Nicorette for Everyone!

Anti-smoking activists and members of Congress are upset that the Justice Department, in its racketeering case against the major cigarette manufacturers, is demanding a mere $10 billion for a smoking cessation program, instead of the $130 billion that one witness suggested (which, by my rough calculation, would be enough to buy every smoker in America a six-month supply of Nicorette). They see the decision as evidence of political pressure. "It reeks of an administration whose heart really isn't in this case," says Sen. Frank Lautenberg (D-N.J.).

Maybe, but you'd think that lack of heart would have manifested itself somewhere else along the way, such as when the Bush administration decided not to drop the case, which was initiated by the Clinton administration; when the Justice Department spent four years and $135 million preparing for trial; when it presented seven months of testimony by scores of witnesses to support 145 racketeering counts; or when it pressed its demand for "disgorgement" of $280 billion in "ill-gotten gains," a fine greater than the tobacco industry's total stock market value. Pace Lautenberg, it's possible that the Justice Department's lawyers did not want to seem like they were seeking those "ill-gotten gains," which an appeals court has ruled out of bounds, under another name.

Gladys Kessler, the federal judge hearing the case (which wraps up this week), seemed to support Lautenberg's charge when, upon hearing the $10 billion figure, she remarked, "Perhaps it suggests that additional influences have been brought to bear on what the government's case is." Yet she herself has expressed skepticism about the idea of forced subsidies for smoking cessation as a way to restrain the tobacco companies from future fraud.

Kessler seems even less inclined to order remedies that involve monitoring the companies' speech or putting words into their mouths. "What about the First Amendment?" she asked during the government's closing arguments on Tuesday.

I had the same question back in February.

Comments

Mr. F. Le Mur | June 9, 2005, 5:48pm | #

Cato.org had an interesting paper on the
gov't's totacco related crimes:

http://cato.org/dispatch/06-08-05d.html
-> http://cato.org/pub_display.php?pub_id=1230

"The 1998 tobacco settlement is a sophisticated,
white-collar crime instigated by contingency
fee lawyers in pursuit of unimaginable riches.
In collaboration with state attorneys general
and the four leading tobacco companies, they
concocted a scheme that forces all tobacco
companies--even new companies and companies
that didn't join the settlement--to engage
in a program of price fixing and monopolization.
Essentially, the major cigarette makers bought
permission to fix prices and exclude competitors.
...
Put bluntly, the MSA (the boguis "agreement") is
illegal and unconstitutional. It is an agreement
among the states that, without congressional
approval, is specifically prohibited by the
Commerce and Compacts Clauses of the Constitution.
Because the MSA exceeds the power and authority
of the states, Noerr-Pennington and state action
exemptions to the antitrust laws do not apply.
The MSA thus constitutes per se antitrust
violations."

thoreau | June 9, 2005, 6:59pm | #

It would be more honest to just increase the cigarette tax. It wouldn't be any more just than the lawsuits, of course, but let's just admit that this is about extracting as much money as possible from the tobacco companies. It would be more efficient, actually, to tax them, since the lawsuits involve large transaction costs (legal bills).

Mind you, I'm not a fan of taxes, but I still think a tax would be more efficient than a lawsuit. Not to mention that the lawsuit has ripple effects by setting precedents that affect liability law.

joe | June 9, 2005, 9:29pm | #

I don't have much of an opinion on the case, one way or the other.

But I have absolutely no trouble believing that the Bush White House would spend $135 million on lawyers fees, tie up dozens of people's time for seven months, or negotiate hard for a huge dollar figure, when it didn't have its heart in the case, just to avoid losing the political support of the legion of soccer moms who support the case.

sage | June 9, 2005, 9:29pm | #

You know, thoreau, I think you just blew my mind.

thoreau | June 9, 2005, 9:31pm | #

sage-

Why? It's clear that the government is going to extract money from tobacco companies one way or another. Let's just cut to the chase and do it, without setting precedents for liability law.

thoreau | June 9, 2005, 9:34pm | #

FWIW, I think it's a sign of just how fucked up the tobacco lawsuits are when taxation is the "lesser evil."

phocion | June 9, 2005, 10:05pm | #

"It reeks of an administration whose heart really isn't in this case," says Sen. Frank Lautenberg (D-N.J.).

Should the administration's heart be in winning the lawsuit, destroying the tobacco companies, or making the most possible money? It seems to me that only one of those three goals has anything to do with the "justice" the department is supposed to be seeking. The others enter the realm of extralegal vengeance, political motivation, and greed.

And that's generously assuming the suit itself is a legitimate exercise of justice.

Yogi | June 10, 2005, 1:49am | #

what's your guys' take on the charge of marketing an addictive substance to children? Certainly you must agree with the evidence that smoking is addictive. Certainly you must agree that many of the Tobacco Industry's marketing was aimed at those under 18. (If you don't, please explain.) So, is this still viewed as good free-market economics by libertarians?

Now, I'll agree any sin tax or smoking ban is a horrible idea curtailing freedom. I do have issues with someone targeting unsafe, risky behaviours to those of our populations that may not be able to choose wisely for themselves. What should be done? I'm not sure, and I'd like to hear alternatives.

Matt | June 10, 2005, 3:19am | #

God forbid we might have an administration whose "heart isn't really in" the attempt to beat up a politically unpopular industry for making a legal product that millions of people want to buy.

I'm with thoreau...for once, higher taxes would be an _improvement_.

Blunt | June 10, 2005, 5:15am | #

What tow-row said!

(and thanks to joe for showing once more what a tedious little Dem-party hack he is. That is not to say, of course, there were not a teensy-weensy kernel of truth in his statement)

Douglas Fletcher | June 10, 2005, 7:18am | #

Smoking cessation, isn't that what happens when the smoker dies of cancer?

Evan Williams | June 10, 2005, 8:17am | #

Joe:

Does the Administration really have to fret about obtaining/maintaining the support of a particular voting bloc? Is Bush planning an extraconstitutional 3rd-term-run that I haven't heard about? Right about now is probably the time when the Bushies care the least about the polls.

Alternately, I would posit that the Administration (like much of the rest of the government) is in this for the money, of course. They find an unpopular industry, and they milk it for all it's worth (The Political Class never met an ill-gotten dollar they didn't like.) However, they're not truly in it to destroy an entire industry, to which large portions of local and state markets are tied. It's a bit like someone robbing you in a dark alley, but not stealing ALL your money, and his buddies claim that his "heart wasn't in it".

Mr. F. Le Mur | June 10, 2005, 10:31am | #

Yogi wrote:
what's your guys' take on the charge of
marketing an addictive substance to children?
A: not nearly as bad as any proposed solution.

Certainly you must agree with the evidence that
smoking is addictive.
A: So what? Lots of things are "addictive."

Certainly you must agree that many of the
Tobacco Industry's marketing was aimed at those under 18.
A: So does Toys R Us.

(If you don't, please explain.) So, is this
still viewed as good free-market economics by
libertarians?
A: Why wouldn't it be viewed as such?

Now, I'll agree any sin tax or smoking ban
is a horrible idea curtailing freedom.
A: Agreed.

I do have issues with someone targeting
unsafe, risky behaviours to those of our
populations that may not be able to choose
wisely for themselves.
A: Do the "solutions" work? Not from what
I've read.

What should be done?
A: After hundreds of years of people smoking,
why should anything be done now? If anything,
now would be a good time to encourage smoking
since it partially solves the problems the
recent Retirement Welfare State(s) have created.

I'm not sure, and I'd like to hear
alternatives.
A: Accept the fact that freedom isn't perfect,
and sometimes has negative consequences, but
that it still remains far superior to the
alternatives.

joe | June 10, 2005, 10:34am | #

Evan,

First, you'll notice that he waited until after the election.

Second, he's still got a term's worth of governing ahead of him. Even second term presidents need public support if they're going to pull a few wobbly votes their way on controversial issues.

Blunt,

Thanks?

jc | June 10, 2005, 10:47am | #

but I still think a tax would be more efficient than a lawsuit.

That's why they went the lawsuit route. Can't line your pockets with efficiency.

Mark B. | June 10, 2005, 11:36am | #

The Bushies may not be concerned with polls, but I'll guarantee that the GOP sure is - after all of their hegemonic boasting, they're going to be sweating it out in 2006 and 2008.

The soccer moms are one thing - Republican support in the South is another. Big Tobacco is still a major source of employment and revenue in Virginia and North Carolina, and the Administration no doubt wants to tread as lightly as possible there while still maintaining its "caring" Big Government image.

BTW - anyone notice that the tobacco subsidies are still being paid to Southern farmers? Always nice to see Federal hypocrisy still alive and well.

Mr. Nice Guy | June 10, 2005, 1:55pm | #

The Washington comPost has more on the story today:

www.washingtonpost.com/wp-dyn/content/article/2005/06/09/AR2005060902098.html?sub=AR

The headline reads "U.S. Won't Ask Firms to Help Current Smokers Quit".

Then the fucking first paragraph mentions that the US is "scaling back its DEMANDS".

Okay.. maybe there's a slight difference between "ask" and "demand". Or perhaps I'm just nit-picking here.

But the main point that the Post article doesn't come near in addressing (big shock):

WHY THE FUCK ARE TOBACCO COMPANIES EVEN EXPECTED TO "HELP" SMOKERS IN THE FIRST PLACE?!

It's like forcing auto makers to re-train convicted drunk drivers. Y'know.. because drunk driving is totally caused by cars.

David Nieporent | June 10, 2005, 5:50pm | #

legion of soccer moms

You misspelled "trial lawyers," Joe. Nobody else cares about this case.

Slocum | June 11, 2005, 11:29am | #

Where to start with the tobacco lawsuits? How about this--the idea that the government is making 'big tobacco' pay. Absurd--the addicted smokers are the ones who are paying through higher prices. And through the settlements and greatly increased taxes on top, the government is increasingly profiting from (and dependent on and therefore complicit in) that addiction. I don't smoke, so I really don't have a dog in the fight, but it makes me sick.

Larry A | June 12, 2005, 8:32pm | #

Actually, I find myself on the side of the anti-smoking crusaders on this one.Force tobacco companies to disgorge the $280 billion in "ill-gotten gaines." The tobacco companies will cough up <groan> their net worth, and shut down. Congress will announce that smoking cessation programs aren't needed, since there aren't any more tobacco companies, and the cash can be used to fund the increased Social Security benefits necessary because the recently-weaned smokers will live longer. Smokers will turn to the newly-created black market, where they can purchase unfiltered coffin nails at half their formerly-taxed price. The black market dealers will hire the former tobacco company personnel at twice the take-home pay they were getting after withholding. Conversion of tobacco workers and smokers to the economy's dark side would finally break the back of the war on drugs.See? Everybody wins.

McPhatty | June 19, 2005, 10:07am | #

Larry A, I like the cut of your jib matey.... I think it almost 4:20 so it's time for a smoke break....