CONGRESS - Turning Over a New Leaf on Tobacco

March 21, 1998, 7 a.m.

When the Wash­ing­ton watch­dog group Pub­lic Cit­izen put out a re­port last month on to­bacco-in­dustry cam­paign con­tri­bu­tions to law­makers, it slapped on the title ”Sweet­hearts of Big To­bacco.” But the ro­mance between in­dustry donors and their friends on Cap­it­ol Hill may be turn­ing sour.

Some erstwhile con­gres­sion­al al­lies are step­ping up their anti-to­bacco rhet­or­ic as evid­ence of pos­sible in­dustry mis­deeds con­tin­ues to sur­face. So to­bacco ex­ec­ut­ives are in­creas­ingly pin­ning their hopes—and an ever-lar­ger share of their con­tri­bu­tions—on the one group that’s nev­er let them down: mem­bers of Con­gress from to­bacco-pro­du­cing states.

Even con­gres­sion­al stal­warts from such key to­bacco states as Geor­gia, Ken­tucky, North Car­o­lina, South Car­o­lina, Ten­ness­ee and Vir­gin­ia, however, are strug­gling with di­vided loy­al­ties.

To be sure, to­bacco-state law­makers—in­clud­ing Sens. Wendell H. Ford, D-Ky., and Jesse A. Helms, R-N.C., and Reps. Thomas J. Bli­ley Jr., R-Va., and Ed Whit­field, R-Ky.—still top Pub­lic Cit­izen’s list of to­bacco-money reci pients. But the big worry for these mem­bers as Con­gress labors to pro­duce a mam­moth to­bacco bill is how to pla­cate farm­ers and grow­ers, not in­dustry ti­tans.

Farm­ers were the one group left out of the na­tion­al to­bacco set­tle­ment that the in­dustry ne­go­ti­ated with a group of state at­tor­neys gen­er­al and tri­al law­yers last June. The set­tle­ment called on to­bacco com­pan­ies to pay $ 368.5 bil­lion over 25 years to fin­ance health and an­t­i­s­moking pro­grams, and offered them pro­tec­tion from class-ac­tion law­suits.

The ne­go­ti­at­ors’ fail­ure to ad­dress the con­cerns of to­bacco grow­ers riled both farm­ers and their Hill rep­res­ent­at­ives. ”When the set­tle­ment was an­nounced on June 20, the grow­ers felt a large sense of be­tray­al,” said Al­bert K. Glass, who dir­ects the Vir­gin­ia Farm Bur­eau’s com­munity and mar­ket­ing de­part­ment. In­dustry of­fi­cials ”were look­ing out for their in­terests, and we were left out.”

Fal­lout from last year’s deal may help ex­plain the hard line that Bli­ley has taken with the in­dustry. With a dis­trict that rep­res­ents both farm­ers and em­ploy­ees of Philip Mor­ris Cos. Inc., Bli­ley has long been con­sidered one of Con­gress’s staunchest to­bacco de­fend­ers; and as Com­merce Com­mit­tee chair­man, he will play a pivotal role in shap­ing to­bacco le­gis­la­tion. But this year, he’s sub­poenaed and pub­li­cized thou­sands of in­crim­in­at­ing doc­u­ments from ci­gar­ette makers. He’s also ac­cused in­dustry lead­ers of ”un­ac­cept­able” be­ha­vi­or.

A Com­merce aide in­sisted that Bli­ley’s ”views on to­bacco are the same that they’ve been for ages, and that is that in­formed adults should be able to (smoke) but that teen­agers should not.” In any case, Bli­ley is play­ing his cards close to his chest; he’s held hear­ings but has yet to draft a pro­pos­al.

It’s fallen to his com­mit­tee’s oth­er to­bacco-state mem­bers—Reps. Richard Burr, R-N.C., and Whit­field—to be­gin filling in the blanks. So far, they’ve fo­cused squarely on the need to pro­tect the na­tion’s 124,000 to­bacco farm­ers from eco­nom­ic dev­ast­a­tion. (A con­gres­sion­al deal that jacks up ci­gar­ette taxes and curbs con­sump­tion could, by some es­tim­ates, lower to­bacco sales as much as 30 per cent over five years.) To­bacco-state Sen­at­ors have like­wise made de­fend­ing farm­ers their top con­cern.

At is­sue in both cham­bers is the fate of the fed­er­al to­bacco price-sup­port sys­tem, which lim­its the total amount of to­bacco that may be grown in the United States and guar­an­tees a min­im­um price for farm­ers. Ford and Sen. Charles S. Robb, D-Va., have in­tro­duced meas­ures that would com­pensate farm­ers for lost ”quota,” that is, the amount of to­bacco each farm­er may sell un­der gov­ern­ment rules. (Quota is a mar­ket­able as­set that farm­ers buy and sell among them­selves.)

The fo­cus on grow­ers by law­makers from to­bacco states is noth­ing new, of course; it’s long been more pop­u­lar to de­fend fam­ily farm­ers than to go to bat for R.J. Reyn­olds To­bacco Co. or Philip Mor­ris. In the past, in­dustry lead­ers could count on farm­ers to shield them polit­ic­ally, and their in­terests were vir­tu­ally syn­onym­ous.

But re­cently, grow­ers have be­gun to find their own voice. As to­bacco com­pany ex­ec­ut­ives in­creas­ingly looked over­seas for profits, U.S. grow­ers wor­ried about the price of to­bacco back home lob­bied more vig­or­ously to de­fend their unique in­terests.

Sev­er­al groups rep­res­ent­ing grow­ers, in­clud­ing the Bur­ley To­bacco Grow­ers Co­oper­at­ive Inc. and the Vir­gin­ia To­bacco Grow­ers As­so­ci­ation, have formed an un­usu­al co­ali­tion with a long list of health or­gan­iz­a­tions, from the Amer­ic­an Heart As­so­ci­ation to the Amer­ic­an Can­cer So­ci­ety. This odd al­li­ance of grow­ers and pub­lic health ad­voc­ates met the week of March 16 to an­nounce a series of ”core prin­ciples,” in­clud­ing the need for farm­ers to be com­pensated for lost quota and the im­port­ance of strong laws to pre­vent to­bacco products from be­ing sold or mar­keted to teen­agers.

”(To­bacco) com­pan­ies do not like what we’re do­ing, ob­vi­ously,” said Scott D. Bal­lin, a Wash­ing­ton con­sult­ant who works on be­half of the Cam­paign for To­bacco-Free Kids and who helped bring the two camps to­geth­er. The co­ali­tion between grow­ers and health groups, Bal­lin ad­ded, ”makes it dif­fi­cult for to­bacco-state mem­bers (of Con­gress) to use the farm­ers as a front for pro­tect­ing the com­pan­ies.”

Rep. Henry A. Wax­man, D-Cal­if., an out­spoken to­bacco foe, noted, ”There’s a dif­fer­ence between the goals” of the to­bacco in­dustry and those of the to­bacco farm­ers. ”In the past, whenev­er le­gis­la­tion was presen­ted that had any­thing to do with to­bacco, there had al­ways been a sol­id front between those rep­res­ent­ing to­bacco com­pan­ies and the farm­ers,” Wax­man said. ”But I don’t think their in­terests are the same now.”

In­dustry rep­res­ent­at­ives deny that to­bacco ex­ec­ut­ives and farm­ers are at odds. The grow­ers’ fate is of great con­cern to to­bacco com­pan­ies, said in­dustry spokes­man Scott Wil­li­ams. To­bacco farm­ers were not in­cluded in last year’s agree­ment, Wil­li­ams said, be­cause they were not part of the lit­ig­a­tion be­ing settled.

In­dustry ne­go­ti­at­or J. Phil Carlton, a North Car­o­lina lob­by­ist, said ”there has al­ways been a nat­ur­al ten­sion between buy­er and seller. There’s noth­ing un­usu­al about that.” Still, Carlton ac­know­ledged that hard-to-re­solve ques­tions over how best to help grow­ers have slowed the pace of the to­bacco ne­go­ti­ations on Cap­it­ol Hill. ”We are look­ing for­ward to get­ting the grow­er is­sue re­solved,” Carlton said, ”be­cause we be­lieve it will help solve the whole is­sue” of what form to­bacco le­gis­la­tion fi­nally takes.

A com­plic­at­ing factor is that not all to­bacco farm­ers think alike. U.S. farm­ers prin­cip­ally grow two to­bacco types, known as flue-cured and bur­ley, which place dif­fer­ent eco­nom­ic de­mands on grow­ers. Flue-cured to­bacco is more cap­it­al-in­tens­ive, for ex­ample, while bur­ley is more labor-in­tens­ive. As a res­ult, bur­ley grow­ers are very price-sens­it­ive, while flue-cured-to­bacco farm­ers are more in­ter­ested in keep­ing pro­duc­tion high.

The up­shot is that Ford, who rep­res­ents mainly bur­ley grow­ers, and Robb, whose state is home to flue-cured-to­bacco pro­du­cers, have di­ver­gent plans for how to help U.S. farm­ers. Ford’s pro­pos­al would con­tin­ue the gov­ern­ment price-sup­port pro­gram, for ex­ample; Robb’s would re­place it with a privat­ized sys­tem that would still lim­it the over­all to­bacco sup­ply. One com­prom­ise may be to let dif­fer­ent types of farm­ers fol­low dif­fer­ent sets of gov­ern­ment rules.

Some on Cap­it­ol Hill, in­clud­ing Sen. Richard G. Lugar, R- Ind., and Rep. Thomas W. Ewing, R-Ill., have set out to end the gov­ern­ment’s to­bacco price-sup­port pro­gram al­to­geth­er. The pro­gram’s only costs are ad­min­is­trat­ive, but ”even as a no-cost pro­gram, it’s been a light­ning rod for at­tack,” Ewing noted.

De­fend­ing grow­ers, in fact, has proved com­plic­ated and time-con­sum­ing for mem­bers of Con­gress from to­bacco states. As a res­ult, they have not taken as ag­gress­ive a lead in craft­ing an over­all to­bacco deal as some had ex­pec­ted. Once the grow­er is­sue is settled, Carlton pre­dicted, to­bacco-state law­makers will start play­ing a more vis­ible role in push­ing through a com­pre­hens­ive bill.

To­bacco-state law­makers may well be temp­ted to kiss and make up with in­dustry ex­ec­ut­ives. Some of these mem­bers are count­ing on a com­pre­hens­ive set­tle­ment to pay for the bil­lions in fed­er­al as­sist­ance that they hope to fur­nish farm­ers. Farm­ers’ dis­agree­ments with in­dustry ex­ec­ut­ives won’t mean much, moreover, if to­bacco com­pan­ies move over­seas or go out of busi­ness. ”My con­cern lies primar­ily with the farm­ers,” Whit­field said. ”But the farm­ers are ob­vi­ously not go­ing to be able to make a liv­ing un­less the com­pan­ies stay in the United States.”

But even some to­bacco-state law­makers warn that sweep­ing le­gis­la­tion, par­tic­u­larly a deal that grants the com­pan­ies’ re­quest for pro­tec­tion from law­suits, may not be polit­ic­ally feas­ible this year. ”Giv­en the polit­ic­al dy­nam­ics of a short le­gis­lat­ive year, and the cur­rent dis­trac­tions at the White House, I think a com­pre­hens­ive deal is very dif­fi­cult to achieve this year,” said Burr.

If ne­go­ti­ations to pro­tect com­pan­ies from li­ab­il­ity fall apart, Con­gress may re­vert to a less-am­bi­tious plan. A scaled- back to­bacco bill would very likely take aim at teen smoking, and raise ci­gar­ette taxes to pay for com­pens­at­ing to­bacco farm­ers. If Con­gress re­sorts to this ”lite” ver­sion of to­bacco le­gis­la­tion, it will be the in­dustry ex­ec­ut­ives’ turn to feel left out.

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