January 25, 2001
By KURT EICHENWALD, GINA KOLATA and MELODY PETERSEN
The following article was reported by Kurt Eichenwald, Gina Kolata
and Melody Petersen and was written by Mr. Eichenwald.
In late 1986, four executives of the Monsanto Company, the leader
in agricultural biotechnology, paid a visit to Vice President
George Bush at the White House to make an unusual pitch.
Although the Reagan administration had been championing
deregulation across multiple industries, Monsanto had a different
idea: the company wanted its new technology, genetically modified
food, to be governed by rules issued in Washington and wanted the
White House to champion the idea.
"There were no products at the time," Leonard Guarraia, a former
Monsanto executive who attended the Bush meeting, recalled in a
recent interview. "But we bugged him for regulation. We told him
that we have to be regulated."
Government guidelines, the executives reasoned, would reassure a
public that was growing skittish about the safety of this radical
new science. Without such controls, they feared, consumers might
become so wary they could doom the multibillion-dollar gamble that
the industry was taking in its efforts to redesign plants using
genes from other organisms including other species.
In the weeks and months that followed, the White House complied,
working behind the scenes to help Monsanto long a political power
with deep connections in Washington get the regulations that it
wanted.
It was an outcome that would be repeated, again and again, through
three administrations. What Monsanto wished for from Washington,
Monsanto and, by extension, the biotechnology industry got. If
the company's strategy demanded regulations, rules favored by the
industry were adopted. And when the company abruptly decided that
it needed to throw off the regulations and speed its foods to
market, the White House quickly ushered through an unusually
generous policy of self-policing.
Even longtime Washington hands said that the control this nascent
industry exerted over its own regulatory destiny through the
Environmental Protection Agency, the Agriculture Department and
ultimately the Food and Drug Administration was astonishing.
"In this area, the U.S. government agencies have done exactly what
big agribusiness has asked them to do and told them to do," said
Dr. Henry Miller, a senior research fellow at the Hoover
Institution, who was responsible for biotechnology issues at the
Food and Drug Administration from 1979 to 1994.
The outcome, at least according to some fans of the technology?
"Food biotech is dead," Dr. Miller said. "The potential now is an
infinitesimal fraction of what most observers had hoped it would
be."
While the verdict is surely premature, the industry is in crisis.
Genetically modified ingredients may be in more than half of
America's grocery products. But worldwide protest has been
galvanized. The European markets have banned the products and some
American food producers are backing away. A recent discovery that
certain taco shells manufactured by Kraft contained Starlink, a
modified corn classified as unfit for human consumption, prompted a
sweeping recall and did grave harm to the idea that self-regulation
was sufficient. The mighty Monsanto has merged with a
pharmaceutical company.
How could an industry so successful in controlling its own
regulations end up in such disarray?
The answer pieced together from confidential industry records,
court documents and government filings, as well as interviews with
current and former officials of industry, government and
organizations opposing the use of bioengineering in food provides
a stunning example of how management, with a few miscalculations,
can steer an industry headlong into disaster.
For many years, senior executives at Monsanto, the industry's
undisputed leader, believed that they faced enormous obstacles from
environmental and consumer groups opposed to the new technology.
Rather than fight them, the original Monsanto strategy was to bring
in opponents as consultants, hoping their participation would ease
the foods' passage from the laboratory to the shopping cart.
"We thought it was at least a decade-long job, to take our efforts
and present them to environmental groups and the general public,
and gradually win support for this," said Earle Harbison Jr., the
president and chief operating officer at Monsanto during the late
1980's.
But come the early 1990's, the strategy changed. A new management
team took over at Monsanto, one confident that worries about the
new technology had been thoroughly disproved by science. The go-
slow approach was shelved in favor of a strategy to erase
regulatory barriers and shove past the naysayers. The switch
invigorated the opponents of biotechnology and ultimately dismayed
the industry's allies the farmers, agricultural universities and
food companies.
"Somewhere along the line, Monsanto specifically and the industry
in general lost the recipe of how we presented our story," said
Will Carpenter, the head of the company's biotechnology strategy
group until 1991. "When you put together arrogance and
incompetence, you've got an unbeatable combination. You can get
blown up in any direction. And they were."
Biology Debate
New Microbes Bring New Fears
In the summer of 1970, Janet E. Mertz was working at Cold
Spring Harbor Laboratory, picking up tips on animal viruses from
Dr. Robert Pollack, a professor at the private research center on
Long Island and a master in the field. One day she began to explain
to Dr. Pollack the experiment she was planning when she returned
to her graduate studies in the fall at Stanford University with her
adviser, Dr. Paul Berg. They were preparing to take genes from
a monkey virus and put them into a commonly used strain of bacteria,
E. coli, as part of an effort to figure out the purposes of different
parts of a gene.
Dr. Pollack was horrified. The virus she planned to use contained
genes that could cause cancer in rodents, he reminded her. Strains
of E. coli live in human intestines. What if the viral genes
created a cancer- causing microbe that could be spread from person
to person the way unmodified E. coli can. Dr. Pollack wanted Ms.
Mertz's project halted immediately. .
"I said to Janet, `There's a human experiment I don't want to be
part of,' " Dr. Pollack said in a recent interview.
The resulting transcontinental shouting match between Dr. Pollack
and Dr. Berg set off a debate among biologists around the world as
they contemplated questions that seemed lifted from science
fiction. Were genetically modified bacteria superbugs? Would they
be more powerful than naturally occurring bacteria? Would
scientists who wanted to study them have to move their research to
the sort of secure labs used to study diseases like the black
plague?
"The notion of being able to move genes between species was an
alarming thought," said Alexander Capron, a professor of law and
medicine at the University of Southern California in Los Angeles.
"People talked about there being species barriers you're
reorganizing nature in some way."
As researchers joined in the debate, they came to the conclusion
that strict controls were needed on such experiments until
scientists understood the implications. In 1975, the elite of the
field gathered at the Asilomar conference center in Pacific Grove,
Calif. There, they recommended that all molecular biologists
refrain from doing certain research and abide by stringent
regulations for other experiments. To monitor themselves, they set
up a committee at the National Institutes of Health to review and
approve all research projects.
It took just a few years and hundreds of experiments before
the most urgent questions had their answers. Over and over again,
scientists created bacteria with all manner of added or deleted
genes and then mixed them with naturally occurring bacteria.
But rather than creating superbugs, the scientists found
themselves struggling to keep the engineered bacteria from dying as
the more robust naturally occurring bacteria crowded them out.
It turned out that adding almost any gene to bacteria cells only
weakened them. They needed coddling in the laboratory to survive.
And the E. coli that Ms. Mertz had wanted to use were among the
feeblest of all.
By the mid-1980's, the Institutes of Health lifted its
restrictions. Even scientists like Dr. Pollack, who sounded the
initial alarm, were satisfied that the experiments were safe.
"The answer came out very clearly," he said. "Putting new genes
into bacteria did not have the unintended consequence of making the
bacteria dangerous."
That decision echoed through industry like the sound of a
starter's pistol. First out of the gate were the pharmaceutical
companies, with a rapid series of experiments on how the new
science could be used in medicines. Hundreds of drugs went into
development, including human insulin for diabetes, Activase for the
treatment of heart attacks, Epogen for renal disease and the
hepatitis B vaccine.
"It's been huge," said Dr. David Golde, physician in chief at
Memorial Sloan-Kettering Cancer Center in New York. "It has changed
human health."
The success that modifying living organisms would bring the
pharmaceutical industry quickly attracted attention from some of
the nation's largest agricultural companies, eager to extend their
staid businesses into an arena that Wall Street had endowed with
such glamour.
Reaching Out
Monsanto Takes a Soft Approach
In June 1986, Mr. Harbison took control of Monsanto's push into
biotechnology, a project snared in mystery and infighting. A
19-year veteran of Monsanto who had recently become its president
and chief operating officer, he formed a committee to lead the
charge.
"There is little more important than this task in our corporation
at this time," Mr. Harbison wrote to the 13 executives selected for
the assignment.
"We recognized early on," Mr. Harbison said in a recent interview,
"that while developing lifesaving drugs might be greeted with
fanfare, monkeying around with plants and food would be greeted
with skepticism." And so Mr. Harbison drafted a plan to reach out
to affected groups from environmentalists to farmers to win
their support.
That same month, the company's lobbying effort for regulation
began to show its first signs of success. The Environmental
Protection Agency, the Department of Agriculture and the Food and
Drug Administration were given authority over different aspects of
the business, from field testing of new ideas to the review of new
foods.
In an administration committed to deregulation, the heads of some
agencies had been opposed to new rules. At an early meeting,
William Ruckelshaus, then the head of the E.P.A., expressed
skepticism that his agency should play any role in regulating field
testing, according to people who attended. That was overcome only
when Monsanto executives raised the specter of Congressional
hearings about the use of biotechnology to create crops that
contain their own pesticides, these people said.
By fall, Monsanto's strategy committee was developing a plan for
introducing biotechnology to the public. A copy of a working draft,
dated Oct. 13, 1986, listed what the committee considered the major
challenges: organized opposition among environmental groups,
political opportunism by elected officials and lack of knowledge
among reporters about biotechnology.
It also highlighted more complex issues, including ethical
questions about "tinkering with the human gene pool" and the lack
of economic incentives to transfer the technology to the third
world, where it would probably do the most good.
To solve political problems, the document suggested engaging
elected officials and regulators around the world, "creating
support for biotechnology at the highest U.S. policy levels," and
working to gain endorsements for the technology in the presidential
platforms of both the Republican and Democratic Parties in the 1988
election.
To deal with opponents, the document said, "Active outreach will
encourage public interest, consumer and environmental groups to
develop supportive positions on biotechnology, and serve as regular
advisers to Monsanto."
Former Monsanto executives said that while they felt confident of
the new food's overall safety, they also recognized that
bioengineering raised concerns about possible allergens, unknown
toxins or environmental effects. Beyond that, there was a
reasonable philosophical anxiety about human manipulation of
nature.
"If this business was going to work, one of the things we had to
do was engage in a dialogue with all of the stakeholders, including
the consumer groups and the more rational environmental
organizations," said Mr. Carpenter, who headed the biotechnology
strategy group. "It wasn't Nobel Prize thinking."
A Blunder
Decision on Milk Causes a Furor
Even as Monsanto was assembling
its outreach strategy, other documents show that it was making
strides toward what former executives now acknowledge was a major
strategic blunder. The company was preparing to introduce to
farmers the first product from its biotechnology program: a growth
hormone produced in genetically altered bacteria. Some on the
strategy committee pushed for marketing a porcine hormone that
would produce leaner and bigger hogs.
But, simply because the product was further along in development,
the company decided to go forward with a bovine growth hormone,
which improves milk production in cows despite vociferous
objections of executives who feared that tinkering with a product
consumed by children would ignite a national outcry.
"It was not a wise choice to go out with that product first," Mr.
Harbison acknowledged. "It was a mistake."
Scientists who watched the events remain stunned by Monsanto's
decisions.
"I don't think they really thought through the whole darn thing,"
Dr. Virginia Walbot, a professor of biological sciences at Stanford
University, said of Monsanto's decision to market products that
benefited farmers rather than general consumers. "The way Thomas
Edison demonstrated how great electricity was was by providing
lights for the first nighttime baseball game. People were in awe.
What if he had decided to demonstrate the electric chair instead?
And what if his second product had been the electric cattle prod?
Would we have electricity today?"
The decision touched off a furor. Jeremy Rifkin, director of the
Foundation on Economic Trends, an opponent of biotechnology, joined
with family-farm groups worried about price declines and other
organizations in a national campaign to keep the Monsanto hormone
out of the marketplace. Some supermarket chains shunned the idea;
several dairy states moved to ban it. The first step toward the
shopping cart brought only bad news.
One year later, in 1987, the E.P.A. agreed to allow another
company, Advanced Genetic Sciences, to test bioengineered bacteria
meant to make plants resistant to frost. But under the agency's
guidelines, it had to declare the so-called ice-minus bacteria a
new pesticide classifying frost as the pest.
On April 28 and May 28, strawberry and potato plants were sprayed
in two California cities. Photographs of scientists in regulation
protective gear spacesuits with respirators were broadcast
around the world, generating widespread alarm.
"It was surreal," said Dr. Steven Lindow, a professor at the
University of California at Berkeley, who helped develop the
bacteria.
For the executives at Monsanto, these troubling experiences
reinforced their commitment to the strategy of inclusion and
persuasion.
The most complex challenge came in Europe, where there was deep
distrust of the new foods, particularly among politically powerful
farmers. Faced with such resistance, Mr. Harbison said Monsanto
began subtly shifting its attention from the lucrative European
market to Asia and Africa. The hope was that the economic realities
of a global agricultural marketplace would eventually push Europe
toward a more conciliatory attitude.
But by the early 1990's, company executives said, everything would
change. Mr. Harbison retired. Soon, Monsanto's strategy for
biotechnology was being overseen by Robert Shapiro, the former head
of Monsanto's Nutrasweet unit, who in 1990 had been named head of
the agricultural division.
In no time, former executives said, the strategy inside the
company began to change. Mr. Shapiro demonstrated a devout sense of
mission about his new responsibilities, these executives said. He
repeatedly expressed his belief that Monsanto could help change the
world by championing bioengineered agriculture, while
simultaneously turning in stellar financial results.
Eager to get going, he shelved the go-slow strategy of
consultation and review. Monsanto would now use its influence in
Washington to push through a new approach.
Mr. Carpenter, the former head of the company's biotechnology
strategy group, recalled going to a meeting with Mr. Shapiro, and
cautioning that it seemed risky to tamper with a strategic approach
that had worked well for the company in the past. But, he said, Mr.
Shapiro dismissed his concerns.
"Shapiro ignored the stakeholders and almost insulted them and
proceeded to spend all of his political coin trying to deal
directly with the government on a political basis rather than an
open basis," Mr. Carpenter said.
Mr. Shapiro, now the nonexecutive chairman of the Pharmacia
Corporation, which Monsanto merged with last year, declined to
comment. But in an essay published earlier this year by Washington
University in St. Louis, he acknowledged that Monsanto had suffered
from some of the very faults cited now by critics. `We've learned
that there is often a very fine line between scientific confidence
on the one hand and corporate arrogance on the other," he wrote.
"It was natural for us to see this as a scientific issue. We didn't
listen very well to people who insisted that there were relevant
ethical, religious, cultural, social and economic issues as well."
Turning Point
Objections by Scientists
On May 26, 1992, the vice president, Dan Quayle, proclaimed
the Bush administration's new policy on bioengineered food.
"The reforms we announce today will speed up and simplify the
process of bringing better agricultural products, developed through
biotech, to consumers, food processors and farmers," Mr. Quayle
told a crowd of executives and reporters in the Indian Treaty Room
of the Old Executive Office Building. "We will ensure that biotech
products will receive the same oversight as other products, instead
of being hampered by unnecessary regulation."
With dozens of new grocery products waiting in the wings, the new
policy strictly limited the regulatory reach of the F.D.A, which
had oversight responsibility for foods headed to market.
The announcement a salvo in the Bush administration's
"regulatory relief" program was in lock step with the new
position of industry that science had proved safety concerns to be
baseless.
"We will not compromise safety one bit," Mr. Quayle told his
audience.
In the F.D.A.'s nearby offices, not everyone was so sure.
Among them was Dr. Louis J. Pribyl, one of 17 government scientists
working on a policy for genetically engineered food. Dr. Pribyl
knew from studies that toxins could be unintentionally created when
new genes were introduced into a plant's cells. But under the new
edict, the government was dismissing that risk and any other
possible risk as no different from those of conventionally derived
food. That meant biotechnology companies would not need government
approval to sell the foods they were developing.
"This is the industry's pet idea, namely that there are no
unintended effects that will raise the F.D.A.'s level of concern,"
Dr. Pribyl wrote in a fiery memo to the F.D.A. scientist overseeing
the policy's development. "But time and time again, there is no
data to back up their contention."
Dr. Pribyl, a microbiologist, was not alone at the agency. Dr.
Gerald Guest, director of the center of veterinary medicine, wrote
that he and other scientists at the center had concluded there was
"ample scientific justification" to require tests and a government
review of each genetically engineered food before it was sold.
Three toxicologists wrote, "The possibility of unexpected,
accidental changes in genetically engineered plants justifies a
limited traditional toxicological study."
The scientists were displaying precisely the concerns that
Monsanto executives from the 1980's had anticipated and indeed
had considered reasonable. But now, rather than trying to address
those concerns, Monsanto, the industry and official Washington were
dismissing them as the insignificant worries of the uninformed.
Under the final F.D.A. policy that the White House helped usher in,
the new foods would be tested only if companies did it. Labeling
was ruled out as potentially misleading to the consumer, since it
might suggest that there was reason for concern.
"Monsanto forgot who their client was," said Thomas N. Urban,
retired chairman and chief executive of Pioneer Hi-Bred
International, a seed company. "If they had realized their client
was the final consumer they should have embraced labeling. They
should have said, `We're for it.' They should have said, `We insist
that food be labeled.' They should have said, `I'm the consumer's
friend here.' There was some risk. But the risk was a hell of a lot
less."
Even some who presumably benefited directly from the new policy
remain surprised that it was adopted. "How could you argue against
labeling?" said Roger Salquist, the former chief executive of
Calgene, whose Flavr Savr tomato, engineered for slower spoilage,
was the first fruit of biotechnology to reach the grocery store.
"The public trust has not been nurtured," he added.
In fact, the F.D.A. policy was just what the small band of
activists opposed to biotechnology needed to rally powerful global
support to their cause.
"That was the turning point," said Jeremy Rifkin, the author and
activist who in 1992 had already spent more than a decade trying to
stop biotechnology experiments. Immediately after Vice President
Quayle announced the F.D.A.'s new policy, Mr. Rifkin began calling
for a global moratorium on biotechnology as part of an effort that
he and others named the "pure food campaign."
He quickly began spreading the word to small activist groups
around the world that the United States had decided to let the
biotechnology industry put the foods on store shelves without tests
or labels. Mr. Rifkin said that he got support from dozens of small
farming, consumer and animal rights groups in more than 30
countries. In Europe, these small groups helped turn the public
against genetically altered foods, tearing up farm fields and
holding protests before television cameras.
If the F.D.A. had required tests and labels, Mr. Rifkin said, "it
would have been more difficult for us to mobilize the opposition."
Today, the handful of nonprofit groups that joined Mr. Rifkin's in
lobbying the F.D.A. for stronger regulation in 1992 have multiplied
to 54. Those groups, including the Sierra Club, Friends of the
Earth, the Natural Resources Defense Council, Public Citizen and
the Humane Society of the United States, signed a petition this
spring demanding that the government take genetically engineered
foods off the market until they are tested and labeled.
"There is absolutely no question that the voluntary nature of the
policy was unacceptable to many," said Andrew Kimbrell, one of the
early activists to oppose biotechnology and now the executive
director of the Center for Food Safety, which filed the petition.
The F.D.A. policy has also helped organizations like Mr.
Kimbrell's raise money. In late 1998 groups opposed to
biotechnology approached the hundreds of foundations that give
regularly to environmental causes and told them about the
government's decision to let the companies regulate themselves.
Since then, the foundations have given the groups several million
dollars out of concern over the policy, said Christina Desser, a
lawyer in San Francisco involved in the fund-raising effort.
There was also an about-face in the approach to dealing with
overseas markets. As the Clinton administration came to Washington,
Monsanto maintained its close ties to policy makers particularly
to trade negotiators. For example, Mr. Shapiro was friends with
Mickey Kantor, the United States trade negotiator who would
eventually be named a Monsanto director.
Confrontation in trade negotiations became the order of the day.
Senior administration officials publicly disparaged the concerns of
European consumers as the products of conservative minds unfamiliar
with the science.
"You can't put a gun to their head," Mr. Harbison said of the
toughened trade strategy with Europe. "It just won't sell."
And it didn't. Protests erupted in Europe, and genetically
modified foods became the rallying point of a vast political
opposition. Exports of the foods slowed to a stop. With a vocal and
powerful opposition growing in both Europe and America, the
perceived promise of biotechnology foods began to slip away.
By the end of the decade, the magnitude of Monsanto's error in
abandoning its slow, velvet-glove strategy of the 1980's was
apparent. Mr. Shapiro himself acknowledged as much. In the fall of
1999, he appeared at a conference sponsored by Greenpeace, the
environmental group and major biotechnology critic.
There, while declaring his faith in biotechnology, Mr. Shapiro
acknowledged that his company was guilty of "condescension or
indeed arrogance" in its efforts to promote the new foods. But it
was too late for a recovery. Soon after that speech, with the
company's stock price in the doldrums because of its struggles with
agricultural biotechnology, Monsanto itself ended its existence as
an independent company. It was taken over by Pharmacia, a New
Jersey drug company.
In recent months, biotechnology has been struggling with the
consequences of its blunders. Leading food companies like Frito-Lay
and Gerber have said they will avoid certain bioengineered food.
And grain companies like Archer Daniels Midland and Cargill have
asked farmers to separate their genetically modified foods from
their traditional ones. That, in turn, creates complex, costly and
as the Starlink fiasco shows at times flawed logistical
requirements for farmers.
Efforts have been made by industry and government to assuage
public concerns although critics of the technology maintain that
the attempts do not go far enough. Last week, the F.D.A. announced
proposed rule changes requiring the submission of certain
information that used to be provided voluntarily. But even
supporters of the rule change say that it will make little
practical difference in the way the business works, since companies
have universally submitted all such information in the past, even
under the voluntary standard.
And the industry itself has started down a new path, with a
multimillion-dollar advertising campaign promoting genetically
engineered foods as safe products that provide enormous benefits to
populations around the world an effort that some food industry
officials say has come 10 years too late.
"For the price of what it would have cost to market a new
breakfast cereal, the biotech industry probably could have saved
itself a lot of the struggle that it is going through today," said
Gene Grabowski, a spokesman with the Grocery Manufacturers of
America, a trade group.
And in recent weeks, Monsanto itself has announced plans to chart
a new course one with striking similarity to the course abandoned
in 1992 reviving its outside consultations with environmental,
consumer and other groups with concerns or interest in the
technology.
For the corporate veterans who set the original strategy, this is
scant solace. A dream they had worked so hard to achieve had, at
the very least, been set back by years.
"You can't imagine how I have bled over this," said Mr. Carpenter,
the former head of biotechnology strategy for Monsanto. "They lost
the battle for the public trust."
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