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Consumer News Release

For immediate release -- Monday May 24, 1999.
Contact Bob Brammer - 515-281-6699

Iowa to Receive $234 Million "Bonus" for its Work on Tobacco Lawsuit

Attorney General Tom Miller announced today that the State of Iowa will receive a "bonus" of $234 million from the major tobacco companies. The bonus is for the contributions the Iowa Attorney General's office and its allies made in the litigation and settlement of the tobacco cases. The $234 million is in addition to the $1.7 billion the state will receive from the settlement of its lawsuit announced in November.

The $234 million, which will be paid to the state treasury over a ten year period, is part of a special "strategic contribution fund", to be paid by the tobacco companies. Three former Attorneys General determined the amount of awards to individual states according to their role in achieving the landmark $206 billion tobacco settlement. Iowa received the 12th largest award despite the fact that 20% of the national fund was allocated based upon the size of the state. Iowa received a baseline amount of $20,453,397. Miller speculated that if population had not been used as part of the decision, Iowa's effort would have ranked in the top ten of all the states.

"Another way to look at it is to compare Iowa's share of the Strategic Contribution Fund to the Master Settlement Agreement itself," Miller said. "If one applied the same formula to the strategic fund that was used for the settlement, Iowa's share would have been $75 million instead of $234 million. Iowa is receiving a substantial bonus because of the work that was done by the Attorney General's office, health advocates and our attorneys."

"It's a lot of money, and it is a great recognition of the work we did in Iowa to help all the states. While the money is important, our first priority has always been public health, particularly stopping the marketing of tobacco to children," Miller said. "Five thousand Iowans die each year from tobacco-related disease and most of them started smoking as kids. Now we need to be sure that we put this money to good use in Iowa so we can help save the lives of our kids, as well as avoid the huge cost these illnesses place on taxpayers." Miller said the decisions the Legislature makes next year concerning spending the tobacco money will be among the most important they make during the new decade.

Florida Attorney General Bob Butterworth, an advisor to the allocation committee, said: "Iowa made an impressive contribution to the effort, and Tom Miller was deeply involved at every stage of the process. He was among the strongest advocates for public health provisions in the agreement, and he helped hold the states together throughout the difficult negotiation process."

Iowa's $234,279,927 share of the $8.6 billion Strategic Contribution Fund will be paid to the state treasury over ten years beginning in 2008.

Miller thanked former Governor Terry Branstad and Governor Tom Vilsack for their support of the lawsuit and other tobacco control efforts. "Governor Branstad was one of the first Republican governors to support the litigation and worked with our office throughout the case," Miller said. "And Governor Vilsack was the lead advocate and supporter in the legislature for the statutory cause of action and is now a strong advocate as Governor for tobacco control, especially in regard to kids."

Miller also thanked the coalition working with him on tobacco issues for their advocacy and support throughout the litigation. Members of the coalition include: American Cancer Society, American Lung Association, American Heart Association, Iowa Department of Public Health, Tobacco Free Kids, Tobacco Free Iowa, Wellmark Blue Cross Blue Shield, Iowa Health Systems, Mercy Health Network, Iowa Medical Society, and the Iowa Hospital Association.

Miller also praised the attorneys who worked on the case: Deputy Attorney General Gordon Allen and Assistant Attorney General Steve St. Clair of the Iowa Attorney General's Office; Brent Appel of the Dickinson law firm of Des Moines; Ralph Walker of the Ralph Walker Law Firm of Des Moines; Steve Wandro of Wandro and Gibson of Des Moines; Roger Stone of Simmons, Perrine of Cedar Rapids; Glenn Norris of Hawkins & Norris of Des Moines and Susan Nial of the Ness Motley firm of Charleston, South Carolina.

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