Bipartisan bill tackles Clinton’s objectives for sweeping tobacco legislation

Tuesday, March 10, 1998

WASHINGTON (AP)—A bipartisan Senate tobacco bill conceived as a path to compromise on granting the tobacco industry immunity from most lawsuits is expected to win White House approval this week.

White House and Senate aides working on the issue said Monday that a bill to be introduced this week by Sens. John Chafee, R-R.I., Tom Harkin, D-Iowa, and Bob Graham, D-Fla., meets President Clinton's objectives for a national tobacco policy.

However, there is still disagreement over how the government should spend money from a tobacco deal.

Clinton has listed five objectives for any sweeping tobacco legislation: 1) reducing teen smoking, 2) affirming the federal government's authority to regulate tobacco products, 3) limiting tobacco marketing, 4) helping smokers quit and 5) protecting tobacco farmers from bankruptcy.

Aides say the Chafee-Harkin-Graham bill in its present form would impose a $1.50-per-pack cigarette price increase over two years, the highest of any measure introduced so far. The bill would maintain the right for large numbers of people to sue and set up a capped fund to pay successful plaintiffs.

Tobacco companies would pay $4 billion a year into the fund, whether or not it is used, and be held accountable for another $4 billion per year if awards exceed the fund total.

Under a negotiated settlement proposed in June, companies could not be forced to pay more than $5 billion a year to plaintiffs.

That deal, which would have to be ratified by Congress to take effect, would end 40 state lawsuits if the tobacco industry pays $368 billion over 25 years and agree to steer advertising away from kids. In exchange, the tobacco industry would be immune from class action lawsuits, which companies and farmers say would protect them from bankruptcy.

If the tobacco industry does not get that lawsuit protection, company executives say they will refuse to voluntarily change tobacco advertising and fight on free speech grounds any efforts to force them to curtail advertising.

Hal Shoup, executive vice president of the American Association of Advertising Agencies, said: “The tobacco companies have agreed to some rather severe restrictions in the agreements they have signed in the states of Texas, Florida, Mississippi and perhaps in Minnesota.”

In exchange, they request “some protection from liability,” Shoup said. “Advertising of tobacco products in those states will be at a very reduced and changed level. I doubt very much that those same restrictions would be included in any federal legislation, but at this point nobody really knows.”

“There is great concern that any specific bans or restrictions on truthful advertising of a legal product will be acceptable under a constitutional analysis,” Shoup said. “There is a strong feeling by many members of Congress that if legislation does include some restrictions or a ban it will face litigation because when you start restricting speech in one area, you then move into whole new different areas.”

The Chafee-Harkin-Graham measure does not meet the industry's demands taken care of in the proposed settlement, a tobacco spokesman said.

“The distance between $5 billion and $8 billion is a lot of money,” said industry spokesman Scott Williams. “It leaves the industry vulnerable to be swamped by class action cases, and they are unpredictable. You can't take that risk.”

Clinton has stepped up his call for Congress to enact a national tobacco policy this year, and Senate Republican leaders have consolidated their efforts to pass one under a bill sponsored by Commerce Committee Chairman John McCain, R-Ariz.

But many members say the intensified discussions aren't enough to overcome disagreements on virtually every issue swirling around the tobacco settlement issue.

Said Shoup: “There are several different bills concerning tobacco advertising and they will all be ultimately accepted or reconciled. The McCain bill has the best chance to be passed on the floor.”

It's final markup is scheduled for March 25, Shoup said.

—FAC Staff contributed to this report.