PROPOSED TOBACCO DEAL FALLS SHORT, HEALTH ADVOCATES SAY

States Consider Record $206 Billion Payoff

NEW YORK -- Public health advocates said yesterday the proposed $206
billion tobacco settlement being reviewed by the states falls short of
delivering a comprehensive approach to discourage smoking.

But they declined to recommend whether the states should embrace the
settlement. In anticipation that the deal will be endorsed, they were
mobilizing to make sure states use the money to discourage tobacco
use.

"We think it's a positive step forward in the war on tobacco, but it's
not the answer and doesn't itself provide a national tobacco control
policy," said Diane Canova, speaking for the American Heart
Association.

She said federal legislation is still needed to give the Food and Drug
Administration authority over tobacco products.

Anti-smoking activist Bill Novelli of the Campaign for Tobacco-Free
Kids said local public health officials were being alerted to make
sure the money that would go to the states "isn't diverted to
non-public health areas."

"There is going to be a huge food fight over these dollars," he
said.

Negotiators for eight states and the nation's four biggest tobacco
makers reached agreement Saturday on settling remaining state claims
for government health costs from treating smoking-related illnesses.

The proposal was then shipped to the 46 states that have suits pending
against the tobacco industry or have not yet filed suits, and they
were given until Friday to decide whether to sign it.

A formal announcement of the agreement was expected today in
Washington.

Several state attorneys general said they would not know until
reviewing the details whether they would sign.

Wisconsin Attorney General James Doyle said yesterday that while the
agreement is much better than the failed $368.5 billion settlement
attorneys general reached in 1997, he hadn't decided whether to sign
on.

"The question is whether the public health advances and the money
involved is enough for Wisconsin to say that it's time now to move
past litigation and focus on cessation," Doyle said.

Either way, he said, the state's case is strong enough that there's no
need to settle too much.

"We're dealing from strength. If we don't take the deal, we'll go to
trial," he said.

Some public health advocates are unhappy that they did not get a
chance to comment as the settlement was crafted in private meetings
between the states and the industry over the past five months.

Mohammad N. Akhter, executive director of the 55,000-member American
Public Health Association, said the states should be given another two
to three weeks to decide so they can consult with public health experts.

He said the five-day deadline is "absolutely inappropriate. It is
enticing people into taking action they haven't thought through."

The industry has not indicated how many states would be needed for it
to proceed with the settlement. It is likely the amount of the
industry payments would be reduced if states decided against signing.

Four states -- Mississippi, Florida, Texas and Minnesota -- have
already settled with the industry for a total of $40 billion.

The $206 billion settlement would be the biggest U.S. civil settlement
ever, but would remove an enormous financial and legal threat to the
industry should it lose a court case to one or more of the states.

One of the chief architects of the settlement, Washington state
Attorney General Christine Gregoire, conceded that the deal fell short
of what Big Tobacco's most vocal critics would like.

"There is more to be done legislatively, but we think this represents
more than they can expect to receive in the courts," she said.

In addition to making payments to the states, the industry would
commit $1.7 billion to research and programs aimed at discouraging
smoking, especially by youngsters.

It also would accept limits on how it markets cigarettes, although
companies could still use human figures like the Marlboro Man and
maintain at least one sports sponsorship a year.

The four companies are Philip Morris Cos., R.J. Reynolds Tobacco,
Brown & Williamson Tobacco and Lorillard Tobacco. The negotiating
states in addition to Washington were California, New York, North
Carolina, Colorado, Oklahoma, North Dakota and Pennsylvania.

A separate deal was struck Saturday with U.S. Tobacco Co., the leading
maker of chewing tobacco, Gregoire said. It would pay about $100
million over 10 years for education on the dangers of tobacco in
exchange for state claims settlements.

Checked-by: Patrick Henry