Smoke Gets in Your Aye

Can Congress say yes to a deal when new evidence shows how Big Tobacco targeted teens?

By Richard Lacayo

WASHINGTON (TIME, Jan. 26) -- The main reason the tobacco companies so badly want Congress to approve the $368 billion deal they cut last year with the states is that it offers them immunity against future lawsuits. And the main reason they want immunity is to save money. But they also want to save face. In every tobacco lawsuit, plaintiffs can demand and make public the industry's internal documents, even as a condition of cases settled out of court. Just how damaging those disclosures can be is plainer than ever since last week, when a California suit opened a flood of secret industry papers. What many of them seem to show is the second largest U.S. cigarette maker scheming like mad to lure smokers as young as 14.

These are not the first disclosures to hint at an industry campaign to dominate the, ahem, younger-adult market. But the 81 internal documents from R.J. Reynolds, released by Democratic Representative Henry Waxman of California, are by far the most unflinching public view of a company determined to get those kids. In a 1975 memo, company official J.W. Hind urged R.J.R., maker of Camel, Winston and Salem, to "increase its share penetration among the 14-24 age group." One year later, a 10-year planning forecast prepared for the board of directors and stamped RJR SECRET noted that 14-to-18-year-olds were "an increasing segment of the smoking population" and proposed a brand aimed at them.

After a confidential 1980 memo warned executives to change their terminology, company documents referred less often to the 14-to-18-year-old market. But they went on talking about how to target "younger adult smokers," a term that encompassed teenagers in earlier company discussions. By 1988 Joe Camel had arrived in America.

As bad as the California papers are, there could be worse to come from a Minnesota lawsuit brought by Blue Cross and Blue Shield and Hubert H. ("Skip") Humphrey, the state's attorney general and Democratic gubernatorial candidate. With jury selection scheduled to start this week, Humphrey has 33 million pages of industry papers that he says provide not just a smoking gun but "a howitzer" against tobacco. To avoid a long and potentially embarrassing trial in Texas, cigarette makers opted last week for a $15 billion settlement of a lawsuit there. If a judge approves it, the companies will pay the state that much over 25 years to compensate for health-care costs and to fund antismoking programs. After Minnesota's case, there are nearly 40 state suits pending.

The industry that used to fight to the death is now flinching, partly because it can't afford more embarrassment just as Congress is approaching a tobacco settlement. In the Senate, Republican John McCain of Arizona, no friend of tobacco, is predicting a ferocious fight. To begin with, the deal is nobody's baby in Washington. "Congress is not inclined to simply embrace an arrangement negotiated by the attorneys general with Big Tobacco in a hotel room," says a Republican aide. Some members of Clinton's circle, including Vice President Al Gore and Health and Human Services Secretary Donna Shalala, are arguing hard against the deal, saying it's soft on tobacco.

Even Republicans, who know that tobacco companies are their party's largest campaign contributors, don't want to get too closely identified with a deal brokered by Evil Weed Inc. What they fear is a Clinton trap in which they commit themselves to the deal, only to have the White House back out, painting them as slaves to tobacco money, a move that would also deflect heat from Democrats on campaign finance. If Republicans aren't persuaded that a deal will give them cover, it won't happen. That's why Senate majority leader Trent Lott is saying it has no better than a 30% chance of passage.

Clinton, whose next budget already plans to spend $60 billion from the deal for such programs as child care and biomedical research, says the California papers show "more than ever why it is absolutely imperative that Congress take action now." But he still refuses to put forward his legislative proposal. "If the President's serious about this," says Oklahoma Senator Don Nickles, "let's see his bill." Republicans are also wary of being blamed for the billions that lawyers stand to take away from the deal or for the fact that it's sure to involve a tax increase of as much as $1.50 a pack.

Both parties have congressional leaders from states with vulnerable tobacco farmers. Yet even Thomas Bliley of Virginia, chairman of the House Commerce Committee and a Republican sometimes known as "the Congressman from tobacco," is wary enough of that title to have scheduled hearings next week at which heads of all the major cigarette companies will have to appear under oath. It could bring back memories of the 1994 hearing at which seven executives swore under oath that they never targeted kids.

--Reported by John F. Dickerson and Bruce van Voorst/Washington

Cover Date: January 26, 1998

• "You Should Not Expect A Miracle"
• A Flurry Of Activity: Clinton's Second-Term Agenda
• No Habla Espanol: Bilingual Education
• The Big Face-Off: Jones v. Clinton
• Smoke Gets in Your Aye: The Tobacco Settlement
• Clash Of Faiths
• Clinton's Last Campaign