TOBACCO COMPANIES TARGET CONGRESS

WASHINGTON -- The tobacco industry is arguing in a hard-sell ad campaign
that passage of anti-smoking legislation would lead to a cigarette black
market and a huge new federal bureaucracy to monitor tobacco sales.

Rebuffed even by their allies in Congress, the tobacco companies have
turned for support outside the Capital Beltway.

"I'm done making a point to these people in Washington," RJR Nabisco
chairman Steven Goldstone said yesterday in New York. "My discussions now
are going to be with the American people."

Congressional Republicans, meanwhile, are unwilling to go out on a limb for
the industry in a year when all 435 House seats and a third of those in the
Senate are up for re-election.

Though millions of dollars in industry campaign contributions helped send
many of them to Congress, GOP lawmakers have been upset by documents
indicating the industry lied about nicotine's addictiveness and whether
cigarettes were being marketed to youngsters.

"Senator McCain doesn't believe the American people will be receptive to an
industry that has addicted their children to tobacco," said Nancy Ives,
spokeswoman for the sponsor of Congress' leading bill, Sen. John McCain of
Arizona.

Though House Speaker Newt Gingrich has rejected McCain's bill, Gingrich's
spokeswoman said, "House Republicans work for the American people, not the
tobacco companies."

The industry uses the same populist, anti-Washington message that
Republicans successfully tapped during the 1994 election. Only this time,
the attacks are aimed primarily at the party that won the congressional
majority in that election.

Tobacco executives say lawmakers are risking the nation's cultural and
economic health by considering a bill that would bankrupt the companies.

The industry's message paints a bleak picture of society governed by
"punitive" national tobacco policy.

According to their vision:

- - Taxpayers earning $30,000 a year or less would bear the brunt of the tax
penalties in McCain's bill.

- - The bill would spawn a black market for cigarettes, in which foreign
interests would be free to smuggle cigarettes and hire gang members to sell
them to anyone -- including children.

- - Farmers, retailers and small business people would be driven from their
jobs by competition with black market dealers who don't have to pay taxes.

- - And more than a dozen new government bureaucracies would be born to
regulate everything from tobacco sales to teen-age smoking rates.

*"What amazes me, all of this from a Republican Senate," Goldstone said.

The campaign follows the industry's rejection of the McCain bill, which
would impose a half trillion dollars in taxes on tobacco companies and
severely restrict its ability to market products.

*But lawmakers of both parties say whatever legislation emerges will not be
influenced by tobacco companies.

The bill as it stands now is in jeopardy because many Republicans believe
it flies in the face of conservative ideals.

* Cigarette prices, according to the Treasury Department, would stay on the
safe side of the threshold that would lead to a black market and other
societal ills portrayed by the industry.