UNIVERSITY DAILY KANSAN
Thursday, March 14, 1996
7A
Tobacco firm settles lawsuit
The Associated Press
NEW ORLEANS — The tobacco industry's united front began to crumble yesterday when the nation's fifth-largest cigarette maker agreed to settle a class-action lawsuit accusing tobacco companies of manipulating nicotine levels to keep smokers hooked.
Liggett Group, which makes Chesterfield and Eve cigarettes, said that for the next 25 years, it will pay 5 percent of its pretax profits, or $50 million a year, whichever is less, to programs that help people stop smoking.
Ken Carter, a lawyer for the class-action suit, said the settlement had destroyed the tobacco industry's invicibility.
"Never again can they claim they have never lost a smoking-related lawsuit." Carter said.
The settlement removes Liggett as a defendant from the lawsuit, which claims the major tobacco companies and their lobbying arm, the Tobacco Institute, concealed research showing nicotine is addictive and manipulated nicotine levels.
Liggett settles
The Liggett Group breaks ranks with the tobacco industry by agreeing to settle a major lawsuit.
--the tobacco industry has broken the code of silence," said Mike Moore, Mississippi attorney general. "Their policy has been to fight every case — never settle, never pay."
The suit: Claims nicotine levels were manipulated to keep smokers hooked
Those covered:
As many as 50 million smokers and former smokers
The settlement:
5 percent of
Liggett's annual
income for 25
years (up to $50
million a year)
SOURCES: Federal Trade Commission Tobacco Institute Inc
Knight-Ridder Tribune
Liggett said it also was pursuing a settlement with five states — Florida, Massachusetts, Minnesota, Mississippi and West Virginia — that want tobacco companies to pay their Medicaid costs for treating smoking-related illnesses.
"This is the first time that anyone in
Lorillard Tobacco Co. and R.J Reynolds Tobacco Co. said they had no plans to settle. Brown & Williamson likewise said it would continue to defend all lawsuits aggressively.
Typical was the reaction from No.1 tobacco maker Philip Morris USA, which said it remained confident in the strength of its litigation position, and intended to fight and win all of the cases in which it was involved.
The tobacco industry has been under assault in recent years from public and private officials.
The class-action case still is in the early stages of procedural maneuvering with its class-action status under appeal.
The settlement with Liggett is subject to approval by the federal judge overseeing the case.
Liggett's payments, during 25 years, could reach $1.25 billion if the company paid the maximum each year. But that is extremely unlikely.
Liggett's pretax income amounted to $11 million in 1994, which would mean a payment of just $550,000.
Liggett admitted no wrongdoing and attached two key strings to the deal. If it makes no profit in a given year, no payment will be due. And if other tobacco companies win the class-action suit, the settlement will be void.
Liggett also said it would comply with proposed federal regulations discouraging sales of cigarettes to children. Until now, all major tobacco companies had been fighting the rules.
Bennett LeBow, chairman of Liggett's parent, Brooke Group Ltd., said the agreement meant that the tobacco maker's assets would no longer be held hostage by the tobacco litigation.
"The tobacco industry has lived for too long with the possibility of financial catastrophe from product liability suits that could destroy the industry," LeBow said. "This settlement is a fresh and prudent approach to this problem and positively addresses concerns about underage smoking."
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The Associated Press
Powell could be ideal running mate
928 Mass.
Downtown Lawrence
The Powell mystique was back in full force
WASHINGTON — A day after Bob Dole emerged as the inevitable Republican presidential nominee, attention swung to Colin Powell, who might or might not run with him.
Powell is "the most popular person in the country, period," said historian Stephen Ambrose, who chronicated Dwight D. Eisenhower's ascension under similar circumstances 44 years ago.
Republican pollster Linda DiVall said Powell's decision to foreclose a presidential bid in 1996 was carried off with such grace that it only
But Powell's hold on the American imagination is greater than Ike's was, Ambrose said.
enhanced his appeal.
"The departure left them yearning," DiVall said.
In recent months, Powell's allure seems to have increased, but he has kept a relatively low
Colin Powell
profile, staying away from the TV talk shows. Still, he commands public devotion.
Recent polls suggest Powell, who is African-American, would help Dole, partly by drawing Black votes from the Democratic Party's base. In one poll, Dole lost when matched against Clinton but a Dole-Powell ticket beat Clinton-Gore.
But Ken Duberstein, Ronald Reagan's former chief of staff and a Powell adviser, said the general had not budged.
Still, some old political hands said that if Dole presses, Powell could resist only so long.
About all this, Powell said nothing yesterday.
"The point will come when he can't say no because he is a man who responds to duty," said Mickey Edwards, a former GOP congressman from Oklahoma who teaches at Harvard Uni versity.
Veteran Republican consultant Eddie Mahe, on the other hand, saw disaster in that course.
"We don't want the campaign to be Bob Dole vs. Colin Powell," he said.
"That's what it would become in terms of crowds, charisma, magnetism and every day on every issue."
Dole, in a TV interview on the night he swept the Super Tuesday primaries, said he believed Powell would take the nomination if it were offered.
"This man has been a soldier all his life, and he's responded whenever his country needed him, and I believe ... that he would suit up again," Dole said.
Dole told reporters yesterday that he hadn't talked to Powell about the vice presidency.
Powell, who has spoken in favor of gun control, legalized abortion and affirmative action — all positions opposite Dole's — also would drive away some voters. Pat Buchanan has made stop-Powell a campaign subplot. For his part, Powell has said he could not vote for Buchanan if he were the nominee.
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