Many corporations feel like a new day is dawning in Washington. "We have come out of the cave, blinking in the sunlight, saying to one another, 'My God, now we can actually get something done,' " says Richard Hohlt, Washington lobbyist for several other major banks...

Tobacco Ties
When it comes to being well-connected with the new administration, few industries rival tobacco. Cigarette makers are hoping those ties help accomplish such goals as snuffing out a multibillion-dollar federal lawsuit against it. Cigarette companies adopted a much lower profile in the last election than drug companies, in part because Republican strategists worried that featuring close ties to tobacco would anger many voters. But the money flowed liberally. Tobacco interests contributed roughly $90,000 to Mr. Bush's campaign, part of the $6.7 million they provided to the Republican Party and its candidates in the last election cycle. Democrats received $1.4 million from tobacco interests.

Beyond the campaign, industry titan Philip Morris Cos. was one of the most generous contributors to Mr. Bush's inaugural, giving $100,000 itself and another $100,000 through its subsidiary, Kraft Foods. Along with a number of inauguration tickets, these donations entitled company executives to two tables at a candlelight supper attended by President Bush and Vice President Cheney the night before their swearing-in.

Philip Morris has numerous long-standing ties to the Bush administration. Karl Rove, a senior White House adviser, worked as a political consultant for the company from 1991 to 1996. Kirk Blalock, a Philip Morris public-relations official, took a job in the White House in January as a liaison to the business community. Handling the inaugural donations for Philip Morris was Thomas Collamore, a vice president for public affairs who worked for President Bush's father, both in the White House and the Commerce Department. Charles Black, an informal adviser to Mr. Bush during his campaign, is also a Philip Morris lobbyist in Washington.

Mr. Thompson of HHS, received more than $70,000 in Philip Morris campaign-related contributions during his years as Wisconsin governor. He disclosed before his Senate confirmation earlier this year that he owned between $15,000 and $50,000 in Philip Morris stock. An administration spokesman says that Mr. Thompson didn't realize he owned the company's stock because it was in a blind trust and that he planned to sell it.

British American Tobacco PLC's Brown & Williamson unit and R.J. Reynolds Tobacco Holdings Inc. are also well-positioned. Both companies are represented by Barbour, Griffith & Rogers, a lobbying firm stocked with Republican operatives, including former GOP Chairman Haley Barbour and Lanny Griffith, a former White House aide to Mr. Bush's father.

The industry's first objective is to get rid of a massive federal lawsuit, launched by the Clinton administration, that accuses cigarette makers of "racketeering" and lying about the health risks of smoking for 50 years. The case is pending in federal court in Washington.

Tobacco companies are so confident the Bush team will drop the suit that they claim to have no plans even to ask for it to be withdrawn. "We are not lobbying on this at all," says Philip Morris spokeswoman Peggy Roberts. Many in the industry say they think an aggressive push to kill the suit would be counterproductive, causing the Bush administration to worry about the perception that it is eager to do a huge favor for one of its most-generous donors.

One way to squelch the suit would be for Congress to cut or eliminate funding for it, which for the current fiscal year is budgeted at $23 million. Although skittish about approaching the Bush administration directly, Philip Morris officials say they have no qualms about lobbying this year for such a funding cut. Another possible scenario for terminating the suit is for the Justice Department to reach a settlement with the companies.

Mr. Bush has avoided making a definitive statement about the tobacco suit. But referring to the case in August, he said, "I think we've had enough suits," adding, "The lawyers I talk to don't feel they [the Justice Department] have a case."

Complicating the situation is the presence of one key person on the Bush team who historically hasn't had an easy relationship with the big tobacco companies: Attorney General John Ashcroft, who now oversees the federal suit. Mr. Ashcroft's dim view of the industry arises from having seen several friends die from cancer, aides say. At a get-acquainted meeting with tobacco lobbyists soon after being elected to the Senate in 1995, Mr. Ashcroft damped the atmosphere with a diatribe. "Let me tell you up front that I believe you guys are the merchants of death, and I don't support your product or your industry," Mr. Ashcroft was quoted as saying by two people at the meeting.

Yet three years later, as Mr. Ashcroft was considering entering the race for the presidency, he took a different position. When the Senate Commerce Committee considered legislation to restrict tobacco marketing and raise cigarette taxes, Mr. Ashcroft was the only vote against the bill on the 20-member committee, even though he still denounced the industry. His vote was a surprise to industry lobbyists, who were even more pleased when his persistent attacks on the proposed $1.10-a-pack rise in cigarette taxes helped kill the measure on the Senate floor.

An aide to Mr. Ashcroft says that, while critical of the tobacco industry, Mr. Ashcroft concluded that the bill contained excessive tax increases and required too much bureaucracy to implement the marketing restrictions.

During his confirmation hearings in January, Mr. Ashcroft said that he had "no predisposition" to dismiss the federal lawsuit. He promised to consult with career attorneys at the Justice Department and make a decision based on a "careful examination of the facts and the law."

Wall Street Journal
Tuesday, March 6, 2001
Tom Hamburger, Laurie McGinley and David S. Cloud
Staff Reporters