Samuel Lowenberg - Independent Journalist biography articles articles

How slick pr, shrewd lobbying killed bill

Legal Times  July 6, 1998, Monday


The defeat last month of the McCain tobacco bill in the U.S. Senate resulted from an unusual but surprisingly effective combination of an insider legislative strategy, a finely tuned grass-roots lobbying effort, and a massive $40 million national advertising campaign.

As a result, the cigarette companies were able to overcome an unremittingly hostile Washington atmosphere and to change the terms of the debate from the dangers of smoking to the supposed follies of a tax-and-spend Congress. "We had to make the Republicans understand that the issue could be handled politically and was not as radioactive out in the countryside as they first thought, " says Philip Morris lobbyist G. Stewart Hall, a former legislative director to Sen. Richard Shelby (R-Ala.), who runs his own lobbying shop.

In many ways, say lobbyists who followed the issue, the industry's assault on the bill introduced by Sen. John McCain(R-Ariz.) resembled a military campaign, with the advertising and grass-roots operations acting as air cover for traditional senator-by-senator lobbying.

Indeed, the tobacco lobbyists were hardly noticed, even by the opposition, as they quietly won over enough GOP senators to kill the measure. The first step was to get out of Washington and take their case directly to the nation, via advertising. The decision to launch the ad campaign was made after industry strategists determined that the McCain bill had so much popular support that traditional lobbying alone couldn't stop it.

After more than a year of embarrassing revelations, the industry's reputation had sunk so low on the Hill that even longtime supporters did not want to be seen with tobacco representatives.

Except for Sen. Don Nickles (R-Okla.) and perhaps Sen. Phil Gramm (R-Texas), " virtually everyone in the Senate leadership was a question mark, " says Hall.

"We started from a position where we were shut out on the Hill. The decision was made, What do we have left? We have cash for advertising.' "

The trick, says lobbyist William Oldaker of D.C.'s Oldaker, Ryan, Phillips & Utrecht, who also represented Philip Morris, was to appeal to Republicans' natural dislike of taxes and regulations.

"Tobacco had very few friends. Ideology had friends, " says Oldaker.

The lobbyists let the ads run for a week before they showed their faces on the Hill.

"We wanted to make sure we wouldn't get shot walking down the halls, " says one.

But advertising alone was not enough. By late April, the industry had launched a national grass-roots campaign aimed at convincing Senate Republicans that opposing the bill did not mean political suicide.

This was "probably as strong a statement to the power of grass roots as there has been, " says Martin Gold, chairman of the Legislative Strategies Group, who advised the industry.

Tobacco companies set up phone banks to channel calls to Capitol Hill, an effort that the industry says led to 300, 000 calls to Congress in two months. Philip Morris also hired Direct Impact, an Alexandria, Va., firm that specializes in so-called grass tops. In an operation spanning nearly 30 states, the firm used computer databases and phone operations to mobilize community leaders and political patrons to contact their senators.

An aide to Sen. Nickles, the deputy whip, says his office was flooded with phone calls with the earmarks of a grass-roots effort. Many came from outside the senator's state, from places like California and Minnesota. "Sometimes they didn't even know what issue they were calling on, " or whose office they had reached, the aide says.

The calls still served a useful purpose, says the aide, because they permitted Nickles to say he had calls from around the nation running 20-1 against the bill.

By most accounts, the one-on-one lobbying that followed was tightly focused and left no footprints. As one Democratic aide notes, "the industry was conspicuous in its absence."

Much of the lobbying seemed to focus on scuttling the legislation on technical grounds. A crack team was assembled, including Charles Black, head of Black, Kelly, Scruggs & Healey, who has worked on the campaigns of Gramm and Jesse Helms (R-N.C.); former Secretary of the Senate Walter "Joe" Stewart of Griffin, Johnson, Dover & Stewart; and former Senate Majority Leader Howard Baker of Baker, Donelson, Bearman & Caldwell.

"The industry wasn't flooding offices asking for time with a senator. They were quietly trying to suggest and explore different options. But when you have Charlie Black and Joe Stewart and Howard Baker walking around, you can get things suggested, " says a Democratic tobacco lobbyist.

There is some dispute among staffers and even among tobacco advocates about who accomplished what. Some incidents seemed to be the result of what the bill's detractors saw as a lucky coincidence.

One event that seriously disrupted the McCain bill's previously solid Democratic front occurred as soon as the bill hit the floor. Through a seeming error, Majority Leader Trent Lott put in, at the last moment, two contradictory bills to subsidize tobacco farmers, sponsored by Sens. Richard Lugar (R-Ind.) and Wendell Ford (D-Ky.). This caused a huge rift among tobacco-state Democrats. Sen. Ernest Hollings (D-S.C.) openly seethed, and Ford and Sen.

Charles Robb (D-Va.) actually voted against the McCain bill in the end. "It is a demonic tale, and it was probably the most crushing thing in the early hours of this thing, " says a tobacco lobbyist, who terms Black the prime mover in this incident. Black, according to this lobbyist, worked through his friends Sens. Helms and Mitch McConnell (R-Ky.) to make sure that the two amendments would both get into the bill. Black was traveling and unavailable for comment.

Two top Republican aides and two other tobacco lobbyists deny that the conflicting bills were planted by the industry. But most agree that the move was done intentionally by the leadership.

Lott's ploy "was designed to scramble the eggs on the Democrat side, " says a tobacco lobbyist. It would have "created two filibusters and generally created havoc."

Another key strategic move attributed to Black by this lobbyist was an amendment added by Gramm in the last weeks of the bill to abolish the socalled marriage penalty tax. Another lobbyist says Black was strategizing with Gramm on this matter. Black had been campaign manager in Gramm's 1996 presidential bid.

Other aides and lobbyists deny this account, and Gramm did not respond to an interview request.

Regardless of its origin, one Democratic lobbyist says the tax amendment was a master stroke.

"That was one of the ways to smoke the Democrats out, by laying an amendment on the floor that would have taken a large percentage of the tobacco revenues and apply it to tax reduction for the middle class . That would create confusion among the Democrats, " says this lobbyist.

As it happened, this move backfired. As a senior Republican lobbyist put it, the marriage penalty amendment went "from being a poison pill to a sweetener, " making the bill so attractive to Republicans that it came close to passing late in the game.

At this point, the industry lobbyists convinced Lott to bring out the doomsday weapon: the fact that the bill conflicted with the balanced budget law. The idea to kill the McCain bill on these grounds originated with the Republican leadership, say lobbyists and senior aides. The leadership was holding onto the conflict as a "safety valve, " speculates Joan Mulhern of Public Citizen. An aide to the Republican leadership concurs, saying that if the bill's fiscal aspects had been corrected at the start, it would have been stronger when it returned for a vote . The industry's aim was to make sure that the budget "points of order" were used, and used well.

The industry deployed an array of lobbyists steeped in parliamentary procedure, including Keith Kennedy, former top aide on the Senate Appropriations Committee; and Black, Kelly, Scruggs & Healey's John Scruggs, a former White House lobbyist and one-time Lott floor assistant. Also helping was Gold, a former aide to Baker.

It was the budget points of order that finally brought down the legislation-- and that ultimately demonstrated the success of the multipronged industry strategy.

"The way tobacco works Capitol Hill has been changed forever, " says Hall, the Philip Morris lobbyist.

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