Share this story
Close X
Switch to Desktop Site

Tobacco Deal Proponents Launch Major Sales Pitch

The selling of the tobacco settlement to Congress and the public has started - even before there's a deal.

The stakes are no less than titanic. There's enough money in lawyers' fees alone to create hundreds of multimillionaires, enough political capital to skyrocket numerous careers - not to mention enough restrictions on tobacco sales to save as many as 1 million lives a year.

About these ads

With so much riding on needed congressional and public approval, it's likely to require the sales pitch of a lifetime - just so it isn't bogged down by those who want to be a part of the action.

Already some health groups and tobacco-control advocates argue the deal is sweeter than ever anticipated and that it should be approved posthaste.

"This ... would essentially level the killing field," says John Seffrin, chief executive officer of the American Cancer Society, which estimates the deal could save 1 million lives. Last week, Mr. Seffrin joined the Campaign for Tobacco Free Kids and the American Heart Association to begin talking about the deal.

Once tobacco firms join in, there will be even more pressure as powerful lobbyists work the lawmakers. Pro-tobacco lobbyists include former senators Bob Dole and George Mitchell, who have been a part of the negotiations. The White House is also likely to become involved.

There are rumors the sides want Congress to ratify any deal before its August recess.

Backers have a big job. As many as 10 House or Senate committees could claim jurisdiction. "We won't be left out of some form of approval. There's not going to be some form of escape hatch," says Sen. Frank Lautenberg (D) of New Jersey.

Congress will certainly want to look at the deal's financial aspect. Lawyers want 20 to 25 percent of any settlement. With the payout by tobacco firms now estimated at $10 billion up front and $15 billion annually, just 0.1 percent of the first year's payment would net $10 million.

About these ads

Some of this might come out of money to be reimbursed to the federal government. According to the proposed deal, tobacco companies will reimburse states for smokers' Medicaid expenses. But 50 percent of Medicaid is paid with federal dollars. Thus, a large portion of the money won by states in their lawsuits would have to be returned to Washington.

"It would be only appropriate to compensate the federal government," says Senator Lautenberg, who sponsored legislation last year to allow states to keep one-third of the federal share of Medicaid. The bill didn't pass, but states are negotiating to get some of the federal money anyway.

Once an agreement reaches Congress it will be a challenge to prevent any changes.

Sen. Ron Wyden (D) of Oregon says he will filibuster any deal that doesn't take up the international aspect of smoking. Others are sure to have their own issues.

"Orders would have to be handed down by the Republican leadership ... to the respective [committee] chairs ... to keep their hands off the legislation," says Cliff Douglas, who is co-counsel in the Mississippi lawsuit.

But Lautenberg says any agreement can't include restrictions on liability lawsuits. "None of the participants on our side have any right to offer any immunity from suits or damage recovery," he says.

In the House, a key antitobacco member of the Commerce Committee, Rep. Henry Waxman (D) of California, will be tough to convince. Waxman's top legislative aide is doubtful the deal will save 1 million people. "How can one be sure of how the companies can act or the reaction of kids?" Phil Schiliro asks.

The White House is also trying to be careful. President Clinton agreed not to take any position until a newly formed Tobacco Advisory Committee draws up a blueprint for dealing with tobacco use. The group will meet this week to draft recommendations.


* Marketing

Limits on advertising include: text-only ads in youth-oriented magazines, no event sponsorship, no billboards, no cartoon characters in ads, and no Internet ads.

* Public education

The industry will spend up to $500 million a year to warn youths against smoking.

* Health warnings

Labels will be revised and have statements such as: "Warning: Smoking Can Kill You."

* Disclosure

The industry will release all papers that would have been revealed in lawsuits, including health-related research.

* FDA authority

The agency will reportedly regulate nicotine, and tobacco will be labeled a drug.

* Youth access

The industry will stop using vending machines and pay for enforcement against youth access. Fines apply if youth smoking doesn't decline.

* Payout

Details aren't final, but the industry may pay $10 billion the first year and $15 billion per year for up to 25 years.

* Smoking ban

Smoking would be banned in public places except restaurants (excluding fast-food), bars, casinos, and bingo parlors.

* Tobacco liability

The only major unresolved issue. So far, rights of people to sue won't be limited. But there may be a cap on what the industry pays per year. A limit on punitive damages hasn't been resolved.

Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.