Small Tobacco

Posted October 17, 2003 at 3:38pm

It’s been several years since the tobacco settlement in Washington, but big tobacco money is flowing in town once again. [IMGCAP(1)]

This time, however, it’s many of the smaller players in the business that are spending the big bucks on K Street.

In the past few months, tobacco farmers like Knoxville, Tenn.’s Burley Tobacco Stabilization Corp. have committed to spending millions of dollars on a lobbying and public relations battle to press for a deal that would regulate cigarettes and buy out tobacco farmers.

Burley Tobacco, for example, hired Hunter Bates, a former top aide to Senate Majority Whip Mitch McConnell (R-Ky.), and Susan Hirschmann, a one-time senior aide for House Majority Leader Tom DeLay (R-Texas) who is now at Williams & Jensen.

“It’s an attempt to cover the House and the Senate with DeLay and McConnell,” said Bates, who now runs his own firm.

The lobbying comes as McConnell, Sen. Edward Kennedy (D-Mass.) and Rep. Ernie Fletcher (R-Ky.) work on a deal that would give the Food and Drug Administration the authority to regulate tobacco in exchange for a multibillion-dollar buyout for tobacco farmers.

Philip Morris, the nation’s largest cigarette-maker, backs the deal because it would help protect the market dominance of its Marlboro brand. Philip Morris competitors— such as RJ Reynolds, Brown & Williamson Tobacco Corp. and Lorilard — oppose the deal.

Since the historic tobacco settlement left Big Tobacco strapped for cash, a larger share of the lobbying battle is being funded by the smaller tobacco farmers.

Farmers in nearly every tobacco-growing state have inked deals with Bates to do their bidding in Washington. In the past year, Bates has signed up the Lexington, Ky.-based Burley Tobacco Growers Cooperative and the Flue-cured Stabilization Corp. in Raleigh, N.C.

Bates has close ties with two of the central players in the potential deal. In addition to working for McConnell, Bates ran for Kentucky lieutenant governor on a ticket with Fletcher before a judge ruled him ineligible for not meeting state residency requirements.

Meanwhile, another set of tobacco farmers has hired the Dutko Group and Ogilvie Public Relations to organize a lobbying and media blitz on Capitol Hill.

Earlier this year, Philip Morris gave the farmers $5 million to lobby Congress for the deal in exchange for settling an antitrust suit that the farmers filed against the largest U.S. tobacco companies.

That lobbying campaign is being organized by Alan Weisman of Howrey, Simon, Arnold & White.

K Street GOTV. A group of seven leading business associations have formed an informal working group to figure out the best way to keep business-friendly voters up to speed on key election issues.

The organizations will collaborate to find the best ways of encouraging their members to register to vote and obtain absentee ballots.

The effort is part of an emerging campaign among U.S. corporations that relies less on multimillion-dollar television advertising campaigns and more on grassroots efforts to make sure that business-friendly voters go to the polls on Election Day.

The campaign was motivated in part by a Census Bureau study that found that 1.9 million registered voters did not vote in the 2000 election because they were traveling.

Businesses believe that many of these 1.9 million registered voters were on businesses travel and would have voted Republican had they voted by mail.

“Business has tried advertising and other approaches in previous elections,” said Steve Sandherr, the head of the Associated General Contractors, one of the trade groups involved in the effort. “This time, we’re going to strictly focus on what we do best, which is to mobilize our own members.”

Others involved are the Business Roundtable, National Association of Manufacturers, National Association of Wholesaler- Distributors, National Federation of Independent Business, National Restaurant Association and the U.S. Chamber of Commerce.

Music-Sharing Biz Hires Lobbyists.  KaZaA, the music file-sharing company, has hired one of Washington’s best-known Republican firms to help it battle new regulation on Capitol Hill.

According to sources at the firm, KaZaA has hired Alexander Strategies, a firm run by several former aides to top House Republican officials. The account is being led by Tony Rudy, a former top aide to House Majority Leader Tom DeLay (R-Texas).

Washington to Lobby Washington. A few months after Congress permitted the District of Columbia to lobby Congress, D.C. officials announced that they have inked deals with five major firms to lobby, well, Washington.

The district’s government has signed up Patton Boggs, Holland & Knight, Van Scoyoc Associates, Arent Fox Kinter Plotkin & Kahn and the Downey McGrath Group.

“Many municipalities and most states employ outside firms to conduct advocacy on their behalf,” said Natwar Gandhi, the District’s chief financial officer, defending the deals.

Up until this year, the District was precluded from hiring lobbying firms, but Congress removed that restriction in the fiscal 2003 D.C. Appropriations bill. D.C. City Councilman Jack Evans, a partner with Patton Boggs, will not work on the account.

Giacometto Group Gets New Clients. Leo Giacometto, a former top aide to Sen. Conrad Burns (R-Mont.), has signed up a host of new telecommunications clients to his new firm, the Giacometto Group, according to PoliticalMoneyLine.com.

Giacometto was hired by Verisign, Nextel, Milton Enterprises, Intrado International and Leonardo technologies.

Giacometto, a Montana native, worked for Burns for years before becoming a lobbyist. The Senator is chairman of the Commerce, Science and Transportation subcommittee on communications.

Firm Takes Off. Gerchick-Murphy Associates has signed up US Airways and Orbitz, the online airline reservation system facing new Transportation Department regulations.