Tobacco Money Flows Both Ways

Trial lawyers squeezed billions out of the Republican-loving tobacco industry in last year's landmark settlement. Now they are taking their newfound wealth and contributing millions to federal and state Democratic campaigns, perhaps in hopes of derailing the GOP's aspirations on tort reform.

| Thu Jul. 6, 2000 2:00 AM EDT

Dec. 8, 1999, was a red-letter day for Washington state Attorney General Christine Gregoire. In that one day, Gregoire, a key force behind the nationwide tobacco settlement and a potential pick for US attorney general in a Gore presidential administration, saw her re-election campaign funds nearly double. The source of the nearly $23,000 surge in support: two dozen lawyers and their relatives from a single firm in Charleston, S.C.

Why were apparent strangers from a tobacco state supporting an anti-tobacco pol 3,000 miles away? Was it, as Republican detractors asked, because Gregoire had done the donors a billion-dollar favor? That's how much the firm, Ness Motley Loadholt Richardson & Poole, is expected to ultimately pocket for its role in the multistate tobacco settlements, having worked with Gregoire to broker what ultimately totalled a $206 billion deal.

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"Nonsense," insists Fred Olson, Gregoire's director of administration. Critics, he says, are wrong to think the donations "must be a payoff, rather than what they are: a reflection that someone has a high regard for an elected official."

But Ness Motley and a host of other US law firms who worked the state governments' side of the tobacco cases certainly seem to have an abundance of that sort of "high regard" for state and federal candidates this year -- particularly if those candidates are Democrats. Al Gore's party has already picked up millions from anti-tobacco lawyers, and more is undoubtedly in the pipeline.

As part of the tobacco installment-plan settlement that requires cigarette makers to pay $206 billion to 46 states over 25 years (Mississippi, Florida, Texas, and Minnesota separately settled for another $40 billion), several dozen US law firms will divvy up more than $20 billion in legal fees, parceled out over five years in some cases.

That influx of tobacco cash is turning into good news for Democrats. Figures from the American Tort Reform Foundation and the Federal Election Commission show the settlement firms are shipping millions from their new wealth to Al Gore's party.

The settlement lawyers and firms that represented Texas alone have already donated at least $2.2 million in soft money to the Democrats since last year. Ness Motley, one of that group, has alone given $525,000 in recent soft and individual money donations to Democrats. Other firms have given at least another $900,000 to Democrats.

Meanwhile, the tobacco-settlement firms have given only comparably token amounts to Gore's opponent. Why? Perhaps because George W. Bush happens to oppose the huge litigation fees and settlements so dear to a trial attorney's heart. Bush successfully made tort reform one of his four goals when he first ran for Texas governor in 1994, and now claims he has saved Texans $2 billion through insurance rate reductions by limiting "junk and frivolous lawsuits, despite strong opposition from the state's powerful personal injury trial lawyers."

One of the biggest Democratic donors has been Peter G. Angelos, the lawyer who represented the state of Maryland in the tobacco litigation and who has given $650,000 to the party this cycle. "I will do whatever necessary to see that candidates who espouse the position that Bush does [on tort reform] are defeated at the polls," said Angelos, who is also the owner of the Baltimore Orioles.

"A handful of [settlement lawyers] who made billions in the tobacco litigation is strategically reinvesting their winnings in the political process," says Michael Hotra, vice president of the American Tort Reform Foundation.

The soaring campaign donations from anti-tobacco lawyers reflect a quiet transfer of political capital, with the settlement funds potentially making the anti-tobacco law firms as formidable a source of campaign funds to Democrats as the tobacco industry traditionally has been to Republicans. Tobacco, of course, continues to give millions every election cycle to the GOP. Total tobacco giving topped $10 million in the last presidential race, according to FEC figures.

The second largest corporate donor so far in the 2000 election is Philip Morris Company, which has doled out $1.4 million to GOP committees. Just as the attorneys oppose Bush for his stand against their fees, tobacco opposes Clinton for his proposal to allow US regulation of nicotine levels in cigarettes.

But the attorneys are catching up, and their influence is surging at a strategic moment. Besides this being a presidential election year, 33 Senate seats and control of the House of Representatives are at stake, along with a variety of state supreme court and state attorney-general positions.

"We're just exercising what we consider our constitutional right to elect the people who will best represent the working class," says Joe Rice, Ness Motley's folksy, Carolina-born managing partner. "These are the people who benefit from the kind of lawsuits we bring."

Ness Motley is renowned for its class-action public health litigation, including successful breast implant, asbestos, and lead poisoning cases. The firm helped represent more than 25 states in the tobacco litigation, with Rice backing up Gregoire. The attorney general also hired Ness Motley to represent her state of Washington, earning the firm millions more in fees.

"Listen, I'd love to see her re-elected, and if you all don't want her in Washington [state], please send her to South Carolina," says an unrepentant Rice, who personally gave $1,100 to Gregoire.

"Any suggestion that there's some kind of payoff, a quid pro quo with Christine, is pure bull," bristles Rice. "I only wish we had given her more." But then, like the tobacco money rolling in, the giving season has only just begun.