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Tobacco Settlement Still under Review

November 18, 1998
By: Pervaiz Shallwani
State Capital Bureau
Links: Tobacco settlement details

JEFFERSON CITY - With two days before the deadline, both Missouri's governor and attorney general said Wednesday they still were reviewing the details of the historic national agreement with the tobacco industry.

Attorney General Jay Nixon must decide by Friday on weather to sign a $6.7 billion settlement put on the table by U.S. tobacco companies, or take the state through a litigation process.

Nixon is awaiting feedback from the Gov. Mel Carnahan, the public health community and final review from his trial lawyers before he makes his decision, said spokesperson Mary Still.

Still said the attorney general expects to make a decision some time today or Friday morning.

"We are continuing to meet with legislative leaders and trial leaders to see if their is the ability to get more money," Still said. "Everybody is impressed with the money and say it is a serious offer worthy of consideration."

If Nixon doesn't sign the agreement by noon Friday, Missouri will join other states that choose not to sign the agreement in a court battle against the tobacco companies. A certain number of states would have to sign onto the agreement for it to go through, said Scott Williams spokesman for the tobacco companies.

"The industry has said a sufficient number, but a hasn't put a specific number on the table," Williams said. He said the tobacco companies would disclose the number on Monday.

As of Wednesday, the National Association of Attorney Generals, said a count of how many states had signed onto the agreement had not been determined and said that a number would probably not be available until Friday.

CNN has been trying to keep an update number of states that have signed the agreement on its web site. As of Wednesday afternoon, it reported 15 states have signed the settlement.

Carnahan met with Nixon to discuss the provisions of the deal on Tuesday.

"We are reviewing the agreement and have not made any pronouncements," said Carnahan spokesperson Chris Sifford. "The obvious one plus is the $6 billion it would bring a lot of money to the Missouri tax payers."

Sifford said as he sees it, their is no reason not to accept the settlement, but said that doesn't mean there aren't any. The settlement has been handed over to the governor's chief council to be reviewed and a decision from the governor's office is expected sometime tomorrow afternoon.

While Nixon was meeting with the governor, members of the attorney general's office met with the various public health agencies in Columbia on Tuesday to discuss the settlement. Some of the bright spots to the agreement Still said are the offer by the tobacco companies to get rid of cartoons in their advertisements, ban billboards and other outdoor advertising and the offer to no longer sell or distribute apparel or merchandise containing brand-name logos.

"If we went to court, these things would be ruled unconstitutional by a judge, because it would be a violation of first amendment rights," Still said. "These are things that you can only get out of a settlement, because the tobacco companies are willing to agree to them."

She said the public health community will weigh the current provisions against provisions that are not offered in the settlement, like FDA regulation over the tobacco companies, before giving its final input into the settlement, which is expected sometime today. The provision calling for FDA regulation was in the tobacco settlement rejected by congress in June of 1997. Nixon favored the last plan which was a $5 billion settlement.

"Financially, this is a better settlement," Still said. "But the last one was a stronger deal."

According to the current settlement, Missouri stands to gain a $6.7 billion share of the $206 billion agreement over the next 25 years.

"Their is not indication of any success in congress," Still said of getting a better deal. She said the settlement is an opportunity for the states to get many of the things they are looking for out of court.

The Missouri Republican Party issued a statement on Tuesday urging the Attorney General to take the settlement. Party Executive Director John Hancock said he did not understand why Nixon was waiting on this settlement when he was in favor of accepting the $5 billion plan rejected by congress 18 months ago.

Hancock accused Nixon of holding back in order to get more money for his trial lawyers, because Missouri's contract with the private lawyers hired for this case changes after January 3, 1999. A settlement reached before that date results in a straight payment to the lawyers by the tobacco companies of $250 per hour. A settlement reached after that date, however would give the lawyers a percentage of the agreed amount, Hancock said.

Still said the Nixon wants to be completely sure of the deal before he signs it. She went on to say that it was because of Republicans that the last deal fell through.

"John Ascroft issued a statement saying that Missouri should accept the agreement because it is good for the kids, but the last deal was better for the kids and he rejected that," Still said. Both Ascroft and Bond voted against the previous settlement.