Phil and Morris were walking across the expansive campus of the giant tobacco company where they hold majority stock positions.
“It’s quite a beating they took, isn’t it?” Phil said as he kicked a stone off the sidewalk into the manicured lawn.
“Who? We’re the ones who are losing customers.”
“Yada yada yada. But, Morris, think about this. Exactly ten years ago the Milennium Fund started siphoning money from cigarette sales to the states to help them get people to stop smoking.”
“Oh, yeah. I remember that. Must be quite a sum that the Fund handled since then.”
“Indeed. It’s coming in at about $25 billion for 2008, including tobacco taxes.”
“Wow. Just think what we could do, Phil, with another $25 billion or so to promote our cigarettes.”
“That’s not the point, silly. The point is that this money is supposed to divert profit from our company, but it’s not working. As far as the anti-smoking folks are concerned, the whole program is useless.”
“Twenty-five billion dollars is useless?” Morris cracked the side of his jaw with his fist. “Twenty-five billion dollars?”
“You’d think the settlement was incentive money to help people smoke more. I find it amusing.”
“Me, too. They must not have put very good hooks into the money that was supposed to help people quit or never start smoking.
“That’s right, buddy. Only three cents of every dollar went to fund programs to help people quit smoking or not start in the first place. Three cents!”
Morris moved his fingers and his lips at the same time. “Giving away $25 billion—with a “B”—to cut the use of nicotine and finding out that only $750,000 was actually used for that purpose. Is anyone getting mad about this?”
“Oh, a few people, but you know what, Morris? Money talks. If everybody quit smoking, think of all the jobs that would be lost.”
“People are paid to smoke?”
“No, silly. People like you and me who work for the tobacco industry.”
“Oh. Anything else?”
“Lots more. Think about the tobacco taxes the states wouldn’t get any more. And don’t forget the investors and marketing people who get plenty of money from our trade. And people who sell our cigarettes in stores and other places.”
“Hmmm. Seems to me there’s a lot of money sitting around that’s not being used.”
“Oh, it’s being used,” Philip said.
“For what?”
“You’ve heard of budget shortfalls?”
“Sure.”
“Well, lots of states just transfer the money from the tobacco settlement to their general fund.”
“And that puts them in the black again.”
“For some of them. You know, Morris, here’s what amazes me the most. The US government has the equivalent of a vaccine for lung cancer and other deadly diseases from the use of tobacco. Not only that. They have plenty of money now to pay for all of the programs and services that are effective in reducing tobacco use significantly.”
“Really? How effective?”
“How’s 50-to-1 for effective?”
“Fifty what?”
“For every dollar the State of California spends on anti-smoking programs, they save fifty dollars in health care costs for people with smoking-related diseases.”
Morris shook his head. “I should be rejoicing,” he said. “Instead, I’m bewildered. I mean, I’m glad we have such a popular product and that you and I are doing so well by putting our lives into the industry, but still. Why don’t people screw their heads on and use the resources available to them? They could easily cut the rate of smoking to 12 percent in two years and probably all the way down to 8 or 10 percent. That would save the country billions of dollars every year.”
“That they could,” Philip responded as he pulled a pack of cigarettes from his briefcase. “That they could. But they won’t. I’m betting on it that they won’t.”
“For our sakes, I hope you’re right.”
Source: Ten-Year Report on the MSA (Master Settlement Agreement)
