- The Michigan Daily - Thursday, April 17, 1997
NATION/WORLD
Tobacco companies may cut back on ads
The Associated Press
Leaders of two big cigarette compa-
iies are ready to make a deal.
Abandoning their all-out defense of
cigarettes, the nation's two biggest
tobacco companies now seem willing to
cut their legal losses for up to $300 bil-
lion and retire Joe Camel and the
yarlboro Man if the government backs
off its threat to regulate nicotine.
RJR Nabisco and Philip Morris exec-
dfives are in early talks with the attor-
neys general of eight states in hopes of
winning blanket protection from law-
suits over smoking-related health prob-
lems, it was disclosed yesterday.
In return, the cigarette companies
would pay hundreds of billions of dol-
lars and agree to cut back on ads, espe-
cially ones like Joe Camel that appeal to
children and those that depict people,
such as the Marlboro Man.
The cigarette companies' willingness
to even consider such concessions
marks a startling turnaround. For
decades, the tobacco industry has
fought a no-retreat battle on all fronts.
In the past few years, however, the
industry has been barraged with law-
suits filed by 22 states and countless
individuals, and the litigation is hurting
stock prices and taking management
attention away from the business of
selling cigarettes.
"I think the tobacco industry is in big
trouble and they know it, so they are
finally beginning to come to the table,"
Minnesota Attorney General Hubert
Humphrey III said. "I think their pro-
posals still fall short of what we'd be
interested in."
A sticking point is whether the Food
and Drug Administration would get the
right to regulate the nicotine levels in
cigarettes to make them less addictive.
The tobacco companies adamantly
oppose such regulation for fear that
once the FDA gets the power to regulate
tobacco, it will try to ban it.
Reports of negotiations between the
tobacco companies, attorneys general
and anti-tobacco lawyers aimed at set-
tling health-related lawsuits began a
few months ago. Bloomberg News
reported in February that such talks
were taking place and the White House
was monitoring them.
But news that the top executives of
RJR Nabisco and Philip Morris were
personally attending such talks, report-
ed yesterday by The Wall Street Journal,
sparked a 10 percent rally in cigarette
company stocks and boosted investor
hopes of a settlement, which would lift
a cloud hanging over the tobacco com-
panies.
Industry analysts have said that
tobacco companies, which had revenue
of about $45 billion last year, could
finance a big settlement simply by rais-
ing cigarette prices.
"A resolution of this issue is impor-
tant to our shareholders, our customers
and our country," RJR Nabisco Chair
Steven Goldstone told a stockholder
meeting yesterday in Winston-Salem,
N.C. "But it has to be fair and it has to
be reasonable."
The amount of a settlement is also
among the sticking points.
"The industry is in the low 2's and the
plaintiffs are in the upper 3's. There is
no consensus on the money," said a
source close to the negotiations, who
spoke on condition of anonymity.
Also under discussion is the estab-
lishment of a fund from which smokers
could seek payments. They would be
banned from suing the cigarette compa-
nies.
Protection from lawsuits would
require an act of Congress, and that's
another one of the unresolved issues
that could still sink the talks.
"It's extraordinarily unlikely that any
agreement could escape contentious
congressional hearings," the source said.
Democratic Sen. Dick Durbin of
Illinois, a longtime tobacco opponent,
said he is skeptical of the industry's pro-
posals and will review them carefully if
they land on Capitol Hill.
"The great wall of tobacco is coming
down," Durbin said. "Tobacco compa-
nies are in a hurry to get out of court,
off the front pages of newspapers and
back to the business of making billions
of dollars in profit."
AROUND THE NATIj7
GOP House chair to return donations
WASHINGTON - Rep. Dan Burton, chair of the House panel investigating
alleged fund-raising abuses by the White House and Democratic Party, announced'
yesterday he would return two questionable donations to his own campaign coffers,
prompting renewed concerns among Democrats about the Indiana Republican's fit-
ness to lead the congressional probe.
Burton, who already faces an FBI investigation into his alleged "shakedown"
contributions from a lobbyist for the government of Pakistan, said he will return
small donations he received in 1992 and 1993 from two Sikh temples. Religious
groups are forbidden by law from donating to political campaigns.
Burton aides called the $646 in returned contributions insignificant - not in the
same league with the roughly $3 million that the Democratic National Committee
has been forced to return in the growing scandal over foreign-linked money in the
1996 presidential campaign.
"This is less than minuscule," Burton's attorney, Joseph DiGenova, said of the
returned checks. "In comparison with the kinds of problems (President Clinton)
has, this is not even on the radar screen."
Nonetheless, some Democrats said the questions swirling around Burton'
money-raising practices make him the wrong person to lead the HousW
inquiry.
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Write for the summer Daily.
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FATTI'NTfION..
Gingrich may take
loan to pay penalty
WASHINGTON - House Speaker
Newt Gingrich told fellow Republicans
yesterday he was near a decision on a
method for paying his $300,000 ethics
penalty. GOP sources said a six-figure
personal loan was a leading option.
Aides said Gingrich wanted to put
the controversial issue behind him
within a day or two at most. Officials
suggested he might formally announce
his intentions in a speech on the House
floor - scene of last winter's historic
vote to reprimand him.
Several Republicans said Gingrich
appeared to be leaning in favor of
paying the entire $300,000 himself,
with the help of a loan. These offi-
cials added, though, that a second
option under consideration included
soliciting supporters for donations to
a legal defense fund to cover part of
the costs.
Several sources said Gingrich also
was contemplating establishment of
an account akin to a legal defense fund
that his personal funds would flow
into. The .fund would then make the
payment to the House. These sources
said this arrangement was under dis.
cussion because Gingrich, prodded by
some lawmakers, wanted to avoid
establishment of a precedent und
which individual members o
Congress are put in a position of
directly paying the House.
Cities learn ways to
avoid terrorist attack
WASHINGTON - As the anniver-
sary of the Oklahoma City bombing
nears, the Pentagon has begun a traib-
ing program designed to help 120 citi
deal with the potential terrorist use of
chemical, biological or even nuclear
weapons.
Local police, firefighters, medics
and other emergency workers will learn
to identify such deadly weapons, deal
with victims and carry out any decont-
amination that might be required, offi-
cials said yesterday at a Pentagon
briefing.
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Netanhu may be
indicted in scandal
JERUSALEM - Police investigators
have formally called for indictment of
Prime Minister Benjamin Netanyahu in
Israel's mushrooming political corrup-
tion scandal, senior legal authorities said
last night.
Police Commissioner Assaf Hefetz
said a three-month probe of influence-
trading charges turned up sufficent "evi-
dence to indict the prime minister on
charges of fraud and breach of trust.' He
did not specify which alleged acts
formed the basis for those charges and
cautioned that "problems with this evi-
dence" raise questions whether it "will
stand up to a legal critique.'
Investigators have centered their
inquiry on the appointment last
January of Roni Bar-On, a little-known
criminal lawyer, as attorney general.
Shas Party leader Arye Deri, who con-
trols 10 of 66 votes in Netanyahu's gov-
erning coalition, is alleged to have
demanded Bar-On's appointment in
expectation of lenience in his own
ongoing felony trial. Several members
of the cabinet, which was required to
confirm Bar-On's appointment, com-
plained that Netanyahu rushed the
decision and that Justice Minister Tsa
Hanegby misrepresented Bar-Ons
qualifications.
Actor to beg
ambassador position
TOKYO - Sidney Poitier, the
Academy Award-winning actor, for-
mally became the Bahamas.
Ambassador to Japan during a ceremn
ny yesterday presenting his credenti
to Emperor Akihito.
Poitier, 70, wore a tuxedo and smiled
broadly during the ceremony.
Born in the United States but a citizen
of the Bahamas, Poitier was appointed
as the Caribbean island's Japanese
ambassador in November 1995.'A
Japanese official said the lengthy delay
between his appointment and yester-
day's ceremony was caused by the lack
of a Bahamian embassy in Tokyo. *
- Compiled from Daily wire reports.
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