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Is the Government Lawsuit Against Big Tobacco Going up in Smoke?

Aired April 26, 2001 - 19:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL PRESS, CO-HOST: Tonight: is the government lawsuit against big tobacco going up in smoke? If it does, is it because the tobacco industry has a friend in George W. Bush?

ANNOUNCER: Live from Washington, CROSSFIRE. On the left, Bill Press. On the right, Robert Novak.

In the crossfire, Democratic Senator Dick Durbin of Illinois and Republican Congressman Ed Whitfield from Kentucky.

PRESS: Good evening. Welcome to CROSSFIRE. For the past eight years, tobacco companies have been under attack. But that may change. Because it looks like the Bush administration's might drop the government's $100 billion lawsuit against leading tobacco companies for lying to the public about the harmful effects of cigarettes.

In testimony today, Attorney General John Ashcroft denied that any decision has been made. But Bush's budget may tell a different story. It allocates only $1.8 million for litigation staffing this year. While that's the same amount the Clinton administration budgeted for staffing last year, the Justice Department lawyers say $57 million is needed to get ready for trial.

On Capitol Hill, Democrats accuse President Bush of getting ready to let big tobacco off the hook. So, will cigarette manufacturers ever be hauled into court by the federal government? Should they? Or can they now breathe a whole lot easier?

Sitting in again on the right from the THE SPIN ROOM into the CROSSFIRE: Tucker Carlson.

TUCKER CARLSON, CO-HOST: Thank you, Bill. Senator Durbin, nice to see you. As you know, it's Happy "Take Your Daughter To Work Day." Happy "Take Your Daughter To Work Day."

In celebration of this, the state of Florida has put full-page ads in newspapers around the country urging people who work at tobacco manufacturing plants -- there's one right there from "the New York Times" -- to quit their jobs, be a hero to your daughter, is the print there. There's no offer incidentally of job retraining or job placement or anything.

But this is a great ad, because it makes a very simple point. It's honest. The crusade against tobacco by the government isn't about reducing childhood smoking, keeping cigarettes away from kids, it's about destroying the tobacco industry. Isn't that true?

SEN. DICK DURBIN (D), ILLINOIS: Of course not. Let's make a point, interestingly enough, about taking your child or daughter to work: the number one cancer cause of death among women today is not breast cancer. It's lung cancer. And it's from smoking: 80 percent of lung cancer is from smoking. Just a point to be made for reference here.

And I just think you got to put it in perspective. We had a lawsuit by the attorneys general across the United States, on behalf of the states that recovered $246 billion that came back to the States and changed the practices of marketing in the tobacco industry.

Think of the potential of a federal lawsuit that's filed on behalf of federal taxpayers and the impact it can have on an industry that is still responsible for the number one preventable cause of death in America today. That's why this lawsuit should go forward.

CARLSON: Well, first of all, urging tobacco companies, ordinary middle-class people to work on a manufacturing line to quit their jobs as if the moral stigma is so overwhelming, that to work there is shameful. It has nothing to do with keeping cigarettes from the hands of kids.

But I'm glad you brought up that point about the $246 billion suit three years ago. How many suits like this can go on before the industry is completely bankrupt? I mean, not many, isn't that true?

DURBIN: If you watch "MONEYLINE," and I think you might, you may have noticed that the tobacco stocks went up about 5 percent today -- Philip Morris and RJ Reynolds -- on the news that the federal tobacco lawsuit may be dropped by Attorney General Ashcroft and President Bush. This is great news for them.

If they don't face the possibility of liability for lying to the public and for selling to children and for deceptive advertising, then frankly they will make even more money. They have been quite profitable even after paying off the States for $246 billion.

PRESS: Congressman, you are from Kentucky, tobacco growing state. I'm sure you don't support this federal lawsuit and that's fine. But I would really like you to be honest with me and all of our viewers tonight, because budgets really do -- they're policy documents. They tell the story of what an administration is planning to do.

And when you look at the Justice Department lawyers are saying, we need $57 million to get ready for this trial. And yet, the Bush administration is giving them he $1.8, they are sending a clear signal, aren't they? They're saying, let's be honest with everybody, this lawsuit will be dropped. They've made the decision.

REP. ED WHITFIELD (R), KENTUCKY: I hope they have, because it should be dropped. The U.S. District Judge Gladys Kessler has already dismissed the most important part of that lawsuit, that part on the health claims and she made it very clear in her decision that the federal government does not have the legal authority, does not have federal statutory authority, to bring the lawsuit -- they're bringing in Medical Claims Recovery Act, the Medicare Secondary Payers Act, and she summarily dismissed it. So it should be dropped.

PRESS: Well, that's one judge's decision on the part of the lawsuit which I think effects the most people. But I just would like to show you something that President Bush said yesterday. He's giving all these 100 days report interviews. In one of them, I think he made it again very, very clear, let's not kid ourselves, this puppy is over. Here is what the president said yesterday: "I do worry about a litigious society. And I remember as the governor of Texas that we had all kinds of major lawsuits against tobacco -- as in every other state. At some point, enough is enough."

So what the president is saying -- tobacco companies, you are back in business, you can kill as many as you want and we don't care?

WHITFIELD: I don't think he's saying that, but the lawsuit should be dropped. You know, when we talk about the tobacco industry, you're also talking about thousands of small farm families around the country who grow this product. You are talking about manufacturers, middle-income people, who work at these plants.

And furthermore, even Senator Durbin should not be wanting this lawsuit to be pursued because the state of Illinois will lose a significant amount of money if the federal government is victorious, and not only Illinois, but every state in the country will lose money under the settlement agreement.

CARLSON: Congressman, I'm glad you brought that up, because I want to ask Senator Durbin about this. The states and the federal government profit wildly from the sale of tobacco. Apparently, more money goes to governments, state and federal, from each pack of cigarettes sold, and goes to the tobacco companies themselves.

I guess, my question is, Senator, if tobacco is so evil, and the people who produce it so wrong, then isn't the money the government gets from it blood money?

DURBIN: Tucker, it's about addiction. We are talking about 40 million Americans who are addicted to nicotine in tobacco. And because of this addiction, they'll buy the product even if it's expensive, and they'll pay the taxes, but the state and local governments come out ahead in this deal? I don't think so, Congressman.

They come out losing, because of all the sick people who end up coming to the hospitals, sticking themselves in the hospitals for long periods of time, subjecting themselves to cancer therapies, and heart treatment. These are expensive diseases caused by tobacco.

CARLSON: And the government is happy to profit from this?

DURBIN: Well, I think the tax on this product also discourages children from buying it and I think that's a sensible thing to do.

WHITFIELD: But, you know, Senator, the FDA in their report when they were trying to regulate tobacco, through their regulatory scheme, said that tobacco costs about 33 cents a pack to the society as a whole. Revenue coming in through the excise tax is about 50 cents. So, there's more money coming in than is being paid out.

According to a Harvard University and also FDA's own...

DURBIN: How you can equate this with the misery that people go through because of cancer, lung cancer, heart disease, and stroke. You are saying that this is just a calculation of money and we ought to be thanking people for selling this product?

WHITFIELD: What about individual responsibility? There have been labels on this since 1964.

DURBIN: Half of the people addicted today started smoking before the age of 14; what about that responsibility?

CARLSON: Let's get to that really quickly, Senator. If it's so bad -- let me just give you an example of Florida, one of the most eager pigs at the troth of the tobacco money here.

The state of Florida once manufactured cigarettes for inmates; it has a huge amount of its pension fund invested in tobacco stocks, and it lobbies on the Hill for tobacco subsidies. Now, if tobacco is so bad, shouldn't the state of Florida and all states divest themselves from the tobacco industry as companies did from South Africa?

DURBIN: I would encourage them to do so; I would encourage both political parties...

CARLSON: How is that any different?

DURBIN: The difference is this: the tax that is collected on the product also raises the price and discourages consumption. It's supply and demand, which, as a Republican, I think you would be very sensitive to.

PRESS: Congressman, you just used the phrase, individual responsibility. I want to ask you about corporate responsibility, and let's get back to this lawsuit, and what the lawsuit is all about.

For 45 years, these companies knew that the product was addictive and knew it was causing health problems. They were spiking their cigarettes, they lied about it. They lied to the American people. They stood up and lied in front of you guys in Congress with serious health consequences and massive public cost. And what are you saying? They should not be held responsible?

WHITFIELD: I was saying the federal government is bringing this lawsuit. The federal government is as guilty as anybody else: they conducted research on this. In 1937, the Federal Trade Commission issued regulations on advertising of tobacco products. And 1964, the first labeling. The federal government gave it away to military men and women up until 1974, gave this product!

Now, they want to file a lawsuit and recoup money from it. He said it's not about money. That's precisely what President Clinton said when he said I will bring lawsuit.

PRESS: I want to repeat: for years, the federal government was after these executives and after these companies, looking to see whether or not in fact it was an unsafe product. They had the material, they knew it, they lied, they hid it from the federal investigators, there are 418,000 tobacco-related deaths every year and you are blaming the government and not the companies? Why are -- why are you standing up for them?

WHITFIELD: I'm saying that they are responsible as well. The federal government is responsible also.

PRESS: But then, why not proceed with the lawsuit?

DURBIN: Why not a lawsuit if they're responsible?

WHITFIELD: Because it's illegal. It's already been thrown out, and on appeal, it is going to be denied! So, why should we waste this money? Let's spend money on a prescription drug benefit for senior citizens.

(CROSSTALK)

CARLSON: We are talking here like the lawsuit is not going to go forward, but in fact, it may. I want you, senator, to listen to what Attorney General Ashcroft said when he came up on the Hill and talked about the lawsuit. Here is what he said.

(BEGIN VIDEO CLIP)

JOHN ASHCROFT, ATTORNEY GENERAL: Our budget request on this case is exactly the same budget request as was fashioned and submitted by Mrs. Reno in anticipation of the year 2002. It is identical to the budget request which she submitted as well for the year 2001. It's for $1.8 million to continue the case.

(END VIDEO CLIP)

CARLSON: Now, he said later, as you know, that pursuing this lawsuit is Justice Department policy, and he supports that policy. So, what gives you the sense that the Bush administration isn't pursuing this as vigorously as Clinton did?

DURBIN: I hope they do. And I hope I can come on CROSSFIRE and say, Attorney General Ashcroft, thank you for pursuing this lawsuit, to spread a lawsuit against tobacco companies.

CARLSON: I'd watch that!

DURBIN: And I will tell you something else...

PRESS: Don't hold your breath! DURBIN: There was a wink, and a nod, and a smoke ring there, and the people on Wall Street said, it's over. The ball game is over. And that's why the stock prices on Philip Morris and R.J. Reynolds went up 5 percent today. Because in the past what the Clinton administration had to do is transfer money in from other agencies affected by this lawsuit to make it happen, resisted on Capitol Hill by the Republican leadership and those from tobacco-producing states.

And we know that 1.8 million will not sustain the lawsuit of this magnitude! The state of California in filing their lawsuit against the tobacco company spent $13 million a year, and recouped billions of dollars as a result. If we're not going to have a serious lawsuit, and we're going to have some sort of a symbolic gesture here, so it doesn't look like the Bush administration is caving into tobacco companies, we're going to see right through it.

WHITFIELD: And the Bush administration is not caving in. The only thing left is the RICO part of this lawsuit, and that is civil and not criminal. And I think most legal scholars will tell you that it's going to be very difficult to prove that case, and probably there won't even be any monetary awards made from it. So, the lawsuit can proceed with the $1.8 million, under the RICO, because the rest of it has been dismissed already.

CARLSON: And the rest of it is silly.

DURBIN: And we use legal aid lawyers!

(CROSSTALK)

CARLSON: OK, we will be back with Mr. Durbin and Mr. Whitfield and more smoke rings in just a moment, when CROSSFIRE continues.

(COMMERCIAL BREAK)

CARLSON: Welcome back to CROSSFIRE. Are tobacco executives racketeers? That was the position of the Clinton administration. But there's a new president in town now, and the government's racketeering suit against big tobacco could be dropped. Critics see the evil hand of cigarette makers at work. Others hail the end of a witch hunt.

We'll hear both sides tonight. Joining us, Senator Dick Durbin, Democrat of Illinois and Congressman Ed Whitfield, Republican of Kentucky -- Bill.

PRESS: Congressman Whitfield, I want to change gears here to another lawsuit, where and I can probably agree. Yesterday, the Supreme Court heard arguments, a tobacco company challenge to a law up in Massachusetts that says that cigarette companies can't advertise around where kids go to school or kids play.

Now, surely, congressman, if you can't sell cigarettes to kids, to minors, then it just makes sense. You can't advertise to minors. You and I would probably have to agree on that, would we?

WHITFIELD: Well, I think that was agreed to in the multistate agreement to an extent.

PRESS: Now, but this -- this Massachusetts law which tobacco companies say is against free speech, and they want it thrown out.

WHITFIELD: Well, I mean, I think that we do have free speech, and I do think that there are certain restrains on free speech. And while I do not know specifics of that Massachusetts case, I do think we have an obligation and responsibility to stand up for free speech. That's why a lot of people have been opposed to Senator McCain and Feingold's campaign finance bill.

PRESS: That's another debate. But University of Illinois -- of course, anything coming out of Illinois we trust with the good senator here. University of Illinois study recently showed that just how effective this cigarette advertising is to kids, that 86 percent of minors who smoke use one of the most heavily advertised brands.

So again, you would tell your colleagues, if I hear you correctly, in the tobacco industry, don't put up any advertising around schools. We should not do it. Massachusetts is right.

WHITFIELD: Well, I would advise them not to put them up around schools. And that's why I think this multistate settlement is so important, because it is providing money for prevention, and they have agreed not to solicit the use of tobacco products by young people. And I think everyone in our society is opposed to young people using these products.

CARLSON: Now, senator, as I -- I think I understand you when you say that tobacco kills hundreds of thousands of people every year, it enslaves our young, it adds wildly to medical costs that states have to bear. Why not make smoking illegal, apart from the fact that trial lawyers would not make any money?

DURBIN: Well, the people are addicted to it. You can't stop selling a product that people are addicted to, you go into black market and underground...

(CROSSTALK)

DURBIN: It doesn't work. And frankly, you would have to have the Food and Drug Administration involved in it -- and I think it's a good idea -- but let's be honest about it. I never called for that, prohibition of tobacco sales in this country. I really think what we ought to do...

CARLSON: Well, why keep them? Apart from the fact that people are addicted to it...

(CROSSTALK)

CARLSON: ... addiction. Apart from that, is there any other reason to keep it legal?

DURBIN: Listen, it's a very sad and tough addiction. I think a lot of us know that from family members who have tried to stop smoking, and I think we ought to be sensitive to that fact.

But let's try to stop the new class of smokers from being graduated, and that means really getting serious about stopping sales to minors. And I watch these ads on television, primarily in prime- time programs that adults watch, where the tobacco companies are boasting how they are stopping sales to minors. Wouldn't it to be a lot better for them to direct their advertising to MTV and the areas where the teenagers are watching, and might be influenced to know what they are doing to destroy their health by the use of tobacco products.

CARLSON: Well, you need to watch more MTV, but you raised an interesting question now. If we're going to regulate where tobacco is advertised, and say, it's Massachusetts, that it can't -- that minors can't even see tobacco advertising, it will burn their eyes, why not do the same for other products that aren't available -- shouldn't be available to minors? I don't know, pornography or beer or PG movies. I mean, why should a sixth-grader be able to see an ad for a PG movie?

DURBIN: Well, I think that -- in my, the city of Chicago that I represent, of course we have a Father Flager (ph) who's been after not only tobacco advertising, but alcohol advertising directed toward children, too, and he has had quite a lot of success at that. The difference, if there is one, when it comes to these products is, tobacco is an addictive drug-filled product, which, if a child starts at age 13 or 14, can become addicted for a lifetime.

CARLSON: But so is alcohol.

DURBIN: Well, it could lead to that, but I think what we have to do is draw a line as the court is trying to, I hope, in the Supreme Court now in the Massachusetts law, and saying this is a unique product and uniquely dangerous to children.

PRESS: You know, congressman, I always look for bottom line in these debates, and I think the bottom line is this: there were big smiles on the faces of the tobacco executives when George Bush was elected. They knew they had no friend in Al Gore, no friend in Bill Clinton, but boy they got a big buddy in George W. Bush, in fact, they showed it. He was the number one recipient of campaign dollars from the tobacco industry last year. This is pay back time for big tobacco, isn't it?

WHITFIELD: What about the number one contributor to the Democratic party who brought the lawsuit were trial lawyers, and by the way, they received as much money from these lawsuits as almost anyone else. One law firm in South Carolina received about $6 billion. So this about dollars as much as it is about children's health or anything else. I might make one other comment. One thing that particularly disturbs me...

PRESS: You're equating trial lawyers who are protecting the public, with tobacco companies that are selling an unsafe product?

WHITFIELD: No. You are saying tobacco companies give us money. They are a legal entity. They have a right to give money to whoever they want to. Trial lawyers do also. My point is, Bill Clinton brought this lawsuit. Even his own attorney general said we don't have a legal basis for this lawsuit.

PRESS: So your point is that Bill Clinton brought the lawsuit because he got money from the trial lawyers, then you must agree that George Bush is letting them off the hook because he got money from the tobacco companies.

WHITFIELD: No, I wouldn't say that. I would say that Bill Clinton's appointee to the federal bench dismissed the lawsuit that Bill Clinton bought.

PRESS: One judge. I would ask you one final thing about Bill Clinton. He issued an executive order saying, no smoking in the White House. Do you support that? Do you think George Bush ought to change it?

WHITFIELD: Well, I tell you what, I think that's up to the president of the United States. His family lives there, and in my home, we don't smoke in my home. If Bill Clinton does not want people to smoke in the White House then I think an executive order is fine. If President Bush feels that way, I think it's fine.

PRESS: All right, and no smoking on the CROSSFIRE set, not in this building, in fact. All right, Congressman Whitfield, thanks so much for joining us. Senator Durbin, good to have you back. And Tucker Carlson and I will be back with a final puff or two on our closing comments about this tobacco lawsuit. Right back.

(COMMERCIAL BREAK)

PRESS: Tucker, I just want to thank you, because you know it's hard to find somebody to defend these killer tobacco companies. And you stood up and did it tonight and I'm very grateful, otherwise we could never have had a show, so thank you.

CARLSON: I came to the conclusion tonight, Bill, do you know why the government is going after the big tobacco industry? Not because tobacco hurts you, but because it can. Tobacco is unpopular, that's why it's being targeted by the federal government. There's no other reason -- because they can, and they will come after other industries, Bill, and some day they will come after you.

PRESS: No, it's because the cigarettes do kill. They have killed. They will continue to kill, and if you don't go after an industry like this, the message to every other industry is, you can market an unsafe product and get away with it. It's called corporate responsibility.

CARLSON: You know what's missing here, the element of surprise, because not a single person in America is unaware of the fact that cigarettes are harmful. So, if you continue to smoke them it's your fault, pal, yours and yours alone, not R.J. Reynolds, not (UNINTELLIGIBLE) It's yours.

PRESS: So they stand up in front of Congress and say, "We don't know our product is unsafe. We never knew it."

CARLSON: So they fibbed, so they fibbed in Congress -- Oh, I'm shocked.

PRESS: So they lied and they killed. What more do they have to do?

CARLSON: Oh, please, and who believed them? Only CSPAN watchers.

PRESS: From the left, I'm Bill Press. Good night for CROSSFIRE. See you a later in "THE SPIN ROOM" with Tucker.

CARLSON: That would be me. From the right I'm Tucker Carlson. Join us again tomorrow night for another edition of "CROSSFIRE."

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