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Republicans in Congress may have the Justice Department’s billion-dollar tobacco lawsuit in their sights, but their shotgun approach to killing it could damage far more than that. The lead Senate measure dedicated to choking off federal funds to the DOJ’s suit against Big Tobacco would also deny money to a number of large-scale cases within the department’s Civil Division — cases in which the government is defending itself against billions of dollars in potential damages. In the last few weeks, a series of separate House and Senate initiatives, using small bits of language tucked away in massive appropriations bills, have targeted the Justice Department’s statutory authority to take funds from other federal agencies to support its litigation efforts. The most dramatic measure comes in the form of a small line in the bowels of a 2001 spending bill for the Department of Agriculture. The language, inserted by Senate Appropriations Committee Chairman Ted Stevens, R-Alaska, would eliminate the DOJ’s power to take money from other federal departments. The Justice Department had used this authority to cover the bulk of its expenses in its lawsuit against the tobacco industry. Jen Siciliano, a spokeswoman for Stevens, says the senator believes that Justice should not pull money away from other federal agencies, such as the Department of Health and Human Services and Veterans Administration, to fund its civil docket. “He believes the money should be used for its intended purpose,” she says. Siciliano says Stevens was never looking to protect the tobacco industry. The bill, if passed, would do much more than that. As currently written, it would blow a gaping hole in the Justice Department’s finances. It would not only cut off the use of funds to continue the tobacco suit, but also force the department to repay the almost $8 million it took this year to fund the litigation. The bill would also have an impact far beyond the tobacco wars. Because the bill prevents the DOJ from using any money from so-called client federal agencies, the department would be left without resources to help fund some of its largest cases. The department’s civil division estimates that money from other agencies makes up about one-third of its litigation budget. In FY 2000, that was about $103 million. Since Congress in 1995 gave the DOJ the power to pull money from other federal agencies, the department has received $338 million in funds. That revenue source would be wiped away by Stevens’ measure. WIDE-RANGING IMPACT One prominent case that would be crippled involves dozens of suits filed against the federal government in the “Winstar” litigation. The government faces billions of dollars in claims brought by owners of more than 400 failed savings and loan associations. To date, Justice has received $188 million from the Federal Savings and Loan Insurance Corp.’s Resolution Fund to defend the government. The department says that if these funds are shut off, it would likely face sanctions and default judgments in several cases. The department has also received $102.5 million from the Navy to defend it in a $2.7 billion suit brought by the McDonnell Douglas Corp. over the Navy’s termination of a contract to provide stealth fighter jets. A trial is expected to begin next fall. The department’s efforts to resolve discrimination claims against the Department of Agriculture by African-American farmers would also be significantly hampered. These scenarios illustrate why Justice officials privately say the Stevens bill would have a “devastating impact” on the department. But it’s in the tobacco litigation where the bill would hit hardest. “If the legislative proposals are enacted into law, we will have to dismiss our lawsuit unless some sort of funding is made available,” Reno says. That, of course, has been the idea all along. Last year, before the suit seeking reimbursement of money spent to treat smoking-related illnesses was even filed, congressional Republicans were complaining. But an attempt to limit funding for the suit died in the Senate Appropriations Committee. This year, the Republican leadership seems more determined. It has launched a four-pronged assault on the millions it will take to continue the suit against Big Tobacco. “This is a concerted effort by the Republican leadership to do one huge favor for the tobacco industry,” says William Corr, executive vice president for the Campaign for Tobacco-Free Kids, a D.C.-based anti-smoking advocacy group. Because of opposition on Capitol Hill last year, no money was budgeted for the DOJ’s tobacco litigation, even though the price tag for the first year alone was estimated by the White House at $20 million. That meant Justice had to scramble to identify sources of funds to support the suit. It found the money in some unlikely places — other federal agencies. The department pulled $2.5 million each from the budgets of the departments of Defense and Health and Human Services and the Veterans Administration. It also tapped money it had accumulated through litigation against health care providers accused of fraud. For the next fiscal year, according to the budget submitted by President Bill Clinton, the DOJ was hoping for $4 million from each of the three federal agencies. The total cost of keeping the suit going will again be close to the $20 million mark. The Republican initiatives are aimed at shutting off that flow of money. In addition to the Senate bill, there are three House measures that also target the litigation. A provision in the 2001 spending bill for the Veterans Administration, which passed the House Appropriations Committee last Wednesday, doesn’t hide its intent: “None of the foregoing funds may be used for the purposes of supporting tobacco litigation.” In its report on the VA bill to the House, the committee states that “resources in this appropriation should remain for the purpose of providing medical care to veterans.” Similarly, a Defense Department spending bill in the House would prevent the Justice Department from using Defense Department money unless it gains approval from the House Armed Forces Committee. The House passed the Defense bill last Thursday. STEALTH ATTACK? Language in the Justice Department appropriations bill in the House, added last week, would prevent the department from using any other agency’s money to fund its tobacco suit. It also would restrain Justice from using its health care fraud account to fund the lawsuit. That bill remains in a House subcommittee. “They’re trying to get this through with low visibility,” says one House Democratic staffer, who asked not to be named. “They’re hoping that no one is paying attention.” The tobacco industry has contributed more than $2.3 million in soft money to the Republican Party during this election cycle. As this takes place, the Justice Department’s lawsuit against the tobacco industry has reached its first critical juncture. Oral arguments concerning motions by cigarette companies to have the suit dismissed were heard June 2 by Judge Gladys Kessler of the U.S. District Court for the District of Columbia. Kessler is expected to rule on the motions near the end of the summer. If Kessler doesn’t allow the tobacco defendants out of the suit, exhaustive and expensive civil discovery will begin in earnest. Without money from the other federal agencies, Justice officials say they will have no choice but to abandon the suit. “This will deprive the federal government of the opportunity to recover billions of dollars in taxpayer money,” Reno says. The federal government estimates it spends $35 million annually to treat smoking-related illnesses. That’s why Clinton is threatening to veto any spending bill that would choke off funds for the tobacco suit. At a press conference Tuesday, Clinton said that he hoped Congress would provide him with budget legislation free of “special-interest provisions for the tobacco industry.” He said that he would “have no choice” but to veto such a measure. It could come to that. So far, nothing is slowing the three House spending bills. The Senate, however, could be a different story. Earlier this month, Stevens pledged to remove the language to which the Justice Department objects. To date, he hasn’t done so, and he may wait to see how much support his idea gains when the bill goes to the Senate floor for a vote. If Stevens goes that far, he will face opposition from Democratic senators, among them Ernest Hollings, D-S.C. and Richard Durbin, D-Ill. The two have already been pushing Stevens to pull the language. “Basically, Congress is trying to decide what case the Department of Justice can or cannot pursue,” says Hollings spokesman Andy Davis. “Hollings and Durbin believe that the department has the legal expertise to determine what it should or should not pursue.” But a Hollings-sponsored amendment to restore funding to the DOJ’s tobacco suit never made it out of the Appropriations Committee. It was snuffed last month in a straight party-line vote.

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