To get some perspective on the deal negotiated with the tobacco industry CorpWatch spoke with Stanton Glantz, Professor of Medicine at the University of California at San Francisco. Glantz, a long-time tobacco crusader, is the author of the Cigarette Papers, the published version of internal documents leaked to him from the Brown and Williamson tobacco corporation.
CW: What events led up to this so-called "Global Settlement."
GLANTZ: In the last three years a tremendous amount of material has
come out. The Brown and Williamson Documents. There were a whole string of whistle blowers. The material that's been produced in litigation.
The tobacco industry is really on the ropes right now. They're in a position where they're not only looking at a huge amount of civil liability, but probably the likelihood of criminal prosecution -- not only of the executives but probably some of their lawyers as well. That's why they're all upset and talking and trying to get off the hook.
CW: How important is this moment then?
GLANTZ: I think we're at the most important time in the tobacco wars since the 1964 Surgeon General's report, which was another time the industry was on the ropes and got off by making a few compromises.
The Surgeon General's report said that smoking caused lung cancer. And the tobacco industry responded by accepting weak warning labels on cigarette packages and a few years later some restrictions on television and radio advertising.
Now they're in much more serious shape because the whole massive conspiracy that's been underway for the last forty or fifty years is having the lid pried off of it. And lot of these people could end up going jail. The industry could be put out of business. So they're just desperate to get this issue off the table.
CW: Explain what you mean by a "massive conspiracy."
GLANTZ: They covered up that they knew nicotine was addictive. They covered up that they knew that they knew smoking caused disease. They tried to keep the public confused on smoking.
It's very hard today to think back to what was happening in the 1960s -- thirty years ago. Now everybody says 'well everybody knows these guys are lying; everybody knows nicotine is addictive,' etc. etc.. But in fact this was a new, hot issue then. And the industry knew a tremendous amount about these products and didn't disclose it. They used every trick in the book to avoid producing the information for the courts.
CW: And that bought them another thirty years?
GLANTZ: Yes, and this deal is going to buy them another thirty years. It's also going to buy them unfettered access into the Third World--into the rest of the world.
CW: Give us some more detail how this settlement fits into the tobacco corporations' strategy.
GLANTZ: What they want is peace. They want certainty. And tobacco is immensely profitable. So they can pay out billions of dollars and still make buckets of money. But they don't want to have the threat of the litigation keeping them from going about their business. Furthermore, to the extent that their advertising is limited by this deal, it's going to lock in the current market
structure in the U.S., which is going to lock in Philip Morris and R.J. Reynolds as the dominant players.
CW: Explain the relationship between this deal and the globalization of the tobacco industry.
GLANTZ: The tobacco industry knows that they're losing in America and they're almost willing to write off America so that they can go about pillaging the rest of the world -- killing people overseas. By getting the issue off the agenda in the United States and by freeing them of these potentially devastating criminal and civil judgements against them, they'll be then left free to go overseas.
In fact, that's the dirty little secret of the deal. It's called a global settlement but there's nothing global about it. It basically leaves the industry free to go after the whole rest of the world.
CW: Could there be a mechanism in such a settlement to keep the industry from doing that?
GLANTZ: There might be. But the way to reign them in is if they're driven into bankruptcy by having to pay for all the damage that they cause, then they won't have the resources to go chase after the rest of the world.
CW: What are your other critiques of the settlement?
GLANTZ: The first thing about the settlement is that it's not really a settlement. A settlement is when two parties who are litigating against each other reach an agreement to dismiss the litigation. This "settlement" is about writing a law. So what these guys are doing is working out an agreement to go to Congress
and propose a very complicated law that will exempt the tobacco companies from liability in exchange for some concessions on their part.
In essence, the tobacco industry won on all the important issues. This deal rolls back the freedom with which the FDA can act in terms of regulating tobacco. It grants the industry de facto immunity from further litigation by banning certain kinds of suits outright and by changing the rules of evidence to make it hard to win the few kinds of cases that can be brought. And they won on disclosure by limiting what information has to be disclosed and again creating a bunch of very high proceedural hurdles for releasing anything.
It's true that there were some concessions to the health groups -- some mild restrictions on advertising and things like that, but on the issues that really matter, the industry won.
Furthermore, all of the money that they pay is tax deductible, so the taxpayers will end up subsidizing somewhere between one-third and one-half of it.
So it's really a sellout. The good public health elements could all have been gotten in a state court. The bad things in it require Congress.
Given that the Republican Congress is very, very beholden to the tobacco industry, I expect that the deal will get further watered down in Congress.
Furthermore, it's premature to settle. We haven't even finished the discovery phase [of the lawsuits]. We don't even know the full extent of the wrongdoing.
CW: What about the $360 billion--is that an adequate amount?
GLANTZ: Since the deal hasn't been approved by Congress yet, the state lawsuits against the tobacco industry are still pending. Some are coming to trial and the first was to be Mississippi. Neither side wanted to go to trial, because they were both afraid they would lose. At the end of June, Mississippi Attorney General Mike Moore reached a financial settlement with the tobacco industry. It actually looks pretty good. The first year has the industry paying Mississippi something like $178 million; the smoking attributable medicaid costs for Mississippi are about $65 million. Overall it's a $3 billion deal over 25 years.
If you applied the same recovery ratio to the deal that Moore got in Mississippi, the global settlement would be $3 trillion. The total medial costs due to smoking are about $50 billion a year, and the medicaid costs due to smoking in Mississippi are about $65 million, so they're a ratio of about 1,000.
CW: So you're saying the Mississippi settlement demonstrates that the Global Settlement was a good deal for the tobacco industry?
Glantz:If you look at the Mississippi settlement, it's a reasonable amount of money financially. It does not comprimise the FDA. It does not give anybody immunity. So it's actually much better than the global settlement.
I think the media has really gone ga ga over the global deal -- which again isn't a settlement, it's a deal that's not binding on anybody -- and sort of missed the importance of what's just happened in Mississippi.
CW: How have the anti-smoking groups reacted to the Global Settlement?
GLANTZ: Most of the people at the grassroots level are appalled. The main person pushing the deal is a guy named Matthew Myers from the National Center for Tobacco Free Kids, which was set up by the Robert Wood Johnson Foundation, the Cancer Society and the Heart Association. And he's pretty much co-opted the leadership of Cancer and Heart.
What he did was bring them in secretly, into the negotiations with the tobacco industry, and said basically, 'I want you to bless what I'm doing, but you can't tell anybody.' And they kept it all very secret until just before the deal went down; by then they were very personally invested.
Myers is a smart guy. It's too bad that all his negotiating prowess is being directed against his former friends. He's a very tragic figure. He's a good person, but I think he's going to undo everything that he's stood for the last fifteen years.
CW: What mistakes has the anti-smoking movement made? What could have been done differently.
GLANTZ: Frankly, I don't think anything. I think that basically Matt Myers wanted a deal. And the people [in industry] were very careful in selecting him as a person who wanted a deal, as somebody who has -- or had -- a tremendous amount of personal credibility with a lot of people. He's put every ounce of this credibility on the line and delivered these organizations [the Heart Association and the Cancer Society] to the pro-settlement forces.
There was a meeting last fall of many people from public health and there was a very strong consensus not to do this. Matt chose to ignore that consensus. So I don't think there's anything that could have been done other than Matt having been more willing to honor the opinions of his colleagues. If Myers didn't do what he
did, there wouldn't have been a deal. He's been absolutely essential to this. The politicians and the lawyers couldn't have done it without him.
CW: What are the lessons of the tobacco experience for people fighting for corporate accountability in other sectors?
GLANTZ: Watch your friends.
CW: What should people be doing about this situation.
GLANTZ: People should be contacting the President saying that they don't want to be sold down the river, that the tobacco companies should not be allowed to buy the right to continue killing people.
People should write their Attorney General and say that they don't like this. That they should get back to litigating their cases and winning.
And people should write their Congressmen and say don't support this deal.