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George W. Bush: Calling for Philip Morris | The Nation

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George W. Bush: Calling for Philip Morris

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Twenty-six thousand Texans will die this year from smoking-related illnesses. That's a fact that seems lost on Governor George W. Bush, whose presidential bid is being greatly assisted by money and manpower intimately associated with the tobacco industry. And if Bush's record in Texas is any indication, should he make it to the White House the industry can feel certain that it will have a friend in the Oval Office.

The Nation Institute's Investigative Fund provided research support.

About the Author

Robert Dreyfuss
Bob Dreyfuss
Robert Dreyfuss, a Nation contributing editor, is an investigative journalist specializing in politics and national...

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Money, in the form of campaign contributions to Bush's $60 million war chest, is part of the story, beginning with the $1,000 check given to Bush in June by Geoffrey Bible, president and CEO of Philip Morris. Even more important, the tobacco industry is poised once again to provide the Republican Party with millions of dollars in unregulated "soft" money, offering a significant boost to the Bush 2000 drive. But Bush's tobacco ties reach far deeper than money; they go to the very heart of his campaign organization--a story that so far has been largely ignored in the national media's bubbly coverage of W.'s campaign.

Some of Bush's closest aides are allies of Philip Morris, including Karl Rove, the leading Republican Party campaign strategist in Texas. A close friend of Bush's since the early seventies and Bush's chief political adviser since the late eighties, Rove--who's been called "the governor's Svengali" by National Review--was formally on the payroll of Philip Morris from 1991 to 1996 as a paid political intelligence operative. Another close friend and adviser is James Francis Jr., whose brother has been a key figure behind several Philip Morris-backed front groups and who himself has flirted with the National Smokers Alliance, an industry-funded smokers' rights group. And then there is former Republican National Committee chairman Haley Barbour, one of the party's most wily and influential kingmakers, who is both an important player in Bush 2000 and arguably the number-one lobbyist for Philip Morris and the tobacco industry in Washington.

Just how much influence these men have had on Bush is impossible to measure. But Bush's record on tobacco certainly doesn't displease the industry: opposition to the federal lawsuit against Big Tobacco and to increased taxes on cigarettes, plus vigorous support for tort reform that limits consumers' rights to sue makers of dangerous products--like tobacco. In Texas, Bush refused to support a lawsuit against Big Tobacco that eventually won $17 billion for the state's treasury. Taken together, Bush's friendships and his stance on tobacco-related issues are causing cigarette makers to salivate over the possibility of a Bush victory next year. "The prospect of Bill Clinton gone and a George Bush presidency makes the industry almost giddy," said Martin Feldman, a tobacco industry analyst at Salomon Smith Barney, in September.

Start with Rove. Deposed in a lawsuit in Texas, Rove frankly admitted to having been a paid political consultant for Philip Morris, reporting to Jack Dillard, the tobacco giant's ubiquitous Austin lobbyist. Beginning in 1991, Rove was paid up to $3,000 per month by Philip Morris, gathering political intelligence and gossip for the company and regularly reporting on federal, state and local political races. For five years, Rove said, he was "retained by Philip Morris in an ongoing capacity to basically advise them on elections, to give them my best feelings about what was going to happen in elections, what was shaping up in terms of candidates, political gossip [about] who was likely to get elected." For example, he said, he would "compile a list of political or community leaders in selective legislative districts...and provide an analysis of which of those districts would be in play in the nineties."

During this whole period, Rove--a disciple of the late Lee Atwater, a GOP strategist and former chairman of the Republican National Committee--was Bush's political guru, operating out of his offices at Karl Rove & Company, which was also the Texas Republican Party's chief fundraising and direct-mail firm. While Rove worked for Philip Morris, he was also assembling W.'s 1994 campaign for governor. Then, until separating himself from the cigarette maker in 1996, Rove spent two years simultaneously advising the sitting Governor on politics and policy and serving Philip Morris. One of the issues that Rove helped shape for Bush was tort reform, which was a central part of Bush's '94 campaign and then a major, and successful, legislative priority in 1995. Tort reform just happened to have been one of the tobacco industry's highest priorities since the start of the wave of class-action lawsuits, individual suits and state-backed litigation against the industry.

Dillard, Rove's paymaster, was a moving force in the Texas tort reform movement, serving on the board of directors of the Texas Civil Justice League (TCJL) and the Texas Association of Business and Chambers of Commerce (TABCC), two of the state's three organizations devoted to pushing tort reform. (The third group, Texans for Lawsuit Reform, has its own Philip Morris connections, as we shall see.) Dillard, though mostly staying behind the scenes, was closely involved in the details of the tort reform effort and the business community's response to antitobacco lawsuits; for instance, in a handwritten memo to the head of the TCJL--obtained by a group opposed to tort reform and released to the media--Dillard prods the tort reform group to soften a proposed response to Democratic Attorney General Dan Morales's lawsuit against the industry, noting that the draft is "way too strong and personal in its approach," adding, "it would have to be toned down. Therefore I am sending you the revised version...which is much less highly charged."

Scott McClellan, a spokesman for Bush's presidential campaign, wouldn't comment when asked whether the Governor had any concerns about Rove's dual role as Philip Morris operative and adviser to Bush, referring back to Rove's own statements on the subject. In his deposition, Rove denied ever having used his connections to the Governor's mansion to advance the tobacco company's agenda. But he admitted using his influence to steer Bush toward making tort reform part of his agenda, saying he was involved in "identification of trial lawyers and the utility of frivolous and junk lawsuits as being a political issue."

Rove ended his employment with Philip Morris, he said, because "it was just getting to be awkward to be juggling" his political work and his tobacco work. But he admitted that he talks to Dillard, the Philip Morris lobbyist, several times a year, sometimes in connection with the company's contributions to the Texas Republican Party. And in Texas, critics of Rove are quick to say that they think he quietly maintains his ties to the company. "There's no evidence to suggest that Karl Rove has kicked his habit of protecting the interests of Philip Morris," says Craig McDonald, director of Texans for Public Justice, a campaign finance watchdog group in Austin that opposes tort reform.

Tied to Rove and to Philip Morris are a pair of brothers, Jim and Charles Francis--both close personal friends of Rove's, according to Rove's testimony--who also play a central role in this drama. The tale of the Francis brothers well illustrates Philip Morris's strategy of buying influence in Texas. Charles Francis, a Washington, DC, public relations executive, played a principal role in the mid-nineties in the State Affairs Company, a PR firm in Arlington, Virginia. That company made headlines a few years ago when it was revealed that it had quietly taken money from Philip Morris to establish a research group called Contributions Watch. The chief product of the ersatz research group was a study lambasting the political influence of trial lawyers in federal and state politics and tracking lawyers' campaign contributions.

In 1996 the Philip Morris-backed State Affairs Company sent Charles Francis to Texas as part of Philip Morris's life-and-death struggle against a Texas antitobacco lawsuit--one of the first legal challenges to tobacco, and one that eventually developed into a multistate litigation campaign that cost the industry billions. Francis hired Ken Hoagland, a political and public relations consultant, to be State Affairs' state director. Soon afterward, the firm began working with Texans for Lawsuit Reform, the third Texas organization that supports tort reform. According to the Dallas Morning News, TLR hired State Affairs to "discredit public interest organizations by portraying them as big-monied special interests." Part of the aim was to present Public Citizen, Citizen Action, the Sierra Club, Greenpeace and the Audubon Society as influenced by wealthy trial attorneys.

Around the same time, as part of a multipronged campaign to build support for the beleaguered tobacco industry, State Affairs began putting together the Texas branch of yet another Philip Morris-backed front group, the National Smokers Alliance, which claims to have 3 million members nationwide. NSA has battled state and local antismoking ordinances and tobacco taxes from its headquarters in Alexandria, Virginia. Hoagland, in a deposition in connection with the antitobacco lawsuit filed by the State of Texas, said, "I was employed to find board members for this National Smokers Alliance here in Texas."

One key person approached by the State Affairs Company was Charles Francis's brother, Jim, a Dallas financier and longtime Texas Republican political operative. Jim Francis has known Governor Bush since 1970, when they became friends while Francis was serving as a scheduler for then-Representative George H.W. Bush's unsuccessful Senate campaign. During the next two decades, Francis worked for the campaigns of Richard Nixon, Senator Phil Gramm, Senator Kay Bailey Hutchison and former Texas Republican Governor Bill Clements, also serving as the executive director of the Republican Party of Dallas County. When W. flirted with running for governor in 1990, Francis was a key confidant, helping to guide Bush to a decision to wait until 1994. And when that campaign began taking shape in 1993, on a fishing trip at Bush's vacation home at Rainbo Lake in East Texas, Francis and Rove helped Bush outline his election strategy. Francis became general chairman of Bush's campaign. Today Francis is "helping to oversee the Pioneers," Bush's high-dollar donors, according to Scott McClellan.

In mid-1996 Charles Francis traveled to Texas with David McCloud, another key player with State Affairs, to recruit Jim Francis to the NSA's Texas board of advisers. According to State Affairs documents obtained by The Nation, Jim Francis met at least twice with McCloud--and with his brother, Charles, says Hoagland--to discuss NSA. In the end, however, apparently conscious of the political taint associated with tobacco and its NSA, Jim Francis reluctantly declined to formally associate himself with the organization. Soon afterward, Bush appointed Jim Francis to head the Texas Department of Public Safety, and when the Governor began his presidential campaign, Francis assumed a prominent role, along with Rove, in the inner circle.

The Smooth Taste of Tobacco Money

Tort reform--backed as it is by corporate America--has been a lucrative source of funds for Bush's two gubernatorial campaigns and for his presidential kitty. Since he's garnered nearly $60 million so far, however, money is not a problem for the Bush campaign. Still, it's instructive to look at the tobacco money that has so far found its way into the campaign's coffers. Since the start of his fundraising in early '99, Bush has accepted $45,550 from tobacco industry executives, according to data compiled by the Center for Responsive Politics. Even more interesting is the fact that attorneys associated with a group of twenty-three law firms employed by the tobacco industry in Texas--firms that battled the state in the $17 billion lawsuit--have given Bush almost $250,000 more, according to antitobacco activists in Texas. High on the list, for example, are thirteen attorneys with the Chicago-based law firm Kirkland & Ellis, who funneled $11,000 to Bush; that firm is the home of Kenneth Starr, the appeals court litigator for the Brown & Williamson tobacco company who is better known as the former Whitewater independent counsel.

So far Bush has refused to accept political action committee money from the tobacco industry. (A $5,000 contribution from an apparently overeager Brown & Williamson PAC was returned by the campaign.) But even in doing so, Bush refuses to say that the industry's money is tainted. The Governor, says campaign spokesman McClellan, rejects the money only because the state is involved in ongoing litigation involving the industry.

When it comes to tobacco money, however, the real muscle for the Republican Party is the vast sum of soft money that Philip Morris, RJR Nabisco, Brown & Williamson and US Tobacco donate to the GOP in chunks of $10,000, $100,000 or more. Since 1991 the tobacco industry has contributed $15,570,000 to the Republican Party in soft money, with two-thirds of that coming during the last two election cycles. (Recently virtually all of tobacco's money has gone to the GOP--in 1999, by a factor of 10 to 1.) If that pattern holds for 2000, once again the Republican Party will find itself awash in tobacco cash, giving it extensive resources to spend on behalf of Bush's presidential bid next year.

A Meeting of Minds

Whether it's a result of the people he surrounds himself with, the money that the Republicans get from the industry or some natural proclivity to defend a pariah industry, Bush has compiled a significant string of actions on tobacco's behalf. In September, after President Clinton and the Justice Department announced a federal lawsuit against the industry seeking to recover billions of dollars in government expenditures to care for the health-related effects of tobacco, Bush was quick to announce his opposition. Bush was, he said, "troubled by the Justice Department's apparent reversal of its earlier position that there was no merit for a federal lawsuit," adding that he hopes the "era of big government is not replaced with the era of big lawsuits." But Bush's worries about big government apparently don't include any concern about the federal tobacco price-support program, since a few weeks earlier the Texas Governor gave it his blessing. And, for good measure, in an appearance in North Carolina he slammed the idea of increasing federal taxes on cigarettes, widely viewed by antitobacco activists as a crucial tool in reducing the prevalence of teenage smoking. "We have recognized that there are some adults, once properly warned, who choose to smoke," said Bush, according to the Raleigh News & Observer.

In Texas, too, Bush has coddled the industry. When Texas's then-Attorney General Morales and a team of lawyers forced the industry to agree to pay Texas $17 billion in damages, allowing the state to recover some of what it has spent over the years caring for sick and dying smokers, Bush--who refused to back Morales's lawsuit--actually sued the Attorney General to block the payment of more than $2 billion in legal fees due to the private attorneys who handled the case. All by itself, Bush's action, if successful, could unravel the entire agreement, saving Philip Morris billions of dollars--and costing taxpayers in Texas an equal amount in lost revenue. (At the time, Morales said that Bush's lawsuit "is about one thing and one thing only: a Republican presidential campaign and political contributions from big tobacco.")

Then, earlier this year, a coalition of health groups, including the American Cancer Society, the American Lung Association and the Campaign for Tobacco-Free Kids, pressed Bush to support a $60-million-a-year smoking prevention program aimed at children, using money from the tobacco settlement. But Bush ignored the calls, which included a personal appeal from former Surgeon General C. Everett Koop, with the result that the Texas legislature agreed to spend just $10 million. Matt Myers, executive vice president and general counsel of the National Center for Tobacco-Free Kids, says that $10 million is about what the tiny state of Vermont spends on such programs. "It would be a tragedy if the children in Texas don't get the benefit of state prevention programs," he says. And, he adds, "I think it's unfortunate that so much focus [in Texas] has been put on lawyers and so little focus on using the settlement to reduce tobacco use among kids."

Whether Bush's opponents will raise the tobacco issue, and what effect it might have, is unclear. Senator John McCain, chief sponsor of the antitobacco legislation that was killed by the industry in 1997, told an American Lung Association meeting in October that he supports a "war...against the tobacco companies and the evil things they do," pointedly noting how lavishly the industry funds politicians. But he didn't mention Bush, and a spokesman says McCain won't bring up the issue of Bush's involvement himself. Vice President Al Gore, Bush's probable opponent, could also use the issue against Bush, but Gore has hobbled himself by hiring Carter Eskew, a Democratic consultant who helped devise pro-tobacco commercials in 1997.

There's no question that Bush's tobacco ties make him vulnerable to attack. And it's conceivable that under criticism, Bush could abandon the industry: With his lead in the polls, his fundraising juggernaut and most of America's corporate elite lining up behind him, he can afford to write it off. But as with smoking itself, Bush and the Republicans may find that kicking the habit is beyond their ability, leaving them and Big Tobacco to enter the new millennium together.

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