Cigarette giant began years ago to fight smoking bans

By Liz Benston

Tuesday, Oct. 24, 2006 | 7:12 a.m.

As Nevadans vote on a pair of statewide smoking restrictions, tobacco companies that are actively fighting smoking bans and tobacco tax increases in other states are standing on the sidelines here.

And that's how it might have looked in the mid-1990s, too, when anti-smoking advocates were attempting to lobby the Legislature to pass smoking restrictions in Nevada and the federal government was weighing a national ban on smoking in the workplace.

At the time, it turns out, cigarette maker Philip Morris was quietly planting seeds that would help business owners such as casinos and bars fend off future smoking bans.

The Las Vegas and Reno-Sparks chambers of commerce were listed as the sponsors of a 1996 study concluding that a smoking ban could cost Nevada's economy as much as $3.5 billion and that as many as 50,000 jobs could be lost.

Unknown to the public at the time, the study - the first and only research of its kind attempting to quantify the economic effect of a smoking ban in Nevada - was commissioned by Philip Morris.

It came at a time when the nation's largest tobacco company was engaged in a broader lobbying effort with gaming companies to thwart workplace smoking prohibitions sought by the Occupational Health and Safety Administration.

At the time, Philip Morris was encouraging building engineers - even buying advertisements in industry trade journals - to improve casino ventilation systems to better clear obvious smoke from gambling areas, thereby fending off campaigns for smoking bans.

"The tobacco industry stays behind the scenes in Nevada," said Larry Matheis, executive director of the Nevada State Medical Association and an anti-smoking advocate. " It lacks credibility and that's why it has to fight through other means."

Those other means began years ago. During the 1995 Legislature, lobbyist Sam McMullen represented both the Las Vegas Chamber of Commerce and Philip Morris. Prominent gaming lobbyist Harvey Whittemore also lobbied for No. 2 cigarette maker R.J. Reynolds. Each was lobbying successfully to keep casino smoking restrictions at bay.

While smoking bans were gaining footholds elsewhere around the country, the 1995 Legislature passed a bill pleasing to the tobacco industry because it prevented local authorities from passing more restrictive smoking policies than allowed by state law.

"Nevada was considered by Philip Morris to be their greatest success in the country," Matheis said.

Internal memos made public as part of the 1998 settlement with states that sued tobacco companies over the alleged cover-up of smoking health risks document how Philip Morris paid a consultant $25,000 to commission the economic impact study and find sponsors to attach their names to it.

"The Las Vegas Chamber of Commerce and the Greater Reno-Sparks Chamber of Commerce have both been active in opposition to the proposed (OSHA) workplace ban and are interested to see if they are accurately representing their members on this important issue," according to a Philip Morris memo on research grants at the time. "The bulk of the funds will be directed to a University of Nevada professor, who is conducting the study, with a smaller amount set aside to be used to publicize the results."

A separate memo states that two Philip Morris representatives "worked diligently to make sure the correct protocols and appropriate questions were employed in the national and state economic opinion surveys that were conducted."

The economic impact study, conducted by UNR economics professor John Dobra, assumed that if 5 percent of smokers stopped visiting Nevada because of a smoking ban, the casino industry's growth would decline by as much as 4 percent and as many as 7,900 jobs would be lost in the first year alone.

When asked Monday about the study, Dobra said he was unaware of Philip Morris' involvement and that he stood by the results.

The assumptions used in the study were obtained from casinos and related to how many customers tend to smoke and how much gambling revenue might have dropped had gamblers been forced to take smoking breaks outside, he said. By some studies, half or more of casino gamblers are smokers.

Such assumptions about gamblers' behavior haven't changed much over the years and were not influenced by Philip Morris, Dobra said.

Officials at the Las Vegas Chamber of Commerce, who oppose Question 5 and support the more lenient Question 4 smoking initiative on the November ballot, said they weren't aware of the 10-year-old study or Philip Morris' involvement.

The chamber's government affairs director, Christina Dugan, said the chamber is opposing Question 5 because it could give local governments the power to impose stricter smoking bans than the state allows, creating a situation where a business in Las Vegas is complying with different rules than a sister location in, say, Henderson.

Business owners aren't complaining about billions of dollars in lost economic activity this time around because Question 5, unlike a total ban, would exempt casinos from a smoking ban, instead prohibiting smoking in taverns, convenience stores and grocery stores with slots.

The Nevada Tavern Owners Association says if Question 5 passes, operators will lay off thousands of food servers and kitchen workers because they would rather close their kitchens than ban smoking and lose the smokers' business.

Question 5 would ban smoking in bars that also have a food-handling license - a figure that represents a majority of Nevada bars - while continuing to allow smoking in bars that don't serve meals.

The Philip Morris memos also document a concerted lobbying effort with casinos and the American Gaming Association in the mid-1990s, concurrent with the OSHA threat.

In a memo to higher-ups, a Philip Morris lobbyist refers to meetings with gaming association Chief Executive Frank Fahrenkopf and "a presentation to 20 high level executives from about 20 properties in Las Vegas."

The tobacco industry was pushing for ventilation standards and air-filtration systems that would accommodate smokers, and the lobbyist reported back to her bosses that the presentation "was very well received."

The gaming industry eventually lobbied for air-ventilation standards that would allow for the presence of tobacco smoke.

This year, R.J. Reynolds is contributing money to rival ballot initiatives in Arizona and Ohio aimed at counteracting smoking bans in those states.

Tobacco companies aren't spending any money to fight either Question 4 or 5, nor have they weighed in on the initiatives. R.J. Reynolds did not return a call for comment, and a Philip Morris spokesman declined to elaborate on his company's lack of involvement this year.

"Philip Morris did a great deal of prospecting in the mid-1990s, looking to get various hospitality associations involved in its cause," Fahrenkopf said this week. "Those memos refer to those efforts and (Philip Morris') hopes of working with us, but neither I nor the AGA ever participated in any of the programs presented to us."

American Gaming Association Executive Director Judy Patterson said it lobbied on its own accord for more sophisticated air-filtration systems that can suck up smoke.

"We believe there will be a negative impact (from smoking bans), but we are committed to providing good indoor air," Patterson said. "Our members need to look at these state-of-the-art indoor treatment ventilation systems."

Last year the advisory group that sets air-ventilation standards adopted by building codes nationwide determined that no filtration system can effectively remove the health risks associated with second-hand smoke.