MAJOR tobacco companies in the US are in secret negotiations to pay billions of dollars in compensation to settle claims that smoking has damaged people's health.
The White House is monitoring the negotiations, and President Clinton has indicated he will veto a proposed law to set up a multi billion dollar compensation funds for victims if it is not generous enough.
The talks are between the four biggest companies, represented by two of them, Philip Morris and RJR Nabisco, and a number of US states who are suing for massive damages to cover healthcare costs caused by smoking. Details of the talks were leaked to the Wall Street Journal yesterday, but observers wamed there could still be a breakdown over compensation amounts.
The lawyers representing some of the 22 states involved in anti smoking litigation are reported to be looking for up to $300 billion over 25 years to cover existing and future claims by smokers. The fund would be set up by a new law in Congress and would grant the tobacco companies immunity from future lawsuits. Their revenues last year amounted to about $45 billion.
The companies, according to the leaked proposals, would agree to be regulated by the Food and Drugs Administration (FDA) and accept its new restrictions on cigarette advertising.
White House spokesman Mr Mike McCurry acknowledged the negotiations were going on and there was "contact on and off" with the Clinton Administration.
The share prices of the four tobacco companies involved in the talks rose on the New York stock exchange as the news of the negotiations became public. Along with Philip Morris and RJR Nabisco, the other two companies involved are the British owned BAT Industries and the Lorillard subsidiary of Loews Corporation.
The present talks began following the breaking of ranks by one of the smaller tobacco companies, Liggett, last month when it settled lawsuits, by 22 states.