Pensions for Trouble

Pensions for Trouble

Pensions for Trouble

A summary of what's in the major U.S. newspapers.
June 20 2001 7:40 AM

Pensions for Trouble

Everybody leads with yesterday's surprise announcement that Attorney General John Ashcroft is pursuing a possible settlement of the federal government's lawsuit against the tobacco industry. Some of the elements of the original suit were thrown out by a federal judge, but its racketeering allegations remain and were being prepared for trial. The New York Times lead says the decision represents a "shift from the policy of the Clinton administration, which had vigorously supported the suit," filed in 1999. The Los Angeles Times lead sees it as "the latest sign of tobacco's improving fortunes since the Bush administration took over." The Wall Street Journal take points out high that the trial date for the case is more than two years away and lawyers for the two sides have just begun taking depositions.

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The papers have many quotes pointing out the inadvisability of publicly entering settlement negotiations. Most of these come from anti-smoking types, but the Washington Post adds a Stanford law professor who, after sympathetically observing that going to court against tobacco companies can be difficult and costly, adds, "Saying that you might lose the case is definitely not the best front to put up when you're entering a negotiation."

The WP and NYT point out that President Bush has previously voiced reservations about the lawsuit. And these papers point out that as a senator, Ashcroft opposed it. The NYT says that in 1998 he was "one of the senators most responsible for blocking anti-smoking legislation." The LAT says Ashcroft was "decidedly noncommittal" about it during his Cabinet nomination hearings. Most of the coverage notes that as AG, he has not funded the lawsuit to the level requested by his department's litigators.

USA Today, the NYT, and the LAT remind that during the 2000 election cycle, tobacco interests gave more than three-quarters of their campaign donations--$7 million--to Republicans.

Reflecting Timothy McVeigh's special hold on journalism, nobody fronts the federal government's execution yesterday of convicted killer Juan Garza on the very same gurney where McVeigh was dispatched just eight days before. In its Garza insider, the NYT emphasizes what it calls a sign that more federal capital prosecutions are likely: new guidelines from John Ashcroft making it easier for federal prosecutors to bring capital cases in states that don't have the death penalty. The Times does not mention that before being lethally injected, Garza apologized for the grief he had caused and asked for forgiveness.

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The WSJ reports that yesterday, with a federal appeals court ruling on the Microsoft antitrust case imminent, the company's CEO, Steve Ballmer, met privately with Dick Cheney. According to the story, by prior agreement the two did not discuss the case but instead talked about education, trade, and tax policy. The story observes that during the antitrust case, which was brought under the Clinton administration, Microsoft and Ballmer became major contributors to the Republican Party.

Hats off to the WSJ for rubbing its readers' noses in a dirty little business secret: Perhaps worse than the income gap between worker and king bees is the pension gap between them. The story starts with a contrast/comparison between a worker and the CEO at a Florida utility. While both lost their jobs when the outfit was taken over last year, the worker, who has asbestosis and lost most of a hand in an on-the-job accident, got a $22,968 severance check but has to wait three more years to draw his pension of $681 a month while the CEO got a $15.8 million severance check and additionally immediately begins receiving a $69,070-a-month pension. But it's the Journal's graphic that really sizzles: According to it, many companies spend a huge amount of their total pension dollars on their executives, who ordinarily make up a tiny percentage of their work force. May Department Stores for instance, spends almost 20 percent of all its pension monies on its execs, Hormel 11 percent, and Motorola 8.7 percent.

Inside, the WP runs an AP report that a videotape, apparently produced to attract recruits to Osama Bin Laden's terrorism network, contains a rallying song that says in part, "We thank God for granting us victory the day we destroyed the Cole in the sea."

Both the LAT and USAT front a man's conviction in San Jose, Calif., yesterday of felony animal cruelty for, in a fit of road rage, flinging a woman's dog to its death in traffic after a fender bender. He could, the papers say, get three years in prison.

The WP and NYT report inside that yesterday Treasury Secretary Paul O'Neill completed selling his approximately $100 million worth of holdings in Alcoa, the company he honchoed before taking his current job, three months after promising to do so. The Post quotes a Salon.com estimate that Alcoa's stock had risen 30 percent in those three months. But neither story bothers to independently look into this issue. Why not? Also, Treasury says O'Neill invested the money he raised via the Alcoa clear-out in "diversified investment funds," but wouldn't elaborate. Neither story points out that therefore, the public now knows less about which of O'Neill's subsequent actions might constitute a material conflict of interest than it did before.