[Congressional Record Volume 144, Number 45 (Wednesday, April 22, 1998)]
[House]
[Page H2214]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              PROPOSED SETTLEMENT FOR TOBACCO CONTROVERSY

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Kentucky (Mr. Whitfield) is recognized for 5 minutes.
  Mr. WHITFIELD. Mr. Speaker, last summer, State attorneys general, 
representatives of health care groups, representatives from the White 
House, and the tobacco industry met to see if they could come up with a 
settlement of a tobacco controversy regarding teenage smoking.
  After many hard hours of negotiation, and in fact, many days of 
negotiation, an agreement was reached, and the tobacco companies agreed 
that they would pay the sum of $368 billion every 25 years forever. In 
addition, they said that they would allow and agree that a health care 
agency, a third party, would set targets to reduce teenage smoking by a 
certain percent each year. If that target was not reached, the industry 
would pay $80 million for every one percentage point that the target 
was not met.
  In addition, the industry agreed that it would pay $5 billion 
annually into a trust fund to take care of any court judgments obtained 
against the industry. In addition, the industry agreed that they would 
allow the Food and Drug Administration to regulate the tobacco 
industry, going far beyond the FDA regulations proposed by former FDA 
Commissioner David Kessler, in fact, going much further than had ever 
been recommended before. They agreed also that they would waive their 
constitutional right to advertise their product.

                              {time}  1830

  In addition they agreed, and this is really almost unheard of because 
every citizen in America has a right to petition the government, to 
lobby the government, but the industry agreed that they would also ban 
and eliminate the Tobacco Institute which was their lobbying arm.
  They also agreed that, like today, any individual that is harmed by 
using a tobacco product would have the right to continue to sue the 
tobacco industry to obtain damages for any injuries that they suffered.
  And so the health care groups, the State attorneys general, the White 
House, all of those groups received exactly what they wanted from the 
industry.
  Now what did the industry want in return?
  Well the industry said that they would simply like to have settled 
the 40 State lawsuits brought by State attorneys general under an 
innovative new legal theory of reimbursing States for Medicaid costs 
that they expended in treating Medicaid beneficiaries who received 
damages from using tobacco products, and that was agreed to. They said, 
``Okay, we'll settle these lawsuits, and some of the $368 billion that 
the industry is going to pay every 25 years forever will go to the 
States.''
  And so everyone left that settlement, and President Clinton said it 
was a great settlement, Vice President Gore said it was a great 
settlement, the tobacco industries were satisfied, the health care 
industries were satisfied, and even FDA Commissioner Kessler said that 
it represents the single most fundamental change in the history of 
tobacco control in any Nation of the world.
  But yet when the bill started moving through the Senate, the 
administration changed their views, the health care industry changed 
their views, David Kessler changed his view, and they became greedy, to 
put it very bluntly. They wanted more. They had this industry on the 
run; they wanted more. And so I think they lost sight of the original 
goal, to reduce teenage smoking. They now wanted to punish an industry.
  And under the McCain bill the $368 billion that the industry agreed 
to pay every 25 years forever went to $506 billion every 25 years 
forever. If the industry missed the targeted reduction, instead of 
paying $80 million per percentage point, they now under the McCain bill 
would be paying $240 million. And then, furthermore, the one thing that 
the industry received from it, immunity from these State lawsuits, they 
lost.
  So it is not surprising that the tobacco industry said we are going 
to walk away from this agreement, and who could blame them really, 
because if the goal is to reduce teenage smoking there was plenty of 
money there. There was plenty of money to initiate programs to help 
teenagers reduce smoking. But as I said, people became greedy and they 
wanted to punish this industry, and so the whole thing has fallen 
apart.
  And I would suggest to you today that the real problem facing 
teenagers is more the use of illegal drugs than tobacco.
  I hope that we can retain some common sense and approach this problem 
to solve it, and I look forward to working with others in that effort.

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