Washington's failure for tobacco farmers no accident

Source from:  By JOEY PENDLETON-State Senator 02/05/2005

Our leaders in Washington have failed the tobacco farmers of Kentucky and 13 other states. Instead of a "tobacco buyout" bill, Congress passed a "farmer sellout" bill last fall, letting tobacco companies off the hook for the final payment due growers. Sadly, our leaders were warned that the legislation had a serious problem, and they passed it anyway. Kentucky Attorney General Greg Stumbo was one of several attorneys general who on Oct. 6 wrote Congressional leaders, pointing out that their failure to include a "January 1, 2005," effective date in the buyout legislation offered tobacco companies an out. With no effective date, the companies could avoid making the December 2004 payment to farmers. The letter was addressed to members of the House and Senate who were on a conference committee working out final details of the legislation. Both Kentucky Senators, Jim Bunning and Mitch McConnell, were members of that conference committee. Incidentally, both also receive generous campaign contributions from big tobacco. Congress ignored the letter and passed the $10.1 billion buyout bill on Oct. 11, without including the effective date. It wasn't an accident. Since then, the tobacco companies have taken the out- they have refused to make the last 2004 payment. As you might have guessed, it was a very costly mistake. The final "Phase II" payment from the cigarette companies is estimated at $424 million, including approximately $124 million for an estimated 160,000 Kentucky farmers, including me. I hold a small tobacco quota. Phase II payments are intended to compensate tobacco farmers for the losses they have suffered as a result of the 1998 Master Settlement Agreement among the tobacco industry and nearly all states to settle legal claims over the health effects of smoking. In addition the companies make Phase I payments to states to address their costs of treating the health effects of smoking. Seven states, including Kentucky, have rightfully sued the companies for the final payment to farmers. That case is now making its way through the courts, which have so far sided with the companies. A North Carolina judge ruled on Dec. 23- just two days before farmers thought they would be getting a check on Christmas- that the tobacco companies did not have to make the last 2004 Phase II payment. The case has been appealed, but five of the seven justices in North Carolina who were scheduled to hear it have a conflict of interest -- they've taken money from big tobacco, own stock in tobacco companies or own a tobacco allotment. Only one has been disqualified. None of this would have been necessary if our representatives in Congress had done their jobs right. Kentucky's entire delegation, including our Congressman, Ed Whitfield, voted for this buyout bill with its fatal flaw. There has been some speculation that the General Assembly will be asked to clean up Congress' mess. In his State of the Commonwealth speech, Governor Ernie Fletcher hinted that he is concerned. The speech states, "Additionally as we move into advanced agriculture and natural product technology, I would like to encourage you to protect Phase I tobacco money for those purposes as we pay our farmers the Phase II money they are relying on. Our tax plan assumes this will happen." In addition, the Governor's Chief of Staff recently said the North Carolina ruling could be a "setback" for Kentucky's budget. Congress needs to do its own housekeeping and make good on the promises made to tobacco farmers in Kentucky and other states- promises it abandoned in the buyout legislation. If that can't happen then Kentucky, certainly, must do right by farmers. Senator Joey Pendleton, who represents Christian, Logan and Todd counties, chaired the Tobacco Task Force and was a member of the Phase II Board. Currently he serves on the Tobacco Oversight Committee, which approves Phase I projects. He is a Democrat. Most of Kentucky's Congressional delegation is Republican. Enditem