September 16, 2018

SERPICO II (profanity alert):

The Man Who Knew Too Much: Angrily, painfully, Jeffrey Wigand emerged from the sealed world of Big Tobacco to confront the nation's third-largest cigarette company, Brown & Williamson. Hailed as a hero by anti-smoking forces and vilified by the tobacco industry, Wigand is at the center of an epic multi-billion-dollar struggle that reaches from Capitol Hill to the hallowed journalistic halls of CBS's 60 Minutes. (MARIE BRENNER, MAY 1996, Vanity Fair)

According to Bergman, "It took Jeff a long time to come out and decide that he wanted to tell his story. He used to say, 'Lowell, I want to do this, but I need support. I need my wife there. We can't do it yet, because Lucretia is not there.'" Wigand had continued to keep secrets from her: In May, the Wigands had come to New York as guests of 60 Minutes. It was not obvious to Bergman that Wigand had not told Lucretia that he intended to be interviewed. "He expected me to explain it to her," Bergman told me. All summer long Wigand debated about his public role, and Lucretia grew increasingly panicky. Meanwhile, he continued to advise Wilmer, Cutler & Pickering regarding Philip Morris's suit against ABC. He was even asked to testify for ABC if the case should ever go to court. Bergman read his name on a wire-service story. "I called him and went ballistic! I said, 'Do you understand that B&W will now go to court to keep you from testifying? Soon every news outlet in America will be calling you.'" Bergman had begun to corroborate Wigand's story from the taped interview he had made; he knew that the Merrell Williams B&W documents supported Wigand's assertions about addiction, disease, and the role of various individuals. "I wasn't doing a personality profile. I wanted to find out what he knew that was different."

In July, Bergman began to get concerned. "I could see right up front that Jeff was going to wind up testifying. Philip Morris knew about him, the Justice Department knew about him, and so did the F.D.A. I called up Ephraim [Margolin, a lawyer friend who was advising Wigand by this time] and said, 'Your client may wind up with a court order not to speak. Let's get the guy's story on-camera and lock it up!' Ephraim had my verbal understanding that we wouldn't run it until he was ready. Jeff was worried about homesteading his house in case he lost a breach-of-contract suit. He showed up in New York and said, 'Ephraim wants you to write him a note.' So I did." The note stated that CBS would not run the interview without Wigand's permission, and that they would reconsider the matter on September 3. It was a harmless exercise, Mike Wallace later told me he believed, intended to keep a source happy and calm.

Bergman told me, "I knew it was going ot take months to check out what he had to say. And I thought, F[***]! If he is going to testify in the ABC case, then it will be out there on Court TV in October or November. I had already yelled and screamed about him listing his name. I said, 'Great, you want to trust these people at ABC. What about this talk about ABC settling the lawsuit with Philip Morris?' I told him, 'The difference between ABC and CBS is that I will raise holy f[***]ing hell if anything happens at CBS."

On September 12, Mike Wallace was asked to attend a meeting with Ellen Kaden, the CBS general counsel, Bergman, then president of CBS News Eric Ober, 60 Minutes executive producer Don Hewitt, and Phil Scheffler, Hewitt's second-in-command. "I think we have a problem," Kaden said, and used the phrase "tortious interference," which she said involved persuading someone to break a contract with another party. Because Wigand had a confidentiality agreement with B&W, she said, CBS could be "at a grave, grave risk." She was proposing something unprecedented in the history of CBS News--stopping an important history in midstream for fear of a lawsuit that hadn't been threatened. Someone at the meeting voiced concern about an aspect of the story that showed Andrew Tisch, the chairman of Lorillard and the son of CBS chairman Laurence Tisch, with Thomas Sandefur swearing before Congress that nicotine was not addictive. "How do you expect us to go on the air with a piece that might put the chairman's son in jail?" someone said. Hewitt, by disposition noisy and opinionated, was muted, as were Ober and Wallace. Hewitt later recalled that he had had no intention of "playing cards with a stacked deck." He advanced none of the First Amendment arguments considered routine, such as: How could you have a confidentiality agreement when there were thousands of pages of supporting documents on the Internet? And Hewitt made no offer to press the issue with his boss, Larry Tisch. Bergman, who was on his way to London to interview bat executives, was told to cancel the trip.

Don Hewitt's relationship with Larry Tisch soured after Tisch got control of CBS in 1986. "I am not proud of it anymore, but Mike Wallace, Walter Cronkite, and I were the cheerleaders for Larry buying the network," he said. "The night Tisch bought CBS, we were all up at our friend Mollie Parnis's slapping him on the back." A week later, Hewitt went to see him. "I said, 'Larry, we have been pretty good friends, and now I need a favor.' I said, 'You have handed me all of this money. Tell me what to do with it. Lead me to a good financial advisor. Who knows better than you?' I got the brush-off. Later I heard he said, 'I not only pay the son of a bitch all that money--now he wants free business advice!'"

The relationship between Hewitt and Tisch, who are both 73, grew icy, according to Hewitt, when Tisch realized that he could have no editorial influence on 60 Minutes--an assertion that Tisch denies. In fact, the two men shared certain personality quirks: Hewitt was as voluble as Tisch and, like his new boss, had a desire for respectability. Hewitt's peppery letters and messages were famous in the city, as was Tisch's pose of modest conviviality. A few years after Tisch became C.E.O., 60 Minutes produced a searing report on the American Israel Public Affairs Committee that Tisch didn't like. "He stopped talking to me at that point," Hewitt recalled. "I went to a reception that Warren Phillips [publisher of The Wall Street Journal] had at the River House, a room full of people like Punch Sulzberger and Kay Graham. I walked in and said to Larry, 'Hey, boss, how are you?' He said, 'Don't you "Hey, boss" me.' He turned his back and walked away! We next did a story on Temple Mount in which we say that the Jerusalem police got out of hand, and somebody tells me that when Larry was asked about it his answer was 'Don't ask me. Ask Horowitz and Wallach, the two self-hating Jews who changed their names.'... We were the most profitable broadcast in the history of television. The f[***]er got out of here with all that money only because we kept his company afloat." According to Tisch, "This is nonsense! Jesus! This poor fellow has a complex. So many things have been attributed to me that I never said. What would I care what Don Hewitt's last name was originally?"

In the midst of the furor over the Temple Mount piece, Hewitt said to Tisch, "Larry, you are, in effect, our publisher. It is up to you to defend us." Tisch answered, "I am not your publisher." "That episode with Temple Mount unsettled Larry," a close friend of his recalled. "He had no idea that as the new proprietor of CBS News he had to respect his news division and their editorial judgment."

After Tisch took over CBS, the news division was stripped of a good deal of its power and reputation. At a time when ABC was expanding its news operation, Tisch cut the CBS budget drastically. He sold off the lucrative CBS record company, refused to invest in cable, and was outbid on broadcast rights to the N.F.L. football games that were the lead-in to 60 Minutes. "You have to understand," a friend of Tisch's told me, "Larry likes money. Money is a game for him!"

The relationship between CBS and Tisch's tobacco company, Lorillard, became a vexing problem for the news division. According to someone who knows Tisch well, when he bought Lorillard, in 1968, he viewed it only as a potential investment. "Years ago, the Tisch family was not afraid of liability. If he had asked his technical people, 'Am I in any danger?' he would have gotten the typical answer back: 'You can't prove anything in a liability case since the surgeon general forced the companies to put a warning on the packs.'" Tisch could not have forecast then the sweeping change in tort litigation, the possibility of immense jury awards. There was no imagining in 1968 how medical costs would soar in a few years. "None of this was on the horizon," Tisch told me. "I couldn't tell you today whether or not I would have bought Lorillard 30 years ago.... There is no clear-cut proof about addiction. I am not a scientist. I never smoked. I take a drink, but am I an addict? Liability suits? This is all pure speculation. I hate it when people tell me what I have been thinking."

Lorillard became an immense cash bonanza for the Loews Corporation--the parent company controlled by Tisch and his brother, Robert--earning approximately $700 million a year. For several of Tisch's friends, a key to his personality can be found in the controversy that tore apart New York University Medical Center in 1989. Tisch was the chairman of the university's board of trustees, and it was believed that he would give a substantial gift. He announced that he and his brother would donate $30 million but with one proviso: the hospital would have to be renamed in their honor--a proposal which caused an outcry in the press. "Naming a hospital after tobacco men is just too ironic," Dr. William Cahan, a prominent surgeon at Sloan-Kettering, said in May 1989. "Around town, the University Hospital is becoming known as Lorillard General." But the hospital gave in to Tisch's demand. According to Tisch, "There was not a great a deal of negative feeling. I only received one or two letters about it. I thought the family was doing the right thing.

Lowell Bergman arrived at the Wigands' red brick house late in the afternoon on September 15. He was deeply concerned about the New York meeting and its ominous implications. His inner radar told him something was way off in the CBS decision, but he was a corporate employee. If he stormed out in a rage of protest, Wigand would be left unprotected. In the wake of ABC's recent settlement in the Philip Morris suit, Wigand felt doubly vulnerable and exposed, because his name was on the witness list. He said, "They're going to sue me, and I don't have any money." During dinner that night, Bergman received a phone call from Jonathan Sternberg, a CBS lawyer. "Leave that house right now," he told him.

At the end of September, Bergman spent a long weekend cutting a version of the B&W exposé. "I wanted to show Mike, Don, and Eric Ober exactly what it was CBS News wanted to kill." Bergman screened it for the three men that Monday. He recalled, "Hewitt was jumping up and down, yelling, 'Pulitzer Prize!'"

Soon after, Bergman ran into Phil Scheffler in the hall. The show's managing editor looked somber. "All he said to me was 'Stop!' in a loud, booming voice," referring to Bergman's reporting on Wigand.

In the research files of Nexis, the information-retrieval service, there are 220 newspaper and magazine stories that have mentioned "tortious interference" since CBS News made the decision not to allow the Wigand segment to go on the air. It is commonly believed that Tisch, who was in the midst of talks with Westinghouse concerning a merger with CBS, would not entertain the possibility of the threat of a tobacco-company lawsuit. Tisch had witnessed personally the consequences of tortious interference. In 1983 he had been brought onto the board of Getty Oil by Gordon Getty. Several months later he and Getty toasted a bid from Pennzoil to acquire Getty--a bid that would later be topped by Texaco. Pennzoil sued in a famous case in which Tisch testified, but Texaco was forced into temporary bankruptcy when Pennzoil won a record-breaking settlement. Still, Tisch denies that this experience had anything to do with the CBS decision. "What I went through had nothing to do with the B&W episode. I read about it in the paper, the same way you did," Tisch told me.

It was not widely known that a complex financial deal was going on at Lorillard about the time Bergman was trying to salvage the Wigand interview. At the end of 1994, the Federal Trade Commission had ruled that B&W had to sell off its discount, or value-brand, cigarettes--Montclair, Malibu, Crown's, Special 10's, Riviera, and Bull Durham--for anti-trust reasons. Lorillard was a logical buyer because, although it controlled close to 8 percent of the tobacco market with brands such as Kent, Newport, and True, it was decidedly weak in the area of discount cigarettes. The potential acquisition of Montclair and the other brands would round out the Lorillard product line and increase cigarette sales by more than five billion units. While the acquisition was being studied inside Lorillard, Westinghouse was negotiating for a merger with CBS, and speculation within 60 Minutes was focused on the effect a possible lawsuit would have on the merger.

By mid-October, the Liggett Group believed it was the high bidder for the B&W cigarettes, according to a source close to the case. Just before the deal was ready to close, the general counsel for Liggett suddenly could not get the B&W lawyers on the telephone. He was stunned when he discovered that B&W had sold the cigarette brands to Lorillard. George Lowy, an attorney who represented B&W in the divestiture, has said, "Lorillard's deal was financially superior." Liggett is considering bringing legal action against B&W. The F.T.C. filing on the sale is unusual; some nine pages have been blanked out. The price of purchase and number of bidders are deleted. The deal was announced in late November, three weeks after 60 Minutes killed its original story. But Tisch recently told me, "I don't know anything about it. I have nothing to do with Lorillard. I was spending my full time at CBS." Ironically, it is possible that the suit Liggett may bring would be for tortious interference.

In November, no one at 60 Minutes was aware of the shuffle that was going on behind the scenes with the B&W brands. "I knew all kinds of litigation was possible," Bergman told me. "I kept saying to people, 'You are making news decisions in a corporate atmosphere where there is no appetite for this kind of story. There is possible perjury on the part of the son of the owner trying to sell an asset at a premium price where the consequences of the story might affect the stock price. Think how history might record this!'"

By brushing against Big Tobacco, Tisch, Wigand, Bergman, Hewitt, and Wallace were all soon lost in a thicket of hidden dangers. Wigand was still oblivious to the gathering perplexities and the corporate forces arrayed against him. As far as Wigand was concerned, said Bergman, "I was the face of 60 Minutes. I was there holding his hand when his wife freaked out." As for Bergman, he had worked for a year and a half to bring in one of the most important stories of his career, and by doing so he had put his employer and his future in jeopardy. Hewitt and Wallace were millionaires many times over, yet their public acquiescence to CBS's reluctance to air their story threatened to tarnish their distinguished careers.

"In the end, I made the call to Wigand to tell him that management had made the decision to kill the show," Mike Wallace told me. "Lowell did not have the heart to do it." Bergman was distraught: "My work depends on my word. We had never indicated to Jeff that there would be any problem." The decision to kill the segment, Wallace said, marked the "the first time in 28 years that Don and I saw something differently." Hewitt, according to 60 Minutes sources, was attempting both to please the authorities and to act like a newsman, a position that became known as "the Hewitt straddle" in the office. However angry Wallace was, he told friends he was too old to quit on principle, and he did not understand why Hewitt was siding with management.

Hewitt called a meeting of the staff. "This is not a First Amendment issue," he said, but several people in the room strongly disagreed with him. "General counsel believes we have broken the law." Suddenly Mike Wallace burst in and screamed at Hewitt, "I understand you have just said we should not have pursued the story!"--which Hewitt had not in fact said. "Who told you that? If that is what you think, I am quitting!" Hewitt said and stormed out of the room.

In November, Hewitt decided to run a version of the B&W story without a Wigand interview. Wallace prepared a news piece for the Friday before the show was to run. It was Wallace's intention to broadcast management's decision, but when he saw the show, he realized his work had been cut by the CBS lawyers. In the hall he confronted Ellen Kaden. "Did you tell Larry Tisch about the Wigand interview? Is that why the piece was killed?" Kaden denied it. Wallace was relentless. "It doesn't make sense. You are his general counsel. Why would you not have told him?" Wallace later recalled that Kaden started to cry, a story she has denied. Kaden had sought advice from an outside counsel, First Amendment specialist Cameron DeVore, but she refused to show Wallace any of the memos he had written her. One former CBS executive surmised that no one at CBS management was willing to take responsibility for killing the Wigand interview, and Kaden was left to take the fall.

Hewitt told a New York Times reporter that the new version was "better, I think, than what we had before." When an Associated Press reporter called Bergman for comment, Bergman told him angrily, "The versions are apples and oranges." Wallace was enraged when he read a Times editorial accusing the program of betraying the legacy of Edward R. Murrow. "I don't know if things will ever go back to normal," one correspondent said. "The fact is," Wallace told me, "that Don and I had a difference of opinion about whether we should or should not push to get this thing on the air. It turned bloody and icy from time to time."

Except for Wallace, not one correspondent picked up the telephone to call Bergman. Wallace and Morley Safer were raging at each other. Safer even issued a statement to the press attacking Wallace and Bergman for making an agreement with Wigand. The feud at 60 Minutes offered a rare view inside the psychodynamics of TV news. "It became poisonous and contagious, with many people wanting to hang Lowell," CBS producer George Crile said. In a fit of pique, Don Hewitt told several staffers to distance themselves from Bergman. Soon a reaction developed within the office. The staff felt as if it were living in a Potemkin village. Their very integrity rested on their ability to tell a story accurately, despite confidentiality agreements. Ellen Kaden would later tell friends that she was furious that Wigand's identity had been leaked to the Daily News. She blamed 60 Minutes for it and for the attacks against her in the press. It was Kaden's belief that she was only doing her job, trying to prevent CBS from entering the nightmare of tobacco litigation that ABC had endured. She later recalled learning of the million pages of red paper that Philip Morris had delivered to ABC--the color red could not be photocopied--and noted with alarm that a Virginia judge had ruled that this was not an abusive tactic.

Finally got around to watching the typically great Michael Mann version of this story--The Insider.  Like all of the best stories, it is fundamentally a love story between two men, in this case, Jeffery Wigand and Lowell Bergman.  While it is not detailed in this story--which is cited as the basis of the film--Bergman ended up becoming Wigand, the insider who had to wrestle with ethical questions before revealing corporate malfeasance.  And while tobacco companies are low hanging fruit, the fact that the company that Bergman informed on is one of the most important institutions of our "free" press makes for compelling viewing.  The press is, after all, afforded nearly unique constitutional protections for what is ultimately a business enterprise (matched only by the gun industry) and the combination intertwines awfully uneasily on the evidence here. We have granted them special treatment on the basis of their serving the public good without necessarily considering the degree to which they are driven by their own private good. In the best of circumstances the two coincide.  In the worst, they are diametrically opposed.

Posted by at September 16, 2018 8:07 AM