Up in Smoke

How Are States Spending Their Tobacco Settlement Funds?

      Remember that huge settlement between the states and tobacco companies in 1998? The tobacco companies agreed to pay $200 billion to the states to help pay for medical costs from smoking-related illnesses, and to help prevent kids from smoking. The settlement was hailed as a legal victory against "Big Tobacco."

President Clinton called the deal "a milestone in the long struggle to protect our children." (Politicians always stress protecting "the children.") Washington state's attorney general, Christine Gregoire, said: "These lawsuits by these attorneys general were on behalf of those 3,000 children who were addicted every day." New York's then-Attorney General Dennis Vacco said, "We're going to save the kids of America."

But once the checks arrived, most of the promises regarding kids went up in smoke.

Michael Horowitz of the Hudson Institute once called the tobacco settlement "the foulest, rankest scandal" he'd ever seen. Now that the money is in play, I see what Horowitz meant.

While much of the money did go to programs like Medicaid, the General Accounting Office says less than 7 percent of it has gone to anti-smoking programs. Where else did it go?

In North Carolina, politicians gave $200,000 to a place that holds horse-riding competitions.

A county golf course in New York got almost $1 million, including $200,000 for golf carts.

And of course the lawyers got even more. Dickie Scruggs, brother-in-law of Senate Minority Leader Trent Lott, R-Miss., is said to be getting more than $800 million. Peter Angelos, who's rich enough to own the Baltimore Orioles, is getting $150 million.

Yet Mike Moore, Mississippi's attorney general had the nerve to call the tobacco deal "probably the finest hour for trial lawyers in America."

Tobacco farmer Bobby Bisset agrees with Moore. He thinks it probably was their finest hour, "because they made a lot of money out of it."

And guess who else got some money out of it? Tobacco farmers like Bissett.

"Why shouldn't I get some of the money?" Bissett asked.

"After the money gets to rolling in, everybody gets interested in money," said Keith Beavers, a North Carolina tobacco farmer.

They sure do. North Carolina has now spent more than $42 million to help the tobacco industry, giving some of its settlement money to a tobacco auction house and a museum of tobacco farming.

The states say all this will help create jobs and stimulate the economy.

The bureaucrats cut a deal promising they'll help stop kids from smoking. But who was really helped? Rich lawyers got richer and farmers got help producing tobacco.

Give me a break!

By John Stossel

ABC news story