Tobacco industry looks for political wins in Minnesota

The Rev. Al Sharpton and a trio of prominent activists appeared in a Minneapolis church basement in January with a somewhat surprising message: Keep menthol cigarettes legal.

Their visit was sponsored by Reynolds American Inc., the parent company of cigarette brands like Newport that are popular with black smokers and a financial backer of Sharpton's National Action Network. Several of the activists argued that banning menthol cigarettes would create an underground market for the product and a new reason for police to stop and search young black men.

From neighborhood meetings like the Sharpton visit, to the halls of the State Capitol and the powerful House Taxes Committee, the tobacco industry is still finding ways to exert political influence in a state long viewed as hostile to its interests.

By all accounts, that influence has waned since its heyday, when a team of tobacco lobbyists would crowd the bar of the old Lexington on Grand Avenue in St. Paul, sipping lunchtime cocktails as they plotted strategy. That was before a crippling lawsuit brought by former Attorney General Skip Humphrey against big tobacco, the "Freedom to Breathe" law that banned indoor smoking and — perhaps most significant — ushered in a change in culture that has made smoking less socially acceptable, especially among young people.

The industry suffered another major defeat in 2013, when the DFL-controlled Legislature raised cigarette taxes an additional $1.60 per pack and included automatic annual increases in the tax going forward. Now Rep. Greg Davids, the influential chairman of the House Taxes Committee, wants to eliminate that automatic yearly hike.

"Tobacco taxation in Minnesota is so far out of the mainstream," said Davids, R-Preston, while stressing he does not like smoking. "This is not about giving money to the tobacco companies. This is about putting money in people's pockets who are being so overtaxed."

One in seven Minnesota adults still smoke, according to a 2014 survey. Those smokers pay tobacco companies for the privilege, which can use the money on advocacy groups like Sharpton's, campaign contributions for sympathetic lawmakers and a stable of skilled lobbyists.

Last year, the state House and Senate passed a sweeping tax bill that cut taxes for farmers, businesses, parents with children and other popular constituencies. It also would have eliminated the automatic annual tax increase on cigarettes. As a tax break for smokers, the measure was widely viewed as a win for the tobacco companies, with research consistently showing a correlation between higher cigarette prices and lower rates of smoking.

The tobacco provision's origins were mysterious, surprising tobacco opponents on the final weekend of the legislative session. It would have cost the state treasury $40 million during the next four years. The bill included another industry-backed measure that would have changed how vaping is taxed — also to the advantage of the big tobacco companies, which have introduced their own vaping products as alternatives to smoking.

Gov. Mark Dayton vetoed the tax bill for an unrelated reason. But he was also critical of the tobacco provisions, recently calling them the result of "a real special interest lobbying effort that got through last year, and I will do what I can to oppose it happening again in this [year's tax] bill."

There is a good chance it will hit his desk again.

Davids said the state's high tobacco taxes, which far exceed those in neighboring states, lead to rampant smuggling and tax evasion.

That assessment of cigarette smuggling was backed by a January report from the Tax Foundation, which found that the percentage of cigarettes smoked in Minnesota that were smuggled from other states rose from 23.6 percent to 35.5 percent after recent tax increases here.

Altria, maker of Marlboro, was a "platinum sponsor" of the Tax Foundation's annual fundraiser last year, known as the Tax Prom. John Buhl, a Tax Foundation spokesman, said the study was funded by the group's operating fund and not specifically financed by industry.

Both Altria and Reynolds are major donors to the Democratic Legislative Campaign Committee and the Republican State Leadership Committee, which in turn funnel money into statehouse races around the country, including Minnesota.

Altria declined to comment.

Brittany Adams, a spokeswoman for Reynolds, which is now known as RAI Services, said the company "participates in the political and public policy process in a manner consistent with the law and interests of their businesses."

The industry-sponsored event in the basement of Greater Friendship Missionary Baptist Church in Minneapolis focused on an issue of overriding concern to black communities: the criminal justice system.

A recording of the meeting was provided to the Star Tribune. Sharpton told the assembled group that he is officially neutral on whether menthol cigarettes should be legal. Sharpton was the star attraction, but three tobacco industry surrogates who joined him — a former congressman and two retired police officers — argued that if menthols are banned, a black market would spring up, exposing black communities to violence, vigorous policing and incarceration.

The speakers were met with a force to be reckoned with in black communities: church ladies.

"We schooled them. That would be the street term," said Ora Hokes, a minister and president of the church's health and social justice ministry.

Hokes, who has been working on tobacco prevention for years, said she was happy for the dialogue: "The more you know the enemy, the more you can prepare for battle."

More than 80 percent of black smokers prefer menthol cigarettes, which are believed to attract and retain customers by cutting down on the harshness of the smoking experience. About 45,000 black Americans die from smoking-related diseases every year, according to the federal Centers for Disease Control and Prevention.

LaTrisha Vetaw, policy manager for Northpoint Health and Wellness, challenged the speakers at the event, which she called "embarrassing."

Vetaw said the entire issue is a red herring: "Someone would have to be working on the [menthol] ban. And no one is. It's a scare tactic. And what better way than through the black church?"

Adams said the company supports events like these "to engage in conversations to work to resolve controversial issues related to tobacco use … and open a dialogue with community leaders and the members of the community at large on how a potential ban on menthol can affect the community and the criminal justice system."

National Action Network did not reply to an interview request.

Hokes said the battle with tobacco rages on: "When black people stop dying, then I'll stop working."

J. Patrick Coolican • 651-925-5042