States Neglect Intent of Tobacco Deal

Like smoke rings vanishing in the air, money from the huge settlement between the tobacco industry and 46 states continues to drift away from anti-smoking efforts, speakers at a Senate committee hearing said yesterday.

Only five of the states have met the minimum spending levels for smoking prevention and cessation recommended by the U.S. Centers for Disease Control.

In 1998, the tobacco industry settled lawsuits filed by the states agreeing to pay about $206 billion over 25 years. The lawsuits sought recovery of costs related to treating smokers for tobacco-related disease.

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"I just think it's very harmful to the whole public perception of what was intended," said Sen. John McCain, R-Ariz., the chairman of the Senate Commerce, Science and Transportation Committee. "Everyone understood that this money was not going to go for tax rebates."

President Clinton issued a news release saying that the report showed a glaring problem. "Tobacco companies are spending 10 times more to market their product than all 50 states combined are spending on tobacco prevention and cessation," Clinton said. "I encourage all states to commit a significant part of their settlement to address the harm that tobacco companies have caused through decades of deceptive marketing, especially to youth."

Because North Carolina has created trust funds to receive its settlement payments and has not spent any of the money yet, the report did not rank the state in comparison to the others. One of the trust funds -- administered by the Golden LEAF foundation -- is for long-term economic programs to help tobacco-dependent communities. The other is for health-related projects.

In some cases, the money has gone to almost everything but smoking prevention, according to the report, titled "Show Us the Money."

Kansas, which the report ranked 43rd of the other 45 states, will get about $53 million this year. That state's legislature appropriated only $500,000 this year to smoking-prevention programs. The first $70 million that Kansas received after settlement payments began went to cover shortfalls in the state budget, according to the report.

Surgeon General Dr. David Satcher said that studies are showing that prevention efforts can work."We have the tools, the knowledge and the resources to cut smoking rates in half by the end of the decade," Satcher said. "The question is, do we have the will?"

McCain said he was shocked by how much of the money is being eaten up by attorneys' fees. One Maryland lawyer wants $1 billion dollars for his services, McCain said, wondering what that would amount to if broken down to an hourly rate.

John Hurson, a Maryland legislator representing the National Conference of State Legislatures, said it is important to remember that the states are in the beginning stages of deciding how to spend the payments. Though Maryland got high marks in the study, he acknowledged that there are many problems over how the money has been spent so far.

"The operative word when we looked at this issue was 'feeding frenzy,' " Hurson said. "There were a lot of groups who saw this money as their salvation."

Maryland has had to put some money that could be used to combat smoking into escrow accounts, he said, pending the outcome of lawsuits over how much lawyers in the case should be paid.

McCain was skeptical of what can be done to stop the abuses. "I didn't make these commitments -- the states did," he said. "I don't know what can be done, frankly, about it."

Carole Crosslin, a spokeswoman for R.J. Reynolds Tobacco Co., said that the master settlement agreement gives the states sole power in deciding how to spend money.

"In fact, the MSA contains restriction deeds precluding tobacco- industry involvement in state spending," she said. "However, we sincerely hope that the states will spend a significant portion of the settlement funds on the purposes that were intended."

In an interview after the hearing, McCain acknowledged that people have a right to doubt the effectiveness of the settlement, given the current spending patterns. "Their skepticism is warranted," McCain said. "I hope we are able to get a public outcry to force change."

by Kevin Begos
Journal Washington Bureau
Winston-Salem Journal
Friday, 10/6/00

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