Tobacco settlement funds are working

Nov. 27--Oklahoma's decision to accept a settlement with big tobacco 15 years ago has led to big bucks.

More than $1 billion so far.

Earnings from the endowment that was started with those payments will continue as long as tobacco is in use and most likely long after.

This year at least $35 million will be spent among 67 programs in nearly every county to prevent and end tobacco use, promote health and wellness and continue research.

Grants will help pay for a smoking cessation helpline, sidewalks in Collinsville, a physical health lab at Jenks schools and materials for the annual Great American Smokeout cessation campaign.

Oklahoma is the only state with a constitutionally protected trust for tobacco settlement funds.

Former Oklahoma Attorney General Drew Edmondson was one of eight state attorneys general charged with negotiating the then-largest settlement in the nation's history.

"When the state attorneys general band together in a particular cause, it can be very effective in stopping improper and illegal practices," Edmondson said.

"Since the tobacco settlement, they have shown in a number of arenas where they have been trying to enforce laws of their own states and with the authority granted under federal law. They are much more powerful together than a single attorney general taking on an industry alone."

While the money is impressive, it wasn't what motivated Edmondson, who is now practicing law at GableGotwals in Oklahoma City.

That came from the unethical behavior and lies told by tobacco companies and Oklahoma's bottom ranking in nearly every health indicator.

"That did two things," Edmondson said. "First, it said this is the kind of evidence I could give a jury that will really help win a case. Second, it kind of made me mad."

Fighting big tobacco

When Edmondson took office in 1994, he wasn't convinced the state should take on big tobacco.

Then, other states started filing class-action lawsuits, and evidence was being released.

The public learned that companies hid studies linking smoking to cancer and directed their advertising at youth.

"They referred to children as the replacement market because customers were dying at the other end of the age spectrum," Edmondson said. "They referred to cigarettes as nicotine delivery devices."

Edmondson believes the tobacco-company attorneys and public relations firms were accomplices.

"Widows and children never got documents showing the industry knew their product was harmful," Edmondson said. "The attorneys were participating in the fraud."

Congress failed to pass a settlement in 1997.

The following year, the National Association of Attorneys General convened a team to negotiate a master settlement. Edmondson was on that geographically and politically diverse legal team.

A turning tide

Edmondson's goal was to get rid of all attempts to hook youth on tobacco.

That meant the end of Joe Camel and other cartoon characters, sponsorships of concerts and sporting events, single- or two-cigarette packaging and freebies featuring tobacco logos.

It included a ban on buying product placement in movies, no more billboard advertising, marketing on television or coupon discounts.

"I never doubted it once we got into it," Edmondson said.

Until that point, no tobacco company had lost a lawsuit, but public opinion was turning.

"They were convinced they would lose, or they would lose on appeal," Edmondson said. "The price tag for such a loss could have been higher than they were willing to pay."

When the settlement was announced, Edmondson made his $2 billion, 25-year projection based on the prospective first two years of payments.

"Fact is, payments will continue as long as cigarettes are around, but I hope we kick the habit one of these days," Edmondson said.

Investing in health

Once Oklahoma agreed to take the deal, a second negotiation began on what to do with the money.

Gov. Frank Keating floated the idea of using it to shore up the teacher's retirement fund.

That's when Edmondson started throwing his political weight around.

"This was based on the health of Oklahoma, and the money should be spent on improving the health of Oklahoma," Edmondson said.

He didn't want the money to evaporate into the state's general fund.

After some discussions, Edmondson agreed on a statutorily protected trust, and voters approved the constitutional change in 2000.

By law, 75 percent of the settlement goes into a trust and 25 percent into the state's budget.

Of the more than $1 billion received so far, about $797 million is in the trust. Earnings from investments pay for the tobacco cessation and health programs.

The Tobacco Settlement Endowment Trust is governed by a seven-member board of directors and a separate five-member board of investors.

"That trust will have the longest-lasting, good impact for Oklahoma," Edmondson said. "We need to watch the Legislature every year to make sure they don't try to take money out of that trust or try to subvert it from its purpose.

"That $800 million makes for a very tempting target, but it's just now getting to the point of having a significant impact. It has the ability to do great good."

Oklahoma tobacco facts

--Ranked 39th last year in tobacco use, up from 47th in 2011.

--23 percent of Oklahomans are lighting up, compared to 19 percent of adults nationally.

--28.7 percent of Oklahomans smoked in 2001, reducing the number of smokers by more than 100,000.

--About $1.16 billion in medical costs are associated with smoking.

--More than 250,000 people have been served since 2003 through the state's cessation Helpline, which provides items and support to quit tobacco use.

--A record 38,732 people contacted the Helpline last year.

--6,085 Tulsa County residents were served through Helpline last year.

--More than 40 percent of Helpline callers have no health insurance, and more than 60 percent of callers have an income of less than $20,000 a year.

--An estimated $18 million in direct costs from tobacco use have been saved through the Helpline program.

Source: Tobacco Settlement Endowment Trust

Ginnie Graham 918-581-8376

[email protected]

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