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Is $246 billion tobacco settlement a massive government fraud?

Approximately $32 billion has been paid out since the national tobacco settlement was reached in 1998. Most of the money has been used to finance things unrelated to smokers health care, health care in general, or smoking prevention programs.

Antismoking activists once claimed the landmark $246 billion settlement was a major victory for public health. Today they and the rest of us are reaping what they sued.

Broken promises

A recent study from Yale University, published in the October 3, 2002 issue of the New England Journal of Medicine, reveals the big lie: Almost none of the tobacco settlement money has been spent for health care or prevention-cessation programs.

By comparing state tobacco control program expenditures with settlement payments for 2001, lead author Cary Gross M.D. and colleagues conclude less than 6 percent of the settlement funds were directed to tobacco-related programs.

The Centers for Disease Control and Prevention (CDC) recommended states spend from $5 to $15 per person, or roughly 20 percent of the settlement money, on tobacco control programs. The Yale University researchers found most states arent even spending half that amount. Only Arizona, Hawaii, Indiana, Maine, Massachusetts, and Mississippi spent more than the CDC recommendations on tobacco programs last year.

According to Bill Core, executive vice president of the Campaign for Tobacco-Free Kids, only about 4 percent of the settlement monies paid out for fiscal year 2002 will be spent on tobacco prevention and cessation, compared with a high of 9 percent in 1999. Core said, I think it is fair to say that even prior to the economic downturn most states were not even close to living up to the promises that were made.

The major victory for public health has given way to a spending spree on what cannot honestly be called health care- or smoking-related matters, paid for entirely by smokers.

Great American smoking scam

Payments from the settlement were originally agreed to be made over 25 years, but 15 states have already sold their rights to some or all future payments in an effort to get quick cash for balancing over-spent budgets or for spending on political pork. As the New Year turned one day old, Governor Bob Holdens (D-Missouri) administration announced the state would try to sell its rights to all future revenue in order to balance a bankrupt budget and keep past spending promises.

Settlement dollars have been used to pay for new schools in New Hampshire, property tax rebates in Illinois, and college scholarships in Michigan. Millions of settlement dollars have been spent to build and improve harbors in Alaska, while North Dakota has spent most of its early settlement money on flood control.

North Carolina, perhaps with an eye toward giving something back to the smokers whose money is financing the settlement, spent $40 million to upgrade tobacco farmers curing furnaces so they could produce better tobacco. In a defense of the move, House Majority Leader Phil Baddour (D) told CBS News the economic health of the state is dependent on tobacco. We are doing a good thing, he said.

Less comprehensible, perhaps, are the decisions by seven states to invest a portion of their settlement funds in tobacco company stocks.

Victims of extortion

While the tobacco settlement agreement may have served the political interests of many state attorneys general and padded the wallets of private contingency fee lawyers, it has become obviously harmful to our civil rights and economic freedoms.

The tobacco settlement forced about a $1 per pack increase in the retail cost of cigarettes, to which states are adding more taxes in the name of ... you guessed it ... health care. The tobacco settlement has been kneaded into a very regressive tax on the people who can least afford the cost and who tend to need health care the most, but has done little or nothing to ensure they get it.

Because of a deal in which they had no say, smokers in states that signed onto the bargain may not litigate as a class, sue for punitive damages covering past acts, or collect compensatory damages in excess of an agreed-upon cap.

The peculiar logic and law of the tobacco settlement has opened the door for even more public health-related contingency lawsuits, like those aimed at the fast-food industry for its alleged role in creating an obese nation. The trial lawyers are hoping to find 12 jurors willing ignore the reality that people freely choose to eat their way to obesity, as they eventually found 12 willing to say smokers werent aware of the risk cigarettes posed to their health.

When it comes to the behavior of our fellow citizens, we appear to have abandoned the principles of free choice and personal responsibility, in favor of big-brother regulatory mandates and self-serving forgiveness for the consequences of individual lifestyle choices.

The consequences for our health as well as our freedom can only be bad.

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