TOBACCO SETTLEMENT WOULD GIVE STATE $4.02 BILLION

NEW YORK - Over the next 27 years, Washington state stands to gain about
$4.02 billion from the nation's biggest tobacco companies under a 30-state,
$200 billion agreement that is in the final, frenzied stages of
negotiations to settle fraud and antitrust lawsuits, Washington Attorney
General Christine Gregoire said yesterday.

The amount, which would be paid through 2025, is about $1 billion more than
the state would have received in the June 1997 proposed settlement, though
the agreement would provide no money to the federal government and would
not include agreements for the regulation of nicotine by the Food and Drug
Administration.

The proposed settlement also does not have penalties if tobacco companies
fail to reduce teen smoking.

The deal would include a wide range of public-health requirements for the
tobacco industry, including curbs on cigarette advertising and marketing
giveaways, said Gregoire's spokesman, Fred Olson, in New York yesterday for
talks.

It would also require the tobacco companies to spend about $1.45 billion on
advertising to persuade youths not to start smoking. Plus, the cigarette
industry would spend $250 million over the next decade to create a national
foundation to reduce teen smoking.

The foundation would pay for scientific studies researching factors that
influence youth smoking.

The settlement would end the current trial of the tobacco industry in King
County Superior Court.

The draft settlement also would limit tobacco companies to sponsoring one
sporting event a year using a brand name, such as Winston or Marlboro.

Advertising in sporting stadiums and arenas would be prohibited and outdoor
ads larger than 14 square feet would be banned.

In ads, cartoon figures would be banned, but human figures would be allowed.

The deal also prohibits, after July 1, the giveaway and sale of clothing
and merchandise - such as hats, shirts and backpacks - imprinted with brand
logos.

The deal also includes a promise to disband the Council for Tobacco
Research, the Tobacco Institute and the Council for Indoor Air Research but
preserve their records for use in future litigation. The $200 billion
settlement would cover the nation's biggest cigarette makers, Philip
Morris, R.J. Reynolds Tobacco, Brown & Williamson Tobacco and Lorillard
Tobacco.

Four states - Mississippi, Minnesota, Texas and Florida - already have
reached settlements of their lawsuits against the industry to recover
Medicaid spending on smoking-related illness and to cut the number of smokers.

Those deals were worth a total of $36 billion.

Seattle Times staff reporter Matthew Ebnet contributed to this report

Checked-by: Pat Dolan