Huge tobacco settlement is nearly dead White House staff split between qualified support and abandonment


WASHINGTON -- Just three months ago, state attorneys general and tobacco industry executives announced a $368.5 billion legislative proposal that was to mark a turning point in the United States' decades-old conflict over smoking and health.

But today the proposed tobacco settlement is all but dead. And what, if anything, will rise in its place remains the subject of intense debate.

Though White House officials helped shape the proposed tobacco accord, a chasm has since opened within the Clinton administration over whether the president should give it a qualified endorsement or abandon it in favor of a broader public-health initiative. President Clinton is expected to offer his verdict on the plan as early as this week.

Initial expectations that Congress would enact a tobacco bill this year have been deflated. And with each passing week, the plan's momentum has slipped away.

In part, the proposal's now uncertain fate reflects a clash of historic adversaries, including fierce opposition from anti-smoking forces and others who have characterized the deal as a bailout for a renegade industry.

But interviews in recent days with administration officials, lawmakers, public-health advocates and tobacco industry representatives also suggest that backers of the settlement package made a series of crucial missteps and miscalculations.

For example, the strategy adopted by tobacco companies and state attorneys general -- to present a prepackaged legislative proposal to Congress that involved complex public-health, regulatory and liability issues -- quickly backfired as lawmakers balked at being told how to do their jobs.

Public was angry

The industry's immense financial offer and its trumpeted concessions on marketing did not mollify opponents, but rather loosed a torrent of popular anger that cigarette makers found they could not control. If the companies were willing to pay as much as that, critics contended, they must be able to afford more.

And in what proved to be a political blunder, tobacco lobbyists managed to slip a $50 billion tax credit into balanced-budget legislation passed in July to lower the overall cost of the settlement. Embarrassed senators voted 95-3 last week to repeal the provision.

"There was institutional reluctance -- resentment, even -- that a .. handful of attorneys general and plaintiffs' lawyers would come to us with such a detailed agreement, even divvying up the spoils," said Republican Sen. John McCain of Arizona, chairman of the powerful Commerce Committee. "Who do these people think they are? That's a legislative and executive branch prerogative."

The plan's staunchest supporters still maintain that Clinton, while demanding substantial changes to the plan, will soon give it the blessing it needs to win favor in Congress.

"I fully expect that the president is coming out in support of the national settlement next week," said Michael Moore, the Mississippi attorney general who was a chief craftsman of the deal and its leading public advocate. "I have been in the midst of negotiating the changes."

White House is torn

But within the White House, deep divisions remain over how to proceed.

Top administration officials briefed the president on Friday on their review of the proposal, but no decisions were made on whether to endorse a revised version of the original plan or to scrap it in favor of a series of general principles to guide the government's anti-tobacco efforts, a White House official said.

The administration is essentially split into two camps, although the groups' differences have narrowed in recent days as a presidential decision nears.

Supporting a settlement with the tobacco industry under a strengthened plan acceptable to the companies are Bruce Lindsey, deputy White House counsel and the president's closest adviser, and Bruce Reed, his chief domestic-policy aide.

Leading the other faction are Health and Human Services Secretary Donna Shalala, a former smoker who favors strict tobacco controls, and Vice President Al Gore, whose sister, Nancy, died of smoking-related lung cancer at age 46.

Shalala and Gore have argued that the president should set broad tobacco-control goals but stop well short of endorsing the plan put forward by the states and the tobacco companies.

Under the proposed accord reached on June 20 among five major tobacco companies, state attorneys general, some public-health advocates and class-action lawyers, the industry agreed to pay $368.5 billion principally to settle smoking-related lawsuits.

The five companies are Philip Morris Cos.; RJR Nabisco Holdings Corp., the parent company of R.J. Reynolds Tobacco; BAT Industries PLC, the British parent of Brown & Williamson Tobacco Corp.; Loews Corp., the parent of Lorillard Tobacco Co.; and UST Inc., a producer of smokeless tobacco.

Marketing to be restricted

In addition to the payments, the industry agreed to restrict marketing, do away with advertising figures such as Joe Camel and the Marlboro Man, finance anti-smoking campaigns, pay fines if youth smoking did not fall to specified levels and submit to the jurisdiction of the Food and Drug Administration.

In return, the agreement proposed giving cigarette makers protection against class-action lawsuits and immunity from punitive-damage awards for past misconduct.

Pub Date: 9/14/97

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