[Congressional Record Volume 145, Number 45 (Monday, March 22, 1999)]
[Senate]
[Pages S3031-S3032]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        TOBACCO SETTLEMENT FUNDS

  Mr. WYDEN. Mr. President, I rise today to discuss an issue that is 
vital to improving health care in America--specifically, whether the 
States are actually going to use a portion of the billions of dollars 
they received in tobacco settlement funds to keep America's youngsters 
from starting to smoke. The Senate has discussed this issue over the 
last few weeks, but I think it may be appropriate to have a new context 
as we go forward with these discussions.
  To get an indication of how the tobacco industry believes it is doing 
and why the Senate ought to be concerned about this issue, you can take 
a look at how the tobacco industry assesses its executives' job 
performance. Recently, the public got a look at information concerning 
the 1998 compensation packages for several of the CEOs of the major 
tobacco companies. The combined compensation package for the CEO of 
Philip Morris and the CEO of RJR equals $36 million.
  Last week, Mr. President, you and I marked up the Federal budget in 
the Budget Committee with our colleagues, but even when you spend a 
week dealing with the Federal budget, $36 million certainly sounds like 
a lot of money.
  I am not against CEOs being compensated for their work. My guess is 
that the CEOs, in this case, earn their salaries. I don't think they 
would be pulling down $36 million a year unless they were doing a 
pretty good job of keeping the ashtrays filled in America.
  Now, the combined compensation packages for just these two CEOs is 
more than 39 of our States and the District of Columbia would have 
received under the legislation Congress voted on last week. Let me be 
clear. Two of the tobacco CEOs were making more money in 1998 than the 
vast majority of our States would have received for programs to keep 
young people from getting started with tobacco.
  For example, my home State of Oregon would receive just over $15 
million under the legislation which was considered last week. That is 
less than half of the CEOs' compensation. The State of Wyoming would 
have received $3.61 million, 10 percent of the combined compensation 
packages. I believe that the traditional targets of tobacco in 
harvesting new smokers--women, children, and minorities--are certainly 
worth 10 percent of the combined compensation for 1 year of these two 
executives.
  Let us also remember that it is not just the money the tobacco 
industry is spending on high-priced executives that the Congress should 
be concerned about. There is another threat to our children, and that 
comes from the $5 billion the tobacco industry spent last year on 
advertising and marketing. That is $96.2 million every week, or $13.7 
million every day. Again, that is far more than many of our States 
would have received to protect young people from smoking.
  Last year, in the Senate Commerce Committee, I wanted to make sure 
that the individuals who had historically been targeted by the tobacco 
companies would have been eligible to receive funds for tobacco control 
and prevention programs. I wanted to make sure that just as the tobacco 
companies have poured billions of dollars into advertising in the inner 
cities and for ads targeted to children, the Federal Government would 
make a special effort to prevent smoking in those communities.

[[Page S3032]]

  I continue to believe the Federal Government needs to play an 
activist role in assuring that populations which historically have been 
targeted by the tobacco industry would be armed with good information 
and good preventive kinds of services, so that the tobacco companies 
would know that our communities are fighting back.
  Let me give you an example of some of the steps that the tobacco 
companies may be pursuing in the days ahead to circumvent efforts by 
the Federal Government such as those we discussed last week.
  We know the tobacco companies are now test marketing cigarettes which 
produce less smoke so that individuals around the smoker will not be 
bothered in the same way as they were so often in the past. Yet, one of 
the cigarettes, the Eclipse, made by RJR, is showing even more signs of 
being dangerous to the smoker. With the Eclipse, the evidence shows 
that smokers may actually be breathing in glass fibers in addition to 
other carcinogens.
  I think it is important that the Senate understand this as we go 
forward with further discussions about how the tobacco settlement funds 
are going to be used. If the Federal Government wishes to waive its 
portion of the billions of dollars involved in the tobacco settlement, 
let's make sure that at least a portion of this money--at least a 
modest portion--is used to protect future generations of Americans 
against the tobacco industry.
  I hope the Congress won't pass up another opportunity to protect 
America's youngsters. I urge my colleagues to continue to try to assure 
that some portion of the dollars secured in the tobacco settlement are 
actually used for health services for American's children.
  Mr. President, I ask unanimous consent that a chart prepared by the 
National Center for Tobacco-Free Kids which compares the compensation 
package of just two of the tobacco CEOs with the money that would have 
been received by the States under the Senate legislation be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

COMPARISON OF AMOUNT STATES WOULD HAVE BEEN REQUIRED TO SPEND ON TOBACCO
  PREVENTION UNDER THE SPECTER-HARKIN AMENDMENT WITH CEOS' COMPENSATION
                       FROM RJR AND PHILIP MORRIS
------------------------------------------------------------------------
                                     15% of       20% of
                                    tobacco      tobacco      Combined
                                   settlement   settlement   total CEO's
             States                 payments     payments   compensation
                                   (millions    (millions     for 1998
                                   per year)    per year)    (millions)
------------------------------------------------------------------------
Wyoming.........................        $2.71        $3.61           $36
Alaska..........................         3.72         4.96            36
South Dakota....................         3.80         5.07            36
Idaho...........................         3.96         5.27            36
North Dakota....................         3.98         5.31            36
Delaware........................         4.31         5.74            36
Vermont.........................         4.48         5.97            36
Montana.........................         4.62         6.16            36
Utah............................         4.84         6.46            36
Nebraska........................         6.48         8.64            36
New Mexico......................         6.49         8.65            36
Hawaii..........................         6.55         8.73            36
Washington, DC..................         6.61         8.81            36
Nevada..........................         6.64         8.85            36
New Hampshire...................         7.25         9.67            36
Rhode Island....................         7.82        10.43            36
Maine...........................         8.37        11.16            36
Arkansas........................         9.01        12.01            36
Kansas..........................         9.07        12.10            36
Iowa............................         9.47        12.62            36
West Virginia...................         9.65        12.87            36
Oklahoma........................        11.28        15.04            36
Oregon..........................        12.49        16.65            36
South Carolina..................        12.81        17.07            36
Colorado........................        14.92        19.90            36
Arizona.........................        16.04        21.39            36
Alabama.........................        17.59        23.45            36
Kentucky........................        19.17        25.56            36
Connecticut.....................        20.21        26.94            36
Indiana.........................        22.20        29.60            36
Virginia........................        22.26        29.67            36
Washington......................        22.35        29.80            36
Wisconsin.......................        22.56        30.07            36
Louisiana.......................        24.55        32.73            36
Maryland........................        24.61        32.81            36
Missouri........................        24.76        33.01            36
Mississippi.....................        25.20        33.60            36
North Carolina..................        25.38        33.84            36
Tennessee.......................        26.57        35.42            36
Georgia.........................        26.72        35.62            36
Minnesota.......................        37.02        49.36            36
New Jersey......................        42.09        56.12            36
Massachusetts...................        43.96        58.61            36
Michigan........................        47.37        63.16            36
Illinois........................        50.66        67.55            36
Ohio............................        54.83        73.10            36
Pennsylvania....................        62.55        83.40            36
Florida.........................        80.40       107.20            36
Texas...........................        94.20       125.60            36
New York........................       138.91       185.21            36
California......................       138.93       185.24            36
------------------------------------------------------------------------
In 39 states and the District of Columbia the use 20% of their total
  settlement dollars is less than the combined compensation of the top
  two Tobacco industry CEOs Geoffrey Bible, of Philip Morris Inc. and
  Stephen F. Goldstone, of RJ Reynolds Tobacco. The compensation total
  includes base salary plus bonuses and stock options (source: USA
  Today, 3/19/99 & 3/16/99).

  Mr. WYDEN. Mr. President, I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. KENNEDY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Roberts). Without objection, it is so 
ordered.
  Under the previous order, the time between 1 p.m. and 2 p.m. shall be 
under the control of the Senator from Illinois, Mr. Durbin, or his 
designee.
  Mr. KENNEDY. Mr. President, I yield myself such time as I might use. 
If others arrive on the floor and I have exceeded my 10 or 12 minutes, 
I will yield to them.
  The PRESIDING OFFICER. The Senator from Massachusetts.

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