Tobacco regulation law unfolding in Philip Morris’ favor 

As President Barack Obama and a credulous media continue to portray the administration’s economywide push for more regulation as a frontal attack on industry giants, the current wrangling about tobacco regulation shows how the opposite is true: Heightened government regulation tends to put big business in the driver’s seat at the expense of the little guys.

When Obama signed the Family Smoking Prevention and Tobacco Control Act in June, he said, “Today, despite decades of lobbying and advertising by the tobacco industry, we’ve passed a law to help protect the next generation of Americans.”

Meanwhile, the biggest tobacco company applauded the bill. “Philip Morris USA Supports Federal Regulation of Tobacco,” the company’s home page blared. Most of the media ignored this detail that derailed its regulators vs. big business narrative.
The law has  yet to be implemented, but as the Food and Drug Administration develops regulations, we already see how Philip Morris benefits while the small guys suffer — and why big government tends to favor the biggest businesses.

For instance, Altria has retained K Street lawyer/lobbyist Coleen Klasmeier to work with the FDA on the proposed rules. Klasmeier, who heads the FDA regulatory practice at the K Street firm Sidley Austin, worked for the FDA until 2005. She gave the maximum contribution to Obama in 2008, plus $1,000 to the Obama Victory Fund.

Her letters reinforce that Philip Morris “actively supported the passage of the FSPTCA for more than eight years,” and tried to mold the law to the company’s advantage.

But filings by Philip Morris’ smaller competitors are different.

Smokin Joes, an Indian tribe-owned cigarette maker, doesn’t have a K Street firm doing its bidding. Company attorney Karen Delaney submits its queries.

Unlike Klasmeier, Delaney hasn’t been through the revolving door, doesn’t work on K Street and doesn’t grease politicians’ palms. That sort of help is probably outside Smokin Joes’ budget.

Aside from the cost of actually complying with new regulations, figuring out how to comply is expensive. Philip Morris already has invested in that: Altria spent $12.8 million on lobbying in 2009, retaining 19 different firms, including well-connected Republicans and Democrats such as FDA alum Klasmeier.

Think about this pitched battlefield when Obama paints his regulatory pushes as broadsides to Wall Street or the health care sector. Regulation favors those who can play the K Street game.

Timothy P. Carney is The Washington Examiner’s lobbying editor.

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