More tobacco settlement money may be received

The Northern Marianas will continue to receive payment from leading cigarette makers even after it has received the $15.9 million share in the $206-billion master tobacco settlement agreement, said Assistant Attorney General David Lochabey.

“As long as they sell cigarettes here, they will have to make payments,” said Lochabey who acts as the CNMI Consumer Counsel. Future payments shall be computed based on actual cigarette sale.

While there is no specific date yet on when the Northern Marianas will get the first installment of the $15.9 million fund, Lochabey said the cigarette companies already made an initial deposit of $2 billion in a bank.

Under the Master Tobacco Settlement Agreement, the Northern Marianas will receive payments in the year 2000 until 2024 ranging from $.5 million to $.7 million.

Beginning April 15, 2000, cigarette companies must have paid $4.5 billion. Additional payments shall be made based on the following schedule: 2001,$5 billion; 2002-2003, $6.5 billion; 2004-2007, $8 billion; 2008-2017 $8.139 billion (plus $861 million to the strategic fund); 2018 onwards, $9 billion.

In order to get its share in the multi-billion tobacco case, the CNMI filed a lawsuit against four of the biggest tobacco companies on December 23, 1998, namely, Philip Morris Inc., R.J. Reynolds Tobacco Co., Brown and Williamson Tobacco Corp. and Lorillard Tobacco Co.

Since the companies failed to file an appeal on January 23, 1999, Superior Court Presiding Judge Edward Manibusan declared the decision infavor of the CNMI final.

The settlement requires the industry each year for 10 years to pay $25 million to fund a charitable foundation which will support the study of programs to reduce teen smoking and substance abuse as well as the prevention of diseases associated with tobacco use.

It also creates an industry-funded $1.45 billion national public education fund for tobacco control. Such fund shall be used to carry out a nationwide sustained advertising and education program to counter youth tobacco use and educate consumers about tobacco-related diseases.

Advertising, promotion and marketing of cigarettes prohibits the targeting of youth. It also bans industry actions aimed at initiating, maintaining or increasing youth smoking.

To ensure that companies comply with the agreement, cigarette firms are required to develop and regularly communicate corporate principles which commit to complying with the Master Settlement Agreement and reducing youth smoking. It will also designate executive level manager as well as encourage employees to identify ways to reduce youth access and consumption of tobacco.

Tobacco companies spend more than $5 billion annually or $13 million a day on advertising and marketing campaigns, the Federal Trade Commission said.

With the settlement agreement, companies will no longer be allowed to implement outdoor advertising, including billboards, signs and placards in arenas, stadiums, shopping malls and video game arcades. It now limits advertising outside retail establishments to 14 square feet, bans transit advertising of tobacco products and allows states to substitute for the duration of billboard lease periods, alternative advertising which discourages youth smoking.

The use of cartoon characters in the advertising, promotion, packaging or labeling or tobacco products has been banned.

At least 16 million packs of cigarettes per year are consumed by minors and half of those are illegally sold to minors, said a study conducted by the Institute of Medicine in its book Growing Up Tobacco Free.

Thirty percent of kids, ranging from 12 to 17 years old, both smokers and non smokers own at least one tobacco promotional item, such as T-shirts backpacks and CD players.

Free samples cannot be distributed except in facility or enclosed area where the operator ensures that no underage person is present. Gifts based on purchase shall not be given to people without proof of age.

Beginning July 1, 1999 distribution and sale of apparel and merchandise with brand-name logos on caps, T-shirts, backpacks, etc. shall be banned.

On lobbying efforts, big tobacco companies spent $28.8 million in 1996 and $35.5 million in 1997 and employed 208 lobbyists to influence members of US Congress. This means that one lobbyist is assigned for every 2.5 members of Congress.

As a result, the settlement said tobacco companies are prohibited from opposing proposed state or local laws or administrative rules which are intended to limit youth access to and consumption of tobacco products.

The industry must now require its lobbyists to certify in writing that they have reviewed and willfully comply with settlement terms including disclosures of financial contributions regarding lobbying activities and new corporate culture principles.

Public access to documents and court files shall be made available by requiring tobacco companies to open a Website which shall be maintained for 10 years in a user-friendly and searchable format.