GOP Wins Spell Brighter Days for Tobacco Firms

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With a magic wand, America’s tobacco companies a year ago would have stripped power from Rep. Henry A. Waxman (D-Los Angeles), putting their legislative fate in the hands of someone more sympathetic--say the ex-mayor of Richmond, Va., where Philip Morris Cos. Inc. is king.

They would have halted congressional inquiries into whether they had manipulated nicotine levels in cigarettes, undermined efforts by the Food and Drug Administration to regulate tobacco products and stifled a seemingly endless flow of revelations about their decades-old awareness of the risks of smoking.

Abracadabra! Events have taken an auspicious turn.

Waxman’s far-reaching probe of the cigarette makers, which had generated intense publicity and energized the anti-smoking movement, went up in smoke in November when Republican election victories cost him his subcommittee chairmanship.


Today the panel is within the domain of House Commerce Committee Chairman Thomas J. Bliley Jr. (R-Va.), not just a friend of the industry but a former Richmond mayor and Congress’ biggest recipient of contributions from tobacco interests.

Explosive disclosures have been replaced by silence, and the FDA, while still pursuing its tobacco investigation, has been thrown on the defensive by hostile attacks on the way it approaches its regulatory mission.

The tobacco companies still face a welter of problems, including a pair of class-action suits on behalf of millions of smokers who claim they became addicted to nicotine and suffered illnesses from smoking. Four states have filed lawsuits against the industry seeking to recover smoking-related health care costs. And the companies have been unable to stem the tide of local anti-smoking ordinances.

But for now, Washington has become a far friendlier place. While business groups in general have thrilled to the fiercely anti-regulatory tone of the new GOP-led Congress, outwardly none has enjoyed a more stunning reversal of fortunes than the cigarette makers.

Making Inroads

In recent months:

* James W. Dyer, former head of Philip Morris’ Washington office, has become staff director for the House Appropriations Committee. Craig Fuller, former senior vice president for Philip Morris, became Republican presidential campaign director for California Gov. Pete Wilson. And Whitewater independent counsel Kenneth W. Starr has been retained by Brown & Williamson Tobacco Co. to handle its appeal of a lawsuit against Reps. Waxman and Ron Wyden (D-Ore.) over documents the company says were stolen and leaked to the congressmen last year.

* The House and Senate have each passed versions of product-liability reform legislation to limit punitive damages in suits involving injuries from dangerous products, including cigarettes. Lawyers suing tobacco companies face huge costs and long odds to begin with; few, if any, would bother without some chance of a major damage award.


* Legislation to impose strict cost-benefit standards on new health and environmental regulations has passed the House and is pending in the Senate. Among other things, the legislation could block the FDA from regulating tobacco or prevent the Occupational Safety and Health Administration from implementing its proposed ban on workplace smoking.

After a Senate briefing on the legislation by lobbyists from Hunton & Williams, a firm in Richmond that represents Philip Morris and other large companies, the watchdog group Public Citizen filed a complaint asking the Senate Ethics Committee to investigate the lobbyists’ role in crafting the bill.

* Despite Republican vows to cut government welfare programs and subsidies, the House Appropriations Committee voted last week to extend the program that guarantees growers a minimum price for tobacco.

* And in May, the House Budget Committee put a law requiring states to crack down on illegal tobacco sales to youths--or risk losing federal funds for drug abuse treatment--on a hit list of “expensive and onerous” statutes whose repeal likely would “encourage economic growth.”

Never stingy with political contributions, the tobacco companies have maintained a steady flow. In the first three months of 1995, Philip Morris donated $338,000 to the Republican National Committee. Included was $250,000 to underwrite February’s Republican inaugural gala, which took in more than $10 million and was heralded as the most successful political fund-raiser in history.

“New faces and new leadership on Capitol Hill means Philip Morris . . . has tremendous opportunities to get new and unbiased hearings on the issues that concern us most,” Philip Morris Chairman Geoffrey C. Bible told shareholders in a March letter. Donations to the firm’s political action committee, Bible wrote, will help “forge a political environment favorable to our success for many years to come.”


FDA Under Attack

GOP leaders say the interests of tobacco, as well as other business groups, just happen to coincide with their anti-regulatory platform.

“What the Republican Congress is doing is keeping the promises that they made to the American people last year,” said a party official who would comment only on the condition of anonymity. “It’s that, pure and simple.”

For the tobacco companies, the bloodying of the FDA has been the most favorable development yet.

Last year, the FDA announced it was investigating whether cigarette manufacturers have manipulated nicotine levels to attract and hook customers. The companies deny the charge, which, if proved, would provide the agency with legal authority to regulate tobacco products as drugs.

Since January, however, the FDA has been repeatedly criticized by conservative advocacy groups and some lawmakers over the amount of time that it often takes to approve drugs and medical devices. In reports, congressional testimony and vitriolic advertisements, the critics have sought to portray the agency as an obstacle to public health that should be restructured or shrunken.

Although the attacks do not mention tobacco, the industry is a major beneficiary. By arguing that the FDA has neglected its basic mission, the critics have made a case against the agency embarking on new initiatives, such as tobacco control.


“Their job is to keep us occupied doing other things, like defending the lifeblood of the agency,” said an FDA official who did not want to be named.

Criticism of the FDA for lagging on drug approvals is hardly new. But for the first time this year, it has graduated from newsletters to mass media campaigns, including expensive radio and television spots and ads in the Wall Street Journal, the New York Times and other publications.

Some of the FDA attackers--including the Washington Legal Foundation, Citizens for a Sound Economy and the Competitive Enterprise Institute--have received financial support from tobacco interests. And that has prompted industry foes to question if the companies are just lucky bystanders or have played a behind-the-scenes role.

Advocacy Groups

The advocacy groups note that they get support from many other business interests, foundations and individuals. They emphasize that contributors do not set policy but rather give to support the group’s message.

Officials of Philip Morris and R.J. Reynolds, the two biggest tobacco companies, declined to discuss corporate donations to such groups.

“If a murderer kills you, it’s homicide. . . . If the FDA kills you, it’s just being cautious,” proclaimed an ad by one of the groups, the archconservative Washington Legal Foundation, whose former president for legal studies, Alan M. Slobodin, joined Bliley’s Commerce Committee staff in January.


Officials said the foundation does not identify contributors. But an internal Philip Morris document listing 1990 donations by the company cited a $25,000 gift to the legal foundation.

At a House Appropriations subcommittee hearing earlier this year, Rep. Richard J. Durbin (D-Ill.), a tobacco critic, suggested that the industry was hiding behind the legal foundation.

“When you peel back the funding sources for these conservative groups, you find companies with products that are subject to regulation by this agency [the FDA],” Durbin said.

“In the case of the Washington Legal Foundation, surprise, surprise, we find our friends the tobacco companies who cannot fight the FDA in public. So they do it through names like the Washington Legal Foundation,” he said.

“We don’t deal in quid pro quo,” retorted Daniel J. Popeo, chairman of the foundation. Durbin, he said, “is blowing smoke. He’s a cheap politician looking to divert attention from the problems at FDA.”

Financial Support

Citizens for a Sound Economy this year has acknowledged spending hundreds of thousands of dollars on print and broadcast ad campaigns attacking the FDA, OSHA and federal regulation generally, as well as demanding product-liability law reform. The group also played a prominent role in getting lawmakers in May to rescind millions of dollars in funds to consolidate FDA operations at a campus site in Maryland.


Spokesman Brent Bahler said Citizens for a Sound Economy does not identify contributors. The Philip Morris document said the company gave the group $91,800 in 1990. The Competitive Enterprise Institute, which also has run anti-FDA ads, acknowledges receiving support from Philip Morris and R.J. Reynolds.

In a blistering profile of FDA Commissioner David A. Kessler that recently appeared in American Spectator magazine, James Bovard, an adjunct analyst for the institute, described Kessler’s desire to regulate tobacco as “his most celebrated grab for power.”

FDA Study

Tobacco companies “have increased their support of CEI,” but not to fund any specific campaign, said spokesman Jason Taylor. “We make it quite clear that support of CEI is support of the whole organization and . . . our principles.”

In May, when Philip Morris sponsored a U.S. junket for about 20 Hong Kong journalists, their Washington itinerary included a talk by CEI Executive Director Marlo Lewis on a pet tobacco industry theme: the political misuse of science.

The Progress and Freedom Foundation, another group that has received financial support from Philip Morris and RJR Nabisco, parent of R.J. Reynolds, is involved in a study of how to restructure the FDA and turn over some of its functions to private industry panels.

The foundation has close ties to House Speaker Newt Gingrich (R-Ga.), who has described Kessler as “a thug and bully” and the FDA as “the leading job killer in America.”


The study is being done by a five-member panel, including Robert D. Tollison, an economist at George Mason University in Virginia and a consultant to the tobacco industry.

Tollison said there is no connection between his work for the industry and his post on the FDA study panel.

“It’s an effort to try to streamline and speed up what the FDA does with drugs and medical devices,” Tollison said. “So far as I know, this whole issue of tobacco and the FDA has never once been mentioned.”

One area where political atmospherics seem to make little difference for the cigarette makers is sales.

While they were being roughed up in Congress and the press in 1994, the tobacco companies had a banner year. Americans puffed their way through 485 billion cigarettes--the first time in a decade that domestic sales did not decline from the previous year.