UA stock shares anger anti-smoking groups

By Trigie Ealey
Arizona Daily Wildcat
October 23, 1996

The UA, as a part of its $91 million endowment portfolio of investments, holds 5,555 shares in RJR Nabisco, the second-largest cigarette manufacturer in the nation.

Although university officials say they are waiting for the company to split its interest before getting rid of the shares, some anti-tobacco groups say the university should get rid of the shares now.

RJR Nabisco is the maker of Camel, Winston and Salem cigarettes, and food products such as Planters nuts, Breath Savers mints, Cheese Nips, Fig Newtons, Cream of Wheat cereal, Blue Bonnet margarine and Ortega Mexican food products. According to its Web site, RJR Nabisco sales are nearly evenly divided among food and tobacco products.

Ronald Smith, University of Arizona financial services controller, said the RJR Nabisco shares were worth about $146,000.

UA Investment Officer Ed Mihalik said the shares were purchased about five years ago. He said he has been waiting for Nabisco to spin off from the tobacco part of the company.

"An effort was made a couple of months ago to separate," Mihalik said. "It is one of the reasons we keep holding (the shares)."

Mihalik said the company now says the separation will not happen soon. He said he hopes the company will spin off within the next 12 months, so the university can put those shares exclusively into the food part of the company. He said there is an eight-member university committee which reviews investment strategies.

However, Rebecca Villicana, director of the tobacco prevention for the American Cancer Society in Phoenix and director of the Coalition for a Tobacco-free Arizona, said the university is not going far enough by attempting to move its shares to the food division on RJR Nabisco.

"So long as Nabisco is a subsidiary, RJR still benefits," she said. "The university is trying to dodge a public relations problem."

Villicana said the problem with investment portfolios is that many people do not realize what investments they have. Two years ago, the coalition placed the tobacco tax on the ballot. Voters supported a tobacco tax which is now used to fund projects like the Arizona Department of Health's anti-tobacco campaign aimed at kids, "tumor causing, teeth staining, smelling, puking habit."

"Many health care advocates are encouraging people to look into their investments," Villicana said. "Divestiture is a big issue. We would certainly encourage it."

The investments are part of a large portfolio of diverse stocks and bonds, Smith said.

"There are also investments in insurance companies, computing and consumer goods," Smith said. The companies include Coca-Cola, Hershey and Procter & Gamble Co., he said.

Mihalik said the endowment, which funds the investments, is made up of donations made to the UA since its inception. He said donations come from employees, students, alumni, corporations and government agencies.

UA President Manuel Pacheco said he had no comment on the type of investments in the university's portfolio.

Dr. Scott Leischow, director of smoking research at the Arizona Tobacco & Nicotine Research Program, said efforts to limit smoking and tobacco advertising will likely lead to more efforts to divest of tobacco holdings.

"The tobacco companies are huge conglomerations," he said. "They are now separating the tobacco from the rest of the company to limit liability for the lawsuits relating to tobacco."

Leischow said all organizations, not just the university, should look to other sources of income when it comes to tobacco.

"In general, if you are not part of the solution, you are part of the problem," he said.

Leischow, whose tobacco research is funded through the National Institutes of Health and pharmaceutical companies, said there is growing acceptance of nicotine as a drug and tobacco use as a problem which is the single largest cause of early death.

"Kids are becoming addicted at an early age, before age 18," he said. "It is far worse than cocaine, far worse than heroin, far worse than pot and far worse than alcohol. It used to be that smoking was seen as a behavioral choice, but it is being redefined as a drug of abuse."

Efforts by the Clinton administration to have nicotine classified as addictive drug and to limit tobacco advertising at sports events and in promotional items such as T-shirts have resulted in a clearly anti-smoking tone in the country.

Mesa voters passed an ordinance earlier this year to ban smoking in all public places including outdoor lines and patios.

In the meantime, the university continues to hold the shares, waiting for RJR Nabisco to make a decision to separate from its tobacco division.


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