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draft settlement

CCAA Calls New Mexico's Attorney General Madrid Soft on Tobacco Industry Violation

August 16, 1999

Attorny General Patricia Madrid
attn: Mr. Glenn Smith
Office of the Attorney General of New Mexico
P.O. Box Drawer 1508
Santa Fe, NM 87504-1508

Dear Mr. Smith:

I thank you for your recent letter and the compliments to our organization concerning our efforts in the battle against tobacco. I believe, as you note, that we are doing our part as citizens. We do wish our government would do its part as well.

When Mr. Udall made public summary details regarding the Master Settlement Agreement (MSA) in November 1998, our organization openly opposed signing the document along the timeline proposed by the tobacco industry. We could see no apparent reason to "rush" into this pact. We asked only for a reasonable amount of time to allow New Mexico's citizens and representatives the opportunity to review the offer here and here.

The Attorney General's office did not hear our cry. Today, citizens must live with an irrational agreement -- not for 25 years as is commonly misreported in the media, but through perpetuity. By signing the MSA, the State of New Mexico formed a cozy relationship with big tobacco.

Since November, our organization as well as individuals and organizations across the country have studied the proposal. From the public health perspective, there are very few reasons to support the MSA. In general, the MSA provides the tobacco industry with privileges not generally considered as "natural rights" for a product of this nature. Additionally, there are many negative outcomes associated with the settlement.

First, it appears that the principle reason the various Attorneys General signed this agreement was the lucrative financial incentive. Most analyses show that the approximate $40 million payment we are scheduled to receive will cover only about half the current annual Medicaid costs the State of New Mexico supports due to tobacco related disease, illness and death. While these medical costs will likely increase exponentially, the settlement dollars remain fixed and may actually decrease over time. I am sure you are aware that due to anticipated inflationary growth, the $40 million annual payment will be worth about $12 million by the year 2025.

Although New Mexico's initial settlement installment will cover only about 49% of the annual costs to the state, payments twenty years from now will cover only about 5% of these costs. This is not a good financial investment in New Mexico's future.

I have posted a complete economic analysis on the CCAA Web site. These figures adjust for inflation and demonstrate that the actual cost to the State of New Mexico due to the provisions of the MSA will exceed $3.5 billion -- and over 75,000 lives. You may view this work here.

Second, the citizens of New Mexico as well as our representatives do not understand the terms of the MSA. As you remember, when I first contacted you about the Brown & Williamson billboard violation, you were unclear whether this simple act violated the provisions of the settlement. It makes no sense to enter an agreement with an industry with a history of maliciously deceptive and manipulative practices without first fully understanding the terms of the proposition.

Third, as tobacco is a regulated and controlled substance, the State of New Mexico was not required to agree to the provisions of advertising listed in the MSA. The State extended privileges that are not in the best interest of today's -- or tomorrow's -- youth.

In general, most adults are now fully aware of the intensely addictive power of nicotine, we must do everything in our power to protect children, kids and teens from the tobacco industry's encroachment into their lives. While research illustrates that our young citizens are aware of the negative health affects associated with tobacco use, it also shows they underestimate the grasp of nicotine addiction.

Fourth, the MSA did not compensate the State of New Mexico for the past burdens associated with tobacco-related costs. As New Mexico is one of the poorest states in the union, these losses have affected citizens more greatly here. Any financial gains should be used to repair the damage done to the state's infrastructure. At present, many tobacco control organizations lobby to use this money to fight the tobacco industry. Had the Attorneys General had the courage to resist big tobacco in the first place, we would not have to now consider using these precious resources to continue fighting the tobacco problem.

Therefore, when the State of New Mexico finds Brown & Williamson in violation of the MSA, it is critical to demonstrate our resolve. Rather, the Attorney General's office demonstrated that we all are "a bunch of cozy partners." We are not. Today, the tobacco industry's history is well documented. They have consistently manipulated and deceived the American public.

We do not agree with your decision to allow them to justify this latest flagrant violation of the spirit of the MSA by saying there was a communication problem.

Keep in mind that during the six weeks your office allowed Brown & Williamson to maintain their tobacco advertisement billboard, over 57,000 Americans died from tobacco-related illnesses and disease. This number exceeds the number of U.S. military personnel deaths for the combined Vietnam Conflict. This was not an inconsequential event.

While we thank you for recognizing our important role in this matter, we feel betrayed by our government. We need greater courage and resolve from your office on this matter.

Thanks in advance for you help and interest in this matter.


Scott Goold, Director
Citizens for Clean Air in Apartments