House Votes to Cut Funding for Tobacco Suit

WASHINGTON —  Backed by public health groups and the Clinton administration, anti-smoking lawmakers fought in vain Monday to continue full funding for the Justice Department’s massive lawsuit against the nation’s five major tobacco manufacturers.

The House voted, 207 to 197, to keep a provision in a spending bill that blocks the Department of Veterans Affairs from transferring money to the Justice Department to help cover the costs of the agency’s tobacco lawsuit.

Monday’s vote was the first in what is expected to be a series of efforts by anti-smoking lawmakers to maintain the threatened funding at current levels.

The closeness of the vote on a provision of the 2001 spending bill for the Housing and Veterans Affairs departments suggests that the funding of the tobacco lawsuit will be hard-fought and probably settled decisively only when the contentious portions of all the spending bills are worked out with President Clinton later in the year.

The department’s legal action seeks to recover billions spent by Medicare, Veterans Affairs and the Defense Department to treat illnesses caused by smoking and to change the way the tobacco companies market cigarettes.

The effort to maintain the funding for the suit was led by Rep. Henry A. Waxman (D-Los Angeles) and Rep. James V. Hansen (R-Utah), two of the most active anti-tobacco lawmakers.

Under an obscure law, the Justice Department can offset the cost of litigation by seeking reimbursement from other government agencies when it brings lawsuits on their behalf. The department has most frequently used such contributions to help pay the costs of defending the Defense Department in billion-dollar contract disputes.

The department is relying on such contributions from three agencies--the departments of Defense, Veterans Affairs and Health and Human Services--for the tobacco lawsuit, in part because Congress last year refused to allocate the Justice Department the money it requested to prepare the lawsuit. The suit, one of the largest and most complex ever brought by the department, was filed in September 1999.

In a rare, impromptu visit to Capitol Hill, Atty. Gen. Janet Reno said bluntly that if the provision in the VA bill and similar provisions in other spending bills remained in their current form, she “would have no choice but to seek to dismiss the lawsuit” because the department would be unable to pay for its prosecution.

“It will be a very grave disservice to the American taxpayer, and to the agencies that have had to shoulder the burden of paying to treat those with tobacco-related illnesses. . . . We believe that we can recover billions of dollars for the American taxpayer,” Reno said.

The three contributing agencies stand to gain billions of dollars if the government wins in court against the tobacco manufacturers.

The agencies this year each transferred $2.65 million to the Justice Department to help fund the litigation. In 2001, the agencies expect they will transfer about $4 million apiece to the department. The department expects to spend $5.8 million from its own budget this year and $14.2 million in 2002.

Lawmakers’ opposition to the suit stems in part from frustration that despite Congress’ refusal last year to give the Justice Department the money it requested to prepare the tobacco lawsuit, the agency found a way to get the funding anyway.

However, there has also been heavy lobbying by the tobacco industry, particularly by cigarette manufacturer Phillip Morris, which has been working behind the scenes to persuade Congress to stop the funding stream for the lawsuit. Among the lawmakers contacted by the company were members of the Black Caucus, which in the past has received funds from the tobacco industry.

“It’s certainly no secret that Phillip Morris is opposed to this lawsuit,” said Tom Ryan, a spokesman for the company. “We believe it’s politically motivated; we believe that the Justice Department has attempted to defy congressional intent by inventing new ways to pay for this lawsuit.”

Waxman characterized the effort to stop the funding as an end run by the industry. “The tobacco industry would like to win this lawsuit, not in the courts but through the legislative process,” he said. “And if they have Congress intervene in this lawsuit to stop it from going forward, it will mean that they will have a huge amount of money that they will not have to pay out.”

However, lawmakers on the Appropriations Committee, which controls spending for each government agency, argued vociferously that they did not want the money they allocated to one agency being given to another.

“You’re taking money out of veterans medical care and giving it to the Justice Department,” said Rep. James T. Walsh (R-N.Y.), chairman of the appropriations subcommittee that oversees the Veterans Affairs bill.

VA officials argued, however, that they spend $1 billion a year treating tobacco-related illnesses and that $4 million would be a small price to pay for a chance at recouping billions.

Republican leaders have inserted an even more far-reaching provision to stop the lawsuit’s funding into the spending bill for the Justice Department, which is expected to come to the House floor next week.

It includes language that would stop the department from getting money from other agencies for any prosecutions it brings on behalf of the government. The department could still use money from other agencies to defend them when they are sued, but could not initiate litigation with contributed funds.

Many Republican lawmakers who look skeptically on lawsuits against businesses say that the Justice Department’s suit is politically motivated and seeks to batter an ill-favored industry.

“The Justice Department’s complaint is only the most recent use of litigation to bludgeon private firms with a prohibition that they could not win in the Congress,” said Rep. Ed Whitfield (R-Ky.).

The suit is Clinton’s only remaining hope of leaving a lasting impact on tobacco policy--an area in which he has taken a personal interest along with Vice President Al Gore, whose sister died of lung cancer.

Using the strongest possible language, Jack Lew, director of the Office of Management and Budget, said that unless the provision is dropped from the bill, Clinton would likely veto it.

“I don’t want to leave any ambiguity how unacceptable it is to us to have actions taken that would cut off the lawsuit,” Lew said.