tobaco

probably should make a new tobacco page?

this is tag?

4/15

Big tobacco is suing Uruguay for their anti-smoking laws. If they win, it will threaten public health laws everywhere and prove one corporation can trump the public good, even when its product kills! But if we launch a giant call and Avaaz hires a world class legal team to carry our voices into the courtroom, the judges won’t be able to turn a blind eye.

Shopping for cigarettes in Uruguay isn't a pleasant experience. Photos of decaying teeth, premature babies and gruesome hospital scenes wrap around every pack. In fact, the country requires manufacturers to cover at least 80 percent of the packaging with medical warnings and graphic images.

Cigarette giant Philip Morris Internationalsees this requirement as a violation of a treaty law. So it's suing the country of Uruguay for $25 million.

The lawsuit is based on a 1991 trade agreement between Uruguay and Switzerland, where the company is located. The cigarette manufacturer says Uruguay is violating its promise to respect intellectual property rights.

Studies have found that such gruesome packaging reduces smoking, particularly in pregnant women.

To better understand this case before it goes in front of the World Bank this month, NPR's David Greene spoke with Alexandra Hall, a reporter based in Uruguay's capital city, Montevideo.

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Podcast: In Big Tobacco Cash, a Boon Turned Burden

by Nicole Collins Bronza

9/14

Investors Haul In Nearly Half the Tobacco Settlement Cash

by Cezary Podkul and Claire Kelloway | @Cezary and@kuhlair3

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More coverage:}: How Wall Street Tobacco Deals Left States With Billions in Toxic DebtAn updated tally by ProPublica shows that tobacco bondholders are due $2.6 billion of the $6 billion in this year's payouts to state and local governments from Big Tobacco.

http://www.propublica.org/article/how-wall-street-tobacco-deals-left-states-with-billions-in-toxic-debt

How Wall Street Tobacco Deals Left States With Billions in Toxic Debt

Politicians wanted upfront cash from a legal victory over Big Tobacco, and bankers happily obliged. The price? A handful of states promised to repay $64 billion on just $3 billion advanced.

by Cezary Podkul

ProPublica, Aug. 7, 2014, 8 a.m

In November 1998, attorneys general from across the country sealed a historic deal with the tobacco industry to pay for the health care costs of smoking. Going forward, nearly every cigarette sold would provide money to the states, territories and other governments involved — more than $200 billion in just the first 25 years of a legal settlement that required payments to be made in perpetuity.

Then, Wall Street came knocking with an offer many state and local politicians found irresistible: Cash upfront for those governments willing to trade investors the right to some or all of their tobacco payments. State after state struck deals that critics derided as “payday loans” but proponents deemed only prudent. As designed, private investors — not the taxpayers — would take the hit if people smoked less and the tobacco money fell short.

Things haven’t exactly worked out as planned.

A ProPublica analysis of more than 100 tobacco deals since the settlement found that they are creating new fiscal headaches for states, driving some into bailouts or threatening to increase the cost of borrowing in the future.

One source of the pain is a little-known feature found in many of the deals: high-risk debt that squeezed out a few extra dollars for the governments but promised massive balloon payments, some in the billions, down the road.

These securities, called capital appreciation bonds, or CABs, have since turned toxic. They amount to only a $3 billion sliver of the approximately $36 billion in tobacco bonds outstanding, according to a review of bond documents and Thomson Reuters data. But the nine states, three territories, District of Columbia and several counties that issued them have promised a whopping $64 billion to pay them off.

Under the deals, the debts must be repaid with settlement money and not tax dollars. Still, taxpayers lose out when tobacco income that could be spent on other government services is diverted to paying off CABs. And states can’t simply walk away from the debt — bondholders have a right to further tobacco payments even after a default.

“It’s going to cost taxpayers, either directly or indirectly,” said Craig Johnson, an associate professor of public finance at Indiana University in Bloomington who has studied tobacco bonds and CABs. “I don’t doubt that at all.”

ProPublica’s analysis is the first to measure the magnitude of the high-risk debt involved in the tobacco deals and to calculate how much Wall Street’s dealmakers earned. It also shows how much of the tobacco money has been securitized — that is, turned into payments that go to investors. As of this year, at least one out of every three dollars coming in under the settlement is pledged to investors, according to bond disclosures and payment data from the National Association of Attorneys General, which tracks the flow of funds.

The sure winners so far: Investment bankers from Citigroup, the now defunct Bear Stearns and others who, along with consultants and lawyers, have pocketed more than $500 million in fees for their financial engineering, ProPublica estimates. They now stand to make more as the governments look to rework old deals and try to get even more tobacco cash upfront.

In part, the troubles in the tobacco bonds arise from the same kind of miscalculation that led to the housing bubble.

Just as mortgage lenders bet that home prices would keep rising, the tobacco deals relied on optimistic predictions of how much Americans would smoke. Forecasters rightly saw that cigarette sales would continue to decline, but now the yearly drop — about 3 to 3.5 percent — is nearly double what was cooked into the deals.

Because the bonds sold to investors can stretch 40 years or more, the outdated estimates mean an ever-widening gap between what states expected to collect under the settlement and the payments they promised investors.

The CABs promise gigantic payouts — as high as 76 times what’s borrowed — because nothing is due on them for decades. Meantime, interest compounds on both the principal and accumulating balance.

Defaults by state and local governments are rare, but rating agencies have been warning that tobacco bonds in general could go under en masse. Moody’s said in May that up to 80 percent of the tobacco issues it tracks are likely to default.

For CABs, defaults appear certain....

us 1st to label

http://en.wikipedia.org/wiki/Tobacco_packaging_warning_messages#Cigarettes

• Caution: Cigarette Smoking May be Hazardous to Your Health (1966–1970)
• Warning: The Surgeon General Has Determined that Cigarette Smoking is Dangerous to Your Health (1970–1985)
• SURGEON GENERAL'S WARNING: Smoking Causes Lung Cancer, Heart Disease,Emphysema, And May Complicate Pregnancy. (1985–)
• SURGEON GENERAL'S WARNING: Quitting Smoking Now Greatly Reduces Serious Risks to Your Health. (1985–)
• SURGEON GENERAL'S WARNING: Smoking By Pregnant Women May Result in Fetal Injury, Premature Birth, And Low Birth Weight. (1985–)
• SURGEON GENERAL'S WARNING: Cigarette Smoke Contains Carbon Monoxide. (1985–)

In 1973, the Assistant Director of Research at R.J. Reynolds Tobacco Company wrote an internal memorandum regarding new brands of cigarettes for the youth market. He observed that, "psychologically, at eighteen, one is immortal" and theorized that "the desire to be daring is part of the motivation to start smoking." He stated, "in this sense the warning label on the package may be a plus." ^[29]

In 1999, Philip Morris U.S.A. purchased three brands of cigarettes from Liggett Group Inc. The brands were: Chesterfield, L&M, and Lark. ^[30] At the time Philip Morris purchased the brands from Liggett, the packaging for those cigarettes included the statement, "Smoking is Addictive." After Philip Morris acquired the three Liggett brands, it removed the statement "Smoking is Addictive" from the packages. ^[31]

Though the United States started the trend of labeling cigarette packages with health warnings, today the country has one of the smallest, least prominent warnings placed on their packages.^[32] Warnings are usually in small typeface placed along one of the sides of the cigarette packs with colors and fonts that closely resemble the rest of the package, so the warnings essentially are integrated and do not stand out with the rest of the cigarette package.^[32]

However, this is subject to change as the Family Smoking Prevention and Tobacco Control Act of 2009 requires color graphics with supplemental text that depicts the negative consequences of smoking to cover 50 percent of the front and rear of each pack. The nine new graphic warning labels were announced by the FDA in June 2011 and were required to appear on packaging by September 2012, though this was delayed by legal challenges.^[33]

In August 2011, five tobacco companies filed a lawsuit against the FDA in an effort to reverse the new warning mandate. Tobacco companies claimed that being required to promote government anti-smoking campaigns by placing the new warnings on packaging violates the companies' free speech rights.^[34] Additionally, R.J. Reynolds, Lorillard, Commonwealth Brands Inc., Liggett Group LLC and Santa Fe Natural Tobacco Company Inc. claimed that the graphic labels are an unconstitutional way of forcing tobacco companies to engage in anti-smoking advocacy on the government's behalf.^[35] A First Amendment lawyer, Floyd Abrams, represented the tobacco companies in the case, contending that requiring graphic warning labels on a lawful product cannot withstand constitutional scrutiny.^[36] The Association of National Advertisers and the American Advertising Federation also filed a brief in the suit, arguing that the labels infringe on commercial free speech and could lead to further government intrusion if left unchallenged.^[37]

On 29 February 2012, U.S. District Judge Richard Leon ruled that the labels violate the right to free speech in the First Amendment.^[38] However, the following month the U.S. Court of Appeals for the 6th Circuit upheld the majority of the Tobacco Control Act of 2009, including the part requiring graphic warning labels. In April 2013 the Supreme Court declined to hear the appeal to this ruling, allowing the new labels to stand. As the original ruling against the FDA images was not actually reversed, the FDA will again need to go through the process of developing the new warning labels, and the timetable and final product remain unknown.^{[39][40][41][42]}

In 1994, the Attorneys General of four states—Mississippi, Minnesota, Florida, and Texas—separately filed lawsuits against the tobacco industry in an effort to secure reimbursement for health care expenditures arising from tobacco-related illnesses. During the course of this litigation, 42 other states joined in similar legal actions. In 1998, a Master Settlement Agreement (MSA) was signed by the Attorneys General of 46 states and the nation's five major tobacco companies: Philip Morris, R. J. Reynolds, Lorillard, Brown & Williamson, and the American Tobacco Company. The MSA effectively settled the outstanding lawsuits by requiring yearly payments by the tobacco companies to the states and placing restrictions on the advertising and marketing of tobacco products. The MSA provisions also created and currently fund theAmerican Legacy Foundation, an anti-smoking advocacy group, which in turn funded the creation of the Legacy Tobacco Documents Library as well as its ongoing maintenance and collection activities.

As part of this Master Settlement Agreement, the U.S. tobacco companies were ordered to release the internal documents produced for the case for public access in both a physical depository in Minnesota and on their own document websites. The international tobacco company, British American Tobacco, was not mandated to provide a document website but they were required to deposit documents into a physical depository in Guildford, England. The National Association of Attorneys General(NAAG) provides oversight and enforcement of this operation. In 2006, U.S. District Judge Gladys Kessler ruled in a separate case that thenation's top tobacco companies violated racketeering laws, misleading the public for years about the health hazards of smoking. These companies were convicted under the Racketeer Influenced and Corrupt Organizations Act (RICO Act). Philip Morris and R.J. Reynolds filed an appeal but Judge Kessler's ruling was upheld. As a result of this case and its appeals, the companies are now obliged to make available any documents produced for litigation on smoking and health until 2021.^[2]

ATRA tort reform came out of PM dirty tricks shop: