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 McCain Prepares To Unveil Tobacco Settlement Proposal(03-26-98)



Clinton Says It Is In Tobacco's Interest To Back McCain Bill

WASHINGTON (AllPolitics, April 3) -- President Bill Clinton said Friday he thinks the tobacco companies "will be convinced it is in their interest" to back Congress' leading tobacco bill.

Clinton, just back from Africa, joined Sen. John McCain (R-Ariz.), the author of the bill, in cautioning cigarette makers to support the legislation or possibly face tougher legislation in the future.

"With each new revelation of the strategies which have been vigorously pursued to market cigarettes to children, I think they have an enormous interest in trying to reverse the record of the past, to try to put this unforgettable chapter behind them, and to start off on a new path, so I still believe in the end we will achieve an agreement where they will be convinced is in their interest," the president said.

McCain, chairman of the Senate Commerce Committee, said Congress is betting that tobacco companies will get behind the bill once they consider the alternatives.

"We have one obligation and that is to fashion a package that would ... (impose) the most effective way of preventing kids from starting smoking," McCain said Thursday. "If that is not acceptable to the tobacco companies, then we go back and find other ways to try and prevent kids from starting smoking."

The bill, which would impose billions of dollars in fines if teenage smoking rates do not decrease significantly, was approved Wednesday by the Senate Commerce Committee, passing with an overwhelming majority.

McCain held a news conference Thursday afternoon shortly after the wire services reported R.J. Reynolds was pulling out of the proposed settlement agreed to with the states last June.

"If the tobacco companies opt out of it, then obviously we don't have a viable proposal. But the consequences are not inconsequential to the tobacco companies ... the consequences are continued lawsuits in every state ... further anger on the part of the American people if they continue to advertise a product that causes three million kids to start smoking every day," the Arizona Republican said.

R.J.Reynolds, the nation's number two tobacco company, remains committed to the June 20th agreement, according to Steve Duchesne, of Bozell Sawyer, a public relations firm representing big tobacco.

Reports on Bloomberg and AP wire services Thursday saying the maker of Camel cigarettes was pulling out of settlement talks were "absolutely wrong," according to Carol Makovich, vice president of worldwide communications for R.J.R. Nabisco Inc., the parent of R.J. Reynolds Tobacco.

"We don't know where this is coming from," said Makovich. "We're trying to find out ourselves. We are not withdrawing from anything."

Earlier Thursday, class-action attorney John Coale told CNN that a source at R.J. Reynolds had told him the company was indeed planning to pull out of the settlement negotiations.

"Now R.J.R. is denying it," Coale said. "They apparently chickened out. This went up the flagpole; they got all the attention in the world, and it took them 20 minutes to chicken out."

But, he said, "if nothing changes in Congress, I think it [the withdrawal of R.J. Reynolds] will happen. We really need them on board or this thing is just bull."

That doesn't mean R.J. Reynolds or any of the other tobacco companies are supporting the bill introduced by McCain, which would boost tobacco industry payments from $368.5 Billion to $506 Billion over 25 years.

"If the McCain provisions were enacted into law, the companies would not sign the binding agreements required to implement many of the provisions," wrote J. Phil Carlton, a tobacco industry lawyer, in a statement issued last Tuesday. "The June 20 resolution was designed to replace decades of fruitless legal conflict with a comprehensive solution on tobacco. Sen. McCain's language would extend, not end, that conflict."

Nevertheless, strong incentives exist for the tobacco industry to walk away from a McCain settlement as it's currently written, class-action attorney Coale said.

"Once it becomes law, the companies go into Chapter 11 bankruptcy. That puts the brakes on everything, stays all the cases automatically. They then file to challenge the constitutionality of this legislation if it becomes law, and they tie the sucker up for five years," said Coale.

The industry has "a lot of remedies that people on the Hill just ignored," Coale said. "What the health groups forgot is, whether we like it or not, cigarettes are a legal product. And, until someone makes it illegal to sell it, these guys have a lot of constitutional protection, just like anybody else who's selling anything else that's legal."

Coale noted that Dow Corning had sought Chapter 11 protection over lawsuits related to its breast implants. "And for three years, nobody could move any of the cases or collect any judgments, or anything," Coale said.

In Other News

Friday April 3, 1998

Starr Urged To Indict Lewinsky
Clinton To Visit Kentucky To Talk Tobacco
Battle Of The Book Subpoenas Goes To The Judge
Payne Calls Solomon's Remarks 'Racist'
Jones' Lawsuit Took A Toll On Her
Clinton Says It Is In Tobacco's Interest To Back McCain Bill
Mortgage Company To Pay $2.1 Billion In HUD Discrimination Settlement
Clinton Takes Aim At Senate's Version Of Budget

President Bill Clinton Discusses Senate Budget

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