Smoke in Starr’s Chamber

Smoke in Starr’s Chamber

This essay is adapted from Thomas Ferguson’s “Blowing Smoke: Who Wants Clinton Impeached And Why,” for American Democracy in the Twenty-First Century, edited by William Crotty.


The government of the world’s sole superpower came close to melting down, in the political equivalent of Three Mile Island. Not surprisingly, people want to know why, particularly because public opinion was so strongly opposed to impeachment. The usual answer is to point to the religious right. These groups are a factor. But the plain fact is that most of the heavyweights who fought this battle–the Wall Street Journal, Richard Mellon Scaife, The American Spectator, Rupert Murdoch’s Weekly Standard–are clearly seeking kingdoms of this world.

So what explains the long-running meltdown? In a political system in which it is accepted practice to sell nights in a White House bedroom but consensual sex there can bring down the regime, there is another answer: money. From this standpoint, the high drama of impeachment looks like an extraordinary case of business as usual, with the primary issues being taxes, government regulation and the future of laissez-faire.

Bill Clinton, after all, captured the White House by relying on a powerful but very thin wedge of support within big business. Despite his noisy efforts to walk away from the legacy of the New Deal, the “New Democrat” Clinton never succeeded in expanding that base. Instead, most of American business opposed him from his earliest days in office, when he proposed a modest increase in taxes on Americans in the highest income brackets. With a straight face Republicans accused the Administration of waging “class war,” while at the same time claiming (falsely) that the bill raised taxes on most working Americans.

That remarkably bitter clash prefigured the willingness of the GOP, including the so-called moderates, to threaten the Administration with historically unusual (some critics suggested unconstitutional) tactics of opposition. Though in many cases the Administration bent over backward to compromise and enlist industry’s support, virtually every new measure it contemplated only fanned the flames of jihad. Despite major concessions to insurers and initial support from some industrial interests, the much-touted healthcare initiative failed in the face of one of the greatest and most expensive lobbying battles in American history. The President’s effort to regulate firearms (as promised during the campaign) by passage of the Brady Bill drew bitter, lavishly financed attacks from the National Rifle Association and firearms manufacturers. New rules proposed by Interior Secretary Bruce Babbitt to control grazing by Western ranchers on federal lands at below-market rates ignited a firestorm. Oil companies opposed new taxes on energy, while seeking drilling rights in Alaskan wildlife sanctuaries. Most firms in oil, paper, chemicals, electric power and related industries were up in arms over a proposed treaty on global warming. Although the Administration revised the government’s approach to regulation along lines many industries had been demanding, efforts to put across legislation for environmental cleanup went nowhere, despite some significant business support.

Though the Brady Bill and a compromise tax measure finally passed, a long series of defeats and scandals threw the White House into a tailspin. All the battles over taxes and regulation and the Administration’s occasional talk–it was just talk, though the Democrats then controlled both houses of Congress–of raising the minimum wage sent enormous, gushing streams of money from anxious businesses to the Republican Party [see Ferguson, “G.O.P. $$$ Talked; Did Voters Listen?” December 26, 1994].

A rough calculation based on my sample of large concerns and investors for the 1996 election makes the point more starkly. Lumping together (most) firms in the pharmaceutical, insurance and healthcare sectors with those in branches of industry most directly affected by the environmental concerns the Administration was raising (paper, chemicals, etc.), and then adding enterprises in firearms and the retail and wholesale sectors (whose tumescent growth during recent merger waves has had major political implications, since such firms are usually acutely sensitive to questions of minimum wages and mandated benefits), one arrives at the very conservative estimate that by the middle of its first term, the New Democrat, self-consciously pro-business Clinton Administration was essentially at war with well over half of the largest investors in the United States. The sum total of opponents with less immediately drastic interests at stake, of course, would run far higher.

This calculation, however, leaves out one very special case: tobacco. Here, relations with the new Administration, initially tense, rapidly became apocalyptic. Because the logic of this shift is central to understanding the most critical single episode in the long impeachment drama and because the oceans of ink spilled by the press on Kenneth Starr’s investigation have unaccountably submerged the heart of the matter, the facts about the tobacco industry’s long war with the Clinton Administration require a careful look.

Pressures on the big tobacco companies long antedated Bill Clinton’s arrival in the White House, of course. Nevertheless, the industry’s political effort, which was massive–and quite bipartisan, though with an elective affinity to the GOP’s stout laissez-faire traditions–gave it formidable protection. Though one of Clinton’s first acts as President was to ban smoking in the White House, the evidence is that the Administration was not then looking for a major confrontation. Dr. David Kessler, whom the Administration kept on as head of a Food and Drug Administration that was already under siege from many other industries, only slowly decided to broaden the campaign against tobacco, which his agency traditionally had not sought to regulate.

Several developments eventually changed this situation. An inevitable consequence of bringing together the advocates of sweeping healthcare reform was the bringing together of the advocates of a wider campaign against the tobacco industry. In addition, the logic of the Administration’s health plan ran sharply counter to the interests of the tobacco companies. As a proven cause of massive medical expenditures, the industry was naturally suspect. No less important, however, tobacco was a vulnerable source of new tax revenues in a period when raising taxes was politically very costly. Indeed, to fund the health plan, the White House proposed a huge increase in excise taxes on cigarettes, from 24 cents a pack to 99 cents.

This proposal immediately sent the industry to battle stations. What happened next, however, moved the conflict–and in the end, it appears, US politics–to a whole new level of vehemence. Studies that suggested smoking might fall sharply if nicotine were reduced persuaded the FDA’s Kessler that nicotine might in fact qualify as an addictive substance in the technical, legal sense of the Food, Drug, and Cosmetic Act. This had sweeping implications, for regulating tobacco would then fall squarely within the FDA’s purview. As a report for CQ Researcher put it, “If the FDA successfully claims jurisdiction over tobacco, the agency could not only determine how much nicotine would be allowed in cigarettes but also how they are labeled, marketed and distributed. In short, the FDA would gain virtual control over cigarette production and could even totally ban tobacco products…. FDA regulation ‘could mean, ultimately, removal from the market of tobacco products containing nicotine at levels that cause or satisfy addiction,’ Kessler wrote in February [1994]. ‘Only those tobacco products from which the nicotine had been removed or, possibly, tobacco products approved by the FDA…would then remain on the market.'”

In the spring of 1994, Kessler testified to Congress that the industry had known for decades that nicotine was addictive but concealed that from the public. He also argued that tobacco companies had calibrated levels of nicotine in cigarettes to keep smokers hooked.

The tobacco industry counterattacked. Taking out full-page ads in newspapers and turning loose a legion of lobbyists, it fought back on many fronts. But while it succeeded in scaling back the proposed cigarette tax even before the Clinton healthcare plan’s fiery crash landing, the industry’s efforts to ward off the FDA were unavailing.

At the end of June 1994, talk of the industry’s sweeping campaign and possible compromises surfaced in the national press. In July, however, the New England Journal of Medicine published a major study by two researchers whose previous work, according to the Washington Post, “has been heavily relied on by the FDA.” The new study, which the Post suggested “also could prove influential” in shaping a forthcoming report by an FDA advisory panel, presented a case for compelling cigarette makers to reduce the nicotine content of their products by about five-sixths over a period of years. The newspaper report noted that the study’s authors readily conceded that such proposals “might seem drastic to some.” Quoting an FDA spokesperson’s praise of the report as providing “the kind of information that the advisory committee will be working with in August,” the story reported that the FDA group planned to begin hearings into “nicotine addiction and dosage” on the first of August.

That report, and an accompanying denunciation by the Tobacco Institute, appeared in the Post on July 14, 1994. That very day Jesse Helms and Lauch Faircloth, the two conservative Republican senators from North Carolina, the state with the biggest stake of all in tobacco, met Judge David Sentelle for lunch in Washington. Sentelle, like Faircloth (who had once headed North Carolina Democrats for Helms before switching parties and winning election to the Senate) a Helms protégé, had formerly chaired the Republican Party of Mecklenburg County in North Carolina. He had also served as a delegate to the 1984 Republican convention from the Tarheel State and named one of his daughters “Reagan” in honor of the President.

Because of a quirk in the law governing special prosecutors, Sentelle had recently regained a position of extraordinary sensitivity. In early 1992, as special prosecutor Lawrence Walsh’s investigation of Iran/contra neared its climax, Chief Justice William Rehnquist had suddenly named the very junior Sentelle to replace moderate Republican Judge George MacKinnon as head of the three-judge panel that supervised special prosecutors. Subsequently, however, the law had lapsed, so that when the Whitewater scandal first burst upon the American political scene, Attorney General Janet Reno had named the first special prosecutor, Republican Robert Fiske. Thanks to the reinstated statute, Sentelle and his two other colleagues once again had authority over investigations by special prosecutors. Faircloth and Sentelle subsequently denied that the then widely discussed Whitewater investigation figured as a topic at their lunch. Shortly thereafter, however, Sentelle’s panel rejected Reno’s request that Fiske be allowed to continue and replaced him with Kenneth Starr.

The appointment was a milestone, in many senses. Starr worked at Kirkland & Ellis, a prominent Washington law firm. According to an article in Salon Magazine last November 18, he represented the tobacco industry; he was also peripherally involved in friend-of-the-court activities on behalf of the lawsuit filed by Paula Jones against the President.

As Starr’s investigation proceeded, the battle between the industry and the Clinton Administration escalated. One careful, though necessarily incomplete, attempt to estimate total contributions by the tobacco companies in American national politics noted that in the 1991-92 election cycle contributions by the industry totaled at least $5.7 million, of which about 57 percent went to Republican candidates for President or Congress. Total contributions during the 1993-94 cycle–the Clinton Administration’s first two years–ran at roughly the same level despite the absence of a presidential campaign (which normally swells expenditure levels), while the percentage of contributions in favor of the then completely out-of-power GOP rose to 68. Thereafter, both total contributions and the percentage in favor of GOP candidates exploded, as Democratic campaign rhetoric increasingly singled out tobacco for special attention. In the 1995-96 election cycle the tobacco industry donated more than $10 million to national political campaigns, with more than 80 percent of the funds headed for Republicans. Incomplete figures for the 1997-98 cycle show the industry giving more than $7 million, with about 78 percent of that going to GOP candidates. Lobbying expenses, it should be noted, normally run many times the level of an industry’s formal political contributions.

A case this strong does not need to rely on overstatement. To my knowledge, no one ever asked whether the judge and the senators discussed the morning news, which, as veterans of North Carolina Republican politics (and in Helms’s and Faircloth’s cases, recipients of vast contributions from tobacco companies), they assuredly could understand quite well. One might also like to know more about what Sentelle said to the other two members of the panel overseeing special prosecutors, though the most reasonable judgment is probably that conservative jurists who don’t know what they want are not well placed to resist another conservative jurist who does and heads the panel.

It also bears repeating that tobacco has never been alone in campaigning against the Clinton Administration. All along, the basic political fight has not been over tobacco but over taxes, regulation and the extent of laissez-faire. Republican leaders in both the House and the Senate, after all, have been as much in thrall to the medical-industrial complex as they have to tobacco, and both sectors have been singled out in the business press as among the likely winners in the political paralysis that comes with even failed impeachment proceedings.

The tobacco industry has a long history of targeting its political enemies. An antitobacco Web site now carries a dedication to the late Michael Synar, once Congressman from Oklahoma. A longtime opponent of tobacco, Synar introduced legislation to regulate the product in Clinton’s first year in office. A year later he lost a runoff primary to an opponent backed in part by tobacco interests. As this essay goes to press, news is breaking that another recipient of tobacco-industry largesse, House impeachment manager Asa Hutchinson, asked Federal Judge Susan Webber Wright if she would testify in the impeachment trial even as she was deciding whether to hold the President in contempt for his testimony in the Paula Jones case.

Such facts cast a long shadow over US politics. It has always been hard to fathom how Ken Starr could insist that his representation of Brown & Williamson, a leading tobacco firm, after he took over as special prosecutor did not raise at least the appearance of a grave conflict of interest. But it is too much for Starr now to suggest that he might rush in where Congress fears to tread and indict the declared enemy of the industry that has for so long retained his services. If government regulation is to be anything more than rank politics, longtime servants of highly regulated industries simply cannot be allowed to disregard appearances so blithely. There may well be a case for indicting Clinton, but Kenneth Starr should not be allowed to make the decision. If the nation goes down that route, the people of the United States are entitled to be sure that it is not in fact Tobacco Road.

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