CEO, Brooke Group, Owner of Liggett Tobacco Company
See also: Tobacco Deal Timeline (Liggett 1 and Liggett 2) | Interview Excerpt | Michael Moore Interview | Richard Scruggs Interview
"And the truth of all this, I didn't believe the strategy these tobacco companies are following. I mean none of the strategy made sense. Intellectually, I just didn't believe it. You have to win every lawsuit. There's nothing here. We're never going to lose. And also recognize that Liggett is the smallest of all the tobacco companies. From a financial point of view, I also said to myself, we can't afford to lose even one lawsuit, one Medicaid case. We go immediately bankrupt. So, from a financial point of view, at this time, I figured it was the right thing to do, to make a settlement. Why stay in court the rest of your life? The other companies have this scorched earth policy that we're going to spend, and spend, and spend, and spend, and spend, and win and win and win. And I didn't want to become a satellite of Philip Morris with them paying my legal fees, or a subsidiary of them."
Who?
Bennett LeBow is the CEO of the Brooke Group which owns Liggett Tobacco, the smallest of the six major tobacco companies. Considered a relative newcomer to the industry and a Wall Street operator, LeBow stunned his counterparts at Philip Morris, Brown and Williamson, RJR Nabisco, Loews and Lorillard when he broke ranks and announced he would settle the Medicaid suits brought by forty state attorneys general. In our February 1998 interview LeBow also revealed that he was cooperating with the Justice Department in its criminal investigation of the tobacco industry.
Contribution to the Deal
By breaking ranks with the rest of the industry and settling early, LeBow gave credibility to the state attorneys general's lawsuits. When he announced his first settlement in March of 1996 with five states, LeBow stunned the rest of the industry and Wall Street. That move and the subsequent document release gave an important push forward to the Medicaid cases.
Expectations
Bennett LeBow wanted to prevent his company from going into bankruptcy and was able to do that through his negotiated settlement. He is now lobbying Congress to treat his company differently in the event of a national deal, since Liggett is so small and settled first. It is likely LeBow will be successful in getting special treatment for his company. His company is the first cigarette company to voluntarily put the label "Nicotine is Addictive" on their product.
Personal Information:
Bennett LeBow has never been a tobacco industry insider, but more of a Wall Street operator. He has generally been highly independent from the rest of the industry, although he did allow Philip Morris to pay his legal expenses for several years. He has made choices as a business man, rather than a tobacco supporter.
Affiliations: Tobacco Company, Financial Security
Cards they hold (issues):
Cards: Being first tobacco company to settle gives leverage on Wall Street and a possible better deal from Congress and Justice CEO, Liggett Group, Wall Street