Shame On Iowa For Diverting Tobacco Money

The Campaign for Tobacco-Free Kids just came out with a report, “A Broken Promise to our Children: The 1998 State Tobacco Settlement 13 Years Later.”

This report details how much each state received in the cigarettes online settlement and how little of that money actually goes toward cheap cigarettes prevention. I am appalled to learn that in Iowa, only 1.1 percent of this settlement money goes to cigarettes prevention. The rest of it is put in the general fund.

With Big Tobacco pouring millions into our state daily to market its deadly product to youth, our elected officials should be ashamed that not only have they been cutting the tobacco prevention and education funding, but that they also don’t use the settlement money as it was intended.

› Read More

Revenue From Tobacco Settlement Flattening Out

Big Tobacco's payments to New Mexico for smoking cigarettes-related deaths are declining.

Even so, at least one legislator said Monday this was no indication that cigarette companies were losing customers or profit margins. The falling numbers may be because of a shifting marketplace.

Elisa Walker-Moran, a state economist, said New Mexico expects to receive $38.6 million from cigarettes online companies this year. That is down from $40.9 million in 2010.

Walker-Moran also projected that the amount of revenue from the buy cigarettes settlement will be flat in the next few years.

One reason for the decline is that cheap cigarettes companies subject to the agreement are losing market share, Walker-Moran told a legislative committee. But state Rep. Gail Chasey, D-Albuquerque, said the lower payment to the state was but another example of how tobacco companies had maneuvered a mass settlement to their advantage.

These cigarette makers may be losing some of the domestic market, but they are making that up with worldwide sales, Chasey said. Tobacco companies that settled lawsuits with New Mexico and 45 other states are using market changes to their advantage, she said. "They prevailed in a number of ways, and that was one of them," Chasey said.

Tobacco has been under siege in the United States since 1994, when Mississippi's attorney general sued the four largest companies for health-care costs associated with smoking cigarettes.

Mississippi, Texas, Florida and Minnesota then reached individual financial settlements with major tobacco companies.

The rest of the states and U.S. territories approved a joint settlement in 1998 with four cigarette giants - Philip Morris USA, R. J. Reynolds Tobacco Co., Brown & Williamson Tobacco Corp. and Lorillard Tobacco Co.

At the time, the companies had 99 percent of the market share.

Another 50 tobacco companies have since joined in the master settlement.

New Mexico had hoped to stash half of the settlement money in its biggest savings account. But in recent times the state has had to spend that money to keep Medicaid solvent.

Members of the New Mexico Legislature's tobacco committee also voted Monday to introduce a bill in January to include more cigarette companies and sales in the master settlement.

The proposal would apply to cigarette packs with tax-credit stamps that are sold by tribes and pueblos.

Republican Gov. Susana Martinez vetoed a similar bill last winter.

› Read More

MS Being Short Changed Millions Of Dollars In Tobacco Settlement

The state of Mississippi is being short changed millions of dollars in the 1998 Tobacco Settlement. That's according to a motion heard in Jackson County Chancery Court today.

In arguing for the state Biloxi Attorney Matthew Mestayer said Brown and Williams, one of the four major cigarette companies in the tobacco settlement, excluded 7.8 billion cheap cigarettes made by Brown and Williams for another company.

Mestayer said those cigarettes were not included in Brown and Williams' production numbers to come up with the tobacco settlement.

Mississippi receives 90-100 million each year from the settlement.The motion seeks to add payment for those cigarettes online into the 1998 agreement.

Mestayer said, to date, Brown and Williams has short changed Mississippi $8.1 million.

› Read More

Tobacco Payment Suit Goes To Trial

A county judge heard Monday a claim by Mississippi Attorney General Jim Hood that the State has received "substantially less" than it should have under a settlement agreement with tobacco company R.J. Reynolds.

According to the Mississippi Press, Jackson County Chancery Judge Jaye Bradley presided over the non-jury trial, which is expected to last two days.

Hood filed the lawsuit in February 2010. He alleges that R.J. Reynolds Tobacco Co. "overstated" its 1997 base-year profit and has failed to report shipments of "free," "continuity," and lost or stolen cigarettes.

The tobacco company was part of a master settlement agreement in 1997 that included 46 states and was led by then-Mississippi Attorney General Mike Moore.

Mississippi, which was represented by now-jailed attorney Richard "Dickie" Scruggs, had a separate agreement from the 46-state settlement.

"When it shipped these cigarettes, R.J. Reynolds necessarily anticipated that they would be consumed by smokers in the United States and all or virtually all of them were in fact consumed in the United States, thus contributing to Medicaid and other costs that the Mississippi Settlement payment amounts were intended to offset," Hood wrote in the lawsuit.

"Under any plausible meaning of the term, these cheap cigarette online were 'shipped for domestic consumption,' and they should have been included in the Actual Volume figures reported by R.J. Reynolds."

The attorney general says R.J. Reynolds should be required to report the actual number of cheap cigarettes it shipped for domestic consumption in each year beginning in 1997 and to include in such figure the promotional, free, "continuity incentive," and lost or stolen discount cigarettes it failed to report.

Then the correct amount the State is entitled to receive under the settlement can be calculated, Hood says.

› Read More