debate, and it just seems to me there's a better way to do business.

Mr. Chairman, thank you.

MR. WYDEN: Well, Congressman, it's hard for me to envision becoming more of an outcast than I already feel that I am. I might say that to you.

But I don't want to come across as being unreasonable, and I don't think anyone of my counterparts at any tobacco company in this country would want to be perceived that way, at all.

So, certainly, we'll be more than happy to cooperate. I think we've been trying to cooperate. But we also realize that there are risks involved in legislation because they may not have the intent, or they may not serve the intent, that Congress intends, if passed.

MR. WAXMAN: Mr. Wyden, your time has expired.

We have to respond to a vote.

The only editorial comment that I would make to you is status quo is not working. We've got to do something different, and I think if the industry is willing to be cooperative, perhaps we could work together. But I haven't seen a lot of it, when the industry still puts on the blinders and goes through:

Cigarettes don't cause cancer; nicotine is not addictive; we don't manipulate the nicotine level, we don't do any of these things and, besides, everything is working fine; your regulations -- in fact, as you complain in your opening statement, may be too burdensome.

MR. SANDEFUR: Well, Mr. Chairman --

MR. WAXMAN: You've cooperated by being here, but you --

MR. SANDEFUR: Mr. Chairman, I think --

MR. WAXMAN: -- haven't really answered a lot of the questions, even though you've been in the industry for 30 years.

MR. SANDEFUR: I think reasonable people certainly have the right to disagree and, obviously, you and I disagree on this particular subject.

MR. WAXMAN: Let me -- we do have to break -- let me suggest to you that perhaps what we could do is, I would be happy to sit down with you and the other CEOs of the tobacco companies and have a private meeting, and see if there's something we can work with.

MR. SANDEFUR: I'll certainly be more than pleased to attend that meeting.

MR. WAXMAN: Okay.

MR. SANDEFUR: You name the time, and I'll certainly try to be there.

MR. WAXMAN: And would you be willing to help to get the other Chief Executive Officers --

MR. SANDEFUR: I'll certainly ask them. Obviously, they --

MR. : I'd like to be at that meeting, too.

MR. WAXMAN: I wouldn't have it without you.

MR. : Thank you.

[Laughter]

MR. WAXMAN: We're going to break now to respond to what may be two votes in a row, so we'll probably break for around 10 minutes.

MR. SANDEFUR: Yes, sir.

[Recess]

MR. WAXMAN: The meeting of the subcommittee will come back to order. I want to call next on Mr. Bliley to pursue his second round.

MR. BLILEY: Thank you, Mr. Chairman.

Mr. Sandefur, Dr. Kessler stated that Y-1 was developed by an organization called DNA Plant Technology. He also said that this organization told the FDA that B&W had authorized it to say that Y-1 had not been commercialized.

I understand from your testimony, however, that B&W gave DNA Plant Technology the authority to talk to the FDA despite its confidentiality agreement, but did not tell it what to say to the FDA. Is my understanding correct?

MR. SANDEFUR: Yes, sir.

MR. BLILEY: Your statement seems to be confirmed by a letter that I have just received from Mr. David Evans, Vice President for Business Development, DNA Plant Technology Corporation.

In the fourth paragraph of this letter, and I quote: "We told FDA in a conversation June 10th, 1994, that DNAP had been freed up by Brown & Williamson to address the topic of DNAP's knowledge of the commercialization status of Y-1. This topic was within the realm of confidentiality under DNAP's agreement with Brown & Williamson; and as such, we were not free to address it absent authorization from Brown & Williamson.

"We were not authorized or asked by Brown & Williamson to address this topic other than with respect to our knowledge or lack of knowledge. We told FDA in that conversation, as confirmed in a subsequent conversation with FDA June 14, 1994, that as far as we knew, Y-1 had not been commercialized."

Mr. Chairman, I ask unanimous consent to make this letter a part of the record.

MR. WAXMAN: Without objection, it will be made part of the record.

MR. BLILEY: The terms "genetic engineering" and "genetic manipulation" were also used rather extensively Tuesday.

Mr. Sandefur, did B&W use genetic engineering to develop Y-1 or did it use crossbreeding methods?

MR. SANDEFUR: It's my understanding we used crossbreeding methods, Congressman.

MR. BLILEY: As I understand it, nicotine levels in cigarettes vary depending on the blend of tobaccos. I also understand that Y-1 is one of the many tobaccos you have used in your blends.

In blending, do you set up to achieve a certain nicotine level, or do you blend for taste and for tar?

MR. SANDEFUR: We blend for taste and for tar; yes, sir.

MR. BLILEY: Mr. Sandefur, the term "manipulate" also was used loosely at the hearing Tuesday. To me, "manipulate" has the connotation that you are doing something artificially or improperly in the context of nicotine, which occurs naturally in tobacco.

The term "manipulate" suggests to me that you are adding something other than tobacco to increase the nicotine.

My question is, do you manipulate the nicotine levels of your cigarettes?

MR. SANDEFUR: We do not manipulate the nicotine levels of our cigarettes; no, sir.

MR. BLILEY: Thank you.

Mr. Sandefur, Dr. Kessler suggested that there was something unique or unusual about Y-1, because it contained approximately 6 percent nicotine. Are there other tobacco plants that are grown with nicotine levels in this range?

MR. SANDEFUR: Yes, sir, there are. And commercial leaf is grown outside of the United States that would have higher nicotine content in the leaf than Y-1.

MR. BLILEY: So if you were just interested in getting nicotine, you could get one of these other leaves that had an even higher rate?

MR. SANDEFUR: Yes, sir.

MR. BLILEY: Thank you very much.

Mr. Chairman, I believe that's all the questions I have.

MR. WAXMAN: If you'll just yield to me so I can ask one question: Why is it only grown outside the United States to get this higher nicotine tobacco leaf?

MR. SANDEFUR: It's my understanding, Mr. Chairman, that the industry, made up of manufacturers, leaf dealers, seed dealers, have an agreement with regard to the type grades that we can in fact raise or the type strains of tobacco that can be raised under the allotment program in here in the United States.

And that range is I believe between 2.5 percent up to 4 percent, something like that, for flue-cured tobacco. That's my understanding and those percentages may be wrong.

MR. WAXMAN: What would be the reason for that agreement? Why would --

MR. SANDEFUR: They're trying to maintain the quality of the tobacco plant, as I understand it.

MR. BLILEY: Well, if I might reclaim my time, you know, it really doesn't make a whole lot of difference what the quantity of nicotine in the raw tobacco is, it's what's delivered to the smoker's tongue, isn't it?

MR. SANDEFUR: That's what we've been saying all along, yes. We said on April the 14th, and I've testified today that it's not the amount of nicotine in the leaf that's important; it's the amount of nicotine that the cigarette delivers in the smoke stream -- that's what's important, because that's what the consumer gets.

MR. BLILEY: Thank you very much.

Thank you, Mr. Chairman.

MR. WAXMAN: Mr. Sandefur, I'm going to pursue my second round of questions with you, and what I want to talk about is the topic of the health effects of smoking. In particular, I want to discuss two other secret projects at Brown & Williamson: Project Truth and Project Janice.

Let me begin with Project Truth, which is summarized on Chart 20, and staff will put that up.

This Project Truth began in 1971. It was a campaign to convince the public that smoking is not a health hazard.

One of the documents from Project Truth that we have is entitled "The Smoking/Health Controversy, a View from the Other Side," and it's a presentation by Brown & Williamson to local newspapers.

Let me read you some of the statements from this document. According to the document, and I quote: "It is our opinion that the repeated assertion without conclusive proof that cigarettes cause disease, however well intentioned, constitutes a disservice to the public."

Specifically, Brown & Williamson directly contested the relevance of mouse skin painting studies. According to your company, the tumors produced on mice exposed to tobacco smoke are -- again I want to quote: "artificially produced under laboratory conditions and as such have little, if any, relation to cigarette smoke as it reaches the smoker."

Now that's so-called Project Truth. And then it's interesting to compare this Project Truth to something called Project Janice. It's very striking.

At the same time that your company was telling the public in Project Truth that mouse skin paintings are meaningless, your parent company, the British American Tobacco Company, was engaged in a decade-long series of mouse skin painting studies in Project Janice. And Project Janice is summarized in a chart, Chart 21.

I have before me a series of over 30 Project Janice studies. These are studies that you have submitted to us. And I want to stack these up -- perhaps you could put these down over here on this table -- that is a stack of all the Project Janice studies.

These studies have titles like "Carcinogenicity of smoke condensate to mouse skin", "An investigation of the mutagenic effect of inhaled smoke on mice."

In mouse skin painting experiments, the researchers paint a condensate of tobacco smoke on the skin of a mouse and then observes whether any tumors form. Well, the Project Janice experiments repeatedly found that tobacco caused tumors when painted on mice skin.

In a 1971 survey of the Janice mouse skin painting experiment, over 80 percent of the mice exposed to a flue-cured blend of tobacco, developed tumors. And in the 1973 report on "Carcinogenicity of Smoke Condensate to Mouse Skin," over 70 percent of the mice developed permanent tumors, and over 50 percent developed malignant tumors.

Mr. Sandefur, I find it difficult to understand the contrast between Project Truth on the one hand and Project Janice and the other. How could your company in good faith tell the public that smoking is not dangerous to health, when you knew from the Janice studies that tobacco smoke condensate produced tumors in mice, many of them malignant.

MR. SANDEFUR: Congressman, I can't answer that question; I wasn't around in 1971.

MR. WAXMAN: Well, you're the chief executive officer of Brown & Williamson. You're here to represent them, there have been accusations in the press.

This is not new; completely I think we have more information than had otherwise been known, but it had been written about even in the New York Times and probably other publications as well.

Wouldn't you expect that, as the Chief executive officer, you would be knowledgeable about something which is clearly part of the inquiry today.

MR. BLILEY: Mr. Chairman, I have certainly discussed this with my scientist; and I can tell you that I'm told that you can take concentrated tomato juice and put it on the skin of mice and create the same type tumors. That's what I've been told.

MR. WAXMAN: Well, you --

MR. BLILEY: I'm also told that fresh, whole smoke has never demonstrated anything like this.

MR. WAXMAN: How can that be?

MR. BLILEY: Well, I'm telling you what that --MR. WAXMAN: I'm telling you that your documents to us, from your scientists in your files, show that they were conducting studies where they put this condensate on the mice and they developed these tumors.

Now you claim you don't know about and you weren't there, but let me ask you this: Do you think it was a responsible action on the part of Brown & Williamson to on the one hand be conducting what was called Project Truth, to tell people "Don't worry about these reports about cancerous tumors in mice because of tobacco, because we don't think it's really happening."

On the other hand, your scientists are at the same time telling you it is happening, and that you had this information, at least as of that time, the people in charge had that information.

Do you think that was a responsive --

MR. SANDEFUR: Mr. Chairman, I can see how you would be concerned about that, and the quandary that this issue raises. But I can tell you that the research that you are referring to was done by a sister company. It was in our file --

MR. WAXMAN: I'm not going to let you get away with that. You are part and parcel of British American Tobacco, you share the research budget with them, your company participates in all their research conferences.

Your scientists were reporting, and I assume to the whole family -- because after all, you sent this to us; we didn't get it from British American Tobacco in London someplace, we got it from you. Wherever your headquarters is, wherever it was stored, it was from you to this committee.

MR. SANDEFUR: I understand that.

MR. WAXMAN: Now you evidently didn't read these things, but what do you think about your predecessor, who presumably did read about it, who presumably knew what was going on because CEOs are supposed to know what goes on in their business.

Hearing from the scientists that tumors are being caused by this tobacco condensate at the same time that that CEO was managing a campaign called, euphemistically, Project Truth, to say none of this is true.

What do you think of somebody who would do that?

MR. SANDEFUR: I really can't speculate on what the --

MR. WAXMAN: What do you mean, speculate? I'm giving you exactly --

MR. SANDEFUR: I can't speculate.

MR. WAXMAN: Would you do something like that?

MR. SANDEFUR: No, sir. If I were convinced, and if my scientists told me, and I was convinced that this was in fact the case, I would make that publicly known.

But you know, Mr. Chairman, as far as I am concerned, this is a moot point, because the Congress of the United States has already decided that the way that we're going to warn the American smoker, the American public, is through the warning statements on the pack. And the warning statement says--

MR. WAXMAN: Mr. Sandefur --

MR. SANDEFUR: -- "smoking causes lung cancer."

MR. WAXMAN: Let me interrupt you, because I do have a limited period of time.

MR. SANDEFUR: Yes.

MR. WAXMAN: I'm trying to figure out what kid of responsibility the chief executive officers of the tobacco companies have when they know that there are scientific studies that they are sponsoring that give them information about a danger to public health, and at the same time they're saying to people that there is no danger.

Well, do you believe this information now, that cigarette smoking causes these tumors?

MR. SANDEFUR: As I've just testified, I would make that public. I really can't speak for what other CEOs might or might not have done.

MR. WAXMAN: At the April 14th hearing, Congressman Synar asked you to provide the subcommittee with copies of all animal studies you had done. In your response you said, and I quote: We have not done any animal research.

How can you make that statement in light of this Janice study?

MR. SANDEFUR: I would suggest to you, Mr. Chairman, that I said my company would cooperate.

MR. WAXMAN: But you said your company didn't do any animal research.

MR. SANDEFUR: And I further said that my company, meaning Brown & Williamson, had not done any animal research; and that's the case. That is what I was asked.

MR. WAXMAN: You're being very, very technical. But now you do --

MR. SANDEFUR: No, sir, I don't agree. I don't think it's technical at all. I was trying to be forthcoming. You asked me --

MR. WAXMAN: Wait a second now. Forthcoming when you are asked to submit animal studies that are -- you could say "I didn't do any animal studies" and you would have been technically right if your scientists did them and you didn't personally; but I don't think that was forthcoming. That was the caliber of the kind of statement.

But there's another point that bothers me about this treatment of Project Janice; that's the efforts of your lawyers to suppress the Janice study.

These efforts are described in detail in a front page story in the New York Times June 18, 1994; and I have a chart. According to the New York Times, your lawyers took extraordinary steps to keep the Janice studies out of the hands of the public, and plaintiffs suing your company.

Specifically, on January 17, 1985, a senior lawyer for Brown & Williamson, J. Kendrick Wells, declared that the Janice reports were deadwood, and ordered the reports removed from the Brown & Williamson files. Wells wrote, and I quote from the New York Times:

"I have marked with an X documents which I suggested were deadwood in the behavioral and biological studies area. I said that the B series are Janice series studies and should also be considered deadwood."

And then he said "I suggested the Research, Development and Engineering Department should undertake to remove the deadwood from its files, and I suggested that Earl tell his people that neither he nor anyone else in the Department should make any notes, memos, or lists."

Mr. Sandefur, the Janice studies are a significant body of scientific work. You tested many different variations of tobacco for cancer-causing effects. Some of the results showed a striking reduction in the incidence of tumors.

Shouldn't you have disclosed these important studies to the public instead of trying to purge the files of deadwood, so-called?

MR. SANDEFUR: Mr. Chairman, I'd like for Judge Bell to answer that question.

MR. WAXMAN: Well, I'll be glad to let you consult with him, but what I want to know is, don't you think the public should have this information, and why should -- wouldn't you consider it an effort to suppress this if your lawyer -- not Mr. Bell, but your lawyer who works for the company is suggesting that this all be disposed of as deadwood so nobody can see it? Isn't that covering it up?

MR. SANDEFUR: Mr. Chairman, I'm advised by Judge Bell I shouldn't answer that question because it's attorney-client privilege.

MR. WAXMAN: Will you provide the subcommittee with copies of all pending discovery requests in product liability cases in January 1985?

MR. SANDEFUR: Yes, sir, we are more than happy to do that.

MR. WAXMAN: I just want to close my comments by indicating to you that 40 years ago, January 4, 1954, your company published what was called a "frank statement to cigarette smokers" in the New York Times and other leading newspapers.

And it said "We accept an interest in people's health as a basic responsibility paramount to every other consideration in our business."

And the company also pledged to "cooperate closely with those whose task it is to safeguard the public health."

I have trouble seeing how one can square pledges in the frank statement to the public and actions such as Project Truth and Project Janice.

If the company says the public's health is paramount, yet your company told the public that smoking is not dangerous, even while it had extensive evidence from animal studies that showed that smoking is dangerous, seems to me that there is an inconsistency, to put it mildly.

A minimal standard of corporate responsibility ought to require Brown & Williamson to disclose the result of Janice, not conceal them as deadwood; and that apparently is what in fact happened, even though your lawyer doesn't want you to comment on it.

Any comment you want to make?

MR. SANDEFUR: No, sir, I wasn't there 40 years ago. I don't know.

MR. WAXMAN: By the way, that lawyer who made that recommendation is still your lawyer, isn't he? J. Kendrick Wells?

MR. SANDEFUR: Yes, sir, he works for Brown & Williamson.

MR. WAXMAN: Thank you.

Mr. McMillan?

MR. McMILLAN: I'd like to go back to a chart that's been referred to repeatedly today that is labeled Data from Dr. Neal Benowitz.

Could I ask the clerk to replace that on the stand?

Mr. Sandefur, is that a pretty representative list of the array of cigarette products? Can you read that?

What it is, if anyone can't see it, it's a list of brands, some 12 to 15, and it has measurement of nicotine content by three different standards.

The first column is Percent Nicotine; the second is Nicotine by Weight, milligrams; and the third is Nicotine Yield in milligrams, which is I think the standard FTC measurement of nicotine content; is that correct?

MR. SANDEFUR: Yes, sir, that's correct.

MR. McMILLAN: And that is what you have to disclose with respect to any of your products?

MR. SANDEFUR: That's correct; yes, sir.

MR. McMILLAN: And do you have to disclose anything else in addition to that? The items in the first two columns, by percent and weight, were derived from some other source --

MR. SANDEFUR: Right. We have to disclose to the FCC the tar and nicotine levels in all of our cigarettes.

MR. McMILLAN: And it's based on a yield basis?

MR. SANDEFUR: Yes, sir. Per carton, per cigarette.

MR. McMILLAN: And that's produced by what you call a smoking machine?

MR. SANDEFUR: That's correct, yes, sir.

MR. McMILLAN: And that's been accepted widely as the standard measurement of the nicotine output of a cigarette in the process of being smoked?

MR. SANDEFUR: Yes, sir. That methodology has been accepted worldwide as the standard for measuring tar and nicotine.

MR. McMILLAN: Now that figure there represents what, the yield of one cigarette, or a pack of cigarettes?

MR. SANDEFUR: One cigarette.

MR. McMILLAN: One cigarette.

MR. SANDEFUR: Yes, sir.

MR. McMILLAN: Now the list covers an array of products that runs from Carlton at the bottom, which has the lowest yield of .08 to Lucky Strike non-filter, which is the only non-filter on the list which is a 70 milligram cigarette in length compared to the 85 milligram filter at this point Carlton.

And the Lucky Strike nicotine yield is 1.46. Is that correct?

MR. SANDEFUR: Yes, sir.

MR. McMILLAN: That would be what, close to 18 times the nicotine yield from one end of that scale to the other?

MR. SANDEFUR: Yes, sir. That seems to be the case.

MR. McMILLAN: I don't know whether the Lucky Strike -- and I'm not singling anybody out here; I used to smoke Lucky Strike, so -- I thought they were pretty good, tasted good -- turns out that maybe I was smoking at the high end of the nicotine scale. I don't know whether it was the highest -- are there any cigarettes with a yield higher than 1.46?

MR. SANDEFUR: Yes, sir, I think there are some still around that have a higher nicotine level than that.

MR. McMILLAN: But 1.46, I would assume, would then represent a fairly normal blend of flue-cured tobacco.

MR. SANDEFUR: Yes, sir. This particular blend in a Lucky Strike 70 millimeter would be a relatively old blend, I would suspect, that was designed many, many years ago for a non-filter cigarette.

MR. McMILLAN: Now, there's nothing in the law that places a limit on the nicotine yield of a cigarette product?

MR. SANDEFUR: That's correct.

MR. McMILLAN: Has anyone, to your knowledge, ever analyzed these things, if you take the yield per cigarette and tried to derive from that some level at which a person would reach a level of what might be legally defined as addictive?

MR. SANDEFUR: No, sir. I, in my 30 years in this business, have heard anything like that; no, sir.

MR. McMILLAN: Wouldn't it also have to include, it seems to me, a behavioral pattern that would represent the number of units consumed; not simply what's in one cigarette.

MR. SANDEFUR: Yes, sir, you would think so.

MR. McMILLAN: And that's going to vary all over a lot.

MR. SANDEFUR: That's correct.

MR. McMILLAN: So if one were to try to attempt to regulate this, they would probably then have to define not only what is the limit that would be allowed in the cigarette, and let's just say it's for the sake of argument, one milligram per cigarette, in order to address the problem, they'd better also specify or set a limit on the number of congressionally-mandated cigarettes that could be smoked in a day?

MR. SANDEFUR: Yes, sir. I would think that would be the case.

MR. McMILLAN: That would be rather difficult to manage, wouldn't it?

MR. SANDEFUR: As I've testified, that would, in my opinion, be impossible, and that brings us to the issue of the black market.

MR. McMILLAN: And I think we raised the point earlier that if this product is truly addictive, if there is some identifiable amount of nicotine that a person needs a day to remain addicted, then the law is going to have to try to get specific about that, which is going to be extremely difficult to enforce.

Do you all produce any cigarettes that would have a nicotine yield higher than the Lucky Strike 70 millimeter, which is 1.46?

MR. SANDEFUR: Yes, sir. We market a product called Raleigh Extra King, which is a non-filter cigarette that has a nicotine delivery of 1.5 milligrams.

MR. McMILLAN: So it's essentially in the same --

MR. SANDEFUR: Essentially the same range; yes, sir.

MR. McMILLAN: All right.

Would you say that -- I don't think you would, but here we've got a whole array of cigarettes that have different nicotine yields on this scale, and then from the bottom of this scale ranging all the way up to what you say is the strongest nicotine yield that you produce, a range of almost 20 times the amount of nicotine yield from the bottom to the top.

And your top is a fairly standard brand that you've described as representing a normal blend of flue-cured tobacco.

What do you say to the charge that somebody is manipulating the amount of nicotine in that array of cigarettes?

MR. SANDEFUR: Well, as I've stated previously, I have a great deal of trouble with the term "manipulation" because that in my opinion implies something illegal or sinister or something that we're doing that is not in the best interests of the American public. We market a wide variety of cigarettes with a wide variety of nicotine levels.

For instance, our Kool Ultra king size product has a .2 level of nicotine, and a 2 milligram tar level. I think that would be -- that's the lowest I see on this list, and we've talked about the Raleigh king size nonfilter, which is the highest; has 26 milligrams of tar and 1.5 milligrams of nicotine; and we have everything in between.

And it's all based on the blending of the cigarette, and we blend for taste, and the consumer tells us if they like it or not.

MR. McMILLAN: And so nothing, it would appear within this range, would indicate that any of the manufacturers of these cigarettes is trying to manipulate the product to elevate nicotine in order to increase the frequency of use, or the total use of the product.

In fact, the opposite is true; that most of them represent a reduction in the nicotine output from a normal blend by the inclusion of the filters. So I think it's important that --

MR. SANDEFUR: Congressman, I might add to that; the high tar and nicotine brands are, to put it bluntly, going out of business in the United States. People are not smoking those cigarettes anymore. They represent a very small percentage of the total sale of the product here in the United States.

The consumers are moving to milder, lighter cigarettes which, generally speaking, have lower tar and nicotine levels.

MR. McMILLAN: Let me just ask one other question, and then I'll conclude, because I think it gets to the heart of the matter. It wouldn't really serve your company's economic purpose to elevate nicotine levels above really this range of market norms to any significant degree, and from what you've said, you don't do it really at all, because to do so would really be economically self-defeating, would it not?

MR. SANDEFUR: Well, it certainly would, because the consumer wouldn't buy it. They wouldn't buy the cigarettes because the cigarettes wouldn't taste good.

MR. McMILLAN: And if the argument is that you can -- that a person is doing this simply because of addiction, then you would then presumably produce one cigarette with a high nicotine content and that would be it? I don't think that's what you're doing.

Well, Mr. Chairman, I think it's important to get the facts out, and I think Mr. Sandefur has been very cooperative in doing that, and I yield back the balance of my time.

MR. WAXMAN: Thank you, Mr. McMillan.

Well, in the interest of getting facts out, I just want to indicate that the issue of what the yields are question as to whether it has any meaningful content in the numbers that are given to us; and I want to ask unanimous consent to put into the record at this point an article dated May 2, 1994, from the New York Times, entitled: Major Flaw Cited in Cigarette Data Testing for Tar and Nicotine Under Reports the Amounts.

And without objection, that will be the order.

Mr. Synar?

MR. SYNAR: Thank you, Mr. Chairman.

Mr. Sandefur, you've done a good job today. Those millions of dollars they pay you have gone well used. I found with great a gentleman who has been involved in this industry for 30 years, 19 with R.J. Reynolds, 12 with Brown & Williamson who can answer Republican questions with precision and detail; but when we ask you questions, you have a very collective, conveniently selective memory.

Yesterday the FDA supplied this committee with all the notes taken at the FDA meeting with your company on May the 3rd. Will you supply this subcommittee with the notes that your people or anyone representing had in that meeting?

MR. SANDEFUR: To the best of my ability; yes, I will.

MR. SYNAR: That's not the question. Will you provide --

MR. SANDEFUR: I understood your question.

MR. SYNAR: Will you do it.

MR. SANDEFUR: Yes, sir, to the best of my ability.

MR. SYNAR: What do you plan to do with the 3.5 to 4 million pounds of Y-1 you currently have in storage?

MR. SANDEFUR: We haven't made a decision on that yet, congressman.

MR. SYNAR: Will you provide the decision, once you make it, to the committee? Will you inform --

MR. SANDEFUR: Be more than happy to, yes.

MR. SYNAR: Is there any additional Y-1 being stored anywhere in the world under your control?

MR. SANDEFUR: Under my control?

MR. SYNAR: Ownership.

MR. SANDEFUR: Under my ownership, not that I know of.

MR. SYNAR: Sister corporations or anything else?

MR. SANDEFUR: There may be some sister corporations that have some Y-1, yes.

MR. SYNAR: Will you provide that information to the record, also?

MR. SANDEFUR: Yes, sir, I will.

MR. SYNAR: Now, Mr. Sandefur, how many people smoke Brown & Williamson cigarettes in this country?

MR. SANDEFUR: Our market share, at the close of first quarter, I believe, was about 11 percent.

MR. SYNAR: How many of those people in that 11 percent are under 18 years old?

MR. SANDEFUR: I don't know, Congressman, we don't do any research, nor do we market to consumers 18 -- as a matter of fact, my company's policy is, we don't market to consumers under 21 years of age.

MR. SYNAR: You say you've done no research or marketing. That brings me to the New York Times article which I'm sure you're familiar with, dated Saturday June 18, 1994. In the New York Times they said you had, there was a list here of the B&W research projects, one of which revealed "the controversial Ted Bates advertising targeting young smokers never used but still dangerous."

Do you continue to deny you've done no research or marketing --?

MR. SANDEFUR: Congressman, I'm sorry, I couldn't hear your question.

MR. SYNAR: The question is, in the article in the New York Times, they have a list here of the Brown & Williamson research projects of which it is revealed "There is a research document called 'Controversial Ted Bates advertising' targeting young smokers. Never used, but still dangerous."

Do you continue to deny you've never done any targeting or research with respect to children?

MR. SANDEFUR: Congressman, I can't answer that question. I know that we --

MR. SYNAR: You just stated earlier that you've never done it. Now, are you withdrawing that answer?

MR. SANDEFUR: No, sir, I'm not withdrawing that answer. I --

MR. SYNAR: Who is Ted Bates --

MR. SANDEFUR: -- I can tell you this; there was a lawsuit that we won with I believe ABC, who alleged that we were doing that, and I just asked one of my legal counsel to let me know if that was the same Bates study. I can tell you, categorically, that we do not market, we do not market to --

MR. SYNAR: I didn't ask you that, I asked you if you'd done any research in the area of advertising and targeting young smokers.

MR. SANDEFUR: Not to my knowledge and certainly not during my time at Brown & Williamson.

MR. SYNAR: Who is Ted Bates?

MR. SANDEFUR: Ted Bates is an advertising agency, who we no longer use.

MR. SYNAR: Will you provide the subcommittee and the FDA with the research that's referred to in this article?

MR. SANDEFUR: If I can find it, I'll certainly supply it to you. You may already have it, I don't know; but I've never seen it.

MR. SYNAR: Now you criticized my bill earlier, even though it specifically prohibits the banning of cigarettes.

You are aware, I'm sure, Mr. Sandefur, that if FDA determines that Brown & Williamson or any other tobacco companies intended to manipulate or control nicotine in cigarettes or oral tobacco, it will have no choice, under their current law status, the Food and Drug Administration, but to declare your product a drug. And that drugs under the FDA are not allowed to be on the market unless they're "safe and effective."

Now if it is declared a drug because cigarettes are not safe and effective, are you aware that the FDA will have no choice but to ban those cigarettes?

MR. SANDEFUR: That's my understanding, yes.

MR. SYNAR: So why wouldn't you support my legislation that would keep that from happening?

MR. SANDEFUR: Congressman, because I don't think the legislation will do what you want done, purely and simply. I think what, and I take you at your word, that you're not interested in banning cigarettes; so obviously you'd write a bill to put forward to the House and then the Senate that would outright ban the cigarettes.

So I am taking you at your word, that you don't want to ban cigarettes. I'm afraid, however, that your legislation, if approved, would in fact have the effect of banning cigarettes. That's why I oppose your bill.

MR. SYNAR: Mr. Sandefur, no legislation guarantees the ban. My legislation at least leaves it questionable, does it not?

MR. SANDEFUR: Well, I guess it's a matter of perception.

MR. SYNAR: All right. I'd ask the staff to provide Mr. Sandefur with the R.J. Reynolds Tobacco Company letter from Mr. James W. Johnston to David Kessler dated February 28, 1994, and I'd ask unanimous consent that it be made part of the record.

MR. WAXMAN: Without objection it will be made part of the record.

MR. SYNAR: All right, Mr. Sandefur, one last time --

MR. WAXMAN: Wait a minute until that's distributed to him.

MR. SYNAR: Look at the last paragraph on the first page, and let me read it for all those who are listening.

In the early '50s -- this is to Dr. Kessler from Mr. Johnston: In the early '50s, sales-weighted averages of tar and nicotine yields were 36 milligrams and 2.7 milligrams respectively. Most cigarette brands were in a narrow band around that average. Flue-cured tobacco naturally contains 2.5 to 3.5 percent nicotine.

Early tobacco contains 2.75 to 4.0 percent nicotine, and Oriental tobacco contains .5 to 1.8 percent nicotine in the cured leaf. Finished cigarettes generally contain approximately 1.5 to 2.5 percent nicotine by weight less than the natural cured leaf.

So if the natural cured leaf and the natural level of nicotine in flue-cured tobacco is 2.5 to 3.5, and you have spent the last decade trying to develop a plant variety of more than 6 percent nicotine, doesn't that show a deliberate manipulation and a desire to control the nicotine level in tobacco by your company?

MR. SANDEFUR: I don't agree; no, sir.

MR. SYNAR: Thank you, Mr. Sandefur.

Thank you, Mr. Chairman.

MR. WAXMAN: Thank you, Mr. Synar.

We are being summoned to the House floor for the purpose of a vote. We're going to respond to that vote and come back and see if we can finish up this hearing with another round.

[Recess]

MR. WAXMAN: The meeting will come back to order. At this time, I want to recognize Mr. Kreidler.

MR. KREIDLER: Mr. Sandefur, let me go to the health effects. This is an issue that's kind of close to me personally; being a person who has been in that profession for over 20 years, but also hold a master's in public health, is to somewhat be intrigued by one of the comments that you made in your opening statement; and that had to do with your testimony that dealt with, that there is a health risk statistically associated with smoking.

I'm not exactly sure I understand what you mean by statistically relevant here, relative to health risk. Perhaps you could elaborate on that.

MR. SANDEFUR: All right, sir. It's my understanding that the medical community, through autopsies, say that this individual died from lung cancer, let's say. And that that individual may be a smoker. And let's say 80 percent of people who die of lung cancer were smokers. That's a statistical association as opposed to, did smoking cause the lung cancer?

MR. KREIDLER: You know, we often use those types of statistics, and we often associated it with carcinogenic effects, cancer-causing effects, and so forth; and how many people will die if they are exposed to certain things, certain chemicals and so forth.

Is that saying, then, that statistically that if you smoke, statistically you run the risk of dying in the case of let's say lung cancer or something of that nature?

MR. SANDEFUR: I'm saying that there is a risk, and there's a statistical association with the risk; yes, sir. I certainly agree to that.

My concern, Congressman, is that as you know my discipline is marketing, and I know very often that statistics can be very misleading. And that's the reason I'm very suspicious of some of the quotes that -- and not to suggest by any means that the individuals making the quotes don't believe what they're saying; I'm sure they do. But to say that 419 or 430 million people die of smoking as a disease every year, I find that hard to fathom.

But again, I understand that that's based on statistical association, yes, sir.

MR. KREIDLER: Would you say, then, that there is an increased risk to an individual who smokes as opposed to a person who doesn't smoke?

MR. SANDEFUR: I believe there's a risk. Yes, sir, I do.

MR. KREIDLER: Would it be not unfair to say, then, that if you smoke, that then in effect certain people are going to die as a result of smoking that wouldn't have died if they hadn't smoked?

MR. SANDEFUR: Well, see, I wouldn't go that far, because I think smoking is a risk factor, I think diet is a risk factor, I think heredity is a risk factor. I think there are any number of things that, in combination with smoking, may enhance the risk factor, you see.

I'm suggesting to you, Congressman, that I hadn't seen any research, nor have my people, my scientists told me of research that directly links smoking as the cause of lung cancer. And if I had that research, if my scientists came to me and I was convinced that that research was valid, I would be the first person to stand up and say that.

But, see, I haven't seen that and my scientists haven't told me that.

MR. KREIDLER: Well, you know, we make a lot of decisions relative to regulating different substances and so forth in our society, that we've come to the conclusion that statistically we can identify them as a public health risk.

MR. SANDEFUR: Yes, sir, and I understand that, and as I say, we in the industry abide by the laws that Congress enacts. And I think we've crossed that bridge in our warning statements to the American public.

I don't think anybody could have any doubt about what the Surgeon General's warning is when he says "smoking causes lung cancer, heart disease, emphysema and may complicate pregnancy." I think that's pretty straightforward and I don't think there's any confusion about that warning statement.

And I would submit to you, I haven't done the research or ever seen research done, but I would submit to you that the majority of people who smoke are perfectly aware of the risk factors.

MR. KREIDLER: So you wouldn't contest, then, that government has a role when we statistically identify that there are health risks in certain areas? For example, PCBs or some other type of very toxic substance that's in society, when we find so many parts per billion or whatever in water supply or in the air and so forth, that we try to minimize people's risk factors associated with that, that statistically, as you admit and I think that's true for the industry as a whole, that there are health risks associated with smoking, if that is true, then it would seem that from a public health standpoint that we should take steps to make sure that at least we have minimized that risk to what might be arguably acceptable levels?

MR. SANDEFUR: I think that's a decision you, as a United States Congressman have to make, and I agree with your responsibility in that area. I have no concern about that, and I think this committee is going about it the right way, trying to get the information you need to make those intelligent decisions.

My only caution here is that there's a way of going about it that will in fact give you the effect that you want to accomplish.

And I would submit to you that those rules and laws are already in place. I truly believe that. We see consumption in the United States declining anywhere from 2.5 to 3.5 percent a year. We know that people are -- 40 million people have quit smoking. Many people have decided to smoke, made a choice to smoke, and then decided to quit, and they're able to do it.

MR. WAXMAN: Will the gentleman yield to me?

MR. KREIDLER: Surely.

MR. WAXMAN: You seem to say that there's an increased risk if you smoke, of dying from these diseases. You say it's an increased risk in conjunction, perhaps, with other factors. But is that your testimony?

MR. SANDEFUR: I've testified that I believe there's a statistical association with smoking.

MR. WAXMAN: How much of an increased risk is there for --?

MR. SANDEFUR: I can't quantify that, Mr. Chairman. I don't know.

MR. WAXMAN: I guess what bothers me --

MR. SANDEFUR: Because see, that's -- excuse me, I'm sorry.

MR. WAXMAN: I guess what bothers me is that you say that the laws on the books are doing fine, and people are starting to give up smoking; but I think if, as the manufacturer of a product that may have a higher risk than you're willing to admit, such as what all the Surgeons General and the American Medical Association, World Health Organization and all the medical and scientific groups say is the case, if you looked at their reports and reached the same conclusion, would that make you want to do something more than leave things as they are?

MR. SANDEFUR: If I was convinced that more needed to be done, yes, sir; as I said earlier, and I'm willing to meet with you and Congressman Bliley I think wants to be there, to talk about it.

What do we as an industry need to do? If anything. But I would submit to you that the regulatory bodies that the U.S. Government has in place are certainly capable of administering anything new that we need to do, if in fact we need to do anything new.

MR. WAXMAN: I yield back to Mr. Kreidler.

MR. KREIDLER: Thank you, Mr. Chairman.

The fact that -- and perhaps you argue with these statistics and perhaps you'd like to explain why; the numbers are something like 400,000 people annually die of an association with -- associated with cigarette smoking and tobacco use.

That's eight times the number we lost in World War II. That's eight times more than what we lose on our highways each year, I should say, and more than was killed in all of World War II.

I guess I come to the conclusion that those are rather dramatic statistics. If those statistics are valid, then it certainly seems to say to Congress that from a public health standpoint, whatever we're doing right now is inadequate and we need to do more.

Are you saying that what we have in place right now is sufficient but perhaps it isn't being administered and is not as forceful as it should be?

MR. SANDEFUR: That may be the case; for instance, Congressman, I get very concerned when I'm told that children are able to buy cigarettes, because I don't think children should be able to buy cigarettes, I don't think they are well-informed enough to make a choice.

So in that regard, maybe the rules should be challenged in terms of how we are monitoring that particular legislation.

MR. KREIDLER: My dad started smoking when he was 14 years of age, and --

MR. SANDEFUR: My daddy did, too, and smoked for about 45 years, and he's 82 years old -- and he doesn't smoke anymore, but he's doing fine, thank you.

MR. KREIDLER: Well, in 1985 I held my dad's hand when he died of emphysema.

MR. SANDEFUR: I heard you say that last -- and I'm very sorry to hear that.

MR. KREIDLER: But I think it's maybe because of that, and the kind of statistics we have in front of us, that if our institutions, if our rules or regulations aren't protecting some 400,000 people out there right now and doing everything we can as a society to minimize the risk to them, it seems that it would certainly dictate to Congress to at least encourage agencies that have the authority right now to be more forceful or to institute regulation they presently aren't doing.

Thank you, Mr. Chairman.

MR. WAXMAN: Thank you, Mr. Kreidler.

Mr. Sandefur, I want to discuss Project Aries, and I have a chart I'd like to have held up.

T.F. Riehl was Vice President for Research and Development at Brown & Williamson. He was involved in the development of Project Aries. He was with you when you testified last time.

MR. SANDEFUR: Yes, sir.

MR. WAXMAN: He also made a presentation on this Project Aries at a 1984 BAT Smoking Behavior Marketing Conference; and according to the proceedings of that conference, Aries used the novel filter that I quote him in saying: "Achieved tar reduction by ventilation alone and thus provided unfiltered smoke at low tar deliveries."

Specifically, "Aries smoke chemistry differs because it provides nicotine enrichment in later puffs."

I find the statement about Project Aries to be very striking. Mr. Riehl testified with you, and he said that you at Brown & Williamson don't design cigarettes -- you design cigarettes for taste but not for nicotine.

Yet in this Project Aries he said, specifically, that you were working on a cigarette that provides nicotine enrichment in later puffs. I think there might be a conflict here, and I want to see how you can reconcile these statements -- you don't design for nicotine, but you work on a cigarette specifically designed to provide nicotine enrichment in later puffs.

MR. SANDEFUR: As I understand it, and obviously I don't mean to speak for Mr. Riehl, he can certainly testify if you wish for him to or answer any questions you may have, and I'll be more than happy to ask him to give you a written response to that question.

But as I understand it, what we're talking about here is taste enhancement. Because as I've testified before, nicotine is a very important constituent of the overall taste of a cigarette.

Now, I'm familiar with Aries, and I can tell you that Aries as a project was the forerunner, if you will, of a project that we had during my watch at Brown & Williamson.

MR. WAXMAN: Was that Project Gemini?

MR. SANDEFUR: No, sir, that was Project Airbus.

Now, Project Airbus was a competitive response to R.J. Reynolds' Premiere cigarette. As a matter of fact, the morning that I went to work after Reynolds had announced that they were introducing this product, I asked our scientists when was the earliest possible response that we could make, realizing that Reynolds had supposedly commercialized something that was going to be reduced sidestream, or the elimination of sidestream, and the taste or satisfaction that we were looking for with virtually no tar and very low nicotine.

Our people were never able to commercialize it or bring it to commercialization; but by the same token during that period of time, and I guess it was about a six month period, R.J. Reynolds took all kinds of grief from everybody that's been on the anti side that "Look, you're doing something wrong."

And Mr. Chairman, I think that's one of the quandaries that we in the tobacco industry are placed in; whether it be Y-1 or a Premiere-like cigarette.

It seems to me it's a Catch-22; no matter what we do in response to what the Surgeon General may say at the time or think at the time or what the health community may think or say at the time, we go along that path, and then all of a sudden we're criticized for going down that path.

MR. WAXMAN: Is it your testimony, then, that Project Aries and Project, Airbrush was it?

MR. SANDEFUR: Airbus was the name of it.

MR. WAXMAN: Airbus, or for the --

MR. SANDEFUR: And it was very similar in nature to Reynolds'.

MR. WAXMAN: Or the Y-1 project. Were those done in response to the Surgeon General and the health community's concerns?

MR. SANDEFUR: As I have stated previously, the Y-1 development was because of the opinions of the Surgeon General, the National Cancer Institute, the U.S. Department of Agriculture as well as the Herner Committee in Washington, very respected scientists such as Giogori were encouraging the industry to try to develop a lower tar cigarette with a moderate level of nicotine; and that's why we did it. Yes, sir.

MR. WAXMAN: How do you reconcile Mr. Riehl's statement: Nicotine enrichment in later puffs? Sounds like he's trying to figure out how to be sure that the nicotine gets through even though -- the tar.

MR. SANDEFUR: I really can't answer that question, but I will be more than happy to ask Mr. Riehl what he means specifically. He's still an employee of Brown & Williamson and he'll get back to you in writing on the answer to that question.

MR. WAXMAN: Project Aries is an example of changing the design of a filter to let more nicotine through. Did your company ever investigate, test market, or commercially produce other filters that were designed to or had the effect of letting more nicotine than tar through?

MR. SANDEFUR: Not to my knowledge, but the company may have done before my time or there may be some design that I'm unfamiliar with, Congressman.

MR. WAXMAN: Over the years, many benefits have been claimed for tobacco and I'm curious as to whether you see any benefits of smoking other than taste. Do you believe that smoking is relaxing?

MR. SANDEFUR: It's certainly relaxing to me; yes, sir.

MR. WAXMAN: Is it useful in relieving stress?

MR. SANDEFUR: It is to me; yes, sir. I'm giving you my personal opinion there.

MR. WAXMAN: But how about for others? Has that impact on people?

MR. SANDEFUR: I've certainly heard that; yes, sir.

MR. WAXMAN: Is it helpful in losing weight?

MR. SANDEFUR: I've heard that as well. I don't think it helped me any, but I've heard that it helped some people.

MR. WAXMAN: Well, you've heard that. Do you believe it?

MR. SANDEFUR: Well, I don't know; it's like my momma used to tell me that smoking would stunt my growth. I don't know that I'd have grown any more if I had not smoked, but I think --

MR. WAXMAN: Well, I always wonder if I would have grown some more if I hadn't smoked.

But what is your company's view on these subjects? You're giving us your personal one --

MR. SANDEFUR: Right.

MR. WAXMAN: What is your company's view on the subject of --

MR. SANDEFUR: I think my company's -- excuse me.

MR. WAXMAN: What's your company's view on whether smoking is relaxing?

MR. SANDEFUR: I think our company's view would be yes, it is relaxing.

MR. WAXMAN: How about useful in relieving stress?

MR. SANDEFUR: Yes, I think my company would take that view.

MR. WAXMAN: And losing weight?

MR. SANDEFUR: I don't think I've ever heard our scientists give a view of that; no, sir.

MR. WAXMAN: Okay.

Well, I want to thank you for your testimony. And I want to tell you, this discussion we've had about getting together with the other chief executive officers and discussing this issue is not something I just say in passing.

MR. SANDEFUR: I understand that.

MR. WAXMAN: I've introduced legislation for years on the smoking issue because I believe as a matter of national policy we ought to discourage people from smoking, and I'm especially concerned about young people. But the tobacco industry has consistently opposed any legislation that I've introduced.

If there is a chance for a new cooperative relationship where we can look at these problems and try to work together, I welcome it; I want that to be the possibility before us.

I said that in the meeting with the chief executive officers a couple months ago, and I say it to you, even with a greater sense of excitement because you've indicated your willingness to cooperate in this way as well.

MR. SANDEFUR: I will certainly encourage my counterparts at the competition to do that, and I would certainly like to make an ally out of the Chairman. I don't think it serves anybody's purpose to have going on what we've got going on.

MR. WAXMAN: I do want to make some underscoring of some things we've learned today, even though you haven't been particularly responsive to some of those points for various reasons; Brown & Williamson and BAT have studied the pharmacological properties of nicotine for 30 years, and its scientists have found significant drug-like properties of nicotine. I think that's important, and with the documents you've given us I think it's very clear that that's what has happened.

And this Project Wheat, which we've also learned about today from these documents, identified the market need for a low tar, high nicotine cigarette for those with an inner need for nicotine.

Now maybe inner need becomes one of those terms like taste, whatever it may mean may be determined by the one using it; but it sounds to me like an inner need is something different than the taste. It sounds like something to which people get a pharmacological reaction.

And then I do want to point out that when we look at that Project Truth and Project Janice going on at the very same time, one intended to convince the American people that it wasn't a danger to smoke and the other in fact uncovering these very dangers.

I know that was before your time, but I find that very distressing, to think that a corporation would be going through that kind of a process; on the one hand misleading people, at the same time that they're learning the very facts that they're trying to tell people don't exist. And I would hope that you and others would see that as something that would be considered irresponsible.

MR. SANDEFUR: Mr. Chairman, I appreciate your comments. I can tell you that during my tenure or career with BAT, that BAT is a very honorable company. I can tell you categorically that I don't think that the management of BAT that I've been exposed to would intentionally mislead anyone.

I would like to have the opportunity to get back to you on some of these studies that you are obviously very interested in, such as the Wheat study. Quite honestly, I didn't know of the study until I came here today.

And I'm sure that if my scientists would have thought that that was very important in terms of the way we were marketing or designing our cigarettes, they would have brought that to my attention. But I will ask them to take a view of that particular study; and I'm talking about Brown & Williamson scientists.

Take a view of that particular study, and answer it in writing back to you as chairman of the committee.

MR. WAXMAN: Okay. Mr. Bliley, any further comments or questions?

MR. BLILEY: Mr. Chairman, I just want to thank Mr. Sandefur. I think you have been most candid. I think you've tried to answer every question that has been put to you by this committee, and you've been an exemplary witness, and I thank you, sir.

MR. SANDEFUR: Thank you very much.

MR. WAXMAN: That concludes the hearing for today, and we stand adjourned.

[Whereupon, the subcommittee adjourned.]