A question of conflict: the University and tobacco

It is too easy to be swayed by the argument that tobacco is a legal product and should be treated like any other," David Kessler, dean of Yale Medical School and former U.S. Surgeon-General, wrote in his book A Question of Intent: A Great American Battle with a Deadly Industry. "A product that kills people—when used as intended—is different. No one should be allowed to make a profit from that."

CLAIRE CONLY/YH While Yale owns stock in cigarette companies and receives federal funding for the study of tobacco addiction and cancer, the Administration maintains there is no conflict of interest.

Still, when your average smoker walks down to the drugstore and asks for a pack of cigarettes, Yale may be taking a cut of the profits.

A few years ago, Yale's investment team met to consider the implications of investing in companies that manufacture addictive products. In a highly controversial move, the Corporation decided to keep its holdings.

"The Corporation carefully worked through the pros and cons of divesting from tobacco stocks before deciding not to divest," William Goetzmann, the current chair of the Yale Advisory Committee on Investor Responsibility (ACIR), said.

The ACIR was established during the 1972-73 academic year, subscribing to the guidelines written in The Ethical Investor by John Simon, a Yale law professor. According to the ACIR website, "the book established criteria and procedures by which a university could respond to requests from members of its community to consider factors in addition to economic return when making investment decisions and exercising rights as shareholder."

So when Yale announced the establishment of its new Center for Nicotine and Tobacco Use Research at Yale (CENTURY) last week, most people saw it as a step in the right direction. To establish CENTURY and the Transdisciplinary Tobacco Use Research Center, the University accepted a five-year, $10 million grant from the National Institute on Drug Abuse and the National Cancer Institute. The purpose of the centers is to study "tobacco use and new ways to combat it and its consequences," according to a press release from the National Cancer Institute.

"Our goal is to understand the problems with nicotine and tobacco," Stephanie O'Malley, a CENTURY researcher and professor in the psychiatry department, said. "We want to find out why it's hard for people to quit."

When O'Malley was asked to comment on the University's tobacco policies, however, she declined: "I haven't been a part of this discussion and wouldn't comment."

Some in the Yale community think that raises a conflict between the goal of CENTURY and the companies from which Yale profits. While on the one hand, CENTURY researches the addictive effects of tobacco products and methods to help smokers quit, on the other, Yale invests money in the very companies that manufacture and market those addictive products. "There's definitely a conflict of interest," David Corson-Knowles, TC '03, a member of the Student Alliance to Reform Corporations (STARC) and a student representative in the ACIR, said. "The basic dilemma is that if Yale is investing in tobacco companies, then the endowment is working against itself [in this situation]."

But University President Richard Levin, GRD '74, does not believe that the University's policies in these matters conflict. "Our primary concern is with the pursuit of knowledge. To not accept the grant because of an investment would be completely contrary to our mission," Levin said. "We make decisions all the time that affect companies we own stock in. That's one of the reasons we do not reveal most of the companies we invest in—we would not want to discourage people from pursuing research that might affect those companies."

Other administration officials tend to agree. "There's no conflict of interest in that at all," Goetzmann said. "Yale can't decide to divest [from tobacco companies] lightly. Many people don't see the issue as black and white."

As an investor in a corporation, the University has the opportunity to vote on major policy decisions of the company, according to how many shares of stock it owns. Thus, Goetzmann argued, instead of divesting from tobacco companies, Yale tries to change the companies to closer reflect the University's sense of values. "We decided to hold tobacco stocks but use the power of our vote to stop advertising to minors," he said.

Tom Conroy, Deputy Director of Public Affairs, concurred: "The University disagrees with the notion that you cannot conduct tobacco research if investing in these companies," he said. "There is no conflict. I'm sure there are many people who could list practices or businesses they disapprove of that ought to determine investment problems, but the University has a good system for determining investment policy."

"In the case of tobacco companies, [the shareholder vote] is clearly not working," Corson-Knowles said. "As long as these companies are marketing these products in legal ways, there's no way you can change them for the better."

In addition to its investment in tobacco companies, Yale has also accepted a number of grants from Joseph Cullman, class of 1935, a former chairman of the board of Phillip Morris, Inc. For example, "Joseph Cullman and his Friends at Phillip Morris" was a major sponsor of an athletic banquet during Yale-Harvard weekend.

When the Herald asked Dr. Rajita Sinha, a researcher for the CENTURY program and an associate professor of psychiatry, to comment on the University's actions, she drew attention to the "gray area" between the goals of the University's research program and its business decisions.

"It's a tough question. On the one hand, tobacco is legal," Sinha said. "Since tobacco is legal, however, it's important to show [tobacco companies] the risks of their product." "That doesn't mean we shouldn't accept money from the companies," she continued. "If we stop accepting the money, will these companies fold? No."

Corson-Knowles disagreed. "There's definitely an issue with using dirty money," he said.

Professor Mireia Jofre-Bonet, an associate research scientist in the departments of psychiatry and the department of public health and epidemiology, noted that the University's investments in the tobacco industry, if they exist, might not be opposed to the research's goals at all. "You have to look at the net gain. In principle, the two sides appear to be inconsistent," Jofre-Bonet said. "But if the University is able to use the money made from these investments to research treatment, the overall benefits may be greater."

When addressing the issue of whether the University might be seen as indirectly supporting tobacco companies, Jofre-Bonet said. "These companies are huge and deal with more products than just tobacco. The University isn't necessarily supporting the tobacco industry."

"Alcohol is another example [of a company selling a controversial product]. But alcohol companies put a lot of effort into making people aware of its effects," Sinha said.

She also stated, however, that tobacco companies have not gotten to that point. "Hopefully, they'll get there," she added.

Kessler, a strong advocate of tobacco regulation, was unavailable for comment.

Many professors also noted the separation between Yale's research and business aspects. "Are their goals on the same footing?" Sinha asked. "They're overlapping in many places. I'm not sure. It seems like they separate the research and business of the University." Goetzmann agreed. "Research activities are fundamentally separated from our investment policy. It's a lot of give and take."

Although Corson-Knowles agreed that research and business are speparated at Yale, he does not believe they can be wholly divided. "If Yale's objective in having a medical school and sponsoring programs like this is to improve public health, then investing in tobacco doesn't make sense," he said.

Despite these allegations, however, Goetzmann reaffirms that the mission of Yale's investment policies are not necessarily the same as the mission of these organizations: "The goal of the endowment is very clear—to support education, not to further other social missions."

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