No smoke screen
RJR accused of violating tobacco settlement
Posted: Wednesday April 25, 2001 6:15 PM
By Mike Fish, CNNSI.com
Brace yourself, race fans. The sugar-daddy of Winston Cup racing, R. J. Reynolds Tobacco Co., stands accused of violating the 1998 multi-billion dollar tobacco settlement with state governments by advertising year-round at race tracks. If the signage is struck down, it could cause RJR to re-evaluate its financial support of racing, which industry sources believe approaches $40 million a year. R. J. Reynolds, through its Winston brand, has long been a major supporter of both the NASCAR stock car racing and NHRA drag racing series. The Winston Cup has been the championship trophy of NASCAR's premier series since 1971, with the company's support of the point fund, alone, growing from $100,000 the first year to more than $13 million this season. Clearly, the relationship is fruitful to the parties. Studies reveal that Winston is far-and-away the No. 1-sponsor, in terms of on-air mentions, during televised NASCAR racing. That exposure alone would cost Reynolds countless millions, if it were still allowed to buy the airtime. So, even though this might appear a minor legal flap, you have to wonder about the Winston name in NASCAR if it can't get full exposure. Simply put, the tobacco giant stands accused here of trying to pull a fast one. And the courts are being asked to enforce the tobacco settlement, as it pertains to outdoor signage, as well as awarding any relief deemed appropriate.
In response Tuesday to separate suits brought by attorneys general in California, Arizona, New York and Washington, the Reynolds legal team acknowledged existence of the signage at various tracks but denied that its violates the 1998 agreement.
The issue really isn't that complex.
Attorneys for the states argue that R. J. Reynolds has matter-of-factly violated a clause in the National Tobacco Settlement, which dictates that tobacco companies can post outdoor advertising 90 days before and 10 days after a sponsored motor-sports event.
An event, in their eyes, is a single Winston Cup race.
Officials for the tobacco giant contend their sponsorship is of the entire NASCAR Winston Cup and NHRA Winston Drag Racing series, which start in February and run through November. So their signage, to the chagrin of states, is a permanent fixture at major racing facilities from coast to coast -- some of which is seen by passing motorists and TV audiences.
Alabama has not filed suit, but permanent Winston Cup Series signage was visible from the main road leading to last weekend's Talladega 500.
"I think they're just trying to keep those signs up as long as they can," said Tim Nelson, Arizona assistant attorney general. "The bottom line is if you describe the event as the entire series, then there is no reason to even have a 100-day window because it'd be a year-round deal. That’s not the agreement.
"The issue is how hard they're pushing the envelope in terms of what they agreed to do. And we think they're pushing too hard."
Anti-smoking advocates believe the tobacco giant is attempting to circumvent rules against TV advertising through its costly sponsorship of motor sports.
An October 1964 report by two British tobacco industry researchers, Sir Philip J. Rogers and Geoffrey F. Todd, showing that the American tobacco industry:
1. Acted in collusion and conspired for years to mislead the public about the perils of smoking.
2. Had decided by late 1964 not to conduct research into smoking and health, fearing they might be "forced to admit in lawsuits that their experiments have caused cancer in animals."
3. Committed a criminal act by having lawyers take over all smoking-and-health decisions.
A "committee of lawyers exercises close control over all aspects of the problems."
"This Committee is extremely powerful, it determines the high policy of the industry on all smoking and health matters - research and public relations matters..."
4. Recognized the role of nicotine in the addiction process
"a reasonable amount of nicotine was necessary in a cigarette,"
"that people smoked because of the nicotine."
"It is important to keep up the nicotine content of the smoke..."
5. Conspired to enact a federal cigarette labelling & advertising law that:
preeempted states from enacting labelling & advertising laws,
allowed manufacturers to continue disclaiming tobacco hazards, and
protected manufacturers in liability law suits.