HARSHBARGER WALKS OUT ON STUCK TOBACCO TALKS

BOSTON -- Accusing the tobacco industry of stalling, Attorney General Scott
Harshbarger has pulled out of negotiations between nine states and
cigarette makers trying to reach an out-of-court national tobacco settlement.

Yesterday, Harshbarger announced he would focus all attention on the
state's civil suit, now pending in Massachusetts Superior Court. The state
is seeking billions of dollars to reimburse Medicare expenditures spent on
treating smoking-related diseases.

"Unless Big Tobacco shows me they are willing to take more responsibility
for protecting our children and improving public health, I am not
interested in returning to negotiations with them," Harshbarger said in a
prepared statement.

In a two-page letter to tobacco company lawyers, the attorney general
accused cigarette makers of backpedaling on earlier commitments to fund
efforts to curb teen-age smoking and reduce advertising and promotions.

"The industry's defiant attitude is disappointing because for the last year
and a half, it appeared to demonstrate a real willingness to change its
public image by agreeing to sweeping measures that would dramatically
reduce youth smoking, improve the public health and save thousands of lives
well into the future."

Harshbarger spokesman Ed Cafasso said the industry's actions have spoken
otherwise.

He said the attorney general was upset that the industry is refusing to
drop its opposition to being regulated by the Food and Drug Administration.
A Virginia appeals court ruled this month against an order to have the FDA
oversee tobacco.

In addition, Harshbarger criticized the industry's continued attempts to
fight Massachusetts's ingredients disclosure law and its decision to run
advertisements to sway public opinion against additional taxes on tobacco
products.

Meanwhile, two of the tobacco companies -- R.J. Reynolds Tobacco Co. and
Brown & Williamson Tobacco Corp. -- have decided to pull out of negotiations.

The nine-state talks followed a collapse in last year's proposed national
tobacco agreement which would have paid $368.5 billion over 25 years. The
plan fell apart when Congress failed to vote on it.

Massachusetts took up the talks with California, Colorado, New York, North
Carolina, North Dakota, Oklahoma, Pennsylvania and Washington.

Cafasso said Massachusetts stands to win up to $8 billion.

"We haven't stopped preparing for trial," he said. "This basically
eliminates the distractions. We're going to stay focused on winning at this
point."

Checked-by: Pat Dolan