THE VOICE THAT SPEAKS LOUDEST FOR TOBACCO

PEOPLE

Humble country lawyer Phil Carlton wields huge power as he represents the
industry in Washington.

Washington The image is as vivid in Phil Carlton's mind today as it was
when he was a young man 25 years ago and secondhand smoke was a slightly
used cigarette you bummed from a friend.

He and his wife would toss the baby in the back seat, no seat belt, no
safety seat, light up the cigarettes, roll up the windows and head off on a
Sunday drive.

"And everybody you met out on the road and waved at were the same way," he
recalls with a chuckle. "Now if I have a grandbaby in my arms and walk into
a restaurant where somebody's smoking, I'll just walk out. I don't even
want to have to breathe it."

They are hardly the words one might expect from the tobacco industry's most
visible representative in Washington, but J. Phil Carlton breaks the mold.

THE $368.5 Billion tobacco deal has produced a cacophony of voices: dozens
of state attorneys general touting the wonders of their settlement with the
tobacco industry, dozens more publichealth groups railing against its
shortcomings. But with the fate of the agreement still largely in the
tobacco industry's hands, the solitary voice that matters most may belong
to Carlton, a country lawyer from Pinetops, N.C., with an "aw shucks"
attitude and a passion for politics.

He still tells homespun stories about his own father, drops a tidbit on
Hargrove "Skipper" Bowles, father of White House chief of staff Erskine
Bowles, and speaks as if his prominence these days is purely accidental.

But make no mistake about it. Behind the laidback veneer, Carlton, the
negotiator on its "global" settlement, his every word holds enormous weight.

"It's a weird feeling," he says. "I have to pinch myself about once a week
just at the enormity of the thing."

Carlton shatters the stereotype of a tobacco man. He quit smoking back in
1990, kicking a 30year habit for one reason smoking is not good for you.
And he is quick to wince at the continuing denials the tobacco industry
issues regarding the link between smoking and health problems.

"I wish they wouldn't do that, quite frankly," he sighs, sitting around a
boardroom table. "It doesn't serve any purpose."

He has his sympathies, of course. Raised a scion of a tobacco family deep
in the heart of tobacco country, he understands just how long the road has
been for the tobacco industry from American staple to pariah.

And he believes in his clients, the five tobacco companies that must now
petition Washington for action on their hardfought settlement.

"It's a new breed of leadership. They really are committed to going into
the future not known as the pariahs of corporate America. They want to be
in a legitimate enterprise, engaged in interstate commerce with a legal
product for adults who have been warned about the risk," Carlton says. "I
don't have any problem working for people who think that way."

Carlton's ties to the Democratic Party go back to 1959, when as a college
senior at North Carolina State University he dropped his role as the
Wolfpack's mascot and helped a young gubernatorial candidate named Terry
Sanford win the statehouse. The next year he worked to help a young
candidate named John F. Kennedy win the White House.

His close connections to Democratic Gov. James B. Hunt Jr. of North
Carolina nearly destroyed his career, according to opponents, or at least
sullied it a bit. In 1994 he pleaded guilty to accepting reports of private
phone conversations illegally gleaned from a police scanner during Hunt's
1992 campaign. For that he received six months' probation, paid a $5,000
civil penalty, performed 60 hours of public service and agreed to pay
Republican gubernatorial candidate Jim Gardner an undisclosed settlement
estimated in the hundreds of thousands of dollars.

To state Republicans, that was hardly enough, especially since they are
convinced that his guilty plea kept the scandal from reaching the governor
himself.

To Carlton, the flap is just politics"silly," he says. The scanner
controversy had long been forgotten by everyone but a few journalists and
a handful of Republican partisans.

The truth may be somewhere in between.

But if his ties to Hunt affected his reputation, they also got him his
current job on the tobacco settlement.

With the settlement talks already well under way, R.J. Reynolds executives
approached Hunt early this year for the name of a skilled negotiator with
White House connections. Carlton was the natural choice.

Carlton had worked on "Skipper" Bowles' unsuccessful gubernatorial campaign
in 1972. Bowles' son had just been installed as White House chief of
staff, and R.J. Reynolds, the nation's No. 2 tobacco company, needed a
liaison to the administration.

Before he knew it, he was in the thick of things, coordinating the
negotiations for the industry.

With the settlement now in writing, Carlton sees his job as educational:
persuading the American people to accept the deal as an honest attempt to
reduce teen smoking while convincing the industry's mot vociferous critics
that they cannot put his employers out of business.

It hasn't been easy. Sen. Edward M. Kennedy, DMass., for instance, has
been pushing him and by extension his employers to publicly admit to
the ill health effects of smoking and the alleged coverup the industry has
engaged in for decades. It's not going to happen, Carlton says, but the
industry has agreed in the settlement not to challenge any publichealth
claims about its products.

"People are saying this business has got to stand up in front of Congress,
raise their right hands and admit to godawful things," Carlton says.