Where’s There’s Smoke… Someone’s Getting Burned
OK, so the big tobacco companies and
their lobbyists have cobbled together a backroom deal to save
their hides. And now the various state Attorneys General can
return to their respective capitals and grandstand the
Neville Chamberlain did the same thing
once. Didn’t help.
Yeah, the bad guys have to pour out
$368 billion, and they give up billboards, vending machines,
Joe Camel, and the Marlboro Man. Cigarette packs will now
have scarier warning labels, smoking will be banned from many
public places, and manufacturers will fund teen anti-smoking
The headlines sound great, right? Read
the fine print.
- Annual tobacco-associated health
costs are about $100 billion, but the companies will
only be paying about $15 billion a year. We’re
settling for 15 cents on the dollar.
- In exchange for the pay out, class
action suits will be abolished and individuals will
be forbidden from seeking punitive damages.
(That’s arguably a violation of the Seventh
Amendment guarantee of due process, but nobody
cares.) The best you might do is sue for actual
losses, minus legal fees. Almost no one will and the
bad guys know that. The days of tobacco liability
lawsuits are essentially over.
- The tobacco companies won’t
pay the settlement; consumers will. The cost of
cigarettes will rise to cover the expense.
They’ll lose a few smokers, but the loss will
be covered by decreased marketing expenses as a
result of the new restrictions. End of story.
- Philip Morris, RJR, and the rest
are sprawling multinationals with major cash flow
outside of cigarettes. Some stock brokers consider
RJR’s Nabisco Foods division alone worth more
than the parent corporation’s total market cap.
Once potential liability suits are removed from the
equation, several tobacco analysts anticipate Philip
Morris and RJR stocks will rise, possibly as high as
30 percent in the next year. On Wall Street, crime
pays. The deal requires companies to pay penalties of
up to $2 billion if teen smoking isn’t curbed.
So what? That’s loose change to these
guys—actually less than the income from
addicting new smokers. If the bad guys demonstrate
that they took "reasonably available
measures," an appeal process already codified
puts $1.5 billion back in their pockets.
- A federal court has already ruled
that the FDA can regulate nicotine as a drug. This
agreement reinforces that, right? Wrong. Actually,
the new deal forces the FDA to demonstrate that
decreasing nicotine levels won’t create
"significant demand for contraband." The
FDA has no way to do that. So the new agreement
actually obliterates the earlier court ruling and
prevents the FDA from regulating nicotine. All five
of the majors already make most of their tobacco
money overseas, so they’ll just accelerate their
marketing into developing countries. By protecting
the tobacco industry’s profits here, the deal
guarantees millions of future tobacco deaths in the
- The GATT agreement gives the
multinational tobacco firms the right to sue the U.S.
government by calling any new regulations in the
agreement they don’t like "unfair
impediments to trade." Which means that the few
useful legal restrictions in the deal probably
won’t stick for long.
All isn’t lost, however.
The deal is really just a rough draft,
because liability limitations must be passed into law by
Congress. Significant public outcry can still stub out the
Rest assured, however, that Speaker
Newt will twist arms until they break trying to get this
thing passed. Why? For one, the two leading soft money
contributors to the GOP were—guess who—Philip
Morris and R.J. Reynolds.
For two, as this space also outlined
two months back, the $300,000 bribe—er, loan,
sorry—that former presidential candidate and current
tobacco flack Bob Dole fronted Gingrich last April
corresponds with a $300,000 payment from Dole’s
employer, tobacco lobbyist Verner Liipfert, just six days
earlier. The fix is in. It’s a major scandal in the
works that the corporate media has so far ignored.
What’s the alternative? Simple: no
deal. Let the existing suits go forward. Let discovery
proceed. Let justice be done.
Ever since the Supreme Court ruled that
private campaign financing is protected by the First
Amendment, rich corporate donors have been guaranteed unfair
The limited reforms available
can’t solve the problem entirely, although current
proposals to abolish soft money donations to political
parties would be a good start.
In the meantime, however, our only hope
is to devise a system that keeps voters fully informed of
exactly who is financing each candidate, a method that is
undeniable, visual, and permanent.
My suggestion? Forehead Branding. All
candidates for public office who accept corporate money
should have the company logos of their sponsors burned
directly onto their heads, so voters will never forget or
confuse their allegiances.
The corporations won’t mind;
they’ll be glad for the extra advertising. Since any
candidate who won’t surrender the ad space will be
replaced by someone who will, politicians will rush to
support the measure as well.
The measure would transform American
politics instantly. Imagine Bob Dole playing tough on drugs
with a big red Marlboro logo right between his eyes, or Newt
Gingrich blustering about Family and Flag with Rupert
Murdoch’s signature straddling his eyebrows.
How long would liberal faith in Clinton
last if he had Goldman Sachs imprinted at the hairline, a
Seagrams bottle painted on his lips, and Mickey Mouse ears
implanted in his nose?
The free market may finally solve
something after all.
The Republican Congress and the
Democratic President are all bragging about the new budget,
which supposedly balances five years from now. As we should
know by now, anything that Clinton and Gingrich both agree on
has got to be a bad idea.
The budget balances in 2002, but only
if all their estimates are right on target and nothing
important changes between now and then. Is the future that
easy to predict? Sure, as anyone who bought a Commodore 64
can tell you.
We’ve seen this game before. Last
decade, Congress passed a law intended to balance the budget
through mandated spending limits. Grab-Rodman-Hollering, it
was called, or something like that. Did it accomplish
anything? No. By pushing the actual date of balance well into
the future, one group of pols took credit for something they
were actually asking a later group to do. The media
applauded, and nothing happened.
By 2002, most of the current crew will
be off collecting fat paychecks for attending board meetings
and lobbying the new guys. So if the budget doesn’t
balance, they won’t take the heat.
Even if it does, nonpartisan estimates
show that from 2003 on, the deficit will increase again
rapidly. So what’s the point? The whole thing’s a
bigger spin job than Twister.
Fact is, balancing the budget
isn’t that urgent a deal. Today’s deficit is less
than a quarter of what it was back in the Reagan years, and
as a percent of GDP, it’s way smaller than the deficits
of most industrialized nations.
The phony rush to balance is really
just a fig leaf to cover some pretty skanky priorities.
There are tax cuts in the
budget. But non-partisan figures say that 98 percent of the
inheritance and capital gains cuts go to the richest 5
percent of us. As usual. The IRA tax break goes to the
richest 20 percent. The two tax cuts which go to the middle
class aren’t indexed to inflation, so they’ll
quietly disappear before long.
As promised, there are also spending
cuts: $14 billion from Medicaid (while last year Congress
gave the military $12 billion it didn’t even ask for),
and over $100 billion from Medicare. Tobacco subsidies and
gold-plated stealth bidets in the Pentagon privies remain
This budget is about as sensibly
balanced as Boris Yeltsin on roller skates in an aftershock.
They shouldn’t get away with this.
The House Government Reform and
Oversight Committee is investigating the thousands of dollars
in Asian contributions to the White House. Never mind the
millions that Ferdinand Marcos, the dictator of the
Philippines, poured into recent GOP administrations.
It turns out, that the guy spearheading
the Clinton investigation has some explaining to do as well.
Rep. Dan Burton of Indiana has accepted thousands of dollars
from foreign lobbyists, and subsequently given those donors
access to his office and staff to promote their causes.
Burton’s friends don’t play
nice. We’re talking brutal dictatorships and police
states—Turkey, Pakistan, Guatemala, Zaire, and apartheid
South Africa—using him to buy access to the floor of
For example, when Turkey’s
terrible human rights record (think Midnight Express and
the war against the Kurds) posed a threat to its U.S. aid
money, Burton recited the Turkish lobbyist’s rebuttal
into the record as his own words.
Burton has also spouted propaganda
straight from Pakistani flacks, defended the death squad
dictatorship of Guatemala, and shared speechwriters with
Joseph Mobutu, the deposed dictator who stole $5 billion from
what used to be Zaire.
In his defense, the Congressman’s
spinmeisters claim that none of the money from Mobutu or the
guys who imprisoned Mandela had any effect on his policies,
that Burton was always acting his conscience.
Do these guys realize what they’re
saying? That Dan Burton has a moral need to defend
murderers, thieves, and racists?
The Forbes Family Friendly
The Senate is toying around with an
idea called the Family Friendly Workplace Act. Sounds
festive, doesn’t it? You picture balloons and happy
music—sort of an IBM meets Chuck-E-Cheese kind of vibe.
But then, they’re proposing a
federal law, so it’s probably more serious than that.
OK. Maybe it’s about tax credits
for day care, or parental leave in the first weeks after
birth. Family Friendly, right? Nope. In the guise of
providing workers with more flexible hours, the bill permits
employers to pay time-and-a-half for overtime in what’s
called "comp time." That means if you work ten
hours of overtime this week, you get paid for ten hours at
your regular rate, with no extra money for the extra work.
What you do get is credit later for five extra hours worked
some other week.
Sounds okay so far. But unlike real
overtime, the extra hours don’t count toward benefits,
and you don’t get to choose when the "comp
time" gets credited. Your boss does. So the flexibility
isn’t for you and your family at all.
What this bill means is you can be
worked 70 hours a week when things get busy, and given your
"comp time" when things get slow.
Now that the social safety net has been
shredded, this bill marks the beginning of an assault on the
40-hour work week.
Should the government be able to
confiscate your money, even if they admit you haven’t
done anything wrong? The answer, according to the Justice
Department, is yes. Three years ago, a Los Angeles
businessperson who owns a couple of gas stations boarded a
plane to visit his birthplace in the Middle East. He had with
him over $350,000 in cash, which border patrol dogs sniffed
The security folks presumed he was some
Trainspotting heroin mule, and so they nabbed the guy
and the cash. However, it turned out he was clean, and so was
the money. The guy was simply going to repay the folks back
home who gave him the business loan that got him started. So
the Feds let him go. But they kept the cash. How can they do
that? Good question.
The Justice Department says that since
there’s a limit on how much currency you can take across
a U.S. border, then anyone over the limit automatically loses
everything. Even if they haven’t committed a crime.
Two federal courts have already ruled
that the Justice Department is nuts and has to give back the
cash. The Supremes have the final say. Let’s hope they
force the Justice Department to live up to its name.