Fr. McGowan: F.D.A.'s Place In Tobacco Deal To Be Key

The landmark $368.5 billion tobacco settlement now being debated is proof that cigarette makers have lost both the moral and public policy debates over smoking, says part-time faculty member Richard McGowan, SJ (Economics).

But the settlement could yet redound to the benefit of Big Tobacco as well as the states, according to Fr. McGowan, who has studied regulation of the tobacco industry.

The tentative agreement reached by the tobacco industry and negotiators for some 40 states in June would require tobacco firms to pay $368.5 billion, admit that tobacco is addictive, submit to extensive new government regulation by the Food and Drug Administration, and sharply curtail cigarette advertising. In return, the firms would be promised immunity from any further punitive liability for past deception, fraud or conspiracy.

The deal requires the blessing of President Clinton - expected to issue a decision this week - and legislation approved by Congress to take effect. The two branches continue to haggle over the settlement's final shape.

"The most interesting point will be if the industry can still keep the FDA out of the settlement," Fr. McGowan said. "If they can, then the federal government will be completely excluded from any future action concerning the cigarette industry. I doubt that Clinton will allow this."

If enacted, Fr. McGowan said, the agreement would protect future profits for America's three largest tobacco companies, Phillip Morris, R.J. Reynolds and Brown & Williamson. The settlement would raise "an absolute barrier against other competitors entering the industry, since only these firms would be given protection" against future lawsuits, he said.

State governments would also see a boost in revenue, Fr. McGowan said, although tobacco growers will likely lose out.

Does the landmark tobacco settlement represent America's great moral reckoning with the tobacco industry? Fr. McGowan said the power of Big Tobacco had already begun to weaken as a result of the "second-hand smoke" issue that came to the fore in the mid-1980s.

"Up to that time, the cigarette industry could maintain that smokers had the right to choose for themselves as long as they weren't hurting other people. Once the second-hand smoke issue was taken into account the cigarette makers could no longer claim any moral ground. So indeed, this settlement means that the cigarette makers have lost the moral debate, and in turn the public policy debate."

-Mark Sullivan

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