Kelly Sleuthed `Insider’ Wigand for Private Firm.

Six years before Mayor Bloomberg hailed Jeffrey Wigand as a “genuine American hero” for exposing the inner workings of the tobacco industry, Mr. Bloomberg’s police commissioner, Raymond Kelly, was involved in an industry-funded investigation into Mr. Wigand’s past that was designed to demolish his credibility as a whistleblower, TheObserver has learned.

Mr. Wigand, a former research director at Brown and Williamson who accused his onetime employer of deliberately withholding information about the dangers of smoking, inspired the 1999 movie The Insider , starring Russell Crowe in the role of the courageous defector. Mr. Wigand has been recruited as a champion of City Hall’s crackdown on smoking in bars and restaurants.

In 1996, Mr. Kelly headed the New York office of Investigative Group International, a blue-chip research firm retained by lawyers for Brown and Williamson to dig into Mr. Wigand’s past. The tobacco company, reeling from Mr. Wigand’s allegations of wrongdoing, mounted a full-blown effort to discredit him, and I.G.I. was brought in as part of the effort.

According to a former I.G.I. official who worked for the company at the time, two investigators in the New York office spent more than a month researching Mr. Wigand’s life, looking for fabrications in his past résumés and driver’s license applications. They even sought to verify a report of a past arrest, the official said.

Told of Mr. Kelly’s role as head of I.G.I.’s New York office, Mr. Wigand assailed the commissioner in an interview with The Observer . “What was done was wrong,” Mr. Wigand said. “I’m sorry he was involved in it.” Mr. Kelly, through a spokesman, declined to comment for this story.

Although the full extent of Mr. Kelly’s involvement is unclear-one former I.G.I. official described his role as “peripheral”-the revelations could complicate Mr. Bloomberg’s smoking crackdown. His initiative has evolved into a full-blown moral crusade against Big Tobacco, which he has accused of waging a “decades-long disinformation campaign” designed to push a “dangerous product.” But Brown and Williamson’s effort to discredit Mr. Wigand surely was part of that “disinformation campaign.”

No one denies that Mr. Kelly ran the New York office of I.G.I. when it worked on the Brown and Williamson contract, or that investigators under Mr. Kelly worked on the case. What’s uncertain is whether Mr. Kelly had a direct supervisory role in the dirt-digging operation. The former I.G.I. official who spoke to The Observer sought to distance Mr. Kelly from the investigation, asserting that the commissioner had not directly orchestrated the operation. He said that the investigation’s heavy lifting had been done mostly by Brown and Williamson lawyers, and that I.G.I. had been enlisted once the bulk of the research was finished to perform a “routine” check of Mr. Wigand’s résumé and other aspects of his record. He added that Mr. Kelly had no idea that Brown and Williamson intended to leak the information as part of a public campaign to smear Mr. Wigand.

Still, Mr. Kelly oversaw a small office; the former I.G.I. employee said that barely more than a dozen investigators worked there. And the former employee conceded that the investigators toiling on the Brown and Williamson case worked under Mr. Kelly.

“It’s a reach to say he supervised the investigation,” the ex-employee said, adding: “He oversaw everything that was happening in the New York office. Did the people who were working on it ultimately report to him? Yes.”

Mr. Wigand said that while he’s fully supportive of the Mayor’s efforts, he is nonetheless upset with Mr. Kelly. “It’s bothersome to me,” he said. “Ignorance is not an excuse here. He’s still the boss. The buck stops there. I still feel that I.G.I. and its management were responsible for preparing a document or dossier geared to discrediting me and discrediting the truth in the court of public opinion. That type of activity, in any format, is clearly unethical.”

Mr. Kelly’s involvement creates a political quandary for the Mayor. At City Council hearings and in other venues, Mr. Bloomberg has sought to cast opponents of his smoking ban as tools of Big Tobacco. That may be a tougher case to make in light of the fact that Mr. Kelly’s investigators helped gather information on the one whistleblower the industry’s opponents have ever had.

“It’s rather hypocritical of the Mayor, isn’t it?” said Ciaran Staunton, the owner of O’Neill’s, a pub on Third Avenue and the chairman of Irish Bar and Restaurant Owners, a group fighting the ban.

“He says those of us who are standing up for our livelihoods are stooges of the cigarette companies,” Mr. Staunton continued. “Yet one of his right-hand people worked directly or indirectly for the cigarette companies, investigating one of the people that Mayor Bloomberg said is a great American.”

Edward Skyler, the Mayor’s press secretary, declined to comment on any aspect of this story.

Mr. Bloomberg has recruited Mr. Wigand, a Bronx resident, as a key ally in his smoking crackdown. At a smoke-free photo-op lunch with Mr. Wigand at the Union Square Café on Oct. 9, the Mayor said: “He’s the first person to stand up and take on the tobacco industry. He did it because he believed it was the right thing to do.”

The campaign against Mr. Wigand was one of the most ignominious chapters of the long-running public-relations battle between the tobacco industry and the anti-smoking forces. Mr. Wigand was fired from Brown and Williamson in 1993 under disputed circumstances. Two years later, he went public, alleging that the tobacco industry had known since the early 1980’s about the dangers of secondhand smoke, when a Japanese researcher published the first evidence that cigarette smoke could cause lung cancer in the spouses of smokers.

When Mr. Wigand began airing his allegations in 1995, Brown and Williamson launched its campaign to discredit him, and I.G.I. was only one part of that effort. In an extensive article in February 1996 detailing Brown and Williamson’s assault on Mr. Wigand’s credibility, The Wall Street Journal reported that the tobacco company had assembled a team that included lawyers from the New York firm of Chadbourne & Parke, and top New York public-relations adviser John Scanlon, who died of a heart attack last year.

Also enlisted in the effort, The Journal reported, was I.G.I., which is based in Washington, D.C., and is headed by Terry Lenzner, the former Watergate investigator who worked for Bill Clinton’s lawyers during the Monica Lewinsky scandal.

Brown and Williamson compiled the results of its investigation in a 500-page file bearing the title “The Misconduct of Jeffrey S. Wigand Available in the Public Record.” Subheadings included “Wigand’s Lies About His Residence,” “Wigand’s Lies Under Oath” and “Other Lies By Wigand.”

Wet Luggage

The dossier went to extraordinary lengths to discredit Mr. Wigand. It detailed everything from a complaint Mr. Wigand had made to an airline about wet luggage to complaints about consumer goods he had purchased, to his possible role in flooding the offices of a former employer.

The file was leaked to The Journal by the Brown and Williamson camp, but the ploy quickly became a public-relations disaster when the newspaper poked holes in many of the dossier’s key claims.

Mr. Kelly has never publicly discussed his role in the affair. There was a one-line mention of it in The Journal piece. Without clarifying Mr. Kelly’s role, the article said: “[The Brown and Williamson camp is] working with the Investigative Group Inc., a leading Washington-based detective firm whose New York office is run by a former New York City police commissioner, Raymond Kelly. This is the firm Ivana Trump hired to investigate her rival Marla Maples and that Sen. Edward Kennedy used to check into an opponent in his 1994 campaign.”

Mr. Kelly’s role was also discussed in March 2000, in an extensive article by Pulitzer Prize–winning investigative reporter Sydney Schanberg on, a now-defunct Web site. Mr. Schanberg reported that Mr. Kelly’s biggest commission as head of I.G.I.’s New York office was “supervising the dirt-gathering investigation on Jeffrey Wigand.”

“Kelly kept out of sight while his IGI operatives dug into Wigand’s past for nuggets that Brown and Williamson hoped would stain and discredit its former head of research,” Mr. Schanberg wrote.

Mr. Kelly was not quoted in the piece. But in an interview with The Observer , Mr. Schanberg said that during an extensive off-the-record conversation, Mr. Kelly admitted to playing a supervisory role in the inquiry.

But that account was disputed by the I.G.I. official who spoke to The Observer . The official said that Brown and Williamson lawyers had already done the dirt-digging on Mr. Wigand, and had brought in I.G.I. to check the accuracy of some of the facts they had unearthed. The official said that the bulk of the research in the dossier had already been done by the time I.G.I. received the file, adding that while two of Mr. Kelly’s investigators worked on the case, Mr. Kelly himself didn’t have an investigative role. He said that Mr. Kelly had been angered when the Wigand dossier was leaked to The Journal , in part because the work was shoddy and because Mr. Kelly hadn’t yet signed off on it before it was given to the paper.

“He was the head of the office that had a piece of the case, but he never read the report,” the official said. “Before it was a finished product, it had been leaked to the press.”

Mr. Schanberg agreed that Mr. Kelly had been surprised when the dossier was leaked: “Kelly apparently never expected that he would be tied to this event.”

Kelly Sleuthed `Insider’ Wigand for Private Firm.