Washington, 26 June 1997 (RFE/RL) -- The U.S.'s largest tobacco manufacturers will face months of negotiations in Congress following a historical decision to regulate their industry.
Last week the American tobacco industry agreed to pay $368.5 billion to more than 40 states. Private citizens and attorneys from those states brought lawsuits against the industry for health care costs arising from tobacco-related illnesses.
The settlement comes after more than three years of negotiations and testimony from both sides. In 1994, leading tobacco companies confidently denied to the U.S. Congress that nicotine is addictive, and said smoking did not cause lung cancer and other diseases. That same year, Mississippi became the first U.S. state to sue the tobacco industry.
During the next two years the tobacco industry was sued by smokers suffering with lung cancer, and fought battles in the U.S. Supreme Court to keep its computerized databases -- which contained information about medical lawsuits -- private.
Jeffrey Wigand, a former researcher at U.S. tobacco manufacturer Brown and Williamson, makers of Kool cigarettes, made history when he accused his former employer of using cancer-causing additives in its cigarettes and lying about the addictive nature of nicotine.
By April 1997, states attorneys and tobacco executives were negotiating a settlement, the results of which were announced last week.
"We wanted to do things that would punish this industry for its past misconduct and we have done that," said Mississippi Attorney General Michael Moore.
The U.S. tobacco manufacturers that will be hit hardest are some of the biggest in the world, including R.J. Reynolds, Philip Morris and British-American Tobacco. These companies and smaller American tobacco manufacturers will pay fines over the next 25 years.
The deal has far-reaching legal and practical implications. Here are the highlights:
Tobacco companies would pay $50 billion over 25 years for denying to smokers worldwide that smoking is addictive. The money will also fund health care for smokers who have tobacco-related illnesses. The settlement would cover any legal, medical or regulatory issue related to smoking in the U.S.
Tobacco companies would not face future lawsuits from large groups, but individuals could recover money for damages.
The Food and Drug Administration (FDA), the federal agency that regulates the quality of food and drugs in America, including tobacco, will regulate nicotine as a drug. Studies show that nicotine is the product in tobacco which causes addiction. Under the agreement, the administration could ban nicotine from cigarettes as soon as the year 2009.
Tobacco companies must pay $500 million each year for a national anti-smoking education campaign, but will not control the campaign.
Tobacco companies must work to prevent smoking among young people, especially teenagers. The agreement says that if youth smoking does not drop by 30 percent in five years, 50 percent in seven years and 60 percent in 10 years, the industry must pay $80 million for each percentage point short of the goal.
Marketing and cigarette sales in the U.S. will be strictly limited. Among other things, all billboards, outdoor signs, cartoons and cigarette machines will be banned. The agreement says humans cannot be portrayed in cigarette advertisements. This includes such popular icons as the Marlboro Man and cartoon figures like Joe Camel. The pact does not effect overseas advertising, however.
But the agreement is far from being a completed deal. Under U.S. law, any legislation must be approved by both houses of Congress and signed by the president before it becomes law. That process could last well into 1998. Tobacco companies also have the power to kill the deal if they don't like the revisions in Congress.
Former Surgeon General C. Everett Koop says tobacco regulations could be a long way off.
"They are talking about it as a marvelous achievement. I would put it in the sense of a marvelous effort. The achievement is yet to come," says Koop, an anti-smoking activist. He adds: "Whether that effort becomes an achievement depends a lot on Congress."
Some members of Congress are critical of the deal, saying that when Congress gets the written settlement, lawmakers from tobacco-producing states will seek to soften the blow to tobacco companies. But the FDA will have the power to prevent that.
Under the new provisions, the tobacco industry will lose power to the FDA to regulate nicotine, control components of tobacco products and ban nicotine products. It's control would limit the power of lawmakers to make major changes to the legislation.
Still other negotiators say the deal should come out of Congress relatively untouched.
Washington trial lawyer John P. Coale, a leading negotiator with the tobacco companies, says: "Everybody who participated in these talks wants the plan to go through as close to what it is now as possible with the understanding that Congress will fine-tune. And Congress has the right to do what they want."
President Clinton, who waged war against the tobacco industry during his re-election campaign, has been cautious with his reaction to the settlement. This week he formed eight working groups to review the settlement and report to him in 30 days.
"Until now we have not had the opportunity to review the actual terms of the agreement, and we have not concluded whether it is in the best interests of the public health," Clinton said shortly after the agreement was announced.
Lawyers and lawmakers say the tobacco settlement has more than just domestic implications. Coale says the proposed tobacco agreement in the United States is an example for other countries to follow.
Says Coale: "What happens here will be a model for the rest of the world. They can either take it and do it or not. I am convinced that the industry in the United States wanted to have fundamental change, they knew they had to and they wanted to do at least negotiations. And throughout the negotiations the industry dealt with integrity and good faith."
But some lawmakers say the international community will suffer at the hands of tobacco companies who are rushing to make up for huge losses in the future. Lawmakers, such as U.S. Senator Ron Wyden (D-Oregon), are worried that tobacco companies will dramatically boost advertising to young adults and children abroad to make up for losses at home. He says Congress needs to remember the larger picture before passing the legislation into law.
He says: "As far as I'm concerned it's not the job of the Congress to just staple the pages of this agreement together and then salute it. It's got to be strengthened on behalf of youngsters in our country and youngsters around the world."
Still, it could be years before smokers in the United States and abroad see any major changes. Even if the U.S. Congress approves the legislation, it won't be enforced until nine months after it passes. John Fithian, a lawyer who represents cigarette advertisers, says he doubts cigarette advertising will slow down, considering the pace of Congress.
"I can't imagine Congress could pass this before the end of this year," Fithian said.