TOBACCO'S LOBBYING OUTLAYS SOARED IN '98

Public Citizen Says $43 Million Was Spent, Much of It Fighting Anti-Smoking
Bill

The tobacco industry spent more than $43 million on lobbying in the
first half of this year -- 23 percent more than in all of 1997 -- much
of it to kill a national tobacco bill championed by public health
groups and the White House, according to a report released yesterday
by Public Citizen, which favored the bill.

More than $18 million of Big Tobacco's expenditures went to outside
lobbying firms, with the largest chunk -- about $7.2 million -- going
to the D.C. law firm of Verner, Liipfert, Bernhard, McPherson and
Hand, where former Senate majority leader George J. Mitchell and
former Texas governor Ann Richards worked on the tobacco issue.

The huge lobbying outlays -- nearly three times what the industry
spent in the first half of last year -- "put the voice, the message
and the pressure of the tobacco industry way ahead of the citizen,"
said Joan Claybrook, president of Public Citizen, a Washington-based
interest group founded by Ralph Nader.

The industry defeated the tobacco bill with a combination of "enormous
campaign contributions" to gain access to lawmakers, high-priced
lobbyists and an unprecedented advertising campaign, she said.

Scott Williams, a tobacco industry spokesman, said he could not
comment on the validity of Public Citizen's report, but added, that
"the industry was facing possibly the largest excise tax increase on a
consumer product in the history of the country. If the public health
community faced a threat of equal magnitude, it would make every
effort to exercise its right to communicate its views with the
government and the public."

According to Public Citizen, the industry "besieged the Capitol with
192 lobbyists," about "one for every three members of Congress." The
team drew on "powerful insiders," including Mitchell (D-Maine), former
Senate majority leader Howard H. Baker Jr. (R-Tenn.), former
Republican National Committee chairman Haley Barbour and former
lawmakers Stanford Parris (R-Va.) and Charlie Rose (D-N.C.). It also
included at least 18 former congressional staffers.

That behind-the-scenes campaign came as the industry mounted a $40
million national advertising blitz to defeat the tobacco bill, which
would have imposed major restrictions on the industry, as well as a
$1.10 per pack price increase over five years.

The industry, which initially championed national legislation, quickly
turned against it in April, after a Senate committee fashioned a bill
with the huge price increase and almost none of the legal protections
the industry sought.

Public Citizen said it culled its information from public lobbying
reports filed with Congress by six major tobacco companies, three
tobacco trade groups and outside lobbying firms they employed.

According to the group's report, Brown & Williamson Tobacco Corp.,
which spent $1.7 million in the first half of 1997, spent $18.2
million in the same period this year, topping the other major tobacco
companies, including Philip Morris Cos. and R.J. Reynolds Tobacco Co.

"I'm not sure what the amount of money cited includes," said Mark
Smith, a Brown & Williamson spokesman, adding that in 1998 the company
was facing major legislation that "would have gone a long way toward
decimating our business."

The report said the leading tobacco companies banded together to hire
Verner, Liipfert and three other influential law and lobbying firms:
Baker, Donelson, Bearman & Caldwell, which was paid $1.4 million;
Covington & Burling, which was paid $880,000; and Barbour, Griffith &
Rogers, which received about $860,000.

The public lobbying reports provide estimates and do not break out how
much money was spent on specific issues.

Checked-by: Don Beck