|THE SMOKE CLEARS|
November 23, 1998
JIM LEHRER: The new tobacco deal. Here to explain the details is Saundra Torry, who's covering the story for The Washington Post. Welcome.
SAUNDRA TORRY, The Washington Post: Thank you, Jim.
JIM LEHRER: Let's go through the settlement here. What have the four tobacco companies agreed to do, in terms of money?
|Splitting the money.|
SAUNDRA TORRY: Well, first of all, the states and the District of Columbia will split up $206 billion, not a bad haul, and there are some advertising and marketing restrictions in the agreement. It's bye-bye to Joe Camel forever, no more billboards on highways, some limits on the sponsorship of sports events.
JIM LEHRER: All right. On the money, the $206 billion, how is that divided up? Is there a formula that gives so much to this state, so much to this state, et cetera?
SAUNDRA TORRY: Yes. Based very much – these lawsuits were for the treatment. States said they paid all this Medicaid money to treat sick smokers, and so this was supposed to be money back for that in the main, and so it's on a formula of population, Medicaid population, numbers of smokers. Maryland, for instance, is going to get about over $4 billion, Virginia about $4 billion.
JIM LEHRER: And when the money actually is – when do the states actually get this money?
SAUNDRA TORRY: There's an up-front payment this year, and then in the year 2000, the payments begin and go on for 25 years, and supposed in perpetuity.
JIM LEHRER: Okay. Now do the states have to make a -- have to prove that this money that they're spending is actually – it's a person who is ill, whose -- their pain was actually caused by cigarette smoking, or is that just an assumption that's made?
SAUNDRA TORRY: Well, no, they would have had to go to trial. They would have had to prove a lot usually by statistics. The tobacco companies tried to argue you'd have to bring in every single sick smoker in the state, and that was thrown out in many places. But now the money can be used for anything actually.
JIM LEHRER: And it doesn't just have to be used for –
SAUNDRA TORRY: Roads, bridges, colleges, whatever they want to, and that's going to be the next fight; that's going to be the next battle.
JIM LEHRER: As to how it's spent?
SAUNDRA TORRY: The public health community wants this money spent for tobacco control, and they are already gearing up to say, look, we didn't get a lot out of the settlement. They are very opposed to the settlement, but let's at least get this money used for tobacco control and health uses and not to build a bunch of highways.
JIM LEHRER: Now, if they were to do that, they would have to do that 46 times, right? I mean, this deal – they can't interfere with this deal -- is that correct?
|Diverting the funds?|
SAUNDRA TORRY: That's correct. Basically the state legislatures, or however the, I guess, judges decide in each state – it's going to be a scramble. I mean, you put this kind of money out, everybody's going to want it. And what they're most fearful of the tobacco companies agreed in the deal not to battle uses for tobacco control or public health, but the public health folks fear that they, for instance, will try to divert it to other public health uses, not to uses for tobacco control.
JIM LEHRER: But as a practical matter, as we sit here, that will be up to each individual state legislature, governor, et cetera?
SAUNDRA TORRY: Absolutely. At least so far.
JIM LEHRER: So far. All right. Now the other part, of course, is the limits on advertising. Specifically, what are those?
SAUNDRA TORRY: A few of them are, as I said, Joe – cartoon characters are gone.
JIM LEHRER: Cartoon characters.
SAUNDRA TORRY: So Joe Camel's gone. What the public health folks are focused on, what they don't like is what's not in the deal. For instance, Joe Camel is gone; the Marlboro Man still lives on, very, very popular.
JIM LEHRER: Why the difference?
SAUNDRA TORRY: Human figure. All they got rid of was cartoon figures. Now, last year's deal would have gotten rid of them both. And those are the kind of details that they talk about. Sporting events, the FDA would have gotten rid of all sporting events with these brand name sponsorships. This -- we're still going to have one per year – for instance, the very popular Winston Cup NASCAR races can still be around if Reynolds decides that's what they want to do.
JIM LEHRER: All right. Now, the deal – last year's deal – had – it went to the Congress and it was defeated in the Senate. It was defeated in the Senate. Now does this deal that is being signed tonight, does it have to go to the United States Congress?
SAUNDRA TORRY: No. It's basically a lawsuit being settled. The people who sued are the state attorneys general in every state. The tobacco companies were the defendants, and that's it for this. Now, it's conceivable Congress and the President could get involved in saying the federal government wants to take its share of these Medicaid funds, since they pay a portion of Medicaid. So we'll have to see what happens with that. That's still developing.
JIM LEHRER: Well, explain in language that we – that I can understand – I started to blame it on everybody else, but why this deal, the deal -- the original deal fell through because Congress didn't ratify it. Now they've come through and they've come up with it. What's the major difference? Why is this one clean in terms of not having – not have to face federal legislation, while the other one did?
|Paying for peace.|
SAUNDRA TORRY: It's much more modest. For instance, the other deal would have given the FDA clear authority over tobacco products. And that's where the heavy marketing and ad restrictions came in. It also was going to impose penalties on the companies we're going to have to pay if the use of their product among young people didn't go down. It was also going to give them some protection against class-action lawsuits and state attorney generals can't make new laws like that. This is a pure and simple you get this, I get that. The tobacco companies got peace with all these lawsuits. Those are over and a big sort of public relations boost, I think, with this.
JIM LEHRER: So would it be an oversimplification to say what this is, it's just a small piece of what the deal was that went down earlier this year, not a small piece, but just a piece of it?
SAUNDRA TORRY: I think the public health folks would say it's all about money and nothing else. The industry would argue and say it was a bigger piece, but, yes, it is definitely a more modest piece of that. It's not what we had in Congress.
JIM LEHRER: All right. Now, if somebody wanted to derail it back to the – to the derailing this now, the people who are opposed to it, and it is the public health community – we had a representative of the American Lung Association on here last week, in fact. And he was talking – his major complaint was that local government was now prevented from suing under this. Is that your reading of it?
SAUNDRA TORRY: That's true. That's the lawyer's reading of it is that this settled government suits basically – local and state government suits are settled. They would be able to sue. But let's say they won $100 million – some city -- that would be subtracted from what the tobacco companies had to pay to the state so there's this pot of money and no one would really gain more money if a city went to court and sued, it would just be subtracted from this pot.
JIM LEHRER: Now, the signatures in terms of today, when we think of this, we should think of it as a final deal then, is that right?
SAUNDRA TORRY: Judges still have to give their consent to this. No settlement is a settlement and still a judge gives his or her consent to it. So we still have to go through that. And I think some of the public health folks hold out and some hope that there's something they can do in those courtrooms to object to this. And I think that's going to be the next round of this. But I also think that they think the chances are very slim to do that. And many of the groups are just moving on to what's going to happen to the money and let's focus on that.
JIM LEHRER: Now, this does not prevent individual lawsuits against tobacco companies, does it?
SAUNDRA TORRY: Absolutely not. Those would have always gone forward. Those were – there was discussion of that I think way early on. But that never went anywhere. Individuals, you or I could sue a tobacco company.
JIM LEHRER: Okay. Well, thank you very much.