RJR: Tobacco deal 'dead'
Other cigarette makers also expected to withdraw
April 8, 1998
Web posted at: 1:59 p.m. EDT (1759 GMT)
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WASHINGTON (CNN) -- RJ Reynolds cannot support tobacco
legislation now moving through Congress, but the
cigarette-maker still stands by a deal it negotiated with
state attorneys general last June, the company's chairman
Four other major tobacco firms -- Philip Morris, Lorillard,
Brown and Williamson and U.S.
Tobacco -- were expected to announce their own pullouts.
"Today, it is very clear to me that we have failed in our
effort to achieve a comprehensive resolution of the
contentious issue surrounding tobacco in our country," RJR
Chief Executive Officer Steven Goldstone said in a speech at
the National Press Club.
"The extraordinary settlement reached on June 20th last year
that could have set the nation on a dramatically new and
constructive direction is dead," he said. (299K/27 sec. AIFF or WAV sound)
Goldstone said there was "no process which is even remotely
likely to lead to an acceptable comprehensive solution this
year." Such a solution, he said, would have to acknowledge
that tobacco companies "have a legitimate right to exist in
Goldstone said that the opportunity to implement a comprehensive tobacco settlement "has been lost" because the Clinton administration, while publicly praising the deal, "took it apart privately piece-by-piece."
Tobacco legislation approved last week by a congressional
committee, and now moving toward a vote in the Senate, would
go much further than last June's $368 billion deal.
The bill, sponsored by Sen. John McCain, R-Arizona, would
require the nation's tobacco companies to pay $516
billion over 25 years and curb their marketing practices.
It also calls for fining companies billions of dollars if
teen smoking rates do not fall significantly.
The bill would give tobacco companies less protection against
lawsuits by sick smokers than they had won in the earlier
deal they negotiated in the hope of settling 40 state
Clinton reacts to the news in Chicago
It was unclear if the decision by the cigarette-makers to
withdraw from the deal was permanent or part of an effort to
pressure Congress to change the proposed legislation.
President Clinton said Wednesday he hoped RJR and the other companies would
reconsider. But, the president added, it was critical for
Congress to act on the issue regardless of their position.
"I've been working for two years on this and I don't intend
to stop now," Clinton said in Chicago, where he was visiting
a school to promote his education policy.
"I think we've got an excellent chance of passing a good
piece of legislation to dramatically reduce smoking by young
people and save lives. I don't think there is very much in it
RJR or anybody else to walk away, so I hope they will
reconsider that," Clinton said.
Correspondents Wolf Blitzer and John King contributed to this report.