Tobacco Asia

Volume 18, Number 5

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Page 17 of 83

18 tobaccoasia The major US tobacco companies, including Philip Morris, RJ Reynolds, Brown & Williamson, and Lorillard, agreed to make payments to US state governments under the groundbreaking Tobacco Master Settlement (TMS) Agreement in 1998. It was heralded as a major step towards addressing the health issues surrounding tobacco use. But it hasn't quite turned out that way. loans will have to be made by future generations up to 50 years down the line. It's another classic example of short term gambling by government that trumps the public good. And that's not all. The agreement money had been earmarked to pay for anti-smoking cam- paigns and to treat patients with tobacco related diseases. It is instead being spent on "critical facili- ties" such as golf courses. The sorry saga began in 1998, when large tobacco companies agreed to annual payments to 46 states (four states made separate earlier agreements), the District of Columbia and five US territories in exchange for freedom from legal liability for harm caused by tobacco use. But there were a couple of major problems that are now coming back to haunt the deal. One was greed. Financial institutions are always on the prowl, sniffing out potential for large profits. That's their job, of course. The TMS was the biggest financial Up in Smoke How US states burned their grandkids with massive debt from tobacco "earnings" "It's another classic example of short term government gambling that trumps the public good" By Mike Phillips Increasing reports are emerging of how some states have mortgaged the annual payments for up-front cash, at huge interest rates. What's more, the legislators who struck the deals will not be held accountable, because the repayments on these

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