By the time they emerged, the anti-tobacco forces seemed to have had their torte and eaten it, too. The deal struck last week between 40 state attorneys general and the tobacco industry marked an American perestroika, not a complete collapse of the smoking industry but a historic turning point. The tobacco companies agreed to pony up $368 billion to defray the smoking-related medical costs shouldered by states. They’d stomach a new culture of marketing: no ads with pictures, no vending machines, no sports promotion. In exchange, the tobacco companies would get limited immunity from lawsuits and, above all, the state A.G.s would remove their 40 pending suits. We ““have changed the world,’’ said Matt Myers of the Campaign for Tobacco-Free Kids, perhaps America’s leading anti-smoking advocate.
Not yet, of course: Congress must sign on to this Rube Goldberg contraption. And that is no sure thing. Congressional liberals are eager to get out their ““editing pencils,’’ says Sen. Ron Wyden, an Oregon Democrat. On the right, Newt Gingrich scolded that the settlement is a Marshall Plan for Democratic-leaning trial lawyers. (Hard to argue with that: lots of lawyers will get rich off the deal.) And the anti-smoking community is divided on the agreement, sometimes to comic effect. While the American Heart Association said it was ““encouraged’’ by the agreement, the American Lung Association trashed it. Still, no one could deny the agreement’s magnitude. Some 32 years after the surgeon general slapped warnings on cigarette packs, anti-tobacco forces had achieved their greatest victory. ““The Marlboro Man,’’ said Florida Attorney General Bob Butterworth, ““will be riding into the sunset on Joe Camel.’’ Indeed, if there was any romance left to tobacco, it was, on a June day, snuffed out.
If the deal survives congressional scrutiny, the fallout will affect all Americans - whether they light up or not. The nation’s 45 million smokers can expect higher prices - up to a buck a pack, more than $500 annually for a carton-a-week habit. Taxpayers will see billions flow into state coffers - money to defray the medical costs of treating smokers. Another proviso, albeit a shaky one: tobacco companies will provide money for health insurance for children who now lack it. Philip Morris meets Ira Magaziner.
DESPITE THE MONUMENTAL deal, the impact on the nation’s businesses is likely to be limited. Tobacco ads account for about 1 percent of the nation’s advertising spending, and the companies can still pitch cigarettes as long as they avoid models or gimmicks like Joe Camel. Some outlets will suffer. Since the agreement bans tobacco billboards, the outdoor-advertising industry takes a disproportionate hit. And sporting events like auto and boat racing will lose reliable sponsors. (What now? ““The Charmin 500’’?) Since convenience stores get 26 percent of their revenue from tobacco, they’re nervously watching the deal, hoping there’s no drop in cigarette sales. It won’t help them that all ““point of sale’’ advertising will go. Cigarettes will be sold a bit like condoms were 20 years ago - a bit hard to find, and if the activists prevail, embarrassing to ask for.
Still, to the chagrin of some activists, much will not change. This is hardly Prohibition. Multinational tobacco will still be in business, free to peddle its wares in the United States and overseas, where billions of virgin lungs await. (Caps, knapsacks, billboards, vending machines and sexy models will be banished in America but can stay abroad.) ““It’s immoral to call this a “global settlement’,’’ says perennial activist Ralph Nader, ““when these companies can continue their brutal marketing and advertising to hundreds of millions of teenagers and young people around the world.’’ And their profits may not even be affected that much. The deal is estimated to cost the tobacco companies close to $15 billion annually for 25 years, about twice their domestic profits last year. Yet tobacco stocks rose as the agreement approached, dipping only modestly after the ink was dry.
How did all this come to pass? It’s the stuff of a John Grisham screenplay. For years, tobacco was Goliath. Sure, smoking had steadily declined since World War II, falling from half of American adults in the 1950s to a quarter today. Still, tobacco remained largely unfettered. While regulatory agencies took occasional slaps, like the Federal Communications Commission’s 1971 ban on TV tobacco ads, elected officials mostly kept hands off Big Tobacco. And in the courts, the tobacco companies seemed to have it all over any ““My Cousin Vinny’’ litigator who took them on. In 1988 the industry lost a rare one - the case of Rose Cipollone, a smoker who died of cancer. But the $400,000 settlement granted her estate was overturned.
That all changed with the arrival of the Mississippi crusaders. The very idea of a Mississippi anti-smoking movement seemed about as likely as an anti-bourbon crusade in Kentucky. But in 1994 Michael Moore, the state’s attorney general, teamed with his law-school classmate, Dick Scruggs, a rangy Mississippi trial lawyer. This time, instead of suing just on behalf of individual plaintiffs, they championed taxpayers who had lost billions paying for Medicare and Medicaid treatments for smokers. The distinction was crucial. While juries were tempted to blame individual smokers when they went to trial - after all, they chose to smoke! - they tended to be much more sympathetic to cases brought by a state. The jurors were, after all, taxpayers themselves. Among those helping the legal team: the ubiquitous Dick Morris, the erstwhile political consultant. Morris’s polling showed that potential jurors had much more empathy when the case was about damages done to a state. What now seems brilliant, of course, seemed kooky at the time - akin to taking on the candy industry for a state’s dental bills. Most Mississippi pols thought Moore was a nut; the governor denounced him. Notably, one pol didn’t criticize Moore: Mississippi Sen. Trent Lott, Scruggs’s brother-in-law and, at the time, Morris’s client.
As they now readily acknowledge, circumstances helped Scruggs and Moore. The crusading of public officials like former Food and Drug Administration head David Kessler and ex-surgeon general C. Everett Koop scared the tobacco companies. The FDA made moves to regulate tobacco and, incredibly, a supposedly tobacco-friendly judge in North Carolina upheld the agency - a move that could allow the Feds to force disclosure of cigarette ingredients or even ban them altogether. Suddenly the courts weren’t such a friendly forum for Big Tobacco. Not surprisingly, other state attorneys general caught the wave. (Most have higher aspirations; Bill Clinton was once an attorney general.) Massachusetts’ Scott Harshbarger, who will run for governor in a heated primary against Joe Kennedy, joined the suit. When Dan Lungren, California’s attorney general and an aspiring gubernatorial candidate, dithered about climbing aboard, he was lambasted at home. He signed on. Suddenly, by the summer of 1996, Goliath wanted to settle.
The first efforts at a deal ended with the two sides wide apart. But earlier this year the talks began in earnest behind closed doors in Dallas, New York, Washington and Chicago. The attorneys general had the upper hand. A telling moment: after one meeting in New York, when tobacco companies offered a particularly puny settlement offer, Arizona A.G. Grant Woods stood up and said: ““It’s been nice working with you.’’ The tobacco companies backed down and the negotiations resumed.
The decisive talks came last week, as negotiators gathered in two Washington hotels on opposite sides of the street. The tobacco companies made concession after concession in talks that ran from 9 p.m. to 3 a.m. At one point, Moore was so tired that he could barely push open the plate-glass door to his hotel’s entrance. An aide had to help him. A cultural barometer: in the ultimate back-room deal, no one smoked.
ON FRIDAY, THE DEAL WAS ALmost at hand when the two sides hit a snag: what about Jeffrey Wigand? The whistle-blower was responsible for exposing evidence showing that tobacco companies knew about the addictive nature of their wares. Brown & Williamson, Wigand’s former employer, wanted to continue its prosecution of Wigand for exposing company materials. The state attorneys general, motivated by sympathy and politics - how could they abandon a martyr? - demanded amnesty for Wigand. After about an hour, Ron Motley, an anti-tobacco lawyer, formed the language to absolve Wigand. Applause went up. The deal was done.
Now the action moves from the hotel to the Hill. Can this deal get past a skeptical Congress? The odds are pretty good that it can, in some form. Despite the huffing and puffing of liberals, they’re unlikely to get a better deal. And while Big Tobacco still has political muscle, it’s better off with the settlement than without it. ““A bitter pill,’’ said one Philip Morris executive, but one worth taking. Interestingly, one of the key players on Capitol Hill expressed cautious optimism about the deal. Thomas Bliley, the head of the House Commerce Committee, who represents Philip Morris’s Richmond, Va., expressed openness to the deal. Insiders think Lott will embrace the deal, too. And while the White House will scrutinize the pact - Donna Shalala, whose Health and Human Services was cut out of the entire process, is said to be eager to make her mark - can anyone imagine a lip-biting Bill Clinton resisting a Rose Garden ceremony declaring the end of the Tobacco Cold War?
Real questions about the impact of the agreement remain. Will the tobacco companies find loopholes? One of the provisions demands steady reductions in youth smoking but threatens ““lookback’’ penalties that may be too small to do any good. The extent of the FDA’s jurisdiction over tobacco and nicotine content are sketchy. Even the attorneys general acknowledge that the proof will be in the numbers of lives saved. Still, they defend the deal, insisting it was better than slogging along in the courts. ““If the lawsuits kept going,’’ Moore told NEWSWEEK, ““the companies would have gone Chapter 11 but come back clean as Clorox. Those who say you should never deal with the Devil have their heads in the sand.''
It’s ironic that the tobacco deal comes in the age of William Rehnquist (and even Ruth Ginsburg), when courts aren’t supposed to be legislating policy. And yet, it was the courts that forced this change. That it began with a few Mississippi lawyers makes it still more improbable. And it’s fitting that this deal comes at the end of the century. The cigarette belongs to the 20th century, popularized by World War I, billed as a modern, convenient way for doughboys to light up in the trenches. By 2000, that image may seem a distant memory.
