B&W STILL USING HIGH-NICOTINE LEAF

NEW YORK--Four years ago, Brown & Williamson Tobacco Corp. assured the
federal government that it would stop marketing cigarettes with tobacco
from plants genetically engineered to pack twice the nicotine of natural
leaf.

It wasn't illegal to use the high-nicotine variety. But after the U.S. Food
and Drug Administration alerted Congress to the new tobacco, the cigarette
maker backed off and said it would drop the project.

Less than a year later, however, Brown and Williamson secretly resumed
blending the high-nicotine leaves with other varieties for American
consumption -and continues to do so today.

The secret use of the ingredient was disclosed by Roger Black, director of
leaf blending for Brown & Williamson, in a Jan. 16 deposition for New York
state's class-action suit against the major tobacco companies.

The deposition was conducted in private, and the transcript was ordered
sealed by a state Supreme Court judge. However, a letter summarizing the
testimony was found by The Associated Press in a public court file.

Brown & Williamson issued a statement Tuesday acknowledging that
genetically altered, high-nicotine tobacco was currently being used "in
small amounts in certain brands, like Raleigh, Richland, Prime and Summit."

The use of the genetically altered tobacco doesn't necessarily mean
Americans are smoking cigarettes with higher nicotine levels.

Instead, Brown & Williamson says it uses the ingredient to control nicotine
content. By blending nicotine-enhanced leaf with weaker tobaccos, the
nation's third largest cigarette maker produces a variety of brands with
varying nicotine levels to satisfy smokers' differing tastes.

Nevertheless, the disclosure could prove a significant development in state
lawsuits against cigarette companies and in the FDA's drive to regulate the
industry on grounds that cigarettes deliver an addictive drug. Critics will
see it as more evidence the company manipulates dosages of nicotine, the
addictive chemical in tobacco, in order to "hook" smokers.

"Despite the mounting evidence, the tobacco industry has repeatedly denied
that they manipulated nicotine to keep smokers hooked," said Hubert
Humphrey III, the Minnesota attorney general who is leading a lawsuit
against the industry in that state. "Now the truth is coming out and it is
truly alarming."

Sen. Ron Wyden, D-Ore., told of the Black deposition by the AP, said it was
"the most compelling case to date to force our government to stop sitting
on its hands when there's proven evidence that a company is manipulating
cigarettes in a way that will poison youngsters."

This is not the first time Brown & Williamson has been found to be adding
genetically altered tobacco to its cigarettes.

In 1994, the FDA learned the company had spent more than a decade
developing a nicotine-rich plant. Code-named Y-1, the plant is the product
of state-of-the-art breeding techniques, including processes known as
protoplast fusion and hybrid sorting.

To hide the invention from competitors, Brown & Williamson shipped seed to
Brazil, where the variety was grown in commercial quantities. Brown &
Williamson told the FDA it had imported Y-1 leaf from Brazil, used it in
five cigarette brands sold in the United States in 1993 and 1994, and had a
stockpile of about 3 million pounds.

Although this was legal, the FDA was concerned enough to disclose its
findings to Congress in July 1994. Brown & Williamson promptly announced
that "because of concerns and doubts raised by FDA," it had stopped the Y-1
project and would no longer add the variety to Raleigh Lights, Richland
Lights King Size, Viceroy King Size, Viceroy Lights Kingsize and Richland
King Size cigarettes.

But the company was using Y-1 again within a year, according to Black's
deposition. His testimony is described in a letter by Brian Campf, an
attorney for one of the plaintiffs in the New York suit.

Campf wrote to Justice Charles E. Ramos on Jan. 23, urging him to make the
deposition public. The letter says in part: "Mr. Black testified that in
1995, B&W secretly began using Y-1 again in even more brands of cigarettes
and at a greater total volume than it did before it temporarily halted Y-1
use in 1994, and that B&W continues to use Y-1 tobacco today."

Campf's letter added, "The public has been duped, and there is immense
public interest in setting the record straight."

In Tuesday's statement, Brown & Williamson said it stopped using Y-1 in
1994 in part because of enactment of a domestic content law, which limited
the amount of imported tobacco that could be used in American cigarettes.
In September 1995, the law was repealed, "and shortly thereafter, B&W began
again using small amounts of Y-1 tobacco in cigarettes as a blending tool
and to use up existing stockpiles," the company said.

Although use of Y-1 in American cigarettes stopped briefly, the
high-nicotine tobacco project never stopped in Brazil, where the largest
tobacco company, Souza Cruz, is owned by BAT Industries PLC, the British
conglomerate that owns Brown & Williamson.

Souza Cruz, which received Y-1 seed from Brown & Williamson in 1983, has
been producing Y-1 and related high-nicotine leafs for the world market for
years, the AP reported in December. The report was based on interviews with
former Souza Cruz scientists and 18 Brazilian growers. Souza Cruz claims it
stopped using high-nicotine varieties in 1994.

Brown & Williamson buys tons of tobacco from Souza Cruz each year. It could
not be learned whether this is the source of the high-nicotine tobacco
blended into the company's cigarettes.

The Justice Department has found that Y-1 seed was shipped not only to
Brazil, but also to other countries including Nicaragua, Zimbabwe and
Canada in the 1980s. Some of the shipments violated U.S. export laws that
required a special U.S. government permit for exporting tobacco seeds and
plants.

DNA Plant Technology, a biotech firm that helped Brown & Williamson develop
Y-1, was indicted by the Justice Department last month for violating
customs laws. The company pleaded guilty to a misdemeanor charge and is
cooperating with an ongoing federal investigation of tobacco companies,
according to the Justice Department.

Questions about whether Brown & Williamson was still using high-nicotine
tobacco in cigarettes were also raised at a Jan. 30 congressional hearing
in Washington.

When asked under oath whether his company was still "using a tobacco that
has higher nicotine," Brown & Williamson chief executive Nick Brookes
replied, "We are."

He paused, then said: "I mean there are many varieties around the world
that have higher nicotine than the average nicotine obtained from U.S.
tobacco. And we do have indeed from those experiments way back in the 1990s
a small stockpile of Y-1 as well. It's perfectly good tobacco."

The line of questioning was not pursued.

But Wyden said the subject will come up again when the Senate Commerce
Committee questions executives of major tobacco companies Feb. 24.

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