Pressures build for tobacco settlement

The Washington Post

WASHINGTON - In a city of dealmakers, tobacco is shaping up as the deal of 1998.

Big Tobacco wants a deal so it can stop worrying about exorbitant lawsuits.

The states want a deal to help pay for escalating health costs.

And the Clinton-Gore team wants a deal that positions it as the defender of America's youth.

The big question now is: Does Congress want a deal?

"Congress will act," predicted Sen. Connie Mack, a Florida Republican pushing for legislation that is tough on tobacco. "There will be throughout the country a strong reaction to the need to do something about the effects of tobacco on our society."

The road will be long and tortuous, but the elements are in place for Congress to pass a national tobacco policy next year.

Pending litigation against manufacturers, Gore's potential presidential campaign, public sentiment against Big Tobacco and the prospect of a giant pot of money for the states are all potent inducements to hammer out a bill - especially in an election year.

After waiting three months for President Clinton's verdict on the $368.5 billion settlement 40 state attorneys general negotiated with tobacco companies, it appears the pace toward passing comprehensive tobacco legislation is quickening. Beginning on Sunday's network talk shows, the tobacco industry will intensify its public lobbying on behalf of a deal. On Capitol Hill, one recalcitrant tobacco state Republican is promising hearings before the end of the year, while several Democrats have begun drafting legislation.

"The prospects have improved dramatically," said Sen. Edward Kennedy (D-Mass.), In the last three months, the tobacco industry has suffered three legislative losses - including last week's repeal of a $50 billion tax credit - despite heavy lobbying and generous campaign contributions. Kennedy is recruiting a GOP co-sponsor for his anti-tobacco bill. Such bipartisanship is how Kennedy won passage of an increase in the minimum wage last year and a 15-cent increase in the tobacco tax to fund children's health care this year.

No one expects action before next spring, and it is far too early to predict the specifics of any get-tough-on-tobacco legislation - how much a pack of cigarettes will rise in price, whether tobacco farmers get relief, and what restrictions the FDA will impose on the industry, among other issues. What is important, say veterans of similar epic legislative battles, is the surprisingly strong and widespread desire to have a deal.

"When you have bipartisan voices calling for action in both chambers, it bodes well for an end result," said White House political adviser Rahm Emmanuel.

But Emmanuel, and others, acknowledge that striking a balance between the competing interests and selling it to voters who are skeptical of both Big Tobacco and politicians will not be easy.

"The quandary is will you ever get anything that is realistically doable and satisfies the public?" said Democratic pollster Fred Yang.

In late June, the major tobacco companies, state attorneys general, trial lawyers and health advocates negotiated a deal in which the industry agreed to pay $368.5 billion over 25 years and accept restrictions on advertising and marketing. In return, tobacco companies were to receive protections against future lawsuits and the budgetary certainty accompanying that pledge. Last week, Clinton, responding to pressure from former surgeon general C. Everett Koop and former Food and Drug administrator David A. Kessler, upped the ante, requesting a $1.50 increase in the price of a pack of cigarettes over 10 years and guarantees the FDA would have broad regulatory authority over nicotine.

The proposed settlement and Clinton's recommendations are not without influential critics.

Some conservatives object on the philosophical grounds it increases taxes and expands the role of government. Other Republicans, who view trial lawyers as a wing of the Democratic Party, may be reluctant to endorse a plan giving the attorneys millions of dollars. And hard-core anti-smoking activists say any deal with the industry - especially one granting immunity from class-action suits - is a pact with the devil.

"The United States does not engage in horse-trading with drug dealers and it should not be cutting deals with the tobacco pushers," said consumer advocate Ralph Nader. "Effectively exempting the tobacco industry from the civil justice system will forfeit a critical public health promotion tool, one that cannot be replaced with government."

As the debate moves to Capitol Hill, and a myriad of committees, the challenge will be fending off the special interests and politicians who want to insert their own special pleadings. "This idea of continuing to add onto the agreement will cause it to fall of its own weight," said Sen. Wendell Ford (D-Ky.) who nevertheless wants to add protections for tobacco farmers.

Several state attorneys general oppose putting limits on future class-action suits. Health advocates, such as Mack, the Florida senator who is a cancer survivor, want more money for the National Institutes of Health for research and treatment. Sen. Ron Wyden, D-Ore., is pushing for tough limits on overseas distribution of cigarettes to minors.

The tobacco industry hopes to haggle Clinton's proposed $1.50 per pack increase down to perhaps $1.30. Companies that make asbestos are clamoring for a cut, arguing they should not bear the brunt alone of paying for the illnesses of asbestos workers who also smoked. And private health companies are beginning to grumble about recouping their tobacco-related costs.

At the same time, numerous lawsuits against the industry to recoup tobacco-related health care costs are moving forward and could reconfigure the political landscape.

After watching Mississippi and Florida win multibillion dollar settlements, the industry is looking for its first big win in Texas. That suit, which is is scheduled to begin Sept. 29, has been weakened by pretrial rulings.

The first of the large private class-action cases against the industry, meanwhile, is scheduled to begin in mid-October in Pennsylvania. The question before the court in this case is whether the industry addicted smokers and hid the evidence of nicotine's addictiveness.

Also in October, the 4th U.S. Circuit Court of Appeals could rule in a case brought by the tobacco industry challenging the FDA's authority to regulate tobacco, including rules to reduce underage access to tobacco.

Finally in January, the most formidable challenge to the industry is expected to go to trial in Minnesota. Armed with 33 million pages of internal tobacco industry documents and allied with Blue Cross and Blue Shield of Minnesota, state Attorney General Hubert Humphrey III is so confident of the strength of his case that he has consistently opposed any settlement that would keep his lawyers out of court.

Regardless of whether these cases against the industry are successful, the industry will lose, said James Tierney, a former Maine attorney general who advises state officials on their cases. "Any trial brings out the truth" about industry practices over the decades through internal industry documents, he said, "and the truth hurts the industry. They can't hide what they did."

They might not phrase it that way, but in a sense, Big Tobacco agrees. "The industry wants a national tobacco resolution," said Phil Carlton, a North Carolina lawyer representing the industry. "It is tired of courtroom after courtroom, day in and day out having 80 percent of the nation's chief law enforcement officers hounding it. And it is sincere in wanting to join the president in reducing underage use of tobacco products."

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