Big Tobacco dodges a bullet - for now

Borrowing a successful tactic from the states, President Clinton wants the US government to sue tobacco companies to recover Medicare costs stemming from smoking-related illnesses.

He's already announced that the Justice Department will file suit, and in his latest budget request he's asked Congress for $20 million to pursue the case.

But the president may have suffered a setback last week, when a key Senate committee, in a little-noticed move, banned the expenditure of federal money for lawsuits against Big Tobacco.

Critics are lambasting the action as an unprecedented attempt to tell the Justice Department which cases it can or cannot pursue. The Senate Appropriations Committee, in denying Mr. Clinton's request for funding, also disallowed expenditures to hire expert witnesses in tobacco cases.

If the full Congress goes along, the move would make it harder for the government to sue, because the US attorney general is not likely to go against the wishes of lawmakers. It would also have ramifications for the budget and for health-care policy, since the Democrats had planned to use any money recovered from the tobacco industry to defray the cost of a prescription-drug benefit for Medicaid recipients.

The White House, antitobacco health groups, and others who want the government to sue were caught by surprise. They hope to counterattack this week, with an amendment offered on the Senate floor that makes it clear the Justice Department has the authority to bring the litigation and incur expenses needed to file the lawsuit.

"After 17 years in Washington, there are very few things that surprise me, but that really surprised me," says Sen. Dick Durbin (D) of Illinois, who hopes to co-sponsor the new amendment. "Particularly coming out of that committee, which I have never really viewed as dominated by tobacco interests."

Industry spokesman Scott Williams denies that tobacco interests sneaked the legislation through in the dark of night. He says the industry and other business groups have been writing letters to the Senate for some time. "The other side was asleep at the switch, and now they don't want to be embarrassed," says Mr. Williams.

Senator Durbin says it is unprecedented for Congress to tell the Department of Justice (DOJ) not to pursue a lawsuit.

Chris Watney, a DOJ spokeswoman, says the agency is currently reviewing the Senate action and working with the Appropriations Committee "to see what it means." In the meantime, she says, "we continue to pursue a plan to recover costs from the tobacco industry." One option is to fund a lawsuit from DOJ's current budget.

Costs of tobacco use

Health groups estimate tobacco-related health costs incurred by the federal government are between $25 billion to $50 billion a year, much of it paid for by Medicare, Veterans Affairs, and the Indian Health Service.

Meanwhile, a DOJ task force is determining whether the federal government has legal standing to bring a suit. The US Supreme Court has already ruled that the government can't recover past medical costs without specific authority in law to do so. The prospect of the DOJ suing a private company engaged in a legal business has prompted letters from the Chamber of Commerce to the National Restaurant Association.

Even if the case got to the courtroom, the government faces a challenging task because it has mandated warning labels on cigarette packs for years. In addition, the US Surgeon General issues an annual report warning about the danger of smoking. Attorney General Janet Reno has already testified before Congress that the US government "does not have an independent cause of action."

Would industry settle again?

Tobacco firms might be willing to settle a lawsuit with the government just to end the uncertainty over the result and to cut expenses. By some estimates, the industry spent $600 million last year on legal defense.

Mounting legal costs and depressed stock prices were partly why the industry paid $246 billion to 47 states for past Medicaid payments. As part of the settlement, the industry will end billboard advertising and fund antitobacco messages directed at youths.

But congressional staffers say it's unlikely DOJ can bring suit if the current language stands. After all, Congress can cut the budget of any agency that defies it.

It's not clear how the antilitigation wording made it into the committee's final legislation. Williams says it may have come from Sen. Mitch McConnell (R) of Kentucky and the chair of the committee, Sen. Judd Gregg (R) of New Hampshire. Neither of the senators' press offices returned repeated phone calls.

Antitobacco groups claim the language was inserted at the last minute - just when the vote was taking place. "It was not discussed as part of the deliberations," says Matt Myers of Tobacco-Free Kids in Washington.

Ironically, Congress last month waived its right to any of the states' $246 billion. At the time, many lawmakers justified the giveaway by saying the US government could gets its share with its own lawsuit.