Juul Labs is spending big on campaign donations and a massive lobbying blitz as the e-cigarette maker faces growing threats from lawmakers and regulators, and with few allies in Washington.
The company spent $1.95 million on lobbying in the first two quarters of 2019, surpassing its 2018 total of $1.64 million. And Juul’s PAC has given nearly $100,000 to lawmakers this year, a pace that will blow past the $225,000 the company spent in the entire 2018 cycle.
Those moves have rattled Juul’s critics, who fear the efforts could slow momentum to combat teen vaping, and question if the company is serious about addressing the problem.
“Juul’s increased spending on lobbying and political donations is the latest example that the company says one thing and does another,” said Vince Willmore, vice president of communications at the Campaign for Tobacco-Free Kids.
“Juul claims it doesn’t want kids to use its products, yet it is doing everything it can to fight strong policies to prevent youth use, such as effective FDA regulation and prohibitions on flavored e-cigarettes,” he added.
Juul insists it is working with policymakers to reduce teen vaping.
“We have grown our team to engage with lawmakers, regulators, public health officials and advocates to drive awareness that JUUL exists to help adult smokers switch from combustible cigarettes and is committed to keeping JUUL products out of the hands of underage people,” Juul spokesperson Ted Kwong told The Hill in a statement. “That is why we have taken the most aggressive actions of anyone in the industry to combat youth usage.”
But influence world watchers expect the lobbying work to also intensify amid scrutiny from both the Food and Drug Administration (FDA) and House Democrats, who say Juul targeted its products to teenagers, leading to a spike in youth vaping.
“I would be surprised if they weren’t ramping up even more,” said David Williams, president of the Taxpayers Protection Alliance, a nonprofit group. “I think you’re going to see a lot more questions about their products that they’re going to have to answer from Republicans and Democrats. This is probably just the beginning for Juul.”
Juul is facing scrutiny over its marketing practices on multiple fronts.
At hearings last month, House lawmakers accused the company of deliberately targeting teenagers. At the state level, the attorneys general of Connecticut and Massachusetts are investigating the company and Juul faces a lawsuit from North Carolina alleging it marketed its products to young people. The FDA is also weighing tougher rules on e-cigarette sales.
Juul says it is trying to lower youth vaping, including by stopping the retail sale of some products critics say appeal to young people, shutting down their Facebook and Instagram accounts and beefing up online age verification. The company also backs legislation to raise the smoking age to 21.
But those efforts haven’t stopped Juul from also seeking help in Washington.
Its PAC has donated $74,000 to Democrats and $22,500 to Republicans so far in 2019, according to Federal Election Commission figures.
Rep. Cedric Richmond (D-La.) was the top recipient with $7,500. Democratic Sens. Kyrsten Sinema (Ariz.) and Jeanne Shaheen (N.H.) received $5,000, with the Congressional Black Caucus (CBC) and the Congressional Hispanic Caucus’ political action committees receiving the same, The Associated Press reported.
The wooing of minority Democratic lawmakers has rankled some anti-tobacco advocates.
“Going after at-risk communities is core to [tobacco companies’] business plan and has been for a long time,” said Stanton Glantz, director of the Center for Tobacco Control Research and Education.
“The CBC has grave concerns about the staggering rise in youth vaping, especially its impact on Black youth,” Gabrielle Brown, CBC spokeswoman, told The Hill in response. “Several of our members … have been very aggressive in providing the needed oversight to better understand the business practices of companies like JUUL.”
Juul’s in-house team has also brought on former aides as lobbyists and consultants, including Benjamin Branch, former senior policy adviser to Rep. Gregory Meeks (D-N.Y.), currently the chairman of the House Financial Services Subcommittee on Consumer Protection and Financial Institutions, and Ted McCann, a former assistant to ex-Speaker Paul Ryan (R-Wis.).
And the company has turned to prominent K Street firms, including KDCR Partners, which has a $180,000 lobbying contract, and S-3 Group with a $160,000 contract. The S-3 team includes Mike Ference, former senior policy adviser to ex-House Majority Leader Eric Cantor (R-Va.) and Matthew Bravo, former director of floor operations for House Majority Whip Steve Scalise (R-La.). Last week, Juul added the Nickles Group to their lobbying team, including former Sen. Don Nickles (R-Okla.).
Bruce Mehlman, a partner at Mehlman Castagnetti Rosen & Thomas, said it was no surprise Juul was “in need of significant government relations” help.
“When an industry is threatened, a lot of money is poured into lobbying,” said Beth Leech, director of graduate studies at Rutgers University’s Department of Political Science.
All of those resources are being put to the test.
“It’s self-preservation for them,” Williams said.
The company is pushing ahead, announcing new plans this week for a product that would monitor users’ vaping and include facial recognition technology to prevent youth smoking. But that could also bring the company new regulatory questions.
Juul insists it is working with regulators. CEO Kevin Burns wrote an op-ed in March highlighting the company’s actions to limit e-cigarette sales to young people. He also called for regulators to help crack down on other e-cigarette products he said could be less safe.
“We also need government agencies to take their own actions against counterfeit, knockoff and other illegal vapor products, which are often made with unknown ingredients, with unknown quality standards, and with youth-appealing flavors and packaging,” he wrote.
The company’s critics, though, are skeptical as Juul devotes more resources to its lobbying campaign, which is likely to fuel the fight.
“The tobacco companies, which include Juul, have a long history of using campaign contributions and fancy lobbyists to deter effective public health measures,” Glantz said.
Critics are vowing to keep pressure on the company.
“Policymakers shouldn’t be fooled and must hold Juul accountable,” said Willmore.