Cigarette lobby's smokescreen Deceptive messengers swarm Capitol Hill


WASHINGTON -- When tobacco barons set out to kill anti-smoking legislation pending in Congress, they didn't send Mr. Butts, the Doonesbury comics' depiction of an industry lobbyist with the body of cigarette and the smarmy grin of a used-car salesman.

Instead, they enlisted police officers, Wall Street analysts, restaurateurs and former congressional staff members -- all with an interest in tobacco's future but none with the negative image of the industry's traditional lobbying army.

Tobacco opponents say too many lobbyists are not revealing their multiple roles when working on Capitol Hill, misleading lawmakers into believing they have no ties to the cigarette industry.

"Unfortunately, people will take [their assertions] at face value," complained John Banzhaf, a law professor and anti-smoking activist at George Washington University, "not knowing the [tobacco] industry for 30 years has used front organizations and front people to carry out their message."

But the lobbyists and analysts working the issue insist there is no conflict of interest. They say strict tobacco-control legislation will affect not just the cigarette companies, but police combating a black market, restaurant owners coping with indoor smoking restrictions, and investors holding shares in huge, multinational tobacco companies.

It is only natural that their interests are converging on Capitol Hill, industry advocates argue.

Even so, many eyebrows have been raised over the high-profile role being played by James O. Pasco Jr., the executive director of the Fraternal Order of Police. Pasco has mounted an aggressive campaign to warn Congress that the Senate's sweeping tobacco bill would be a nightmare for law enforcement, sparking a black market in duty-free cigarettes and overwhelming police forces.

He has been less forthcoming about his other affiliation: registered lobbyist for Philip Morris, the nation's largest tobacco company.

Pasco is not the only tobacco lobbyist apparently making an impact.

Senator's role questioned

Sen. Orrin G. Hatch, a Utah Republican who chairs the Senate Judiciary Committee and is a longtime antagonist of the tobacco industry, has surprised many by opposing tough anti-smoking legislation written by Republican Sen. John McCain of Arizona.

Instead, Hatch favors legislation patterned on the milder settlement agreement reached in June by the tobacco industry and 40 state attorneys general, arguing that a more punitive measure would likely become tied up in courts and perhaps be deemed unconstitutional.

Some Senate aides believe they know who has Hatch's ear: Kevin McGuiness, a former Hatch chief of staff now lobbying for R. J. Reynolds Tobacco, the nation's second-largest cigarette maker.

Jeanne Lopatto, a spokeswoman for the Judiciary Committee, called that allegation "a cheap shot," noting that McGuiness was lobbying for R. J. Reynolds last year when Hatch overcame tobacco industry opposition to push through a cigarette tax increase.

"Anyone who knows Senator Hatch knows the idea that a tobacco policy position is based on one lobbyist is absurd," Lopatto said.

But there is far more than one lobbyist working on the issue. When tobacco companies warn that restrictions on cigarette advertising will be challenged not by them but by advertising companies, they probably know what they are talking about. G. Stewart Hall, a top Philip Morris lobbyist, also represents the Outdoor Advertising Association of America, a billboard trade group.

Restaurant owners have gone to Capitol Hill to complain about McCain's strict proposed controls on indoor smoking.

They have also had help from the tobacco industry. Steven R. Phillips, of the powerful Washington law firm Verner, Liipfert, Bernhard, McPherson and Hand, lobbies for the National Restaurant Association when he is not working for the country's five largest tobacco companies.

Two Wall Street tobacco analysts, Gary Black of Sanford C. Bernstein & Co. and Martin Feldman of Salomon Smith Barney, have become perhaps the tobacco industry's most potent allies.

The pair have testified at numerous hearings that the tobacco bill would raise the price of a pack of cigarettes far higher than proponents contend, bankrupt the cigarette industry and spawn massive black market.

Tobacco industry officials have assiduously sent members of the press every analysis written by Black and Feldman.

Black surprised Senate aides recently by showing up at a meeting McCain was holding with convenience store owners to allay their fears about the tobacco bill. Black even asked the first question.

What did not become clear until yesterday was the magnitude of the analysts' financial holdings in tobacco companies.

Black's company, Sanford C. Bernstein, holds over 30 million shares of Philip Morris stock and 13 million shares of RJR-Nabisco, according to documents released yesterday by the Campaign for Tobacco-Free Kids. Salomon Smith Barney owns more than 16 million shares of Philip Morris stock and nearly 3 million shares of RJR-Nabisco.

Both Black and Feldman defended themselves yesterday, saying they were only acting in the best interest of investors.

"My only objective is to forecast accurately all those factors that might influence the earnings power of the tobacco companies," Feldman told the Senate Judiciary Committee yesterday. "I would stress that I neither support nor oppose either side in this debate."

Pasco remains the lobbyist under the greatest scrutiny. Under the guise of the politically unassailable Fraternal Order of Police, the former Bureau of Alcohol, Tobacco and Firearms agent has organized letter-writing campaigns, offered witnesses to testify on Capitol Hill and developed legislative recommendations to control tobacco contraband, should Congress approve an anti-smoking bill.

Police help lobby

Pasco's efforts coincide with a media blitz launched by the tobacco industry last week to sound alarms about a potential black market.

Industry officials are releasing a letter written by the president of the Fraternal Order of Police, Gilbert G. Gallegos, that assails the tobacco legislation for that reason.

"By drastically raising the price of tobacco products, [the bill] will inevitably lead to the creation of a massive black market," Gallegos wrote.

Some Senate staff members working on the tobacco issue have quietly begun grumbling about Pasco, saying his dual role as law enforcement spokesman and tobacco lobbyist is misleading members of Congress.

Pasco said he sees no such conflict. Most of his work for the cigarette industry has involved regulatory issues affecting Miller Brewing Co., a Philip Morris subsidiary.

Besides, Pasco said, the political agenda of the police group is determined by its president and executive board, not by its executive director.

But, he conceded, "I've had a number of conversations with the national president" on the black market issue at the same time he is on tobacco's payroll.

Pub Date: 5/13/98

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