Debate and Issues Index

draft settlement

Glantz - "What a Scam"

The more I learn about the fine print in the deal, the less likely I think that the states will ever see they money they think they are getting.

It deal specifies payments by the tobacco industry, which can be reduced accoring to the following:

  • Inflation adjustment (which will not keep up with medical cost inflation)
  • Volume Adjustment (which overstates the effects sales declines)
  • Previously settling states reduction
  • Non-settling states reduction
  • NPM adjustment
  • Offset Miscellaneous payments
  • Federal Tobacco Legislation Adjustment (which could give tobacco coompanies
  • a credit for money that smokers pay in federal tobacco taxes)
  • Litigating Releasing Parties Offset
  • Offsets for claims described in sections XII(a)(4)(B) and XII(a)(8)

In addition, the deal allows the tobacco companies to be insulated from the rest of the multinationals, making it easier for them to go bankrupt.

Various authorities have said that the deal will amount to about 35 cents per pack. Under the federal tobacco legislation adjustment, the tobacco companies would get credit for the taxes paid on cigarettes, so if the federal cigarette tax was increased by more than 35 cents a pack, the states would loose their money entirely.

What a scam. Perhaps we should make a citizens' arrest of Gregoire, Lungren et al for consumer fraud.