SETTLEMENT: Implodes Under Weight Of Politics

      RJR Nabisco Holdings Inc. CEO Steven Goldstone yesterday said the $368.5 billion tobacco settlement was "dead" and "sharply attacked" Congress, President Clinton and "health activists" for backing out on the June 20 agreement. The Richmond Times-Dispatch reports that Goldstone "was quickly seconded by the other four major tobacco companies" (Jones/Hardin, 4/9). "I'm not kidding around when I say I'm done with the process. I'm not going to spend time walking the halls of Congress in a process I see as totally broken," Goldstone said in a speech at the National Press Club. The Charlotte Observer identifies Goldstone as the first major tobacco executive to "publicly go beyond the industry's rejection last week of" Sen. John McCain's (R-AZ) tobacco bill. Although Goldstone said he would like see the original June 20 accord enforced, he said he "will no longer pursue it" because "it can't win the necessary congressional approval" (Hopkins/Leonnig, 4/9). Criticizing Clinton and Congress for a "taxing frenzy" and "partisan posturing," Goldstone said, "Washington has rushed to collect more tobacco revenues while playing the politics of punishment" (Hoeffel, Winston-Salem Journal, 4/9). The Raleigh News & Observer called Goldstone's speech "defiant and bitter" (Rosen, 4/9). Click here to read his speech.

Chiming In
      Within hours of Goldstone's speech, representatives from the other major cigarette makers issued similar statements. The CEO of Brown & Williamson Tobacco Corp., Nicholas Brookes, said the reasonable agreement of June 20 had been "pulled apart by election-year politics." He said, "Congress wants us to sign a suicide note. We won't do that" (Ward, Louisville Courier-Journal, 4/9). In a prepared statement, Philip Morris Tobacco Co., the nation's largest cigarette producer, said, "We will actively oppose the Senate Commerce Committee bill because of its punitive impact on Philip Morris, our consumers, suppliers, retailers, growers and others" (Times-Dispatch, 4/9). Lorillard Tobacco Co. said it "wants to associate itself fully with the remarks made today by Steve Goldstone. ... [I]t would be irresponsible -- to our customers and our company -- to agree to the kind of proposals now before Congress" (Campbell, Greensboro News & Record, 4/9). NPR's Brian Naylor reported that Goldstone's comments "could be seen as an indication of how worried the industry is about the legislation moving through Congress and a move to assure company stockholders of an all-out fight to stop it" ("All Things Considered," 4/8).

Advertising Campaign
      The Los Angeles Times reports that "the industry will launch a public relations campaign to defend its position" (Rubin/Levin, 4/9). A full-page industry ad running in today's New York Times and other papers states: "While we are still committed to change, regrettably we believe the political process has ended any prospect for achieving a rational, comprehensive tobacco solution. Instead of mounting the kind of massive and sustained assault on underage tobacco use that the politicians all say they favor, Congress is now considering legislation that is ... unconstitutional" (4/9).

Clinton/Gore Fire Back
      President Clinton called the tobacco industry's stance a "huge mistake." He said, "I'm very disappointed. We're going to get this done. Now, they can be part of it, or they can fight it. But, I think they ought to be part of it" (Dorning, Chicago Tribune, 4/9). Vice President Al Gore, asked by Fox News Channel's Brit Hume if it matters that the tobacco companies have left the agreement: "I think that what you saw and heard today from the industry was more a bargaining ploy than anything else. The fact is there's now a strong bipartisan consensus to protect our children, and to pass effective legislation. ... When the American people make up their mind to protect the children of this nation, it's a nearly unstoppable force" ("Special Report," 4/8). Gore continued, "I think that the tobacco companies are not necessarily in tune with the realities in the nation and on Capitol Hill. ... The legislation is going to pass" ("World News Tonight," ABC, 4/8).

Gingrich's Ire
      House Speaker Newt Gingrich (R-GA) was highly critical of cigarette makers yesterday, saying, "We are not going to ask them to come back. I do not want to have any negotiations with the tobacco companies" (Rodrigue/Curriden, Dallas Morning News, 4/9). Appearing on CNN's "Larry King Live," Gingrich said: "What we're going to do in the House -- I talked with Chairman Tom Bliley [R-VA] of the Commerce Committee earlier today -- we're going to pass anti-teen smoking legislation designed to protect our children and try to bring down the rate of smoking which has gone up dramatically under the Clinton administration." Asked if he is worried about the power of the tobacco lobby, Gingrich said, "I think it is zero. ... The public documents that indicated that they lied to the Congress and lied to the country, that they were consciously trying to addict 14-year-olds, I think they have no standing in the U.S. Congress today on any issue. I think this is going to be decided by members of the Congress trying to do what's right for the country, with no reference to the tobacco lobbyists" ("Larry King Live," 4/8).

Anti-Tobacco Groups Defiant
      Richard Daynard, director of Northeastern University's Tobacco Control Resource Center, said, "What are you telling me? That you're going to take your marbles and go home? I'm supposed to be scared?" (Weisman, Baltimore Sun, 4/9). Matthew Myers of the National Center for Tobacco-Free Kids echoed these sentiments: "They lost control of the process. It doesn't bode well for [the industry]. The reality is that Big Tobacco needs Congress more than Congress needs Big Tobacco" (Winston-Salem Journal, 4/9).