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Odd Bedfellows Try to Stymie Asbestos Draft

As negotiations continue over asbestos settlement legislation, lobbyists involved in the debate are focusing their attention on five conservative members of the Senate Judiciary Committee.

The conservative bloc within the panel has so far stalled progress on a draft bill introduced last week by Judiciary Chairman Arlen Specter (R-Pa.). This has frustrated business and insurance groups that are pushing for a deal while giving hope, ironically enough, to trial lawyers, labor unions and some corporate interests who have serious objections to the draft.

Specter was set to meet with Majority Leader Bill Frist (R-Tenn.) and the panel’s Republicans on Tuesday afternoon to discuss the draft bill.

But the “GOP Five” — as Sens. John Kyl (Ariz.), Jeff Sessions (Ala.), John Cornyn (Texas), Sam Brownback (Kan.), and Tom Coburn (Okla.) have come to be known — are stuck in the lobbying crossfire over the issue.

Two business and insurance coalitions pushing to pass Specter’s draft — the Asbestos Study Group and the Asbestos Alliance — are working with committee staff to win Republican support for the measure.

Meanwhile, those Senators are gaining grass-roots cover for their opposition from FreedomWorks, the anti-tax group headed by former House Majority Leader Dick Armey (R-Texas).

The group, a merger of the groups formerly known as Citizens for a Sound Economy and Empower America, activated its “activist phone tree” this week, generating more than 5,000 e-mails and about 50 calls each to the offices of the five Senators on Monday alone.

The campaign continues this week with newspaper and radio ads in the home states of the “GOP Five,” in addition to that of Frist and Judiciary Committee member — and Finance Chairman — Chuck Grassley (R-Iowa).

“There’s a new threat to your pocketbook emerging in the U.S. Senate, where Arlen Specter wants to create an Asbestos Trust Fund paid for by $140 billion in new taxes,” Armey will say in the radio ad, according to a draft script. “That’s right, 140 billion dollars in new taxes. What’s more, the Asbestos Trust Fund would set aside billions of those tax dollars as payoffs to trail lawyers!”

But because the draft bill caps lawyers fees at between 5 percent and 10 percent, the Association of Trial Lawyers of America — the target of FreedomWorks’ ire — is actually joining the conservative group in opposition to it.

Carlton Carl, ATLA’s spokesman, acknowledged the group was talking with other interests opposed to Specter’s draft bill, but he declined to discuss the extent of their coordination.

“I think there are some communications, but I couldn’t tell you what or when or how,” he said. “We’re willing to talk to anybody who wants to improve the bill in ways that assure people who have been poisoned through no fault of their own are fairly compensated.”

Add to this already strange mix of bedfellows the AFL-CIO, which last week said that the draft language contained “a number of serious deficiencies,” though it supports the trust fund approach. Another opponent of the Specter bill is an informal collective called the Coalition for Asbestos Reform, which includes corporate giants DuPont and ExxonMobil and such insurers as AIG and Liberty Mutual.

All have their own gripes with Specter’s bill, which would require businesses and insurers to pay $140 billion into a trust fund to compensate victims of asbestos-related illness. In return, the companies would get some cover from their legal liability.

To be sure, Specter’s draft also has its backers. The Asbestos Study Group includes General Electric, General Motors, Honeywell and Viacom. And though some manufacturers have broken ranks on the issue, the National Association of Manufacturers so far is cautiously supportive.

“There is much to like in the chairman’s draft,” NAM President John Engler said Friday. “I’m encouraged by the renewed commitment on both sides of the aisle, and I am more hopeful about prospects for consensus than I have been in weeks.”

But one Senate aide said the force of the lobbying on both sides of the draft bill does not bode well for it.

“Individual members get put in a position where the gun is put to the head,” the aide said. “It causes both sides to dig in, and the interests on both sides make compromise less likely.”

In case they can’t stop the bill in the Senate, many groups that oppose Specter’s draft are looking to the House.

There, they hope to ensure the bill avoids the path followed by the bankruptcy and class-action reform bills, both of which cleared Congress earlier this year by passing the Senate and the House unamended, thereby avoiding a conference process that could have doomed them.

The Coalition for Asbestos Reform, for example, hopes to rally support for a bill that Rep. Chris Cannon (R-Utah) will likely introduce later this month. It closely mirrors legislation Cannon introduced last session that, as an alternative to a trust fund, establishes medical criteria that asbestos claimants must meet before going to court.

Cannon wrote a “Dear Colleague” letter earlier this month, outlining broadly what his bill would seek to do to round up early support.

Back on the Senate side, insurers are split on the bill, so far making it difficult for the American Insurance Association, an industry trade group, to stake out a public position.

Members have a conference call scheduled Thursday to discuss it but may not come to any conclusion, said AIA’s Julie Rochman. “There’s not any huge rush for us,” she said. “We’ll say something when we’re ready to say something.”

In a Monday letter co-signed by the National Association of Mutual Insurance Companies and the Reinsurance Association of America, the group wrote Specter, “It is important that we state clearly that the draft does not adequately address all of our key concerns.

“As we have stated throughout all our meetings and correspondence over the past two years,” they continued, “it is imperative that any trust fund provide insurers with both certainty and finality over asbestos exposure.”

Sen. Ben Nelson (D-Neb.), a Judiciary Committee member who represents a state with significant insurance interests, has been working with insurers to address their concerns.

“He’s got an insurance background and very strong ties to people in the industry,” said spokesman David DiMartino. “He wants to act as an agent of compromise.”

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