Locals left out in tobacco wars
The fact that the tobacco settlement is dead has not prompted many city or county tears. That’s because they likely would have been left out in the cold when any money was distributed. In fact, in discussions about potential uses for tobacco settlement revenue, references to cities and counties were few and far between.
The settlement of a lawsuit brought by various states’ attorneys general against the tobacco industry would have cost the companies $368.5 billion over 25 years, eliminated class action lawsuits against the industry and imposed voluntary restrictions on advertising aimed at children. Cities and counties had hoped that some of that money would trickle down to them as reimbursement for the money they provide to treat tobacco-related illnesses.
RJR Nabisco Chief Executive Officer Steven Goldstone, however, abruptly withdrew his support for the agreement, prompting Philip Morris, Brown & Williamson and Lorillard Tobacco to do the same. Goldstone argued that current tough anti-tobacco legislation making its way through Congress represented an attempt to reach beyond the agreement and punish the industry.
In a speech before the National Press Club, Goldstone said, “The extraordinary settlement … that would have set the nation on a dramatically new and constructive direction regarding tobacco is dead.” The industry’s withdrawal from the agreement leaves cities and counties no choice but to rely on Congress to address their concerns, and Congress might not be much help.
That has local governments fuming. At a Feb. 27 Washington press conference, Louise Renne, the elected city attorney for the city and county of San Francisco, noted that county governments were among the leaders in suing the tobacco companies. In fact, it was a suit filed by San Francisco and 13 other California city and county governments against R.J. Reynolds that was instrumental in squelching the “Joe Camel” advertising campaign.
Additionally, Erie County, N.Y., has sued tobacco companies to recover the $500 million that health department officials estimatethey have spent treating tobacco-related illnesses over the past 40 years, according to County Executive Dennis Gorski.
Local officials say they just want to be heard on the subject. The U.S. Conference of Mayors, the National League of Cities and the National Association of Counties sent a joint letter to House Commerce Committee Chairman Tom Bliley (Rep.Va.) outlining their top two priorities: reimbursement for costs incurred by health departments and assurance that any federal legislation does not pre-empt state and local tobacco control laws, many of which are stronger than the federal law.
Congress already has indicated its willingness to bow to more stringent state and local legislation. The Senate bill, introduced by Arizona Republican John McCain, prohibits federal pre-emption.
It does not, however, specify any compensation mechanisms, a matter local government organizations hope to address when the bill is brought to the floor. Additionally, language in the bill would wipe out any pending local government lawsuits against the tobacco industry. “There’s no recognition of local government costs,” says Tom Joseph, deputy legislative director for NACo. “And they want to wipe out our lawsuits. That makes it a double whammy.”
McCain’s bill helped prompt the tobacco industry’s withdrawal from the settlement. If passed, it would cost the industry $516 billion and give the federal government authority to raise cigarette prices by $1.10 per pack over the next five years.