Iowa’s top consumer official filed a motion Thursday to enforce terms of the Tobacco Master Settlement Agreement. Attorney General’s spokesman Bob Brammer says at issue is whether payments on that 755-Million-dollar settlement could be trimmed back.
When the tobacco companies agreed with the states in 1998 to change their practices, he says they also agreed to make yearly payments to the states every April. There are a couple ways they could be entitled to adjustments in how large those payments are, and some are disputing the payments now and a few are even putting money not into the mail but into a “disputed-payment account.”
He says it’ll have to be resolved in the courts, and the Attorney general’s office on Thursday filed a motion with the Polk County court saying the state’s entitled to a full payment the same as it’s been for years. At issue is a footnote that said other companies not part of the lawsuit should still make payments, putting them into an escrow account even if they weren’t a part of the Master Settlement Agreement. The big-name tobacco companies are charging states didn’t make the other companies comply, but Brammer says Iowa did hold them to it.
“Diligently enforced” are the words of the agreement, and he says the big companies charge the states didn’t enforce the payments into those escrow accounts, a plan they settled on because somebody down the line those other companies may also be targeted in a similar suit and also because it’s not fair that they could sell cigarettes for a far lower price because they don’t bear the burden of paying off that Master Settlement Agreement.
In any event, the state’s position is that it has indeed “diligently enforced” that part of the agreement, and now it’s up to the courts to tell the tobacco companies to send the small disputed portion of their payment to the state. It may be a small share, but just the amount witheld from this month’s payment to Iowa comes to a million and-a-half dollars.