ICE was not always so brash. The agency was established in March 2003 as the key investigative arm to help Homeland Security track and repel terrorists. It was created by combining the former Immigration and Naturalization Service and the U.S. Customs Service with the Federal Protective Service and the Federal Air Marshal Service. ICE's massive mission includes protecting U.S. borders, transportation, and roads and bridges, as well as U.S. workplaces with the potential for disaster, such as nuclear power plants.

The ICE budget has ballooned annually, more than doubling from $2.4 billion in 2002 to nearly $5.6 billion this year. And while ICE was created with public safety as its primary goal, the hefty budget increases have also brought tougher oversight for corporations and for illegal immigrants who only want to work in the U.S.

Historically, the government didn't criminally prosecute employers, and it simply deported illegals. But in 2005, according to ICE's Gleason, the agency grew more aggressive. That's when ICE went from a somewhat ineffective agency to a fierce enforcer of criminal laws.

ICE's Web site openly states its latest goals: "Today ICE relies heavily on criminal prosecutions and the seizure of company assets to gain compliance from businesses that violate the employment provisions of our nation's immigration laws."

Why the change? The shift came after several conservative groups criticized the Bush administration for not cracking down on illegal workers. They reasoned that if you stop companies from hiring illegal immigrants, then millions of aliens will quit sneaking across the border to hunt for jobs.

One way to stop companies is by imposing criminal charges. Gleason, who works in ICE's Office of the Principal Legal Advisor, says the smaller civil penalties were "not as effective as they could [have been] because companies treated them as the cost of doing business." But criminal prosecutions, with larger financial penalties and jail time, have proven to be "a significant deterrent," he adds.

ICE added the legal office in 2004 to support its growing needs. Headed by the principal legal adviser with dozens of associates in Washington, the department handles duties ranging from representing ICE in courts and administrative proceedings to coordinating criminal prosecutions with the Justice Department. The law department is divided into 38 divisions, including work site enforcement. It has grown from a few hundred attorneys to 849 full-time and 34 part-time lawyers, many spread out across the country to work with regional ICE units. The agency has chief counsel located in at least 26 major cities.

Gonzalez, the Pasadena defense attorney, says ICE's shift from emphasizing civil to criminal enforcement "happened overnight" with very little warning to employers. "You had this very laissez-faire attitude for 15 years," she recalls, "and the workforce grew to be composed of many undocumenteds." Then, suddenly, that scenario was a crime.

Golden State Fence, the suburban San Diego company, was one of the early criminal targets. Gonzalez, who helped defend that company and its owner, says that ICE threatened to prosecute numerous managers who hired and supervised the illegals, but the owner stepped up to the plate. He took full responsibility, pled guilty, paid a personal fine, and agreed to an asset forfeiture of $4.7 million to protect his employees, she says.

Why did ICE go after Golden State with criminal charges? Gonzalez thinks that politics played a key role. Then-U.S. Attorney Carol Lam reluctantly brought the criminal allegations, Gonzalez says, "but the pressure was coming from Washington." Before the case ended, the Bush administration replaced Lam, allegedly because she failed to aggressively pursue illegal immigration. Lam, now a deputy general counsel at Qualcomm Inc. in San Diego, didn't return calls for comment.

If political considerations bolstered ICE's aggressiveness, a change in government might also tame it down. The Obama administration is already reviewing the agency's work site enforcement policies

The Golden State case was one of the first work site enforcement actions to end with an asset forfeiture. But it won't be the last, unless the new administration tackles reform quickly. Since 2005, ICE has made growing use of this controversial financial weapon, hitting companies where they are the most sensitive -- the bottom line.

Forfeitures are allowed under the Financial Institution Reform, Recovery and Enforcement Act of 1989. The act lets certain government units, such as the Drug Enforcement Agency, seize assets of criminal enterprises. Over the years, the act has been amended to both strengthen law enforcement's hand and to add other agencies, including ICE.

It permits the agency to seize assets or profits associated with a criminal enterprise, and courts have held that includes a business operating with illegal labor. The process has put millions of dollars into a law enforcement fund that ICE can draw upon to purchase vehicles or to investigate future cases. The agency also can share forfeit proceeds with local law enforcement. For example, last October, ICE sent $200,000 from a $1 million forfeiture to the Naugatuck, Connecticut, police department for its "critical assistance" in a work site enforcement case.

Such payouts have riled critics, who have labeled asset forfeiture with terms like "policing for profit." Back in 1995, the late congressman Henry Hyde (R-Illinois) wrote a book seeking to reform U.S. forfeiture laws. "Civil asset forfeiture has allowed police to view all of America as some giant national K-Mart, where prices are not just lower, but nonexistent-a sort of law enforcement pick-and-dont-pay, he wrote.

Corporate attorney Jim Walden, a partner at Gibson, Dunn & Crutcher in New York, also sees dangers in the concept of asset forfeiture. "In a number of circumstances," Walden says, "when agencies are given too much discretion up front, they can seize assets marginally tied or not tied at all to what is being investigated."

Gonzalez says the government wields unfair bargaining power. By threatening to indict the company or its employees, or to debar or exclude a company from government contracts, the feds can intimidate management or boards of directors into major asset forfeiture, according to Gonzalez. "The way ICE invokes asset forfeiture is controversial," she adds. "There haven't been any challenges yet, but it's a strange and unfair formula."

How does the government decide on an amount? In the Golden State case, Gonzalez says she thinks the government "just went after what the owner had in the bank at the time." At least that deal went before a judge.

In contrast, there is no judicial oversight when civil forfeiture is done as part of a nonprosecution agreement, as happened with the record IFCO settlement. (U.S. Attorney Andrew Baxter, whose Albany office negotiated the IFCO deal, declined to comment.)

ICE's in-house lawyer, Gleason, says forfeiture amounts can be based on various factors. One, he says, is if the company allowed a disparity in the wages paid to illegal as compared with legal workers. "If the prevailing wage is $10 an hour, and we can show he is only paying $8 an hour, then we can put that dollar figure right on the employer," Gleason explains. At IFCO there was a wage disparity, and that accounted for some of the $2.6 million in back pay. But at Golden State Fence there was no disparity, according to court documents.

Another factor, Gleason says, is that if half of a company's workers are illegal, then ICE could argue that so are half of the profits. And if an employer is providing shelter to illegal workers, then that property can be seized as well.

ICE's Sibley says there is no way to know for sure if ICE will go after company assets, or how much it might seek. He sums it up this way: "There is no exact formula that says, if this, then that."

John Worrall, a professor of criminology at the University of Texas at Dallas, last year published a study of asset forfeiture, entitled "Is Policing for Profit?" In the study Worrall lists various experts' general criticisms of forfeiture. Among them: that the procedure encourages policing for profit by targeting assets rather than crimes, that 80 percent of all seizures are unaccompanied by any criminal prosecution, and that it is "predatory public finance" because it tends to target offenses that are both frequently repeated and victimless.

Worrall says his study found that "money matters," especially to local law enforcement when they receive a share. And he acknowledges that there have been some abuses by some agencies. But he adds, "We [the study] could not say forfeiture concerns superseded crime concerns."

Worrall, who often consults with law enforcement agencies, has his own opinion about seizing assets. "Forfeiture is a profoundly useful law enforcement strategy," he allows. "Hitting criminals where it hurts makes considerable sense, and even more sense in these times of economic turmoil."

If corporations want to avoid nasty asset forfeitures and other penalties, then the key is compliance, says attorney W. Stephen Cannon, chairman of the law firm Constantine Cannon in Washington, D.C. Cannon was general counsel of now-defunct retailer Circuit City Stores Inc., from 1994 to 2005; he now serves as outside general counsel to a group representing the country's largest retailers, the Retail Industry Leaders Association. Although he had no work site problems at Circuit City, Cannon calls the recent ICE raids and their resulting deals a "pretty amazing" development.

He explains that most retailers have a strong compliance program in place, starting with a federal I-9 form to verify each job applicant's employment eligibility. Beyond that, Cannon says, a company's internal auditing process checks compliance with good employment practices. "Given good-faith efforts to comply with the law," he asks, "under what circumstances does something justify criminal prosecution of a company?"

Gonzalez, the immigration attorney, would really like to know the answer to that one. She reasons that ICE could engender more corporate compliance if it provides employers with civil warnings and fines before escalating into criminal prosecution. Besides, Gonzalez argues, "in today's economy it serves no purpose to bankrupt and jail America's employers."

______________________

This Free Money Comes With Strings

Edward T. Waters and Stacia Le Blanc
Legal Times
April 15, 2009

The American Reinvestment and Recovery Act, signed on Feb. 17 and intended to stimulate the economy, will quickly provide federal grant funds in unprecedented amounts to a wide array of organizations, including the usual suspects: state, local and tribal governments, colleges and universities, and nonprofits of all kinds. But recipients will also include many for-profit companies that do not typically receive federal grants. With many of those private sector companies unfamiliar with the grants process, they should be especially vigilant to the strings attached to federal money.

Although traditional projects that either directly or indirectly benefit the public are included in the Recovery Act -- such as research, education and health care services to the uninsured -- the act also provides substantial funding for which for-profit companies are eligible, such as the development of green technologies. While even the traditional grant recipients will struggle to keep up with the numerous new requirements placed on Recovery Act funds, new entrants into the world of federal grant funding ought to be careful to understand that though the money from the government may be technically free, it comes with plenty of baggage.

TREAD CAREFULLY

Consider these three things if your organization is about to compete for and receive Recovery Act funds:

• Watch the optics.

As the folks at American International Group, General Motors, Chrysler, and a host of others are painfully learning, federal assistance comes with a level of public scrutiny unheard of in the private sector. Not only can information about an impending audit of a local organization make its way to the press, when audit reports by the offices of inspector general are completed, they are promptly posted on the Internet, enhancing the negative publicity.

In the case of the Recovery Act, audits and other federal scrutiny are inevitable. The act provides for huge increases in appropriations to offices of inspector general and establishes OIG "reviews," which occur in addition to OIG audits and investigations. The act also establishes a Recovery Act Transparency Board made up of agency inspector generals that possess very broad powers; provides for a Web site to receive citizen complaints involving Recovery Act expenditures; and creates broad whistle-blower protections. Given the recent publicity about the failures of the Securities and Exchange Commission to follow up on complaints about Bernie Madoff, one can expect that even the most far-fetched of complaints will be followed up on by the appropriate OIG or the RATB.

Grantees should always keep in mind that what they are doing can easily end up on the front page of their local newspaper. If a particular situation strikes you as the in-house counsel as problematic, investigate further into the use of grant funds and act accordingly.

• Remember, grants are not contracts.

Recently, we heard a high-ranking federal acquisition official comment that grants are just an outgrowth of the federal procurement system, only a few decades behind in terms of uniformity. Although we certainly agree that uniformity in federal grants administration remains elusive, we can't agree that grants are simply a variation on the federal contract system.

More than 30 years ago, Congress passed the Grants and Cooperative Agreements Act expressly to distinguish between the two. That distinction starts with the purpose of a grant, which is to perform functions for the greater good. The purpose of a contract, on the other hand, is to buy the tools, so to speak, that the government or a grantee needs to perform its public purposes.

By way of example, the Navy buys an aircraft carrier to give it one of the tools it needs to provide for the national defense. Similarly, a Head Start grantee buys school supplies, but to help it provide child development services to children living in poverty. The public purposes, defense and healthy child development, are the ultimate aims of Congress, not the purchasing of ships and supplies.

This need for a public purpose leads to a second and equally important distinction between grants and contracts. Every federal grant program is based upon a specific statutory authorization that provides that public purpose. There is nothing comparable in the federal contract world. Moreover, appropriations for a grant program can be applied only to the purposes found in those authorizing statutes and must be spent by grantees on costs that are "allowable" for that program under the cost principles issued by the Office of Management and Budget.



Even seemingly sacred spending can be questioned. For example in 2005, the comptroller general of the Government Accountability Office reviewed $44 million in post-9/11 grants to New York City. The comptroller found that no matter how worthy the cause, the funds were not expended by New York for the statutory purposes and sought recovery of the $44 million unless Congress duly ratified the use of the funds. It did not matter that the grantor agency allocated the money to New York.

Lesson learned: The grantor agency has no authority to approve, and the grantee has no authority to spend, financial assistance funds if those expenditures are not in strict accordance with the statutory purposes.

The question of what requirements apply takes on heightened importance in the case of Recovery Act funds. That act is a one-time appropriation of funds with all sorts of additional strings attached. This means that recipients and their attorneys must understand not only the requirements of the authorizing statute that created the grant program, but they must also understand how the additional strings interact with the authorizing statute. For example, one of the strings attached to Recovery Act funds is a new requirement to report quarterly on how the use of those funds created or preserved jobs and aided in the economic recovery. This type of reporting is completely different from the well-established reporting requirements for federal grant programs and is in addition to, not in lieu of, those requirements. These reporting requirements will require grantees to track not only the expenditure of the federal funds but also difficult to quantify matters such as job creation (raising such interesting questions as: What is a job? An individual hired? A position created? What if one person leaves and another takes his or her job? Is that two jobs or one? And so on).

Another nuance that exists not in the act itself but in the OMB guidance to agencies on implementation of the act requires federal agencies to include a far-reaching self-disclosure provision in all Recovery Act grants. This imposition of substantive requirements through agency guidance is far too common in the grants world, but is not typical in the contracts world.

In this case, the required provision mandates reporting to the appropriate office of inspector general instances where a grantee or sub-grantee has "credible evidence" of fraud or "a criminal or civil violation of laws pertaining to fraud, conflict of interest, bribery, gratuity, or similar misconduct involving those funds."

Recipients of Recovery Act funds would be well advised to have at least a basic understanding of the statute, regulations, and agency guidance that applies to their new-found source of funding. (Note: the Notice of Grant Award will provide the necessary citations to get started.) They should ensure all expenditures further those statutory purposes and the activities identified in the winning proposal.

• Create an audit trail.

At the most basic level, every grantee must be able to show how it used its federal funds in furtherance of the relevant public purposes. Moreover, federal grants are cost-reimbursement agreements whereby the federal government reimburses the grantee its cost, with no profit or fee in most cases, of conducting the funded program.

The rules on what is and is not reimbursable under a federal grant can be rather arcane, and the requirements for documenting the use of grant funds is too. At the heart of the matter is this question: Can our organization show through documentation -- not oral explanation -- how we used federal grant funds and how those funds furthered the purpose for which they were provided? Grantees must always keep in mind the need for an "audit trail" demonstrating the proper use of federal dollars.

In this regard, reviewing the high-risk areas identified by the Health and Human Services OIG in its draft compliance guidance for research grants is a great way to see how other grantees get into trouble. (The information can be found at 70 Fed. Reg. 71312 (Nov. 28, 2005).) Although the draft guidance was written for recipients of grants from the National Institutes of Health, two of the risk areas identified (time and effort reporting and cost allocation) are common problems, in our experience, in many grant programs.

Time and effort reporting, i.e. time sheets, are the primary way in which staff costs are reimbursed by a federal grant. Yet many grantees either don't have their employees do them or, more likely, set up systems for collecting time and effort reports that they fail to monitor and enforce, leaving substantial gaps in their records.

Cost allocation systems are systems that ensure that the federal government is paying its fair share and only its fair share of joint or shared costs. One of the most frequent problems in this area is "chasing the dollars." In other words, accounting practices change to charge costs to whichever program has funds left in it. To be clear, the rules require that costs are charged based on which program received the "benefit" of the expenditure of the funds, not which program has the most money.

In sum, organizations should aggressively seek out Recovery Act funds but only if they understand that, as the old adage goes, "you don't get something for nothing." Private sector companies must educate themselves on the strings attached to the grant money that they covet, or compliance trouble will likely ensue.

Edward T. Waters is the co-managing partner of Feldesman Tucker Leifer Fidell in Washington, D.C., and heads the firm's grants law practice group. Stacia Le Blanc is a partner at the firm. They may be contacted at ewaters@feldesmantucker.com and sleblanc@feldesmantucker.com.

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Learn the Rules on Fax and E-Mail Ads

Offer an opt-out, or prepare to pay out

By James H. Laskey, Fernando M. Pinguelo and Andrew D. Linden
April 14, 2009

The importance of having a robust compliance policy to review the content of proposed advertisements is well known and widely accepted. But what may not be as familiar is the need for a separate policy focused on the means of disseminating such advertising. In a technology driven world, it makes sense for businesses to capitalize on the use of electronic communications to increase the number of consumers they reach, and businesses more than ever rely on direct advertising through e-mail and fax promotions. However, an advertisement that would raise no issues if disseminated by mail or in the print media can create major headaches for in-house counsel if the means of distribution is fax or e-mail.

UNLAWFUL DIRECT ADVERTISING

Unlawful direct advertising through e-mail and fax promotions can be financially devastating, and cases that have made the headlines illustrate the potential devastation. For example, in a well-publicized case from Georgia, 1,321 recipients of improper unsolicited fax advertisements sued a Hooters restaurant under federal law and received a $12 million jury verdict against the chain. Similarly, the Dallas Cowboys and the AMF bowling alley chain each settled cases involving unsolicited faxes for over $1 million. To further accentuate the timeliness of this issue, on the day we sent this article to the publisher, a class action suit was filed in the federal District Court of New Jersey alleging defendants "sen[t] out thousands of unsolicited fax advertisements to the plaintiff and class without permission."

FEDERAL LAW

Federal laws governing e-mail and fax promotions regulate both the content of such advertisements and also to whom such advertisements may be sent. Violators may be subject to significant financial penalties. Here's what you should know.

FAXES

The Telephone Consumer Protection Act of 1991, which now includes the Junk Fax Protection Act of 2005, and corresponding federal regulations prohibit sending an unsolicited advertisement to a fax machine unless the recipient has granted the sender implied or express consent to receive the advertisement.

Implied consent comes from an established business relationship between the sender and the recipient. "Established business relationship" is defined as "a prior or existing relationship formed by a voluntary two-way communication between a person or entity and a business or residential subscriber with or without an exchange of consideration, on the basis of inquiry, application, purchase or transaction by the business or residential subscriber regarding products or services offered by such person or entity, which relationship has not previously terminated by either party."

Express consent may be communicated in writing or orally, but the sender bears the burden of proving that consent was provided. It is important to note, however, that otherwise lawful faxed advertisements become unlawful if they do not inform the recipient how to avoid receiving such faxes in the future. This information, called an "opt-out" notice, is required to be provided with every faxed advertisement, even one that was expressly authorized by the recipient.

In order to comply with the TCPA and federal regulations, an advertiser's opt-out notice must:

• appear on the first page of the advertisement in a clear and conspicuous fashion;

• state that the recipient may request that the solicitor not send any future faxed advertisements and that the failure to comply with such a request within 30 days is unlawful;

• set forth the requirements of a valid opt-out request as articulated by the TCPA and applicable regulations; and

• include a domestic telephone number and fax number for the recipient to send its opt-out request, as well as a separate cost-free mechanism to send an opt-out request, such as a Web site or e-mail address.

The telephone numbers, fax numbers and cost-free mechanisms must be available for recipients to make an opt-out request 24 hours a day, seven days a week. In addition, any message sent via fax must contain in the top or bottom margin the time and date it was sent, an identification of the sender and the telephone number of the sending machine, individual or entity. Under the TCPA, a state may bring a civil action against an advertiser to recover $500 in damages for each nonconforming advertisement or the actual amount of loss caused by the nonconforming advertisement. If the court were to find that the sender willfully failed to include a compliant opt-out notice, it can increase the award up to three times. Individuals and entities receiving faxed advertisements lacking proper opt-out notices may also sue to recover the greater amount of actual monetary loss or $500 for each violation. As a result, penalties can add up quickly. This private cause of action has given rise to a new wave of class action litigation which has produced some of the large verdicts and settlements referred to above.

E-MAILS

Similarly, the CAN-SPAM Act, which governs the sending of commercial e-mails, requires that commercial e-mails contain a return address or comparable mechanism that allows the recipient to send a request not to receive future advertisements. Specifically, commercial e-mails must clearly and conspicuously:

• display a functioning return electronic mail address or other Internet-based mechanism for recipients to submit an opt-out request; and

• inform recipients that an opt-out request may be submitted in the manner specified in the e-mail message.

The return e-mail address or other Internet-based mechanism must be capable of receiving opt-out requests for at least 30 days after transmission of the commercial e-mail.

The CAN-SPAM Act permits the state to bring a civil action against persons violating the aforementioned provisions for damages in an amount that is the greater of the actual monetary loss suffered by the recipients of the messages or an amount equal to the number of violations multiplied by up to $250, limited in some but not all cases to $2 million aggregate. Like the TCPA, the CAN-SPAM Act authorizes a court to increase such damages up to three times if it were to determine that the sender willfully or knowingly committed the violations. Attorneys fees may also be awarded to the state. In contrast to the TCPA, the CAN-SPAM Act limits the private right of action to providers of Internet access services and reduces damages in such cases to $25 for each violation, and no more than $1 million in the aggregate in some but not all cases.

Even with these partial caps, penalties can be astronomical. In May 2008, MySpace received an award of approximately $220 million under the CAN-SPAM Act against users who, among other violations, sent over 500,000 unsolicited commercial e-mails that did not contain satisfactory opt-out mechanisms. Most recently, in November 2008, the CAN-SPAM Act led to a judgment in excess of $800 million in favor of Facebook and against one of its users who had sent commercial e-mails that violated the act.

CONCLUSION

Faxed advertisements and commercial e-mails are marketing tools that should help enhance a business' performance. Disseminating fax ads and e-mails that do not contain proper opt-out notices defeat their own purpose by potentially subjecting your business to quickly surmounting penalties. Ensuring that the opt-out notices of your business' fax and e-mail ads comply with the TCPA and CAN-SPAM Act, respectively, will significantly reduce your business' liability and may even increase goodwill. When marketing through e-mail and fax, it is critical that your business do so in accordance with these and other similar state laws. If the recipients of your faxed and e-mail ed advertisements cannot opt-out, you may reluctantly join the club of those having to pay-out.

James H. Laskey is a member of Norris McLaughlin & Marcus in Bridgewater, N.J. He practices in the firm's corporate department. Fernando M. Pinguelo is also a member of the firm and co-chair of its Electronic Discovery Group. Andrew D. Linden is an associate and practices in the litigation and appellate practice groups.

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Workplace Defamation Suits on the Rise

Vermont legalizes gay marriage with veto override

By DAVE GRAM Associated Press Writer - April 7, 09 

MONTPELIER, Vt. (AP) - Vermont on Tuesday became the fourth state to legalize gay marriage - and the first to do so with a legislature's vote.

The House recorded a dramatic 100-49 vote - the minimum needed - to override Gov. Jim Douglas' veto. Its vote followed a much easier override vote in the Senate, which rebuffed the Republican governor with a vote of 23-5.

Vermont was the first state to legalize civil unions for same-sex couples and joins Connecticut, Massachusetts and Iowa in giving gays the right to marry. Their approval of gay marriage came from the courts.

Tuesday morning's legislative action came less than a day after Douglas issued a veto message saying the bill would not improve the lot of gay and lesbian couples because it still would not provide them rights under federal and other states' laws.

House Speaker Shap Smith's announcement of the vote brought an outburst of jubilation from some of the hundreds packed into the gallery and the lobby outside the House chamber, despite the speaker's admonishment against such displays.

Among the celebrants in the lobby were former Rep. Robert Dostis, D-Waterbury, and his longtime partner, Chuck Kletecka. Dostis recalled efforts to expand gay rights dating to an anti-discrimination law passed in 1992.

"It's been a very long battle. It's been almost 20 years to get to this point," Dostis said. "I think finally, most people in Vermont understand that we're a couple like any other couple. We're as good and as bad as any other group of people. And now I think we have a chance to prove ourselves here on forward that we're good members of our community."

Dostis said he and Kletecka will celebrate their 25th year together in September.

"Is that a proposal?" Kletecka asked.

"Yeah," Dostis replied. "Twenty-five years together, I think it's time we finally got married."

Craig Benson, a gay marriage opponent who had lobbied unsuccessfully for a nonbinding referendum on the question, said he was disappointed but believed gay marriage opponents were outspent by supporters by a 20-1 margin.

"The other side had a highly funded, extremely well-oiled machine with all the political leadership except the governor pushing to make this happen," he said. "The fact that it came down to this tight a vote is really astounding."

Also in the crowd was Michael Feiner, a farmer from Roxbury and gay marriage supporter, who took a break from collecting sap for maple syrup-making to come to the Statehouse.

"I'm taking a break to come and basically make sure that I was here to witness history," he said.

The House had initially passed the bill last week with a 95-52 vote.

________________________________

House approves FDA regulation of tobacco products

By ERICA WERNER Associated Press Writer

WASHINGTON (AP) - The federal government would for the first time have regulatory powers over the tobacco industry under a bill the House approved Thursday after years of campaigning by anti-smoking forces.

The measure, passed 298-112, gives the Food and Drug Administration authority to regulate - but not ban - cigarettes and other tobacco products.

The Senate could take up its version of the bill later this month, and supporters have expressed confidence they can overcome expected resistance from tobacco-state senators. The White House supports the legislation, a shift from the Bush administration which threatened to veto a House-passed measure last year.

President Barack Obama has spoken publicly about his own struggles to kick a smoking habit.

"This vote brings us closer to putting a deceitful and dangerous industry under the watchful eyes of government regulators," American Heart Association CEO Nancy Brown said in a statement.

The bill was sponsored by Energy and Commerce Committee Chairman Henry Waxman, D-Calif., who in 1994 summoned the heads of big tobacco to a memorable hearing where they testified that nicotine was not addictive.

Waxman and his Senate counterpart, Sen. Edward Kennedy, D-Mass., have promoted legislation giving the FDA regulatory powers over tobacco products since the Supreme Court in 2000 ruled that the agency did not have that authority.

"We have come to what I hope will be an historic occasion, and that is finally doing something about the harm that tobacco does to thousands and thousands of Americans who die each year," Waxman said Wednesday as lawmakers debated his Family Smoking Prevention and Tobacco Control Act.

His bill wouldn't let the FDA ban nicotine or tobacco outright, but the agency would be able to regulate the contents of tobacco products, make public their ingredients, prohibit flavoring, require much larger warning labels and strictly control or prohibit marketing campaigns, especially those geared toward children.

Opponents from tobacco-growing states such as top-producing North Carolina argued that the FDA had proven through food safety failures that it's not up to the job. They also said that instead of unrealistically trying to get smokers to quit or prevent them from starting, lawmakers should ensure they have other options, like smokeless tobacco.

That was the aim of an alternate bill offered by Rep. Steve Buyer, R-Ind., who would leave the FDA out and create a different agency within the Health and Human Services Department. His proposal failed on a 284-142 vote.

"Effectively giving FDA stamp of approval on cigarettes will improperly lead people to believe that these products are safe, and they really aren't," Buyer said. "We want to move people from smoking down the continuum of risk to eventually quitting."

Major public health groups, including the American Lung Association and the American Medical Association, wrote to lawmakers asking them to oppose Buyer's bill, contending it would leave tobacco companies without meaningful regulation and able to make untested claims about the health effects of their products.

Rep. Mike Rogers, R-Mich., also was unsuccessful in changing a provision that allows the FDA to tap its general fund for about six months to get the new program started. He argued that money would be diverted from the agency's already overstretched food inspection and disease research budgets. Waxman countered that the user fees from the tobacco industry would pay for the new FDA office and that any money borrowed from the general fund would be paid back without affecting other programs.

Buyer pointed out that Waxman's bill is supported by the nation's largest tobacco company, Marlboro maker Philip Morris USA. Officials at rival tobacco companies contend the Waxman bill could lock in Philip Morris' market share.

Kennedy plans to introduce his version of the legislation after Congress returns from a recess later this month. Sen. Richard Burr, R-N.C., is expected to lead the opposition, but supporters are confident they can clear the 60-vote threshold needed to break a filibuster.

______________________________________

The bill is H.R. 1256.

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At JobAngels, our mission is to help bring people together in a community setting where each person commits to a single goal: to help just one person find gainful employment. That person can be a friend, a family member, a colleague or a complete stranger. All it takes is one person helping one other person find a job. We are nimble, innovative, determined and impassioned to drive this movement and develop a fully operational non-profit entity that enables a new generation of talent networking that is both meaningful and results-oriented.

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