Relighting the Tobacco Wars Government has become hopelessly addicted to tar and nicotine money
Macomber, Shawn
Relighting the Tobacco ars Government has become hopelessly addicted to tar and nicotine money. BY SHAWN MACOMBER HE TOBACCO WARS MAY SEEM PASSE NOW; as rapidly aging a part of the '90s as...
...Part of this is because trial lawyers have failed to find a way to wrangle individuals into massive (and lucrative) class-action lawsuits...
...The vice president was serious...
...Shortsighted, even, in the context of the history of governments, which are not the most honest creations of man...
...The press has rarely played this up, but tobacco companies have fewer cases on file now than they have had in about a decade...
...President Bush recently signed the Framework Convention on Tobacco Control, essentially a globalization of some of the harsher aspects of the MSA...
...In 1996, John Grisham released the novel The Runaway Jury, in which shadowy executives plot to influence a juror to save Big Tobacco from having to cough up any cash to a person suffering from lung cancer...
...It did not work...
...The case the federal government stuck together was twofold...
...The second was a somewhat baffling civil claim pur sued under the RICO Act, passed in 1970, to crack down on the mob...
...The restrictions the tobacco companies have already submitted to with the MSA do not go far enough for the feds...
...It wants more funds available to help people quit smoking, over and above the millions the tobacco industry has already committed...
...O F COURSE, some would like to cut out the middle man entirely...
...It was "a thriller for people who think, and"¡ªenter gratuitous swipe¡ª"Jesse Helms won't like it one bit...
...The tobacco industry cut a deal with the government to achieve what Neville Chamberlain once called "peace in our time...
...Former FDA head David Kessler (no relation to Judge Kessler), the prime architect of and agitator for Bill Clinton's tobacco reversal, suggests that the day may come when only the government profits from the sale of tobacco...
...A significant portion of the settlement monies was dedicated to funding programs to "prevent youth smoking" and "promote public health" through advertising campaigns and education programs...
...With a settlement running into the hundreds of billions of dollars and a major shift in the way this industry does business, one might expect that tobacco's hour of contrition had passed...
...The companies were also forced to put up $50 22 THE AMERICAN SPECTATOR JULY/AUGUST 2004 million to fund enforcement of the deal...
...Fines run into the millions of dollars...
...The agreement barred cartoon characters in cigarette ads (sorry, Joe) as well as brand-name tobacco sponsorship of major athletic events...
...First, it sought to recover federal dollars used to treat people with smoking-related illnesses...
...Washington state sold more than a quarter of its settlement payments...
...It outlawed nearly all billboards, and prohibited cigarette manufacturers from seeking "product placement" deals in movies, television, or "other performances or video games intended for the general public...
...North Carolina has spent much of its settlement on, well, on the marketing and production of tobacco...
...The constitutional boundary is an interesting one...
...HAT IS THE MONEY being spent on...
...Think again...
...In order to successfully argue a civil RICO claim, the government cannot merely seek redress for past damages, but also must prove the defendant will use these "ill-gotten gains" to fund future violations of the law...
...Rhode Island used the funds to balance the state budget...
...The government's case is almost entirely dependent on demonizing cigarette manufacturers as terrible, greedy corporations that cannot be reformed...
...The truce in this skirmish was reached in November of '98...
...Robert Levy of the Cato Institute set up the issue rather well when he wrote recently, "We treat flag burning and KKK orations as protected speech...
...It wants marketing terms that give smokers "false impressions" about the dangers of smoking (e.g., "low tar," "light") eliminated...
...Publishers Weekly called Grisham "either remarkably prescient or just plain lucky" for coming up with the story just as "public concerns about the tobacco companies [are] heating up...
...Without stepping into a courtroom, the trial lawyers brought home an estimated $92,000 per hour for their services...
...And we have the gall to complain now about lawsuits against fast-food companies...
...So, with regards to the MSA, let's get this straight: The government gets loads of free money to do with whatever it wishes, the tobacco companies raise cigarette prices and go on with business as usual, and the working stiff who wants to enjoy a perfectly legal product that Congress has no intention of banning pays for it all...
...The treaty calls for "a comprehensive ban on tobacco advertising, promotion and sponsorship," as far as these nations' "constitutions permit...
...The feds do not want to shut the industry down, but, instead, control it, regulate it, and get a still bigger cut...
...All of this smacks of hypocrisy coming from a government that hauls in $7 billion yearly from tobacco taxes...
...Some states rejected the yearly tobacco payments for larger one-shot sums...
...In 1998, the MSA must have seemed like a life pre server to a storm-tossed industry, but tobacco might have been better off to have ridden it out...
...Commercial speech in the U.S...
...Occasionally, someone in government speaks out of school and admits that this process is all about getting a piece of the action...
...Kind of like the federal government, but smaller...
...Within three years there were thousands of lawsuits and also congressional hearings and countless calls for regulation...
...Instead, he proposed that the industry "be dismantled" and replaced by "a tightly regulated corporation, from which noone profits"¡ªexcept, you know, the government...
...The unconditional surrender of the tobacco manufacturers marked them as a wounded animal...
...Not such a great idea...
...And there will be more...
...300 million was being used to make sidewalks handicap-accessible in Los Angeles...
...Except for state governments, the big payday never came...
...In 1992, there were fewer than five serious lawsuits pending against Big Tobacco...
...That is a fairly high bar for the government to clear, especially considering that the two tobacco-funded organizations accused of disseminating fraudulent research, the Tobacco Institute and the Council for Tobacco Research, were dissolved under the MSA...
...Until the ink on the settlement dried, the federal government argued that litigation against tobacco companies was not a federal matter...
...A recent report by the General Accounting Office revealed that of the $11.4 billion to be paid out in fiscal year 2004 of the previous settlement, only 2 percent is marked for tobacco control and less than 20 percent for health-related programs...
...By the time the movie version was released last year, the shadowy figures were no longer tobacco execs but the firearms lobby...
...The $240 billion settlement was sold to the American people as compensation for treating smoking-related illnesses, but it's the states that have become addicted to tobacco money, spending it on all kinds of unrelated programs," says Sam Kazman, gen eral counsel for the Competitive Enterprise Institute...
...They will not stop until all forms of fun are purged from the earth...
...In the aftermath of the MSA, Kessler actually tut-tutted that the settlement might "confer legitimacy on tobacco" and stressed in his book A Question of Intent the "importance of removing the vestiges of social acceptability from tobacco...
...RELIGHTING THE TOBACCO WARS Few expect the tobacco companies will have to pony up the $280 billion, but the threat of "injunctive relief" by the court could pose problems...
...According to the National Taxpayers Union, $717 million of North Dakota's settlement money was being used for flood-control projects...
...This has led to a strange Bizarro reality in which tobacco companies have begun to criticize states for the paucity of anti-smoking education...
...Another study by the National Conference of State Legislators shows only a paltry 5 percent of these payouts have been spent on education programs...
...More than half a dozen states have invested portions of their settlement money in index funds which include the same tobacco companies they extracted the money from...
...BY SHAWN MACOMBER HE TOBACCO WARS MAY SEEM PASSE NOW...
...The court rulings¡ªeither initial judgments or appeals--tended to side with the tobacco companies...
...Shawn Macomber is a reporter for The American Spectator...
...Not likely...
...But, just three months after the agreement was signed, President Clinton announced in the 1999 State of the Union address that he was setting the lawyers of the Department of Justice after the tobacco manufacturers...
...California sold ten years worth of payments...
...Kessler also let slip that some elements within the federal government during the '90s considered the fight done, and were already looking beyond our borders...
...S O, THE REAL EFFECT of the MSA was akin to dumping a truckload of chum off the coast of the Litigious Sea...
...could do about smoking in Russia...
...as rapidly aging a part of the '90s as flannel shirts, grunge rock, and the Macarena...
...This mega-settlement would be dispersed to the victims of big tobacco's "racket," namely "youth addicted smokers," who are defined as anyone who smoked five cigarettes a day by the time they were 21...
...Reynolds are held accountable...
...At one State Department function, Al Gore asked him if there wasn't something the U.S...
...Thirty-one separate courts, in no fewer than 69 cases, threw out class-action claims on the basis that every smoker's situation and reasons for smoking are unique, and, therefore, cannot be aggregated...
...Justice Department lawyers argue that up to $280 billion of past cigarette profits were "ill-gotten gains" being used to perpetuate "pervasive fraud...
...But for a time it captured the imagination of the media and the general public and held them by the throat...
...is not as protected as political speech, but that, historically, hasn't meant that it had no protections...
...But don't worry...
...The tobacco industry agreed to a Master Settlement Agreement (MSA), which ended the lawsuits pending against the industry by 46 states in exchange for a payout of more than $200 billion over 25 years and a fundamental change in the way it advertised cigarettes...
...But, frivolous libertarian complaints notwithstanding, wouldn't a federal settlement be a boon to the health of the country by funding countless health initiatives and stop-smoking programs...
...Using lawsuits to raise revenue is far easier than raising taxes the old-fashioned way," he said...
...Kessler whined in his book that the ban on television advertising of cigarettes had "looked meaningful" but "ultimately rebounded to the industry's benefit at the expense of public health...
...This method bypasses the need for representatives of the voters to approve the tax...
...Judge Gladys Kessler dismissed the first claim in September 2000, but has allowed the RICO action to move forward...
...In 1997 then-Attorney General Janet Reno admitted that the feds do "not have an independent cause of action" against tobacco producers...
...Sharks in the White House, the Justice Department, Congress, and beyond caught the scent and turned their snouts to the action...
...The sponsor of this initiative is the World Health Organization, which takes a few lines on its website to praise the anti-smoking efforts of North Korea...
...First, in six European countries where tobacco ads have been completely banned, overall SHAWN MACOMBER tobacco sales have increased...
...And by "held accountable," he means "forced to fork over more money to the government...
...And this international approach to tobacco turns out to be bipartisan...
...Second, if the states' use of MSA funds is any indication, federal settlement money will probably be appropriated for...other uses...
...Yet if Tiger Woods shows up wearing a jacket emblazoned with a Joe Camel emblem, our new speech guardians will see to it that the executives of RJ...
...we even insulate `gangsta rap' from the censors, despite its message that the drug culture is admirable and the killing of police officers is a pleasurable recreational activity...
...Instead, it merely emboldened a tyrannical minority in love with the idea of decree by lawsuit...
...In fact, until they cut a deal with the state governments, tobacco companies had not been forced to pay out a single dollar...
...Wisconsin sold 25 years of settlement payments, worth about $5.9 billion, for a measly $1.3 billion to balance the state budget for a single year...
...I glanced at him expecting to see the glint of a smile, but there was none," Kessler reveals...
...According to the late lamented Insight magazine, MSA opponent Alabama Attorney General Bill Pryor explained at a 1999 meeting of the American Legislative Council that the "main objective of the tobacco lawsuits" is to raise money...
...In essence, this required tobacco companies to pay for condemnations (often hysterical) of their own products, all to let the public in on what had been a closely guarded industry secret: Smoking is bad for you...
...That people can start lighting up legally at 18 is apparently beside the point...
...The Justice Department is demanding a court-imposed ban on cigarette vending machines...
Vol. 37 • July 2004 • No. 6
