TOBACCO ACCORD IS AN EXERCISE IN COMPROMISE

WASHINGTON - Joe Camel and his cartoon ilk are dead, but Marlboro Man
lives. Tobacco ads on billboards, buses and subway cars are banned, but
outdoor ads smaller than 14 square feet would be permitted. Cigarette ads
in stadiums will be torn down, but specific brands such as Virginia Slims
and Winston can sponsor one sporting event a year.

If one word summarizes the deal ratified yesterday in New York between
attorneys general and Big Tobacco, it is compromise.

Unlike the far-reaching - and inevitably unsuccessful - June 1997
agreement, this national settlement worth $206 billion to 30 states is far
more modest in its approach to regulating tobacco in the U.S.

More than anything, Attorney General Christine Gregoire, who led the
negotiating, can say she actually has a national settlement - a seemingly
elusive possibility in the balmy days of last summer when Congress
summarily dumped the first agreement.

It also means an abrupt halt to her lawsuit under way in Seattle. Once the
deal is approved by the state and tobacco companies, a superior-court judge
must approve a consent decree that would enforce the pact.

Gregoire issued a statement that seemed to reflect the exhaustion that
accompanied the frenzied pace and long hours of negotiating: "We have
finished. We have done the best we can do here."

"We have been here negotiating for five months," she said. "It's not
perfect, and we didn't get everything that we wanted. But that is so common
with settlements."

The nation's major tobacco companies - Philip Morris, R.J. Reynolds
Tobacco, Brown & Williamson Tobacco and Lorillard Tobacco - and attorneys
general from Washington, California, New York, North Carolina, Colorado,
Oklahoma, North Dakota and Pennsylvania - ratified the pact yesterday
afternoon in a New York City law office. Twenty-two other attorneys general
are reviewing the deal, said Washington attorney-general spokesman Fred
Olson.

A news conference is scheduled for tomorrow afternoon in Washington, D.C.
Attorneys general from at least six states, including New York, are
planning to attend, Olson said.

Public-Health Groups

But notably absent are officials from the public-health groups that first
embraced the June 1997 deal and then trashed it as it wended its way
through the U.S. Senate.

Gregoire, who led these secret talks as her chief deputies prosecuted a
lawsuit in King County Superior Court, eagerly marks this settlement with
superlatives: At $206 billion, it is the largest lawsuit settlement in
history and contains sweeping public-health provisions meant to deter
youths from picking up the deadly habit.

Filed to recoup the taxpayers' costs of treating sick smokers, the states
will not share this amount with the federal government - as would have
happened in the earlier deal. Washington state stands to get $4.02 billion
between now and 2025 - by far the largest legal settlement in state history
and nearly $1 billion more than the state would have gotten under the
earlier agreement.

If approved by other state attorneys general, those states too would recoup
lost Medicaid costs: New York and California would get about $24 billion;
smaller states would receive amounts in the hundreds of millions of
dollars, Olson said.

There are many tradeoffs in the agreement because this scaled-down version
was built around the premise that it would not need or get approval from
Congress or the White House.

Without federal approval, the states could not offer the tobacco industry
the limited immunity for class-action suits. In exchange, the states made
many concessions.

Smaller Than Previous Deal

The deal is far less than the $368.5 billion deal cut a year and a half ago
because there is no money for the federal government. It also lacks the
assent of the tobacco companies to agree to regulation of nicotine by the
Food and Drug Administration.

The proposed settlement also does not have penalties for tobacco companies
if there is no reduction in teen smoking. The so-called "look back"
provisions were among the most contentious for the cigarette industry - and
some of the most sought-after clauses by the public-health community. But
without congressional approval, such penalties would be virtually
unenforceable.

In place of the broad new quit-smoking programs envisioned under the
earlier agreement, tobacco companies agreed to massive spending for similar
efforts. Gregoire has secured a promise from tobacco companies to spend
$1.45 billion on advertising to persuade youths not to start smoking. And
the cigarette industry would spend $250 million in the next decade to
create a national foundation to reduce teen smoking.

Such programs were castigated by conservatives in Congress as more "big
government," but under the states' agreement, the foundation would be
private and pay for many of the same functions, such as grants for
scientific studies researching factors that influence youth smoking.

Other compromises: Cartoon characters are banned from cigarette ads, but
human figures are allowed. And in a bow to certain cities and states that
didn't want to lose local sporting events, such as car racing, tobacco
companies would be permitted to sponsor one event a year for each brand,
but tobacco advertising is banned in arenas and sports venues.

Also late yesterday, smokeless-tobacco maker U.S. Tobacco, which had
settled for $2 million with Washington state in its lawsuit, agreed to pay
the 30 states about $100 million over 10 years to warn about the risks of
using snuff. Other smokeless-tobacco companies have not settled.