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Illinois case could make odd bedfellows of tobacco industry, Attorney General

April 02, 2003
By: Jason McLure
State Capital Bureau

JEFFERSON CITY - The Missouri Attorney General's office is considering putting itself in the awkward position of proffering assistance to the tobacco industry it once held responsible for the smoking-related illnesses and deaths of thousands of Missourians.

On an April day nearly six years ago, Attorney General Jay Nixon announced that Missouri would join with other states in suing the tobacco industry in an effort to recoup billions of dollars in medical costs for treating smokers with lung cancer, emphysema, and other smoking-related illnesses.

"We now have proof that these companies have broken the laws of Missouri by willfully targeting young people and knowingly lying about the addictive nature of nicotine," said Nixon that spring day.

Two years later Nixon reached a settlement with the tobacco companies under which they agreed to pay the state $6.7 billion over 25 years, but this spring he could end up taking legal action that could hurt a class-action suit against the tobacco industry.

A $10 billion verdict against cigarette-maker Philip Morris in an Illinois court last month has led the company to warn state governments that it may not be able to pay them $2.5 billion it owes them this month.

In order to appeal the verdict, the court ruled the tobacco giant must post a $12 billion bond: $10 billion plus interest and fees.

This has stirred fears in Jefferson City that the golden goose might not be able to lay its next egg: Missouri is due to receive $55 million from Philip Morris by April 15. That's roughly as much as the state will receive from all the other tobacco companies combined this year.

State Budget Director Linda Luebbering said that in previous years Philip Morris has transferred the money to a bank in New York by March 31. This year, as a result of the Illinois case, it has failed to do so. This has caused the Attorney General's office to warn Luebbering that Missouri might not be getting $55 million the state's already spent.

The alignment between Missouri's and Philip Morris's financial interests could, ironically, leave Nixon in the position of joining with other attorney generals to ask the Illinois court to go easy on Philip Morris.

Vermont's Attorney General William Sorrell told the Wall Street Journal this week that he expected several attorney generals to do exactly that by filing motions in Illinois to have the tobacco company's appeal bond reduced.

Nixon did not return repeated phone calls from Missouri News on Wednesday.

Scott Holste, a spokesman for Nixon, said the Attorney General was considering "all legal options" in the Illinois case and had not ruled out intervening for Philip Morris.

Missouri's share of the tobacco settlement has been a boon for state lawmakers at a time when tax revenues have been weakening.

Though money from the settlement was supposed to be directed for health care and anti-smoking programs, Missouri lawmakers failed to allocate a single dollar to anti-smoking programs last year.