I’ve been amazed at how little the news media has paid attention to the abnormalities surrounding the Big Tobacco bailout. Maybe they’re afraid if they write something about Big Tobacco they’ll be challenged by herds of lawyers or dragged off to the Guantanamo Detention Facility never to be heard from again. Or maybe they believe the other side who’s saying, “Oh it’s just a technicality. Nothing to see here!” OR MAYBE they’re on the take, too? Who knows, because when you dive into the nexus between the news media, members of Congress, congressional staff and the people working directly for Big Tobacco, you will find incestuous relationships.
Today’s Message: @LawmakerXYZ Strip it and forget it! The #BigTobacco bailout in the highway bill hurts #smallbiz! http://bit.ly/NewTax
Good morning! It’s Thursday, June 14, 2012. The kids have been out of school for more than a week and they’re driving me crazy! But, not any more crazy than the news media’s lack of reporting on the Big Tobacco bailout. So I’ve decided I’ll do the work FOR the major news organizations. Attention newsroom employees, editorial assistants, and assignment folks: PLEASE feel free to use this in your publication FREE of charge and you only need to attribute this original work to cub reporter George Renome.
Headline: Big Tobacco Buys a Bailout
Subhead: Big Tobacco companies caught spending millions to crush small business competition
Body: Hidden in the highway bill approved by the U.S. Senate is a provision that has nothing to do with highways. In fact, it has nothing to do with transportation at all. Its only target is making certain the Big Tobacco companies keep a handle on more profits.
Dubbed the “Big Tobacco bailout” by some, the provision was inserted in a middle of the night maneuver by U.S. Senator Max Baucus (D-Montana). Introduced to the Senate as “Senate Amendment 1825” the Baucus language is 18 pages of mostly program reauthorizations and special little tax code revisions. The amendment description itself says, “To reauthorize for 1 year the Secure Rural Schools and Community Self-Determination Act of 2000 and to provide full funding for the Payments in Lieu of Taxes program for 1 year, and for other purposes.” One of the “other purposes” tucked in as the very last bit of the 18 pages of legislative language was this:
SEC. 40425. ROLL-YOUR-OWN CIGARETTE MACHINES. (a) In General.–Subsection (d) of section 5702 of the Internal Revenue Code of 1986 is amended by adding at the end the following new flush sentence: “Such term shall include any person who for commercial purposes makes available for consumer use (including such consumer’s personal consumption or use under paragraph (1)) a machine capable of making cigarettes, cigars, or other tobacco products. A person making such a machine available for consumer use shall be deemed the person making the removal as defined by subsection (j) with respect to any tobacco products manufactured by such machine.”
Senators approved the Baucus amendment by a vote of 82 yeas and 16 nays. When asked if they were aware there was a tobacco provision in the bill, not a single Republican senator has reportedly answered yes. Similarly, not one lawmaker was aware the provision has the real potential to force the closure of more than 1,000 small businesses.
Senator Baucus’s office did not return calls for comment on this story.
The provision remains in the final Senate-approved transportation bill. That bill is currently stalled in negotiations among members of the House and Senate highway bill conference committee.
Oddly enough, a similar provision was introduced in the House of Representatives just three days earlier by U.S. Representative Diane Black (R-Tennessee). Black, a 34-year native of Baltimore, Maryland, is renowned for quietly introducing and shepherding similar anti small business legislation as a state lawmaker in Tennessee.
Black’s legislation, H.R.4134, has drawn a great deal of interest from Big Tobacco companies Altria, R.J.Reynolds, and Lorillard, as well as many Federal lawmakers who have taken hundreds of thousands of dollars in campaign contributions from those companies. According to public records filed with the U.S. House and Senate disclosing lobbying activity, the Big Tobacco companies spent more than $3 million dollars in support of H.R.4134 in the period between March 5 (the day Black’s bill was introduced) and March 31, the last day of the first reporting quarter.
Ms. Black’s effort to gather cosponsors has been intense. The freshman lawmaker who ran on a “Tea Party” platform has so far gathered 74 cosponsors for her legislation that will heap new taxes and regulations on small retail outlets. According to sources not wishing to be named for fear they might lose their job but with direct knowledge of Black’s activities, Black’s legislative operation is inexperienced and incapable of the effort that has supported her legislation. Instead, the lobbyists hired by the Big Tobacco companies have done the lion’s share of the work.
One anonymous source with ties to Black’s office noted, “They handed them the bill, they introduced it, and then they sat back and watched the thing grow.”
According to publicly available documents, Big Tobacco companies spent more than $3 million dollars and hired more than 60 lobbyists to canvas the Hill in support of H.R. 4134 just in the month of March. Second quarter lobbyist disclosures will not be available until July or August.
If Ms. Black’s legislation is approved by Congress, it would be the first such effort where so few companies have exerted so much influence in such a short period of time. Indeed, not a single hearing has been held either on H.R.4134 or the topic in general. In fact, Ms. Black herself has not posted a single word about her legislation on her official or campaign websites, on her Facebook page, or made any public comments about the matter. Ms. Black’s office has also blocked an undisclosed number of Facebook users critical of her legislation from posting on her official page.
Ms. Black’s office did not return requests for comment on this story. Responding to a question via Twitter, public watchdog group Citizens for Responsibility and Ethics in Washington (CREW) said, “Thanks for the mention. I had sent along your post to our research dept. for a deeper look. It’s definitely on our radar.”
The anti small business tobacco provision is also on the radar of U.S. Representative Steve LaTourette. The Ohio congressman sent a letter to all House members alerting them to the fact of the provision’s existence and the damage it will do to the economy. LaTourette wrote:
“Included in the Senate Transportation Reauthorization is a provision that would classify retail establishments that offer roll-your-own tobacco machines as large scale manufacturers of tobacco. With this classification comes higher taxes which will impose a crushing burden on these establishments. This provision is in opposition to the spirit of this legislation which is to create jobs and to bolster the economy, not to impose further regulation.”
LaTourette further noted:
“It is imperative this provision not be included in the final Highway bill as over one thousand small businesses and their customers across the nation will suffer harmful effects.”
Whether LaTourette, CREW, the House Ethics Committee, or others put roadblocks between Ms. Black’s H.R.4134 and final passage is unclear, though time might be the ultimate victor. Despite her efforts and the efforts of Big Tobacco, the legislative calendar is not working in Ms. Black’s favor. As the November elections draw nearer, Congress is less likely to move anything so controversial, especially at a time when both parties, Republicans and Democrats, are trying to champion the “jobs and economy” message as their own.
– GR, cub reporter