BY MICHAEL HAWTHORNE
Enquirer Columbus Bureau
COLUMBUS - Tobacco companies would pay Ohio up to $422 million annually for at least the next 25 years as part of the multistate settlement announced Monday.
While Attorney General Betty Montgomery said she will decide by Friday whether to sign on to the agreement, she said it contains provisions the state couldn't hope to get from its pending lawsuit against Big Tobacco.
"These include restrictions on advertising and changes in the corporate culture of the tobacco companies," Ms. Montgomery said in a prepared statement. "Also, if we choose not to participate, we risk the possibility of losing at trial and gaining nothing."
She said she would consult Gov.-elect Bob Taft before making her decision. But Brett Buerck, Mr. Taft's spokesman, said it's Ms. Montgomery's call to make.
Anti-smoking groups called the agreement a "first step," noting it failed to include a key provision of the proposed national settlement that died in June: regulation of tobacco by the Food and Drug Administration.
"We like to see billboards coming down and the fact that the tobacco companies can't lobby against anti-smoking legislation," said Robert Crane, associate director of the Family Medicine Residency at the Ohio State University and founder of an anti-tobacco group called Tobacco to 21.
Dr. Crane and other activists are reserving judgment on the settlement until they've analyzed the text of the proposed deal. But they say state lawmakers need to be reminded that Ohio's lawsuit sought to recover the cost of treating smoking-related illnesses. Indeed, activists from groups such as the American Cancer Society and the American Lung Association may soon find themselves battling in the General Assembly to secure a share of the settlement for anti-smoking programs.
"We need to make sure this money is used to prevent people from using tobacco in the first place," said Harvey Schwartz, vice president for marketing and communications at the American Cancer Society of Ohio.
Health groups want at least one-third of the proceeds spent on smoking-prevention programs targeted at youngsters. Mr. Taft wants to spend some for school repairs and health care coverage for uninsured children. And the National Taxpayers Union of Ohio says the money should be refunded to citizens.
They may end up arguing over a smaller pot of money. State leaders are cautioning that 60 percent of the windfall may be claimed by the federal government to recover its share of Medicaid spending to treat smoking-related illnesses.
"My advice is don't spend the money until the check clears," said Senate President Richard Finan, R-Evendale.
The proposed $206 billion deal was negotiated by officials in eight states and is designed to cover the 46 states that haven't reached broad settlements with the tobacco industry. Minnesota, Florida, Texas and Mississippi already have reached separate settlements with the industry.
If the multistate deal is accepted by enough states, Ohio would stand to gain more than $9 billion - $4 billion more than the state would have received from the proposed national settlement.
In return, Ohio would drop its lawsuit against tobacco companies pending in Franklin County Circuit Court. Other states would do the same.
Ohio's first payment - $120 million - would be made by the end of the year. Subsequent annual payments would range from $323 million in 2000 to $422 million in 2003, according to a payment schedule provided by Ms. Montgomery's office.
Unlike the national proposal, the deal negotiated by state attorneys general would not require congressional approval. It also would be up to Congress to decide whether the FDA should regulate tobacco.
Ohio was the 24th state to file claims against the tobacco industry, alleging it was forced to spend billions of dollars in Medicaid-funded treatments because cigarette makers were negligent.
Between 1980 and 1993, Ohio spent $3.3 billion treating smoking-related illnesses, according to the federal Centers for Disease Control and Prevention. Much of that money came from Medicaid, a health care program for the poor, disabled and elderly funded jointly by the federal government and the states.
About 20,000 Ohioans die each year from smoking, Ms. Montgomery said.
It's unclear whether Ohio will get any additional money from an $8.6 billion pot of settlement proceeds intended to reward states that brokered the agreement.
In January 1997, Ms. Montgomery decided to stay out of the increasingly popular tobacco litigation, saying it would divert attention from her office's crime-fighting priorities. She also said there was a lack of court decisions indicating that such lawsuits could be won.
Six weeks later, she cited tobacco's setbacks in Mississippi and Florida - along with a reduced caseload in her office - among the main reasons she changed her mind and decided to pursue the case. On Monday, her office faxed a statement to reporters hailing Ms. Montgomery's role in the multistate agreement. The statement came from Washington Attorney General Christine Gregorie, the chief tobacco negotiator for the states.
"Her determination to arbitrate this case and her persistence have helped us get to the point we are today," Ms. Gregorie said.
Meanwhile, Ahron Leichtman of Amberley Village, executive director of the national anti-smoking group Citizens for A Tobacco-free Society, told Cincinnati City Council Monday that the settlement is full of "tremendous loopholes you could drive a truck through." The settlement doesn't go far enough toward preventing cigarette advertising to kids, he said, or reimbursing for Medicaid coverage of smoking-related illnesses.
Further, he said, it would grant the tobacco industry "outrageous" protections against future lawsuits by states and localities. Questions about second-hand smoke and the regulating role of the U.S. Food and Drug Administration go unaddressed, according to Mr. Leichtman.
Council's Law and Public Safety Committee voted to draft a resolution, urging Ms. Montgomery to take more time to study the settlement proposal. The full council will consider it on Wednesday.
Anne Michaud contributed to this report.
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