Expectorating an Exemption: 

May 11, 2006

Mouth Cancer Trumps Lung Cancer In Lobby

Fast-Growth Chaw Lobby Hawks Tax On Smoke, Not Spit

The smokeless tobacco industry quietly but dramatically increased its lobby spending in first quarter 2006 as proposals to increase tobacco taxes smoldered in Austin. This allowed Big Chew to surpass the once-omnipotent cigarette lobby, which has cut its lobby spending one-third this year.

Preliminary Texas lobby data suggest that smokeless and cigar interests are fighting hard for exemptions, which the cigarette industry no longer may be able to defeat through raw lobby power. Yet the Marlboro Man and Joe Camel have perfected other tricks—including the Big Lie. Capitol insiders say Big Tobacco lobbyists are now telling Texas lawmakers that a major cigarette tax would prompt smokers to switch to crack!

Lobby Watch has received calls for updated data since last week’s issue analyzed tobacco lobby data filed by New Year’s 2006.

The updated data show that the tobacco industry as a whole increased its lobby spending 4 percent in the first quarter of this year. Yet this obscures the fact that smokeless tobacco and cigar interests greatly expanded their lobby expenditures in this period—even as cigarette interests cut back on lobby spending.

So far this year chewing tobacco interests led by U.S. Smokeless Tobacco Co. (UST) increased their spending 88 percent to pay 37 lobbyists up to $1.3 million. Cigar interests, which the House exempted from its tobacco-tax bill, increased spending 43 percent, spending up to $500,000 on five lobbyists.

Meanwhile brand-name cigarette makers slashed their Texas lobby spending 38 percent (to a maximum of $845,000) and discount cigarette companies cut spending 25 percent (to a maximum of $500,000).

 

Texas Tobacco Lobby Contracts By Tobacco Type, January-May 2006

 
Tobacco
Product
Max. Value
of Contracts
Jan. 2006
Max. Value
of Contracts
May 2006
% Change
In Value,
Jan.-May
No. of
Contracts
Jan. 2006
No. of
Contracts
May 2006
Brand cigarettes
$1,355,000
$845,000
-38%
21
16
Smokeless
$680,000
$1,275,000
+88%
20
37
Discount cigarettes
$500,000
$375,000
-25%
7
6
Cigars
$350,000
$500,000
+43%
4
5
TOTALS:
$2,885,000
$2,995,000
+4%
52
64

 

Texas Tobacco Lobby Contracts, May 2006

Tobacco Interest
Min. Value
of Contracts
May 2006
Max. Value
of Contracts
May 2006
% Chang
eIn Max. Value,
Jan.-May ‘06
No. of
Contracts
May 2006
No. of
Contracts
Jan. 2006
UST Public Affairs (S)
$485,000
$1,060,000
+106%
28
13
Philip Morris USA (B)
$280,000
$595,000
-30%
11
15
Swisher International (Z)
$225,000
$400,000
+60%
4
3
Commonwealth Brands(D)
$110,000
$225,000
0%
3
3
R.J. Reynolds (B)
$95,000
$200,000
-33%
4
4
Star Scientific (D)
$70,000
$150,000
-45%
3
4
North Atlantic Trading (S)
$60,000
$125,000
0%
3
3
Cigar Assn. of America (Z)
$50,000
$100,000
0%
1
1
Lorillard Tobacco (B)
$25,000
$50,000
-75%
1
2
Swedish Match (S)
$10,000
$45,000
+125%
3
2
Conwood Co. (S)
$10,000
$45,000
+125%
3
2
TOTALS:
$1,420,000
$2,995,000
+4%
64
52
Key: B = Brand-Name Cigs; D = Discount Cigs; S = Smokeless; Z = Cigars.

 

Texas’ tobacco lobby has expanded greatly over the past decade, ballooning from expenditures of up to $1.4 million on 28 lobbyists in 1995 to up to $2.9 million on 52 lobby contracts in 2005. Cigarette giant Philip Morris outspent smokeless tobacco king UST every year during this period except 2001.

As the Texas Observer reported at the time, that is when then-Comptroller Carole Keeton Rylander unsuccessfully promoted a UST-backed bill that would have taxed smokeless tobacco by weight rather than price. This would have boosted UST profits (it sells the premium products hardest hit by price-based taxes).

 

Texas Tobacco Lobby Spending, 1995-2005

Year
Max. Value
Of Contracts
Min. Value
Of Contracts
No. of
Contracts
1995
$1,405,000
$635,000
28
1996
$580,000
$240,000
17
1997
$1,715,000
$885,000
33
1998
$1,155,000
$550,000
19
1999
$995,000
$470,000
20
2000
$1,055,000
$550,000
17
2001
$1,620,001
$855,000
36
2002
$1,225,000
$585,000
23
2003
$1,695,000
$875,000
27
2004
$1,275,000
$655,000
21
2005
$2,885,000
$1,445,000
52
TOTAL:
$15,605,001
$7,745,000
293

 

 

 

Last week’s Lobby Watch listed the 52 tobacco lobbyists registered at the first of this year. Since then, cigarette interests have reported a net reduction in lobby contracts while smokeless tobacco interests have beefed up their lobby muscle. This has introduced 23 new faces into the tobacco lobby in recent months. Most of them are pushing smokeless tobacco.

 

Recent Additions To the 2006 Texas Tobacco Lobby

Tobacco Lobbyist
Max. Value
Of Contracts
Min. Value
Of Contracts
 Tobacco Client(s)
Walter Fisher
$150,000
$100,000
  Swisher
Sabrina Thomas Brown
$100,000
$50,000
  UST
Monte Williams
$100,000
$50,000
  UST
Louis A. Bacarisse
$50,000
$20,000
  Conwood/Swedish Match
J.E. Buster Brown
$50,000
$25,000
  UST
R. Bruce LaBoon
$50,000
$25,000
  UST
Yuniedth Midence
$50,000
$25,000
  UST
Mark Miner
$50,000
$25,000
  UST
Marc A. Rodriguez
$50,000
$25,000
  UST
Patricia A. Shipton
$50,000
$25,000
  Swisher
Lee A. Woods
$50,000
$25,000
  UST
Toni L. Barcellona
$25,000
$10,000
  UST
Monty G. Humble
$25,000
$10,000
  R.J. Reynolds
Mark Malone
$25,000
$10,000
  UST
N. J. Robnett
$25,000
$10,000
  UST
Robert L. Shepherd
$25,000
$10,000
  UST
Christopher Shields
$25,000
$10,000
  UST
Bill Stinson
$25,000
$10,000
  UST
Robert Eric Donaldson
$10,000
$0
  UST
Mike French
$10,000
$0
  UST
Wade C. Long
$10,000
$0
  UST
Mark Malone
$10,000
$0
  UST
Susan Baumbach Ross
$10,000
$0
  UST