PROFITS OUTWEIGHED SAFETY, EX-TOBACCO RESEARCHER SAYS

A former Philip Morris research director testified yesterday that
studies on cigarette safety routinely took a back seat to profits.

William Farone, who was director of applied research at Philip Morris
from 1977 to 1984, said he went to work for the nation's largest
tobacco manufacturer in 1976 because developing a safer cigarette
"seemed like a pretty good thing to do."

But he said the company wasn't dedicated to improving the safety of
cigarettes, despite widespread acceptance there that smoking led to
health problems.

Research recommendations that increased company profits would be put
into practice within months, he said. But research that only appeared
to offer health benefits - and no profitable gain - "would be dragged
on for years, and there would be hurdle after hurdle that we would
have to go through to even keep the project alive," Farone said.

He said the company did all its live-animal testing in Europe because
of an agreement with other tobacco companies and the fear results
could be used against the company in lawsuits.

Farone's testimony in Washington state's lawsuit against the tobacco
industry follows a videotaped deposition played earlier this week by
another former Philip Morris scientist, who invoked his Fifth
Amendment right against self-incrimination more than 150 times rather
than answer any questions about his work at Philip Morris.

Farone frequently referred to meetings or conversations with
then-colleague Thomas Osdene. He said Osdene was the one who told him
of the tobacco industry's agreement not to compete on health and
safety issues.

"They had decided not to do that because it would lead to the early
demise of the industry," Farone said.

He said the company - and the entire industry - feared that
competition on health issues, or research into that area, could lead
to more regulation and more lawsuits, eventually driving the companies
out of business.

Nicotine addiction testing was allowable, though, Farone
said.

"Dr. Osdene explained that wasn't safety, so it was OK," Farone
said.

The lawsuit accuses seven tobacco companies of conspiring to violate
antitrust and consumer-protection laws, suppressing health research
and manipulating nicotine levels. The state is seeking as much as $2.2
billion to reimburse Medicaid and other insurance costs related to
illnesses caused by smoking.

Meanwhile, Attorney General Christine Gregoire headed to New York
yesterday for negotiations on a national settlement with the nation's
four largest tobacco companies: R.J. Reynolds, Philip Morris,
Lorillard Tobacco and Brown & Williamson Tobacco. All are defendants
in this lawsuit.

Also named in the lawsuit are American Tobacco, B.A.T. Industries,
British American Tobacco, the Hill & Knowlton public relations firm,
The Council for Tobacco Research-USA and the Tobacco Institute.

Checked-by: Rich O'Grady