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Selling Off or Selling Out? Medical Schools and Ethical Leadership in Tobacco Stock Divestment

Wander, Nathaniel PhD; Malone, Ruth E. RN, PhD

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Author Information

Dr. Wander is research associate and Dr. Malone is associate professor, Department of Social and Behavioral Sciences and Center for Tobacco Control Research and Education, University of California, San Francisco.

Correspondence should be addressed to Dr. Wander, Center for Tobacco Control Research and Education/Department of Social and Behavioral Sciences, University of California, San Francisco, 530 Parnassus, Suite 366, Box 1390, San Francisco, California, 94143-1390; telephone: 415-514-9343; fax: 415-514-9345; e-mail: 〈〉.

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Medical and health science schools occupy a prestigious place in U.S. society. When they express a position on tobacco use—either by action or silence—that expression is consequential. Recognizing this, the tobacco industry has worked to sustain and exploit relationships with academic health sciences institutions. Corporate contributions to medical research are more visible, but institutional investments in tobacco stocks are also crucial to these relationships. The American Medical Association divested (sold) its tobacco holdings in 1986, urging others to do the same. Yet, as late as 2004, at least five of the leading dozen medical schools have not divested, and those that have seem reluctant to publicize their actions. The authors use internal tobacco industry documents and secondary source material to describe and analyze Philip Morris's response to two cases of threatened academic divestment. In each case, the world's largest tobacco company succeeded in minimizing the impact of divestment activities—in the first, by muting the consequences of a divestment, and in the second, by convincing university decisionmakers to recommend against tobacco stock divestment. In addition to arguing that tobacco divestment would lead to other pressures or be ineffective, the company exploited university concerns about losing corporate research funding as a key element of its antidivestment strategy.

If academic medical centers regard protection of the public's health as a primary mission, divestment from tobacco holdings is essential; profiting from tobacco either through investments or research funding undermines this mission. Silent divestment squanders opportunities for ethical leadership and public dialogue.

Medical and other health science schools occupy a prestigious place in U.S. society. When they express a position on tobacco use—either by action or silence—that expression is consequential. For its part, the tobacco industry has been “white-coating” itself, borrowing from medicine's prestige and public esteem since the 1940s and its subsequent “Nine out of ten doctors prefer Camels” advertising. It continues today to sustain and exploit relationships with academic health science institutions, as demonstrated by Lorillard Tobacco's $6 million gift to Ohio State University's College of Medicine and Public Health for a new “Center of Biomedical Technology for the Study of Environmental and Smoking Induced Disease” in December 2003. Corporate contributions to medical research may be the more visible form of such relationships, but institutional investments in tobacco stocks can structurally ally universities with the industry, and there are clear connections between investment and research funding.1–3b

Divestment by health and social welfare organizations from the tobacco industry—whose products contribute to 440,000 premature deaths in the U.S. annually4—began in the early 1980s, paralleling the developing momentum of South African divestment.5 (In this context, divestment means selling stocks and bonds for other than purely financial reasons.) The American Medical Association divested its tobacco holdings in 1986,6 and resolved in 1987 to “urge medical schools and their parent universities to eliminate their investments in corporations that produce or promote the use of tobacco.”5 While some schools divested, others did not, for reasons rarely made public. (See Table 1.) In this article, we analyze internal tobacco industry documents and secondary materials to show how the industry's activities may affect academic divestment decision making. Case studies of divestment efforts at Johns Hopkins University and Yale University illustrate how and why the tobacco industry fosters academia's “tobacco-dependence.”

Table 1
Table 1
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The Search

Between October 17, 2002 and January 11, 2004, we searched for internal tobacco industry documents on corporate Web sites and at the Legacy Tobacco Documents Library of the University of California, San Francisco (which may be found at 〈〉). Contemporary and historical documents acquired through multiple lawsuits against the tobacco industry continue to be added to these archives as a result of the 1998 Master Settlement Agreement between the tobacco industry and 46 states’ attorneys general.7 Document sites and searching techniques are discussed elsewhere.8,9

We used a snowball sampling approach, expanding out from the keywords divestment, disinvestment, and divestiture. We retrieved and reviewed more than 1,700 relevant industry documents. Documents were analyzed in conjunction with contemporaneous news accounts and various reports related to academic divestment and tobacco industry funding to construct case studies of specific academic divestment efforts. Through literature searches and interviews with university officials, we also determined the tobacco investment status of the leading dozen U.S. medical schools in the U.S. News & World Report ratings for 2004.10

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What We Found


Philanthropic foundations and health organizations were the first to divest from tobacco industry financial holdings for health and social welfare reasons.5 As scientific consensus emerged about the risks of tobacco smoking and exposure to secondhand smoke,11–16 universities and other institutions became concerned about (1) the ethics of subsidizing and profiting from such a destructive product, and (2) the financial viability of a lawsuit-vulnerable industry. Beginning in 1990, and nurtured by Northeastern University Law School's Tobacco Divestment Project,5,17 a movement started to emerge as divestment discussions were initiated at Sloan-Kettering Institute,18 Yale-New Haven Hospital,19 the City of Pittsburgh,20 the Massachusetts General Court,20 the North Dakota Public Employees Retirement Fund,21 Rice University,22 and other institutions. While Philip Morris documented the movement's emergence23—which first came to public notice through divestments at Harvard and at the City University of New York (CUNY) in May—it also began mobilizing to undermine it.24

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Divestment at Harvard and CUNY

Spurred by responsible-investment shareholder actions in Spring 1988, Harvard's Advisory Committee on Shareholder Responsibility requested information from tobacco firms, particularly regarding consumer information and marketing practices in developing countries.25 Unsatisfied by the industry responses, Harvard decided to divest of tobacco holdings, which it completed by March 1990. However, it was not until May, when challenged by Harvard School of Public Health activists, that President Derek Bok publicly acknowledged this. In his letter to the activists, Bok explained:

[Harvard] was motivated by a desire not to be associated as a shareholder with companies engaged in significant sales of products that create a substantial and unjustified risk of harm to other human beings.26

The disclosure of Harvard's actions drew complaint letters from Philip Morris (PM) Attorney Lee Pollak (an alumnus of Harvard College and Harvard Law),27 and PM Director Paul Douglas (parent of two Harvard students).28 Responding to Douglas, Bok denied Harvard had been pressured into divesting. Also, “the sales were not intended to bring pressure on the tobacco companies. I do not believe in using our portfolio for that purpose.”29 Answering Pollak, he elaborated: “Had we felt otherwise, we would have publicized the selling of the stock to maximize pressure. … The story only came to light many months after … because several students inquired, and we felt obliged to tell them that we no longer held your stock.”30

Almost immediately thereafter, Tobacco Divestment Project activist and CUNY Trustee Edith Everett introduced a divestment resolution before the CUNY Board, where it passed on May 21.31 By late May 1990, the national press was reporting two major university divestments.32–34 USA Today wrote: “Tobacco stocks tumbled Wednesday in a generally flat market, partly on expectations of institutional stock sales,”35 and within a week, Merrill Lynch lowered tobacco stock ratings, anticipating “further pressure to force state and other public pension funds to eliminate their tobacco holdings.”36 PM Public Affairs Vice President George Knox responded that “people buy and sell our stock every day for a range of reasons. … We just have to watch (the divestment issue) play out and see how it develops.”35

But PM did not watch passively. Within a few days of the USA Today article's appearing in PM files,35 Vice Chairman R. William Murray had already sent a counterdivestment strategy memo to Senior Vice President (VP) for Corporate Affairs Craig Fuller,24 and sought feedback from Corporate Affairs VP Guy L. Smith37 and former CEO and Board Chairman George Weissman.38 When PM learned of the divestment discussions already in progress at Johns Hopkins University (JHU), it responded quickly. Both the industry and the university recognized the symbolic import of what would amount to a censure of the tobacco industry by one of the nation's leading health science centers.39,40

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Johns Hopkins's Divestment Deliberations

Divestment deliberations at Hopkins began in April 1990, with a recommendation from its Public Interest Investment Advisory Committee (PIIAC), created in 1972 to advise the trustees “how to cast the University's votes on shareholder resolutions on matters of social responsibility.”39 PIIAC's action was prompted by the defeat of responsible-shareholder resolutions at tobacco company meetings in the Spring of 1990.41 Initiated by Father Michael Crosby and the Interfaith Center for Corporate Responsibility,42 one resolution had called on tobacco companies to stop manufacturing tobacco products by December 31, 1999, while the other aimed to reform PM's sales practices abroad, and end marketing to minors.

In recommending divestment, PIIAC observed:

Hopkins is the world's premier biomedical and public health research center. … By taking a stand that we refuse to profit from addiction to and subsequent loss of health from tobacco, we give new meaning to our mission [of improving human health]. … As others follow our leadership, the profitability of investment in the tobacco industry may be minimized and the industry … encouraged to turn to other … business.39

The ad hoc Trustees Committee on Tobacco Stock Divestment (TCTSD), created to evaluate this recommendation, began meeting in October 1990.

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Philip Morris's Response

In the same month, Philip Morris Magazine editor Frank Gannon wrote to Corporate Affairs VP Smith regarding institutional divestment:

These trustees are under attack by people who say we are merchants of death and that it is unconscionable for any portfolio to harbor our stocks. … Many of the trustees to whom we are writing will probably agree with—or at least have some sympathy with—this argument. Unless we disarm them with argument—or provide them with arguments by which they can themselves do some selective disarmament—we're probably actually setting our cause back.43

PM was well placed to defend its interests. JHU Trustees’ Chair Morris Offit, an intimate of PM's still-active Retired Chairman Weissman,44,45 provided him with JHU documents and arranged to have PM executives invited to the TCTSD's December 1990 meeting.46 Also invited at Offit's suggestion47 was former U.S. Secretary of Defense Dr. Harold Brown, chairman of JHU's Foreign Policy Institute. Brown had been a PM corporate director since 1983.48

At the meeting, PM offered six arguments:

Corporate diversity: PM's “nontobacco businesses contribute some sixty percent of our operating revenues.”

Responsible marketing practices: “Almost without exception, in each of our major markets health warning labels appear on our cigarette packs. … For us to include a warning label [where not legally required] would imply that our brands are inferior to those brands which do not.”

A doubled “slippery slope”: Tobacco divestment would create pressures to divest from tobacco's “suppliers and customers, Eastman Kodak, Mobil, Kimberly-Clark … our banks, investment advisors … newspapers … supermarket chains.” There would also be pressure to divest from other controversial industries: aerospace, nuclear energy, petroleum.

Backlash boycotting: PM could be pressured to distance itself from JHU. “Corporations can be boycotted if they contribute to a university that performs tests on live animals, conducts genetic testing or uses aborted fetal tissue for research.”

Corporate research support: “Johns Hopkins is more than an investor in Philip Morris. It is the recipient of research monies funded directly and indirectly by Philip Morris,” more than $2 million over five years.

Prohibition” by extralegal means: Succumbing to pressure from “antismoking organizations” helps them accomplish “their ultimate goal: a complete ban on smoking.”49

Corporate Secretary and Associate General Counsel Donald Fried summarized the meeting for PM's top management. “On the whole the atmosphere was friendly… We were requested to submit additional factual information … [and] any additional arguments against divestment which we could develop.”46

Still, PM was in a defensive position:

[W]e believe the Deans of the School of Hygiene and Public Health and the School of Medicine presented an affirmative case for divestment before we entered the meeting … [O]ne of the Trustees who is from Virginia and not an enemy of the tobacco industry…[a]fter describing the Johns Hopkins preeminence in medical education and indicating that medical education was the “special charge” of the University as a whole, … asked how the University could profit from cigarettes.46

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Containing the Inevitable

A week later, PM's top public relations consultant Harold Burson summarized the general agreement that a JHU divestment was imminent despite PM's efforts, and recommended a strategy to “contain and interdict a process that is likely to lead to broader divestment of Philip Morris stock by medical schools. … [W]e should preempt any such announcement … I see no reason to delay given our studied assumptions that Johns Hopkins’ divestment appears inevitable.”40

Burson proposed two preemptive messages linked to the issue of tobacco industry research funding. First, “Philip Morris will continue to fund medical research at Johns Hopkins or any other medical school regardless of any investment decisions they make. … To withdraw such funding would be the wrong thing to do.” Second, PM should “point out the hypocritical stance taken by Johns Hopkins and other medical schools that [are wealthy enough to] choose to divest themselves of Philip Morris stock” and suggest that JHU “is setting up other [less well-endowed] universities to make inappropriate financial decisions.”40

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The Second PM-JHU Meeting and JHU's Decision

PM's ranking officers, CEO and Chairman Hamish Maxwell and General Counsel Murray Bring, returned to meet with JHU trustees January 14, 1991. Maxwell argued that JHU had a responsibility to not undermine less-well-endowed schools. He also elaborated the proposal that the university pool tobacco income with PM contributions to study “diseases statistically associated with smoking.”50

Bring emphasized the costs of divestment, including “transaction costs and lost profits … other divestment proposals … the dilemma … in continuing to accept research grants from the tobacco industry.” Possibly insinuating a financial threat, Bring concluded: “It would be a tragedy if this important source of research funds is jeopardized.”50

Despite PM's efforts, TCTSD recommended divestment to the JHU Board of Trustees,41 which unanimously approved it on February 22, 1991.51 In its report, TCTSD emphasized JHU's “unique” position:

The School of Hygiene and Public Health is known worldwide as the premier school of its type. The School of Medicine holds an equally esteemed reputation. … [T]he University has an obligation to mount a public campaign against smoking … [and] the conduct of a … campaign against tobacco use requires the divestment of tobacco-related stocks.41

That “many members” believed such a campaign would reduce the value of the stocks was “another major reason to divest.”41

However, the TCTSD veered away from the “leadership” course originally charted by PIIAC, denying it was “advocating similar actions by other institutions or … shap[ing] social policy.” It disassociated itself from “social investing as a general policy,” writing that “in this particular and unique circumstance, divestment of tobacco-related stocks is warranted solely to ensure compatibility of the actions of Johns Hopkins with its public position [italics added].” It was not, it emphasized, recommending divestment to “persuade people to stop smoking, stop production of a legal product, or deny capital to producers of tobacco products.”41

Hence, the committee recommended against issuing a press release or announcing the names of companies whose stock would be sold. “Publicity would be limited to a brief article in the University's publication, the Gazette.”41 A 120-word sidebar appeared in the JHU Gazette on Friday, February 25,51 and without a press release, no major daily covered the story with its own staff. The New York Times and Los Angeles Times picked up Associated Press wire coverage, and carried cursory reports in their least-read Saturday editions.52,53 The Baltimore Sun, however, reported the TCTSD recommendation even before it had been approved by the Board of Trustees,54 suggesting that at least one TCTSD member was not resigned to seeing the report sink in silence.

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Yale Divestment Discussions

On January 15, 1991, the evening after their second session with JHU trustees, PM executives met with the members of the Yale Advisory Committee on Investor Responsibility (ACIR). Their tactics, identical to those used in Baltimore, proved more effective in New Haven.

Like Hopkins’ PIIAC, Yale's investment overseers had been made uncomfortable by the Spring 1990 shareholder resolutions calling for an end to tobacco promotions aimed at minors, regulation of international advertising and promotion, and a move away from cigarette manufacturing entirely. While these resolutions’ failure led JHU's PIIAC to conclude there was no honorable alternative to divestment, Yale was reluctant to depart from the tobacco industry's financial fold.

In August 1990, Yale CIO David Swenson wrote to PM Chairman Maxwell:

Yale University abstained on the resolution asking the company to get out of the tobacco business by 1999. … As a major research institution, Yale University recognizes the unhealthful effects of cigarette smoking and … would like to see your company consider its role in the tobacco business in relation to the impact of cigarette smoking on public health. We did not support the resolution because we did not want to instruct you on diversification or to impose a timetable.55

PM appears to have agonized over its response to Yale, possibly because the company was at this time seriously considering proposals to spin off or exit from its tobacco interests.56 One month and at least four drafts later,57,58 Corporate Secretary Fried replied to Swenson, thanking him in the name of CEO Maxwell for “sharing with us Yale's concerns about Philip Morris’ involvement in the tobacco business.”58 Fried made many of the arguments PM would deliver at Hopkins and Yale four months later: the corporation was diverse, and a responsible marketer; despite skepticism about “statistical associations” between smoking and disease, it believed smokers should be and were already adequately warned of potential risks; PM continued to support research into the health consequences of smoking; institutions conceding one divestment demand laid themselves open to endless demands; tobacco control advocates were really just prohibitionists. Fried warned that while “divestment will not eliminate smoking and the tobacco industry from society,” it would hurt “the more than 20,000 employees of Philip Morris U.S.A. and the economies of the localities where they work, not to mention the harm … to suppliers and others dependent on their continued success.”58

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PM and Yale Engage over Disengagement

At its January 15, 1991 meeting with Yale's ACIR, PM emphasized its “long relationship with Yale,” noting that Emeritus Chairman “Joseph Cullman has donated over $2.5 million, including Cullman Tennis Center,” and that his brothers had made additional substantial donations.59 PM drew ACIR's attention to a pending $900,000 grant request from Yale's Bush Center for Child Development and Social Policy. Corporate contributions of $1.24 million were enumerated, 80% of which had gone to endowing a PM chair in the School of Management, founded by investment banker and New York Stock Exchange President William Donaldson.60 As with Harold Brown at Hopkins, at Yale, William Donaldson's PM board membership48 was highlighted.59

PM repeated claims it had made at Johns Hopkins: that “the real goal of the antismoking movement is prohibition”; that “[i]f Yale divests itself of tobacco stocks on moral grounds” it would have no basis to “draw the line once it starts down this slippery slope”; and that divestment would lead to financial losses comparable to those claimed to have been experienced by institutions divesting of South Africa–related securities.59 Again explicitly linking its “longstanding commitment to the support of medical and scientific research relating to diseases statistically associated with tobacco” with divestment, PM suggested that “if universities divest their tobacco stocks, they may feel compelled on ‘moral’ grounds to abstain from applying for these grants, thereby jeopardizing important research.”59

Like Hopkins, Yale was invited to “earmark all or a portion of the income … from tobacco stockholdings for scientific research projects relating to those diseases statistically associated with smoking.” Yale was additionally invited to exercise “its leadership role, … [to] encourage other institutions to follow a similar alternative to divestment, … to consult with other medical schools … and to consider organizing a combined research program to be funded by income derived from the tobacco stocks owned by these institutions.” Finally, PM suggested that “this research could be combined or coordinated with related research that has already been funded by CTR [the tobacco industry–created Center for Tobacco Research61] and the industry.”59 Recent studies show how much of this research was carefully screened and controlled for public relations purposes.62,63

Finally, Yale was urged to heed its own law faculty member, Professor John Simon, who argued in a 1983 letter to the New York Times on South African divestment that a “university's sale of stocks ends its role within the company and transfers its stock to what is likely to be a less socially concerned investor. Accordingly, it is at least plausible that a university will have a better opportunity, through use of its shareholder vote and voice, to bring about [desired changes] if it does not practice … divestiture.”59 (Bracketed text and ellipsis apparently added to original by PM.)

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Yale Declines to Disengage

On February 8, 1991, Law Professor Peter Schuck delivered ACIR's 7–1 recommendation against divestment to the Yale Corporation. Chairman Schuck wrote: “Yale should immediately establish a committee of experts … charged with the task of designing effective, enforceable controls on (a) the marketing of tobacco products to minors, and (b) the marketing of tobacco products overseas.”64 This committee would be further charged with reporting to the Corporation on the industry's implementation, and the university would be charged with “give[ing] both the committee's reports and the companies’ responses wide publicity.”64 Although PM memos indicate that the company was interested, even eager to work with such a committee,65 we found no evidence from either industry documents or contemporary news reports that such a committee was ever formed, engaged in questioning, or had developed or widely publicized any findings.

In her minority critique of the recommendations, then-Yale College student Nina Morrison observed:

ACIR's vision of a “committee of experts” does little more than reinvent the public health wheel. Powerful experts like the American Cancer Society and the US Department of Health and Human Services have extensively documented the tobacco industry's shameful noncompliance with existing standards for years.66

“By holding stock in the tobacco companies,” Morrison argued, “Yale profits from their continued success. What is simply ‘good business’ to the tobacco industry—new generations of steady consumers, expansive international markets—runs contrary to our mission as an institution dedicated to the public good.”66

Morrison explicitly addressed PM's “slippery slope” argument. “Tobacco is not just another ‘objectionable’ product. With an estimated 2.5 million smoking deaths a year [worldwide in 1990], its lethality is unparalleled. … Tobacco is the only legal product in America which, when used as directed, kills.”66

Morrison quoted CUNY Trustee Edith Everett, who had led her university through divestment ten months earlier. When asked about the potential loss of contributions from tobacco foundations and alumni after CUNY announced its decision to divest, Everett said, “We'll soon find out whether these were really contributions, or payments for our silence.”66

Divestment, Morrison wrote, “will, above all, end this ‘conspiracy of silence’—among institutions, legislators, and all of public life—which allows the world's most severe health crisis to go unchecked.”66

Reports from Yale over the next several years document that the ACIR declined to revisit the issue in April 1996,67 that the university informally discussed it in December 1997, but ultimately to no effect,68 and that the trustees again voted down tobacco stock divestment in “an unusually contentious debate” in May 1998,69,70 despite Professor John Simon, coauthor of Yale's 1973 responsible investment guidelines, having switched his recommendation from “voice” to “exit” in February.69

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Divestment Stumbles, Then Moves On

In one month, JHU decided to divest but not publicize its decision, while Yale's ACIR recommended that the Yale Corporation not divest, but retain its tobacco holdings and engage with the industry to change its behavior.64 When, at the prompting of its medical school, Wayne State University in Detroit divested in June 1991, divestment was no longer in the national spotlight.5 Hence, when the movement pointed to its academic successes five years later, JHU would be the last major victory it could claim.71 The first wave of institutional divestments predicted by activists and the media32,35,72 expended itself weakly, never building the momentum of the previous decade's movement to divest of companies doing business with South Africa.

The divestment movement returned in the mid-1990s, however, aimed especially at larger shareholders such as health and life insurers and public pension funds.5 As late as 2000–2001, even university divestment seemed to be picking up steam, as the Universities of California, Michigan, and Washington—parents of three leading medical schools—announced tobacco stock divestment decisions,73–75 and several universities moved to debate the related issue of accepting tobacco industry funding for research.76

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PM was partially correct in minimizing the corporate/financial impact of divestment by a university. Another investor would buy the stock; the tobacco business would continue. However, as a PM planning document noted:

Open and media emphasized activity regarding the sale of tobacco stocks for nonfinancial reasons stigmatizes the industry. … Wide-spread [sic] divestment activity would seriously damage our ability to raise capital for expansion and diversification purposes.77

Moreover, divestment by medical schools would magnify such stigmatization, as well as potentially unleash pressures to reject research funding. “Should that occur,” suggested industry public relations consultant Burson, “Philip Morris would simply give the money to someone else, preferably the university's direct rival.”40 While Burson recommended that PM continue funding research even at divesting medical schools, he emphasized, “this strategy [should] be limited to medical schools only. … Yanking endowments and other grants from, say, a liberal arts school would be appropriate under certain circumstances.”40

This concern about losing the research money connection to major academic health institutions is also illustrated in the carrot-and-stick talking points PM used at both Hopkins and Yale, alternately offering or threatening the loss of research funding, even proposing to expand funding to medical school-led consortia.50,59

Exchanging tobacco industry research dollars for medicine's credibility and prestige was an active topic of discussion among the executives who represented PM at Yale and Hopkins: Chief Counsel Bring, his ultimate successor, Deputy Counsel Charles Wall, and CEO Maxwell.78 A form used by PM Worldwide Scientific Affairs to evaluate research ideas includes the “credibility” the research would provide the industry among its four major classification criteria.79 As this study shows, PM well understands that stock divestment is closely linked with the threat that the tobacco industry might lose the respectability and legitimacy afforded by continued research associations with major academic health centers.

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The Larger Ethical Issues

In recent years, the tobacco control movement has developed increasingly effective strategies aimed at delegitimizing the “business as usual” aspects of tobacco companies.56 Expanding beyond individual tobacco use prevention and smoking cessation efforts to include a focus on the industry as “vector” of the tobacco disease epidemic has changed public perceptions about tobacco use and highlighted specific industry behaviors that undermine public health goals and raise ethical concerns.80–83 These concerns lie at the heart of the divestment movement's successes and the tobacco industry's worst fears, because they extend the tobacco control battle to corporate ethics and public relations.

However, as our study shows, attending to these concerns exposes the inherent ethical contradictions involved in divesting from tobacco stock ownership while continuing to accept tobacco industry research funding. It is not surprising that two of the public health schools among the earliest academic divestors, Harvard and JHU, were also the first to promulgate strong policies barring tobacco industry research funding.26,51,76 In both cases reviewed in this article, PM coupled the implied threat of loss of research funding with its arguments against divestment. Perhaps for this reason, leading academic medical institutions have been reluctant to publicize their universities’ divestment actions—or to divest at all.

The JHU and Yale cases illustrate at least three perspectives on divestment: (1) divestment as ethical leadership, (2) divestment as reconciliation of private financial stakes with public postures, and (3) divestment as threat to mutually supportive academic–corporate relationships. At JHU, PIIAC advocated the first perspective, ethical leadership, but in the end, like Harvard before it, the trustees settled for public–private reconciliation—perhaps because the industry effectively highlighted the third perspective: threats to mutually supportive financial relationships. At Yale, though the sole dissenter argued strongly for the first perspective, PM's strategic carrots and sticks may have led ACIR to settle for avoiding the loss of mutual support.

Yet divesting from tobacco stocks in private (or choosing not to divest but to work “from within”), while it may assuage individual institutions’ anxiety over profiting from a product antithetical to good health, does little to address the larger ethical issues involved in continuing corporate promotion of tobacco use and reliance on industry research funding. Silent divestment represents a lost opportunity for contributing to the public discourse on how this major public health policy issue should be addressed and ignores its very real impact on public health. Efforts to delegitimize the industry have been shown to be an effective part of comprehensive tobacco control campaigns.84 Continuing academic–tobacco industry partnerships undermine such delegitimization efforts.

As of this writing (August 2004), of universities housing the top dozen medical schools in the 2004 U.S. News & World Report ranking,10 at least five apparently still have not divested from tobacco stocks. It is unknown how many accept tobacco industry research funding, but the topic is being raised vigorously at academic medical centers, some of which have adopted policies against acceptance of such funding.76 Although we have focused our report on academic medicine, dependence on tobacco industry revenues is also problematic for other institutions, including public pension funds holding tobacco stocks, state governments receiving Master Settlement funds, and community organizations accepting corporate tobacco donations.

If academic medical centers genuinely regard protection of the public's health as a primary mission, divestment from tobacco holdings is essential. As Yale alumna Morrison argued more than ten years and four million tobacco-related deaths ago: “For as long as we remain shareholders [of the tobacco industry] … [our] financial gains depend on the ‘success’ of these companies’ most reprehensible practices.”66 But it is insufficient to divest in silence. Effective divestment, as ethical leadership, must be done in the open.

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The authors thank Elizabeth Smith and Naphtali Offen of the Department of Social and Behavioral Sciences and the Center for Tobacco Control Research and Education, University of California, San Francisco, for their helpful comments. Thanks also to Bob Mason of the Legacy Tobacco Documents Library, University of California, San Francisco, for consultation regarding document retrieval. This work was funded by the California Tobacco-Related Disease Research Program (Award #11RT-0139) and the National Cancer Institute (CA095989).

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19.Capers RS. Yale-New Haven Hospital to sell its tobacco stocks. 15 Aug 1991. Philip Morris. Bates No 2045748942/8943. Accessed 8 November 2002.

20.Nazario S. California widens attack on cigarettes. 30 Jan 1991. Philip Morris. Bates No 2024302979 〈〉. Accessed 30 October 2002.

21.Cramer MT. North Dakota divestiture. 20 Aug 1990. Philip Morris. Bates No 2024672806/2808 〈〉. Accessed 6 November 2002.

22.Olafson S. Rice rejects pressure to shed tobacco stock. 12 Jan 1991. Philip Morris. Bates No 2040862103 〈〉. Accessed 7 November 2002.

23.[Philip Morris]. Divestment tracking chart (900703). 3 Jul 1990. Philip Morris. Bates No 2024258583/8585 〈〉. Accessed 1 November 2002.

24.Murray RW. Memorandum between Philip Morris employees memorializing legal strategy regarding stock divestiture. 31 May 1990. Philip Morris. Bates No 2024672801/2804 〈〉. Accessed 6 November 2002.

25.Gray EA. Harvard letter requesting Philip Morris report on cigarette sales and promotion in developing countries. 8 Jul 1988. Philip Morris. Bates No 2024261705/1706 〈〉. Accessed 1 November 2002.

26.Bok D. [Reply to Harvard Public Health Students for Social Responsibility letter of April 23, 1988, disclosing that Harvard had already divested its tobacco stock]. 18 May 1990. Philip Morris. Bates No 2024302978 〈〉. Accessed 30 October 2002.

27.Pollak L. [Critical letter to Harvard President Bok regarding Harvard's tobacco stock divestment]. 31 May 1990. Philip Morris. Bates No 2024261700/1702 〈〉. Accessed 1 November 2002.

28.Douglas PW. [Letter complaining to Harvard's President Bok about tobacco stock divestment, and against social activism in general]. 1 Aug 1990. Philip Morris. Bates No 2024262616/2618 〈〉. Accessed 23 December 2002.

29.Bok D. [Reply to Douglas letter of August 1, 1990 criticizing Harvard's tobacco stock divestment]. 15 Aug 1990. Philip Morris. Bates No 2024262606/2607.〉. Accessed 23 December 2002.

30.Bok D. [Repy to Pollak letter of May 31, 1988 regarding Harvard's tobacco stock divestment]. 11Jun 1990. Philip Morris. Bates No 2024261697/1698 〈〉. Accessed 1 November 2002.

31.Warmbrand MJ. Investments in tobacco companies. 21 May 1990. Philip Morris. Bates No 2024303107 〈〉. Accessed 30 October 2002.

32.Lewin T. Harvard and CUNY shedding stocks in tobacco. The New York Times 1990 May 24; Sect. 1. LexisNexis Academic. Accessed 16 December 2000.

33.Deveny K, Bacon KH. Tobacco is facing new attacks. Wall Street Journal 1990 May 24; Sect. 1. LexisNexis Academic. Accessed 16 December 2002.

34.Phillips F. Harvard divests of tobacco firms’ stocks. The Boston Globe 1990 May 23; Sect. 27. LexisNexis Academic. Accessed 8 April 2003.

35.Wiseman P, Cox J Protest heats up against tobacco firms Group urges holders not to take stock in smoking. 29 May 1990. Philip Morris. Bates No 2026165586/5589 〈〉. Accessed 10 January 2003.

36.Kaplan A. Tobacco stocks intermediate opinion lowered. 31 May 1990. Philip Morris. Bates No 2048302101 〈〉. Accessed 31 December 2002.

37.Murray RW. [Request for comments on divestment issue action plan of May 31, 1990]. 4 Jun 1990. Philip Morris. Bates No 2024672800 〈〉. Accessed 6 November 2002.

38.Murray RW. [Conveys first Philip Morris divestment action plan and asks for comment]. 6 Jun 1990. Philip Morris. Bates No 2024303116 〈〉. Accessed 30 October 2002.

39.Public Interest Investment Advisory Committee. Stock holders in companies that manufacture tobacco products. 6 Apr 1990. Philip Morris. Bates No 2024302977 〈〉. Accessed 30 October 2002.

40.Burson H. [Letter assessing significance of probable Johns Hopkins divestment, and strategies for responding]. 19 Dec 1990. Philip Morris. Bates No 2023225319/5320 〈〉. Accessed 23 October 2002.

41.Bozzelli AJ, Dankis VJ, Janney SSI, et al. Report of the Trustee Committee on Tobacco Stock Divestment to the Board of Trustees. 22 Feb 1991. Philip Morris. Bates No 2024302971/2976 〈〉. Accessed 30 October 2002.

42.Crosby MH. Religious challenge by shareholder actions: changing the behavior of tobacco companies and their allies. BMJ. 2000;321:375–7.

43.Gannon F. “Tobacco project” divestment statement draft. Oct 1990. Philip Morris. Bates No 2024672510/2519 〈〉. Accessed 6 November 2002.

44.Woodcock M. [Covering note for enclosures from Offitbank to Weissman]. 6 Dec 1990. Philip Morris. Bates No 2024303048 〈〉. Accessed 29 October 2002.

45.Weissman G. [Letter thanking Morris Offit for documents]. 1 Mar 1991. Bates No 2024302969 〈〉. Accessed 30 October 2002.

46.Fried DD. The Johns Hopkins University. 12 Dec 1990. Philip Morris. Bates No 2048299354/9355 〈〉. Accessed 21 October 2002.

47.Snow WE, Jr. [Letter of invitation from JHU Treasurer to Foreign Policy Institute Chair Harold Brown to attend December 10 Trustees Committee on Tobacco Stock Divestment meeting]. 4 Dec 1990. Philip Morris. Bates No 2024303053/3054 〈〉. Accessed 29 October 2002.

48.Fried DD. Proxy statement. 7 Mar 1991. Philip Morris. Bates No 2048179784/9809 〈〉. Accessed 28 January 2003.

49.[Fried DD]. [Script for 19901210 presentation to the Trustees Committee on Tobacco Stock Divestment of The Johns Hopkins University]. Dec 1990/E. Philip Morris. Bates No 2048299359/9371 〈〉. Accessed 23 October 2002.

50.Bring MH. Outline of talking points. Jan 1991/E. Philip Morris. Bates No 2023225215/5224 〈〉. Accessed 23 October 2002.

51.[The Johns Hopkins University]. Board of trustees to divest tobacco stock. 25 Feb 1991. Philip Morris. Bates No 2024302970 〈〉. Accessed 30 October 2002.

52.Associated Press. Johns Hopkins will sell tobacco holdings. The New York Times 1991 Feb 23;Sect. 11. LexisNexis Academic. Accessed 19 September 2003.

53.Associated Press. Johns Hopkins plans to sell holdings in tobacco firms. Los Angeles Times 1991 Feb 23;Sect. 3. LexisNexis Academic. Accessed 19 September 2003.

54.Meisol P. Hopkins may drop its investments tied to tobacco. The Baltimore Sun 1991 Feb 21. LexisNexis Academic. Accessed 19 September 2003.

55.Swenson DF. [Letter explaining Yale's abstention on shareholder resolution to divest Philip Morris of tobacco manufacturing]. 24 Aug 1990. Philip Morris. Bates No 2024261695 〈〉. Accessed 1 November 2002.

56.Smith EA, Malone RE. Thinking the ‘unthinkable’: why Philip Morris considered quitting. Tob Control. 2003;12:208–13.

57.Fried DD. [Draft letter (#4) responding to Yale's queries re: PM's views on smoking and health, and on responsible marketing]. 19 Sep 1990. Philip Morris. Bates No 2024261683/1687 〈〉. Accessed 1 November 2002.

58.Fried DD. [Letter responding to Yale's queries re: PM's views on smoking and health, and on responsible marketing]. 25 Sep 1990. Philip Morris. Bates No 2024261678/1681 〈〉. Accessed 1 November 2002.

59.[Philip Morris Companies Inc.]. Outline of talking points. 15 Jan 1991/E. Philip Morris. Bates No 2023225204/5209 〈〉. Accessed 6 November 2002.

60.[Bring MH]. Grants supported at Yale. Jan 1991. Philip Morris. Bates No 2045749344/9346 〈〉. Accessed 8 November 2002.

61.Glantz SA, Slade J, Bero LA, Hanauer P, Barnes DE (eds). The Cigarette Papers. Berkeley: University of California Press, 1996.

62.Hong M-K, Bero LA. How the tobacco industry responded to an influential study of the health effects of secondhand smoke. BMJ. 2002;325:1413–6.

63.Hanauer P, Slade J, Barnes D, Bero LA, Glantz SA. Lawyer control of internal scientific research to protect against products liability lawsuits: the Brown and Williamson documents. JAMA. 1995;274:234–40.

64.Alderman M, Gonzales-Echevarria R, Lipsher LM, et al. Recommendation by Advisory Committee on Investor Responsibility concerning tobacco products. Feb 1991/E. Philip Morris. Bates No 2023225103/5106 〈〉. Accessed 23 October 2002.

65.Bring MH. Divestment—Yale. 22 Aug 1991. Philip Morris. Bates No 2048299150 〈〉. Accessed 12 December 2003.

66.Morrison N. Dissenting statement by Nina Morrison, Member of the Advisory Committee on Investor Responsibility, on the ACIR's recommendations concerning tobacco products. Feb 1991/E. Philip Morris. Bates No 2023225107/5111 〈〉. Accessed 6 November 2002.

67.Cheong Y. Despite the war against tobacco, Yale holds on to investments. Yale Daily News 1996 Apr 12. LexisNexis Academic 〈〉. Accessed 19 September 2003.

68.White E. Yale will reconsider tobacco holdings. Yale Daily News, Friday, 12 Sep 1997; Sect. LexisNexis Academic 〈〉. Accessed 19 September 2003.

69.Wilner I. Yale's divestment dilemma. Yale Daily News 1998 Sep 8 〈〉. Accessed 19 September 2003.

70.Anonymous. Tobacco stocks staying in university portfolio. Yale Alumni Magazine, May 1998 〈〉. Accessed 19 September 2003.

71.[Kinder Lydenberg Domini & Co Inc]. N344 [Tobacco-free investing by health care institutions: an analysis]. 23 Apr 1996/E. Philip Morris. Bates No 2070140960/0982 〈〉. Accessed 26 November 2002.

72.Advocacy Institute. Smoking Control Advocacy Resource Center (SCARC) action alert issue: American Lung Association nondependence day, July 5, 1990. 11 Jun 1990. Advocacy Institute,. Bates No 2025862094/2095 〈〉. Accessed 10 January 2003.

73.Associated Press. UM will sell tobacco stock in portfolio. South Bend Tribune 2000 Jun 17;Sect. 1. LexisNexis Academic. Accessed 12 January 2004.

74.Campbell, Pam, investment manager, Washington University at St. Louis. Conversation concerning tobacco stock investment policies at Washington University. Personal communication to N. Wander, San Francisco, California, 9 May 2003.

75.The Regents of the University of California. [Minutes of January 18, 2001] 〈〉. Accessed 6 August 2004. University of California, 2001.

76.Benowitz N, Glantz SA. [Petition from the faculty of the University of California, San Francisco to Chancellor Bishop requesting enactment of a policy against accepting tobacco industry research funds] 〈〉. Accessed 22 January 2004.

77.[Philip Morris]. Cigarette excise taxes. 24 Sep 1993. Philip Morris. Bates No 2040714381/4405 〈〉. Accessed 16 December 2002.

78.Bring MH, Murray RW. Proposal for Support of Biomedical Research by Philip Morris. 5 Dec 1989. Philip Morris. Bates No 2023266370/6377 〈〉. Accessed 15 October 2003.

79.Malone RE, Bero L. Chasing the dollar: Why scientists should decline tobacco industry funding. Epidemiol Commun Health. 2003;57:546–48.

80.Zucker D, Hopkins R, Sly D, Urich J, Kershaw J, Solari S. Florida's “truth” campaign: a counter-marketing, anti-tobacco media campaign. J Public Health Manag Pract. 2000;6:1–6.

81.Goldman L, Glantz SA. Evaluation of antismoking advertising campaigns. JAMA. 1998;279:772–7.

82.Yach D, Bettcher D. Globalization of tobacco industry influence and new global responses. Tob Control. 2000;9:206–16.

83.Balbach ED, Glantz SA. Tobacco control advocates must demand high quality media campaigns: The California experience. Tob Control. 1998;7:397–408.

84.Pierce J, Gilpin E, Emery S, et al. Tobacco Control in California: Who's Winning the War? An Evaluation of the Tobacco Control Program, 1989-1996. La Jolla, CA: University of California, San Diego, 1998. [Note: The references after number 84 are to statements in

85.Shumate, David. director of Finance and Administration, Duke Management Company. Conversation regarding Duke Management Corporation's investment policies. Personal communication to N. Wander, San Francisco, California, 12 May 2003.
86.University of Pennsylvania. No communication regarding University of Pennsylvania's tobacco investment policies. Personal communication to N. Wander, San Francisco, California, 14 May 2003.
87.Schevitz T. Regents set to exclude tobacco in UC portfolio: Risks to health cited for change in policy. Chronicle. 12 Jan 2001;Sect. A3. LexisNexis Academic. Accessed 16 July 2003.
88.Autman S. UC decides not to buy into tobacco. Union-Tribune. 18 Jan 2001;Sect. A3. LexisNexis Academic. Accessed 16 July 2003.
89.Novak, Adar, public affairs specialist, Health Sciences Division, Columbia University. Tobacco stock divestment policies of Columbia University. Personal communication to N. Wander, San Francisco, California, 1 April 2003.
90.Kennedy, Joseph, senior public affairs officer, Office of Public Affairs, Columbia University. No further information about tobacco stock divestment policies of Columbia University. Personal communication to N. Wander, San Francisco, California, 14 May 2003.
91.Oleary D. [Letter inviting PM to participate in the September 21, 1992 trustees’ discussion of tobacco stockholdings.]. 2 Sep 1992. Philip Morris. Bates No 2021156683/6685 〈〉. Accessed 8 April 2004.
92.Kurovsky R. [Letter from Stanford's Director of University Relations to PM's Wall asking for further information about the company pursuant to A November 23, 1992 Trustees Special Committee on Investment Responsibility meeting on tobacco divestment.]. 8 Dec 1992. Philip Morris. Bates No 2021156517/6518 〈〉. Accessed 5 April 2004.
93.Wall CR. [Response to Kurovsky's December 8, 1992 request for information letter of Stanford Trustees Special Committee on Investment Responsibility]. 10 Feb 1993. Philip Morris. Bates No 2021156495/6500 〈〉. Accessed 5 April 2004.
94.Sanchez R. UW may stub out tobacco stock. The Seattle Times, 20 Jan 2000; Sect. 1 〈〉. Accessed 16 July 2003.
95.Fehrs, Donald, chief investment officer, Cornell University. Conversation concerning tobacco stock investment policies at Cornell University. Personal communication to N. Wander, San Francisco, California, 9 May 2003.

© 2004 Association of American Medical Colleges


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