Tobacco Deal Caught in Snag

A potential new obstacle to the giant tobacco peace accord surfaced Thursday at a Senate Judiciary Committee hearing, where several members voiced anger that tobacco executives still do not admit that their products are addictive.

The hearing was Congress’ first formal discussion of the mega-deal, and at the end of a highly charged hearing that lasted nearly four hours, committee Chairman Orrin Hatch (R-Utah) announced that he planned to call industry leaders before the panel.

“I do believe we’re going to have to bring in [tobacco] executives to admit that they now know that nicotine is addictive,” Hatch said.

Such testimony would raise thorny legal issues for the industry and would recall the fateful congressional hearing in April 1994 at which seven top tobacco executives stated under oath that they did not believe nicotine was addictive.

Almost immediately, previously secret documents were leaked suggesting that top executives of Brown & Williamson Tobacco Corp. and its corporate parent, BAT, knew by the early 1960s that nicotine was addictive. The apparent contradiction between the executives’ testimony and the documents triggered a criminal probe of the industry by the Justice Department that is continuing.

The admissions sought by Hatch and other committee members would not only complicate the industry’s defense of any future criminal indictments, but would leave the companies vulnerable in the types of civil suits still permitted under the settlement.

Even so, Sen. Joseph Biden (D-Del.), in a blistering attack on the companies, said he was unlikely to vote for any settlement that did not include admissions that they had lied in the past.

Thursday’s hearing underscored the highly uncertain prospects facing the $368.5 billion tobacco deal, which requires approval by Congress and the White House.

The hearing also raised--but did not resolve--the question of whether the industry might reject conditions added by Congress and attempt to abandon the deal.

Asked by Sen. Patrick Leahy (D-Vt.) if the deal would be “down the tubes” if significantly strengthened by Congress, industry lawyer Meyer G. Koplow said it was “difficult to predict what would happen.”

The landmark settlement, announced last Friday, was hammered out during three months of intensive negotiations between tobacco representatives, state attorneys general and private anti-tobacco lawyers.

At Thursday’s hearing, committee members heard testimony from three witnesses deeply involved in the talks: Mississippi Atty. Gen. Mike Moore, lead negotiator for the anti-tobacco forces; Matt Myers, executive director of the National Center for Tobacco-Free Kids, and the only public health representative regularly at the bargaining table; and Koplow, a lead negotiator for the industry.

Several senators praised Moore and Myers for their roles in the accord, in which the industry agreed to accept--and in some cases, to finance--a series of health initiatives that would have been unimaginable just a few months ago.

But some provisions of the deal came under strong attack, with lawmakers suggesting the companies gave up too little for the liability protections they got.

Unlike a conventional settlement worked out between parties in a lawsuit, this one needs congressional approval because its constraints on future suits must be written into law.

The deal would rid the industry of pending lawsuits filed by 40 states and 20 private class-action cases. Such claims would be barred in the future, but individual smokers could still sue the industry.

Tobacco firms sought the deal because they “do not want to spend every day, everywhere, litigating about everything with everyone,” Koplow told the committee.

In return for relief from litigation, tobacco companies would pay a little more than $300 billion to the states over an initial 25 years to reimburse Medicaid funds used to treat sick smokers.

About $60 billion more would pay for health programs, including a massive anti-tobacco ad campaign and smoking cessation for those who want to quit. The money would also be used to establish nationwide licensing for tobacco retailers and to crack down on those who illegally sell to youths.

Price increases of about 50 cents per pack would pay for the settlement. The hikes alone would be expected to reduce smoking.

Under the accord, the industry also would accept a ban on smoking at most work sites and public places, and would agree to use larger and more ominous warning labels, eliminate billboards and other outdoor advertising, halt sponsorship of sporting events and ban the distribution of caps, T-shirts and other items with tobacco logos that are thought to appeal to kids.

Until the issue of nicotine addiction arose Thursday, most criticism of the deal had focused on language that could make it hard for the Food and Drug Administration to order reductions in nicotine; allows the companies to treat settlement payments as tax-deductible expenses; and imposes inadequate penalties on the industry if targeted reductions in youth smoking are not achieved.

Committee members also raised these concerns--but then tore into the settlement’s promise of a new “corporate culture” for tobacco.

Noting that one of the new labels reads: “WARNING: Cigarettes cause cancer,” Sen. Edward M. Kennedy (D-Mass.) asked Koplow if he agreed with that statement.

“I personally am not in a position to give you a precise answer,” Koplow replied.

“How about, ‘Tobacco smoke can harm your children’? “ asked Kennedy, reading another label. “Can you tell us whether you agree with that?”

“I’m not in a position to answer that question,” Koplow said.

Biden lashed out at Koplow, telling him that without a settlement the industry could be destroyed or driven “offshore with the cocaine dealers.”

Addressing Moore--who had filed the first of the state suits that pushed the industry to the bargaining table--Biden said that he had “done such a good job” of exposing “what liars the tobacco companies are,” and that now his settlement is in peril.

But Moore pleaded for quick approval from Congress, and with a minimum of tinkering--arguing that the states could win all of their lawsuits without ever securing the public health measures contained in the deal.

On the other hand, said Moore, if Congress delays and trials go forward, the chance of a settlement could be lost forever.

The Senate Judiciary Committee, one of several committees likely to review the deal, will take it up again on July 16, said Hatch. He told the witnesses: “I know you’re going to have to come back a number of times to help us with this.”