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Big tobacco won't work toward settlement

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icon VXtreme Video
RJR announcement
Part One   |   Part Two

RJR chief: Deal killed by 'politics of punishment'

April 8, 1998
Web posted at: 5:02 p.m. EDT (2102 GMT)

WASHINGTON (CNN) -- Five major tobacco companies have decided not to participate in any effort to get a comprehensive tobacco settlement through Congress this year, CNN has learned.

In a speech Wednesday, RJR Nabisco chairman Steven Goldstone said the historic settlement reached last June between the tobacco industry and 40 state attorneys general "is dead" because of what he called the "politics of punishment" by the Clinton administration and Congress, who have proposed placing even tougher restrictions on the industry than did the attorneys general.

CNN has learned that four other tobacco companies -- Philip Morris, Brown and Williamson, U.S. Tobacco and Lorillard Tobacco Co. -- are poised to follow RJR's lead and will no longer work toward moving a comprehensive deal through Congress.

McCain: Congress will proceed without industry

cigarettes
Cigarettes on an assembly line
 

But the chief architect of a tobacco bill in the Senate, Sen. John McCain, R-Arizona, says he will proceed with the legislation anyway, saying "we cannot be blackmailed or cajoled by the tobacco industry."

"The decision of whether the industry will cooperate in the nation's effort to stop kids from taking up a dangerous addiction is up to each of the companies," McCain said. "But the public demands action, and, with or without the industry's support, Congress must pass a bill to achieve that goal.

"I think we're a long way from falling apart," said McCain, warning that if tobacco companies fight efforts to reach a tobacco settlement, "American public opinion will not be on their side."

Tobacco under attack

  • Brief history of tobacco

  • Text: Tobacco settlement

  • Tobacco company internal documents

  • Connecticut Attorney General Richard Blumenthal denounced Goldstone's comments, saying, "These kinds of threats and posturing will only antagonize and embolden Congress."

    "I think a lot of congressional leaders will react the same way Sen. McCain did," Blumenthal said. "He was very angry. He basically told the industry to go pound sand."

    "The fact is Congress doesn't need this outlaw industry's permission to enact comprehensive legislation that's going to protect our kids and the public health," said Minnesota Attorney General Hubert Humphrey III.

    "I think there is a substantial likelihood that Congress will move forward, that the public health community will unite with both the president and a bipartisan group of Congress to pass truly tough, comprehensive legislation," said Matt Meyers, executive director of the Campaign for Tobacco Free Kids.

    "It would be better to do it with the tobacco industry, but if the tobacco industry doesn't want to participate, Congress has the power to go forward without it, and I think they will," Meyers said.

    Mississipi's Moore calls for Clinton's intervention

    But Mississippi Attorney General Michael Moore, the chief architect of the original settlement with the industry, said RJR Nabisco officials have consistently made it clear that the terms of the settlement were "about as far as they could go."

    Moore
    Mississippi Attorney General Michael Moore
     
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    "An historic opportunity"
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  • "What has happened is that everybody in America has had their say in this thing. Some want to do other things by growing it bigger and bigger and bigger," Moore said. "Frankly, what this thing needs to return to is a bill to solve the problems tobacco causes in America and to solve the problems that it especially causes to our children."

    The initial settlement between the tobacco industry and the attorneys general called for the payment of $368 billion over 25 years. A tobacco bill that came out of McCain's Senate Commerce Committee last week calls for $516 billion in payments over the same period.

    In addition, McCain's bill would raise the cost of a pack of cigarettes by $1.10 over five years.

    Goldstone said the original settlement failed "because the Congress, in the absence of leadership from the (Clinton) administration, dissolved into a taxing frenzy on a disfavored industry and the 45 million customers it serves."

    "Those of us in the industry did not fully appreciate the depth of the mistrust and anger that existed about the industry's past controversies," he said.

    Moore said he believes the "only way" to salvage a tobacco settlement is for President Clinton to call a summit with all of the affected parties, including leaders of the tobacco industry.

    "Whether we hate the tobacco industry or not, there are 50 million people smoking in this county. It is a huge public health problem." Moore said. "They are a legal business, and unless you are going to outlaw them, frankly we need a resolution, and it is going to take cooperation on both sides."

    Correspondent Wolf Blitzer contributed to this report.

     
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