Texas Gets $15.3 Billion Tobacco Settlement

SATURDAY, JAN. 17, 1998

Texas will get $15.3 billion over 25 years from the tobacco industry to settle its lawsuit over smoking-related health care costs - a deal state officials Friday called the largest settlement in the history of U.S. litigation.

Florida and Mississippi last year negotiated deals with the industry totaling $14.4 billion.

“Our lawsuit asserts that the history of this industry has been rooted in a concerted, decades-long conspiracy to conceal the truth about tobacco,” Attorney General Dan Morales said.

“As a direct result, millions of Americans - fathers, sons, daughters, mothers - have died horrible, preventable, premature deaths. This must stop,” he said. “Nothing less than the promise and the potential of America hangs in the balance.”

In a joint statement, Philip Morris, R.J. Reynolds, Brown & Williamson, Lorillard and United States Tobacco said: “Today’s settlement with the state of Texas again demonstrates that the industry is prepared to cooperate with government and the public health authorities to discourage underage tobacco use.”

Texas will receive $725 million up front and more than $1.2 billion this year primarily for children’s health care, anti-smoking education and enforcement.

Over the next 24 years, the state will receive $14 billion, which the Legislature will decide how to spend.

The settlement also requires the tobacco industry to remove all billboards in Texas - including those in sports stadiums - within four months. Advertising also must be removed from buses, taxis, airports and trains.

The deal pays Texas more than $1 billion more than it would have received in the proposed national settlement negotiated with a coalition of states last June. By breaking out on its own, Texas is guaranteed to be paid if the national deal, which is pending Congressional debate in Washington, doesn’t go through.

“At first glance, the tobacco settlement appears to be a windfall for Texas,” Gov. George W. Bush, Lt. Gov. Bob Bullock and House Speaker Pete Laney said in a joint statement.

“However, we must closely examine the details and find out what strings are attached to the settlement money.”


Click here to comment on this story »