Hopkins further tells how he was, on several occasions, required to take millions of dollars into the DRC, destined for what is apparently the unmapped town of Auzi, built by BAT in the 1950s with a church and a school. He has photos of himself with $2,5 million in cash which he says is from one of the drops he did for BAT. En route there he’d protect himself in rebel-run Congo by renting an AK47, and hiding the dollars either in BAT-branded promotional items like hats and pens, or on occasion under a priest’s cassock.
‘These drops had to be illegal, that amount across an international border without any government being aware of it. It had been going on before I joined,’ Hopkins claimed.56
(See addendum 6 for selected extracts transcribed from the BBC’s interview with Hopkins, and addendum 7 for more details on the various other smuggling and tax evasion cases.)57
The BBC documentary quoted BAT as saying that its ‘accusers in [the] programme left us in acrimonious circumstances, clearly demonstrated by the false picture they present of how we do business’. The company was also quoted as saying it was committed to operating to the very, very highest standards of corporate conduct.
I asked the respective big tobacco companies for comment on the various allegations this book explores. Reynolds replied within a day that they had ‘no comment’. BAT, PMI and Imperial never replied.
TISA, the now-defunct industry body that represents big tobacco in South Africa, has previously denied that their members are involved in illegal activities and have pledged to take action against any of their members found to be contravening the tax, customs or excise laws of the country.
JTI replied that the allegations were ‘outdated’, relying in part on a 2013 report from OLAF (the EU Anti-Fraud Office) to the effect that ‘cheap whites and counterfeits (including the counterfeiting of cheap whites) dominate in large-scale seizures, and in particular in seizures related to containerised transport,’58 but this relates only to smuggling in containers (which the same report says is on the decrease), and very pertinently only relates to the EU.
Big tobacco has had more than its share of felonies, fines and infringements – and increasingly so over the last 20 years. It has been faced with unprecedented monetary penalties that would have crippled most other industries. On top of that, add advertising restrictions and all-out bans, and damning evidence and criminal prosecutions in relation to covering up scientific evidence on the dangers of smoking, and the fact that it kills more than half of its customers. And yet this industry not only survives, it thrives.
Make no mistake – the industry knows its hands are dirty.
As Prof. Anna Gilmore, Director of the Tobacco Control Research Group at the University of Bath, puts it: ‘Diverse and growing evidence shows that tobacco industry illicit (product) outstrips the problems of cheap whites and counterfeits and remains the single largest problem in illicit tobacco; that incentives for industry involvement have barely changed since their well-documented involvement in the 1990s; that tobacco companies likely continue to be involved in and benefit from tobacco smuggling.’ 59
6. Jam on their face and still they do nothing
‘It is the unspoken ethic of all magicians
to not reveal the secrets.’
– David Copperfield
In fairness to the tobacco industry, it is conceivable that some of the examples I’ve assembled could perhaps be attributable to vindictive whistle-blowers or to rogue employees. But it is entirely inconceivable that all of them are.
The industry – even licensed, bigger players – has a long and consistent history of fines, felonies and infringements, spanning decades, across the globe.
There is ample proof that the tobacco industry incorporated smuggling and other tax and duty evasion measures as an explicit part of its business strategy.1
BAT’s internal documents suggest that smuggling operations were almost certainly conducted with the knowledge and often the direct involvement of senior executives within the company, including regional directors, a former head of BAT’s marketing department, senior marketing managers, and BAT area managers. BAT executives appear to have expressly been put in charge of various smuggling and contraband operations.2
And indeed, despite being publicly called out, BAT declared that it would not sue over allegations that its senior staff had been involved in smuggling, with David Hinchcliffe, the Chairman of Britain’s House of Commons Select Committee on Health noting: ‘I personally pressed BAT whether they intended to take legal action and they said they did not. You will draw your own conclusions from that, as I did mine.’3
BAT’s apparent one-time plans to manufacture cigarettes in Andorra for smuggling to Spain in 1992 were not a secret – a document detailing the strategy was sent from a BAT marketing executive to the head of BAT’s marketing department and copied to a BAT lawyer.4
In Brazil the then-Chairman of BAT Industries is directly implicated in planned smuggling operations in a memo sent from the Territorial Director for Latin America to the Managing Director of BAT Industries, the CEO of BAT’s Brazilian subsidiary, the Chairman of BAT and others: ‘I am advised that the BAT Industries Chairman has endorsed the approach that the Brazilian Operating Group increase its share of the Argentinean market via DNP [duty not paid, i.e. contraband].’5
As a lawsuit against PMI noted: ‘Defendants created a circuitous and clandestine distribution chain for the sale of cigarettes in order to facilitate smuggling. The decision to establish and maintain this distribution chain was made at the highest executive level of PMI. Defendants have collaborated with smugglers, encouraged smugglers, and sold cigarettes to smugglers, either directly or through intermediaries, while at the same time supporting the smugglers’ sales through the establishment and maintenance of so-called umbrella [cover] operations.’6
And, so, it is hardly surprising that a Reynolds sales executive, interviewed on a CBS documentary, would note that, ‘… We were considered the most – single-most – profitable business unit in the RJR Nabisco family of companies. They knew exactly where the money was coming from. On an average of approximately every other Monday, an in-house lawyer from upstairs would come down and talk to us, “Yeah, it’s sensitive, but we’re here. We’re all in this together. And it’s – it’s a loophole. It’s grey. It’s legal, OK?” The company knows where they made the $100 million. They know the customers that produced the $100 million.’7
The same Reynolds executive goes on to explain how: ‘We were told to keep no paperwork in this business [by vice president of sales at RJ Reynolds]. He insisted … “You’re not keeping any documents, are you?” He reminded me on many occasions not to keep any hard copy on any correspondence with their offices.’8
In a statement, a spokesman told CBS that neither RJ Reynolds Tobacco nor the parent company have been implicated in any criminal investigation.
At least some had the sense to ask how ethical this was, with one fax query from BAT’s headquarters to its branch office in Venezuela asking ‘… whether the company could continue with duty paid and duty not paid [contraband] in parallel and be seen as a clean and ethical company at the same time’.9
At a meeting at BAT’s UK headquarters, a memorandum records executives discussing smuggling into Nigeria: ‘Discussion was held concerning direct imports to Nigeria through Mr. Adji who would disguise the cigarette importation by calling the shipment something else, e.g. matches.’ 10
And although I haven’t seen the accounts for myself, numerous sources have alleged that this part of their trade was accounted for against separate cost centres, in dedicated bank accounts, typically in offshore tax havens like Switzerland11 – a fully entrenched, formal part of big tobacco’s business practices.
My concession aside that some of the examples may perhaps