A platoon of elite lobbyists is preparing for political war with
Mayor Michael Bloomberg, crafting position papers, dreaming up telegenic images
and identifying legislators who may be easily swayed by well-honed arguments
and well-timed campaign contributions. The goal of all this activity is simple:
to block Mr. Bloomberg’s proposal to raise the state’s cigarette taxes from
eight cents to $1.50 per pack.
The lobbyists represent two powerful groups mobilizing to kill
the proposal, which would tax smokers to the tune of $250 million to help plug
a $4.7 billion hole in the city’s budget. One of the opponents is the tobacco
giant Philip Morris USA, which is headquartered on Park Avenue and 41st Street
and is busily crafting a lobbying counteroffensive. As if Big Tobacco weren’t a
daunting enough foe, Mr. Bloomberg’s proposal now has another adversary: a
coalition of 10,000 Dominican bodega owners and Korean greengrocers, who argue
that the tax will deal the shopkeepers a severe blow by decreasing customer
traffic in their stores.
The looming two-front war may have the makings of Michael
Bloomberg’s first real Rudy Giuliani moment, in which the Mayor morphs into a
municipal scold intent on taming tobacco merchants. Indeed, the fight over the
cigarette tax will provide Mr. Bloomberg with the first bully pulpit of his two-month-old
administration. He has given his tax proposal a moral tinge, arguing that it
would liberate children from the grip of a lethal addiction.
“I think anyone who smokes is crazy,” he observed not long ago,
adding, in an apparent reference to Mr. Giuliani’s former director of
communications, Sunny Mindel: “I heard that the former press secretary smoked.
But I would be shocked if that were
true.” (It is true, Mayor.)
To the storeowners and the tobacco executives alike, city smokers
aren’t lunatics; they’re prized customers who purchase some 350 million packs
of cigarettes a year. The shopkeepers have unfurled a banner bearing an innocuous
moniker-“Neighborhood Retail Alliance”-and they have assigned the task of
making their case to a well-connected lobbyist named Richard Lipsky. Mr. Lipsky
is something of a virtuoso at portraying his clients as economic Davids being
ground under the heel of various Goliaths. He played a key role in representing
a coalition of small shopkeepers that helped defeat a zoning plan in 1996 that
would have allowed big-box superstores to open in their neighborhoods.
“We shouldn’t balance the budget on the backs of small
businesses,” Mr. Lipsky said in an interview with The Observer . “The only people that get hurt by this tax are the
little stores that rely on tobacco sales to drive customer traffic. At the end
of the day, it will do nothing to alleviate the health concerns of New
Meanwhile, executives at Philip Morris are already formulating
their battle plan. According to sources, the company’s executives held a
conference call on Feb. 19 to plot strategy with two of the company’s top
lobbyists: Martin McLaughlin, who will lobby members of the City Council, and
Robert Malito, whose job is to influence state legislators in Albany. (Mr.
Bloomberg needs approvals from the City Council and from Albany to implement
the tax.) Neither Mr. McLaughlin nor Mr. Malito returned calls for comment.
Despite the planned counteroffensive, Mr. Bloomberg’s advisers
say that he has no intention of backing down. In addition to bringing in
much-needed revenue, he has argued, the tax will persuade many tobacco addicts
to quit rather than shell out $7 for a pack.
War on Horizon
The coming conflict will certainly enliven City Hall, setting the
stage for raucous budget hearings populated by tobacco executives, angry
merchants and nicotine-crazed smokers’ rights advocates. In an interview with The Observer , Mr. Lipsky, who is no
stranger to orchestrating such events, vowed that a telegenic and pan-ethnic
parade of shopkeepers would show up to testify before the City Council, which
holds hearings on the budget in March.
“There will be Indians and Pakistanis who own stationery stores,
Dominican bodega owners and Korean greengrocers, all of whom have a vested
interest in demonstrating to the City Council and the Mayor that this budget
gimmick is futile,” Mr. Lipsky said.
Mr. Lipsky’s willingness to parade small shopkeepers through City
Hall has already enraged some backers of the tax. They point out that the
lobbyist has frequently represented retail groups holding the same view as
Philip Morris on anti-smoking legislation, and they accuse him of tacitly
collaborating with Philip Morris in legislative fights. For instance, Mr.
Lipsky, representing a small business group, fought unsuccessfully to stop a
ban on smoking advertising near parks and schools that passed the City Council
several years ago-a law also fought by Philip Morris.
“Lipsky and the retailers have worked with Philip Morris in the
past, and we have every reason to believe that he’s fronting for Philip Morris
right now,” said Elena Deutsch, director of tobacco control at the American
Cancer Society, which supports the tax, along with several other health
organizations in New York. “They are coming together to defeat a tax that could
help save the lives of New Yorkers.” Ms. Deutsch argued that price hikes for
cigarettes are proven to reduce smoking and added that her group would help
push the measure through both the City Council and State Legislature.
Mr. Lipsky denied ever collaborating directly with Philip Morris.
“I’ve always been accused of being an affront ,
but never a front,” he said. “I don’t
front for anyone. I represent the small stores, and I’ve done it successfully
for 20 years.”
In addition to lobbying Albany politicians, Mr. Lipsky plans to
target City Council members in leadership positions, including Speaker Gifford
Miller and Finance Committee chairman David Weprin. He hopes to aggressively
lobby black and Latino Council members who preside over districts filled with
small grocery stores.
“Our stores are concentrated in the districts of black and Latino
Council members, and we are actively looking for allies among them,” Mr. Lipsky
said. “Those Council members who oppose the cigarette-tax hike will be
perceived in the small-business community as champions of their interests, and
in two years that perception will translate into active financial support.”
Mr. Lipsky will be joined in his efforts by Sung Soo Kim, the
president of the Korean American Small Business Service Center of New York,
which represents 3,500 Korean grocers.
“If people don’t pick up cigarettes, then they won’t come for
drinks, for sandwiches, for other groceries,” Mr. Kim said, adding that he
would hold a press conference at City Hall in March to advertise his group’s
Executives at Philip Morris concede that their counteroffensive
is just in the planning stages, but they promise to be every bit as aggressive
as the small shopkeepers. “You can expect a similar approach,” said Brendan
McCormick, manager of media relations for Philip Morris USA. “We’re not going
to lay out our strategy, but we will communicate our position to elected
officials and work with anyone who shares our view.”