WHERE THERE'S SMOKE...

By MARGARET CARLSON

It was one of the darkest mysteries of Congress: who was the mastermind behind the biggest heist of the year--the delivery of a $50 billion tax break for tobacco companies? Now a prime suspect has emerged: former Republican National Committee chairman Haley Barbour. Two Republican Party officials told Time last week that Barbour, now a millionaire tobacco lobbyist, had gone to House Speaker Newt Gingrich and majority leader Trent Lott and persuaded them to slip a giant gift to his clients into the must-pass balanced-budget agreement just minutes before it was inked. For weeks it looked as if the two g.o.p. leaders had pulled off a classic fix: looting the general Treasury in the interest of a specific client with a laser-like incursion into a massive bill that no one had the time or inclination to read. Tobacco executives--the guys who raised their right hands and swore that tobacco does not cause cancer, must have been spiking cartons of Marlboros in the end zone. Joe Camel lives!

Sadly for Gingrich and Lott (but not for Barbour, who gets paid no matter what), a couple of goody-goody freshmen had to go and ruin everything. Calling the move "midnight madness" that "shines and stinks like a mackerel in the moonlight," Democratic Senator Richard Durbin and Republican Susan Collins exposed the tax credit, which would have offset industry costs in the now ill-fated tobacco deal, to the light of day. No one came forward to defend the stinker once it was yanked from its protective package, so it went down, 95 to 3, in the Senate and was killed by the House in a unanimous vote. Such consensus is normally reserved for measures like proclaiming Mother's Day.

Why didn't Lott and Gingrich spread the blame by giving up Barbour? After all, he makes big bucks--$50,000 a month--fronting for the industry. But fingering Barbour would force the two leaders to choose between pleading stupidity (We were tricked into it) or venality. And neither Lott nor Gingrich is inclined to annoy tobacco's top ambassador in Washington, who controls thousands if not millions of dollars in political contributions. In the past 18 months, Republicans have pocketed $1.9 million from tobacco. (Democrats got $300,000.) Barbour makes Roger Tamraz, the star of last week's campaign-finance hearings, look like a sucker. For the $300,000 Tamraz proudly admitted spending for access, he got only a few minutes with the President at one of his six social visits, and he never nailed the help he needed for his pipeline. Barbour, in contrast, got actual results. Neither Lott nor Barbour would comment.

But Gingrich's staff has chosen to plead something between stupidity and disloyalty. An aide says Gingrich defended the tax break because he didn't really understand its political liability. When staff members sat him down and explained it, Gingrich felt, one says sadly, "betrayed."

You would think that getting caught in a clear exchange of cash for a tax break might pique the interest of the two committees busily looking for just that. But you would be wrong. Republicans (tacitly supported by many Democrats) are trying to preserve this kind of money flow by putting on a show trial of past violations. After the House killed the tax break on Wednesday, members of Congress piled onto a United States Tobacco Co. jet that very night to fly to a--this is hard to believe--tobacco-industry fund raiser in Manhattan. How's that for remorse? When the posturing at the hearings is over, the Capitol will still be for sale, and that's just what most of the Congress intends.

--With reporting by Michael Duffy/Washington

With reporting by Michael Duffy/Washington