The Tobacco Master Settlement: That Time We Got Em | STUFF YOU SHOULD KNOW

[music]. >> Welcome to Stuff You Should Know, a. production of iHeart Radio. >> [music]. >> Hey, and welcome to the podcast. I'm. Josh, and there's Chuck, and [music]. Jerry's here, too. And this is Stuff You. Should Know. I think part of our ongoing. corporate malfeasance edition. >> Yeah, for [music] sure. And the beginning of this episode ties. in a lot with we did an episode about. the history of the cigarette. >> Sure. >> Like just the thing that you.

shouldn't put in your mouth, but people. do. >> Right. >> Uh and so, we're going to talk a little. bit about that here at the beginning. because you need to know a little bit. about that. uh as it leads up to what were the you. know, this lawsuits against big tobacco. Uh and we should start by saying that. it's been a long time that we've known. that tobacco and smoking was really bad. for you and would kill you. Uh like the. 1920s, we knew for sure. The 1950s,

we really, really knew. And. uh in night the 1960s is when John F. Kennedy finally came out via his Surgeon. General Luther Terry and said, "All. right, everybody. It's 1964. I'm finally going to issue a government. report based on you know, about a dozen. studies with lots of data about a. million male smokers. And this stuff is. really bad for you. So, we're going to. have to start putting um warning labels. on packages.".

>> Yeah. Uh the great thing about those warning. labels, though, is you were um educated. to imagine Sammy Davis Jr. saying it in. your head. >> That's right. >> So, um. the cigarette companies, this is the. beginning of their um playbook. And. their playbook was basically nah. >> Yeah. >> Prove it. You can't prove it. This is. the whole idea of settled science, the. idea that which is just a complete um. oxymoron. Science is never settled. It's.

a constant ongoing process. But, the. idea that you have to have 100%. definitive proof before you can even. begin talking about whether something is. harmful or not. Um and really exploiting. and manipulating the public through. really horrible means, this is where. that all started. And the first response. that cigarette companies came up with. was to say, "All right. How about we put filters on. cigarettes? Because as everybody knows, cigarettes make your throat kind of. scratchy. Sometimes they can make you.

hoarse. And that's okay. That's just. part of smoking. These new filters are. going to help with all of that. And. there you go. Cigarettes are healthy, everybody.". >> That's right. Uh in the '60s and '70s, that's when we saw uh lighter cigarettes. or low-tar cigarettes. >> Mhm. >> Uh in the '50s, they got really sort of. organized and official about their um. uh PR campaigns, I guess, their. propaganda campaigns. Uh when they formed the Tobacco Industry.

Research Committee. um under the guise of studying the. health hazards of smoking, but it was. very much just a PR move. Um they put. out an ad called "A Frank Statement to. Cigarette Smokers" early on, which said. like, "Hey, we're really like your. health is paramount to us. as we sell you cigarettes." It's hard. not to laugh cuz it's just so dumb to. think about that people would have. bought this. >> Yeah, but also just so cynical that they. would even say this, too, you know? >> But, they said, "All right. We're really. going to pledge to research this,

everyone, because we care about your. health. Um but also, again, like you. can't really prove that it's just a. cigarette. Like, how do you know that. these people dying of lung cancer didn't. also get it from all the other stuff. that's going on in the world?". >> Yeah, and actually that would become. kind of codified in what's called the. Roper Proposal. There was a Tobacco. Institute vice president. So in addition. to the Tobacco Industry Research. Committee, they also came up with the. Tobacco. Tobacco Institute. And then they renamed.

the TIRC the Council for Tobacco. Research. No word of the industry in it, so it's even more trustworthy, right? >> Mhm. >> And Fred Panzer was vice president of. the Tobacco Institute, and he wrote a. memo in 1972. that said essentially here's what we. should do. We need to create doubt about. the health charge without actually. denying it. And essentially it's a. variation on the theme that the case is. not proved. And he said.

kind of what you were saying that like. these are like you can't really prove. that it's cigarettes. So for example, extroverts are more likely to smoke. cigarettes, but they're also more likely. to get out in the world and drop dead of. a heart attack. So maybe it's just. [laughter] that extroverts smoke. cigarettes. Or that there was one called. the constitutional hypothesis that was. people who get sick from smoking are. biologically predisposed to get sick in. general. So it's really them. This is.

all just thrown about in 1972 to. basically lie to the public and confuse. the public about whether or not. cigarettes were unhealthy or harmful. >> Yeah, so they're pushing this campaign. out behind the scenes. They're just throwing in the back file. drawer every study that they had that. showed that nicotine was addictive, that smoking was bad for you. Like. they're suppressing that information. as well as. at the same time targeting children. with you know, product placement in.

movies. Specifically Superman II in 1981. with Marlboro. Obviously we've talked about Camel Joe. before in the history of the cigarette. >> Joe Camel. >> What did I say Camel Joe? >> Yeah. >> I like Camel Joe. >> Okay. >> I think we should leave all this in. except the beep. Although there's plenty. of those in episodes. >> [laughter]. >> Yeah, let's get the beep out. >> Uh so, that was in 1988. Uh I like Camel Joe. I think I always.

called him. >> I always called him Camel Joe. I didn't. know that wasn't the name. >> I'm sure there's some retired tobacco. industry guy who was like, "Man, we. should have called him Camel Joe. That. is way better.". >> Uh here's a Gen X stat for you, which is. fairly staggering but completely. believable. >> Mhm. >> Um youth uh smoking, like kids and. teenagers smoking, had been on the. decline kind of through the '70s and. '80s for the most part. And then in the. '90s. when Gen X came around to like prime. smoking age, it really jumped. Uh it hit.

an all-time high in 1997 of 36.4%. of youth were smoking. Uh adults were. smoking at 24.7% at the time. And that's just a staggering number. I. think it's at like 3.something% now. So, Gen Xers were smoking at a rate of 36%. >> Yeah, and there's two things that that. they suggest had to do with that huge. jump in um youth smoking. One was this. big campaign and push to target youth.

smokers. The tobacco industry called. them replacement smokers. They would. replace the other lifelong smokers that. died off from smoking, right? And that's. the thing, too, is like one of the. things about smoking very few people. start smoking as adults. We call them. total morons. Most people who smoke. started smoking in adolescence. So, the. tobacco industry had every incentive to. go after kids. They just knew that. society would not allow them to do that.

if they did it overtly. So, they had to. do it, you know, kind of under the radar. with Camel Joe. Um. the other thing is that there was a. price war that started in the mid-'90s. And that they think that um this. the drop in the price of cigarettes. >> Yeah. >> made it more likely for younger kids to. smoke because younger kids are more. price sensitive than older people who. are smokers. >> Remember how cheap cigarettes were back. then? >> Yeah. >> a buck something buck 25 a pack or.

something. >> For sure. >> Yeah, I mean I wasn't a regular smoker. I occasionally smoked. as we talked about before. So, I wasn't. like buying packs, but I sold them at. the Golden Pantry. uh in Athens, Georgia on the east side. and cigarettes were cheap and they're. somebody told me the day that they were. like 12 to 15 dollars and like 20. something bucks in New York. A pack? >> I I believe that. I totally believe. that. >> Will we? And well well, we'll see why here in a. minute. >> So, yeah. Um one of the other things too.

that they're doing at the same time. besides suppressing studies, sowing doubt and confusion among the. public about the harm of cigarettes, they're just out and out denying. publicly that not only are cigarettes. not harmful, they're not even addictive. That as recently as 1994. >> Yeah. >> they were publicly saying like like the. head of Philip Morris was saying in. interviews, "We do not believe. cigarettes are addictive." In the 90s, people had known like all you had to do. is ask a smoker back in the 50s.

>> Yeah. >> were addicted to cigarettes and they. could tell you that they probably were. Um and like this the the industry in the. 90s still wouldn't fess up to that. Like. that was their tactic. Just a complete. solid wall with zero cracks in it over. and over again being reinforced. publicly. >> Yeah, actually in the 1950s, I think. they probably said like, "No, I don't. think they're addicted, but do you have. a cigarette? Can I have a cigarette?". >> Right. >> I see a guy over there smoking. Do you. think he has an extra cigarette for me? >> Right. >> [laughter]. >> Uh all right. So, in the 1950s, uh we.

need to start with sort of lawsuit talk. Um there were a lot of lawsuits, all. unsuccessful. Uh by the mid-90s when. they were still saying that it wasn't. addictive, there were at least 400. lawsuits uh that they never lost, they. never settled. They had a 100% record. >> That's crazy. >> Which is staggering to to learn. Um they had obviously a ton of money to. to form like the best legal. representation they could. But they're. also actively lobbying state governments.

about making it harder to sue, about. tort reform, because like hey, tobacco's. a natural product. So cigarettes fall. into that category. Uh. like despite all the other stuff that's. in there. So you can't sue somebody for. packaging a natural thing and selling it. to people. >> Yeah, that was the other thing they were. doing, too, is they were really lobbying. um government really effectively. Like. they spent a lot of money on lobbyists, right? >> like now. >> So yeah, they were like the Teflon Don.

um of industries, I guess, tobacco. industry was. Um. What did you just say, not like now? Cuz. I I picked up a uh. like a you were being sarcastic. >> Yeah. >> What were you mentioning? >> I'm sure they're still pouring tons of. money into the lobby. >> Oh, sure, sure, yeah. I'm sure, too. Um but the so they were they were just. completely um. untouchable. Like I mean, if you have a. 100% record, that in and of itself will.

prevent people from filing suit against. you, right? >> Yeah, cuz it's expensive. >> It is, right? And you're just like, I'm. not going to win or the chances of me. winning are so low, um I might not even. file suit. So the state also, we should. mention Congress is doing almost nothing. about this at this point. So the state attorneys general, um William Safire just smiled from. heaven. >> Mhm. >> Uh. led by a guy named Michael Moore, he was. the attorney general for Mississippi.

Uh they got together and they said, well, if if the the federal government's. not going to do anything about it, we're. going to.". >> Yeah. >> And one state might not be able to take. on the tobacco industry, but every. state, territory, and DC together. definitely can take on the the tobacco. industry. Not only can we take them on, we can seriously threaten to bankrupt. the entire tobacco industry right out of. existence if we if we really try. >> Yeah. And they they played their cards. right because they were like, "How can.

we best go at them? Uh, maybe Medicaid is the way to do it. because we have these Medicaid programs. uh, through our individual states that. are. not going bankrupt, but they're they're. in bad shape in a lot of cases because. they're treating all these smokers who. are really expensive uh, to get through. like, you know, lung cancer treatment. And they have deceived us for all these. years, so let's go after them for for. RICO status like fraud and. racketeering.". And that'll that'll send a a shiver uh,

even through the spine of a Teflon Don. >> Right. >> And they were turning up uh, like Livvy. says, like literal truckloads of. documents from the industry about them. selling to teenagers, burying studies, covering up what they knew about how. addictive everything was. And there were. I mean, this would be a good sort of. thriller movie almost like a Soderbergh. kind of thing. He'd probably do a great. job with it. Where like they're racing. uh, like documents out of offices while.

they're trying to actively like bury. these documents. Like I think the the. guy from Texas. um, was literally trying to put papers. on a private jet so they could be taken. to a district judge before the state. court could seal them up because once. uh, the feds are investigating, it can't. be sealed at the state level. >> Right. Or even if they do seal it at the. state level, this federal district judge. is like, "That doesn't apply to me, so I. can I can make these public or part of a. court case, right? So, yeah. I mean,

yeah, that is like a thriller. And there. is something that kind of touched on. this. It was the the Insider with um. Who is the Australian actor who used to. get in fights all the time? >> Russell Crowe. >> Yeah, Russell Crowe is Jeffrey Wigand, I. think. >> Yeah. >> Who is like this whistleblower in the. tobacco industry. It was great. I think. that was a Michael Mann movie. >> Michael Mann? >> Mann, I I nailed it. >> You're just nailing all of it. >> I should be a guest on Movie Crush. >> Oh, man, if only. >> But one of the other things you kind of.

um touched on, their strategy, it like. the focusing on lying to the public and. targeting teens, that was a really smart. strategy because if they were just like, "Oh, cigarettes are harmful and we need. to get rid of them." A lot of adults are. like, "You don't need to tell me whether. I should smoke or not. I can kill myself. if I want to." So, they left that part. alone and they went after the fact that. they were targeting teens and lying to. the public because the public sentiment. can get behind those two things. Like, "Yeah, kids are out of bounds. We don't.

want them smoking and. you know, we were lied to all these. years by these same people. Yeah, go get. them." So, that was a really smart. strategy that these attorneys general. like took on. Like, it was. amazing, an amazing court angle, I think. is what they call them. >> What a court angle. Look at that. >> [laughter]. >> Uh yeah, for sure. And the writing was. on the wall for investors because we're. talking about hundreds of billions of. dollars at stake.

And they were like, "Hey, this is this. is going to look really bad and our. stock prices are going to really go in. the tank. And so, you got to cut a deal. here.". Uh so, in which the tobacco company. never had thought about, you know, cuz. they had not only lost uh. never lost, they never settled anything. Yeah. So, finally in April of '97, uh they were set to go to trial in a few. months. And they're like, "All right, let's get a meeting set up with this. Michael Moore character from. Mississippi, not the movie guy. obviously. >> Sure. >> Uh and an attorney for Tobacco Free Kids.

who was working with the states about. all the the marketing toward uh you. know, kids with Joe Camel Joe and. everybody. So, they started negotiating like all. right, out of the gate let's just say. we'll get rid of Camel Joe. We love him. Kids love him, but uh we'll get rid of. him and the Marlboro Man if that makes. you happy. >> Kramer? >> And then a few months later in June. uh they said all right, we got to start. talking like hash out the money part. So, how does 368. and a half billion dollars sound over 25.

years as just an opening salvo? >> I yeah, and the the states were like, I. was not expecting that actually. Um but. they So, they were like, okay, here's. the problem though. These are like we. need to bring the feds in. Like the. Congress has to approve of this deal the. way that we've set it up. And there were. some federal aspects to it. One was that. the FDA would start regulating tobacco. products. Um another one was that the companies, these tobacco companies would be um.

protected against any further civil and. class action lawsuits. >> This is the big one, yeah. >> Yeah, in exchange they would create a. fund to pay some of those people off. And then there would also be federal. restrictions on indoor smoking. And this did not go very far because of. that protection of the companies, right? >> Yeah, I mean that was the the sticking. point. I think they could have. not too happily live with the rest of. it. Uh but that was that was uh a big one as. far as Congress and and.

soon enough the American people were. like, uh-uh, we can't have that. >> No. >> Um so, Congress had a bill to ratify or. at least considering a bill to ratify. it, uh Universal Tobacco Settlement Act. S 1414. Uh they were debating it. All this. disclosure comes out and they're like, "Man, they were really awful companies, and it's worse than we thought even.". And the idea of them being protected. moving forward, like, isn't going to. fly. So, the late Senator. John McCain.

said, "All right, how about S1415, where there's more money? Like, how does. 520 billion sound? And we're not going. to protect you from now on. Like, you're. you can be sued moving forward, too.". >> Yeah, the industry lobbied like they've. never lobbied before to keep this from. getting passed through. And again, you. mentioned the stock prices. When all. these stuff stuff is going on, their. stocks are tanking. When, you know, there would be a win for. in the negotiations for the tobacco. companies, their stock prices would go.

back up. It's all very cynical. And they. the stock price went back up after. McCain's bill did not get passed. And. one of the reasons it wasn't passed is. because other senators added like riders. that had nothing to do with tobacco. And. I'm guessing unpopular riders probably. at the behest of the tobacco companies. I could not find the riders to save my. life. Um. to basically sink this bill. You know, like Like, imagine if you had this great. bill, and then somebody's like, "Um.

I'm also adding a rider to repeal the. requirement for um. child sexual predators from having to. register, and they can live by schools. now." Your bill's not going to pass. And. I get the impression that that's kind of. what happened to McCain's bill. >> Yeah, for sure. There was another thing we just sort of. should mention in passing, at least. There was another suit in October of. '97. This is while they're debating. these original bills in Congress, where they did settle. It was a separate.

class action suit that was filed in '91. by flight attendants in the United. States saying, like, "Hey, smoking sections in planes are like. killing us. And it's pretty awful. So, um, it was a. husband and wife team named Stanley and. Susan Rosenblatt who filed this one and. they ended up settling for $300. uh, to fund medical research. And they. said this was a big sort of turning. point and that's the first time they. officially caved. And again, this is. while they're debating these bills in.

the Congress. >> Right. Uh, Chuck, I feel like we uh, set things. up pretty well for a break. Like we. deserve an ad. >> We deserve a break today. Let's do it. >> Okay. >> [music].

>> Okay. So, um, things are just kind of. not going quite well because the whole. thing was handed over from the states to. Congress. And Congress has fumbled it as. they do. Um, so some of the states went. on and we're like we're we're going to. just keep going and negotiating our own. agreements with the tobacco companies. Florida, Minnesota, Mississippi who who. had led the charge originally in the.

first place and Texas. They all came up with their own. settlements. And like pretty eye-popping amounts. Texas got seven more than 17 and a half. billion dollars out of their agreement. Minnesota got a nice chunk of change, but they also, um, had the foresight to. say not only are you going to settle. with money, part of this is that you. have to disclose um, public records. All. internal documents that are part of.

discovery in this process are going to. be made public after this and the. tobacco companies had to agree with. that. So, that was where a lot of these. disclosures came from that they had just. been lying, lying, lying because these. troves of um. documents that came up in discovery. during these cases just journalists went. crazy. It was like a feeding frenzy on. them. >> Oh, yeah, for sure. Um. they, you know, saw the writing on the. wall once again. So, they got together.

with the other remaining states who were. all plaintiffs at this point uh in. November of 1998 and agreed to what. would end up being the Tabasco uh. >> [laughter]. >> Tabasco. The tobacco Oh, man, the. tobacco settlement. Can you imagine the. numbers? Uh the tobacco master settlement. agreement, the MSA, >> Mhm. >> which would include $206 billion paid. out over 25 years. to 46 states, five territories, and DC.

>> Yeah. >> And they would allocate it according to. like how many smokers they estimated. each state had and how much was still. based on the Medicaid thing. So, how. much they had, you know, had to pay out. in Medicaid for all these related costs. They said, "We'll also stop targeting. minors even though they really like to. smoke, as it turns out. And they love. cartoon camels. Uh so, no more cartoon characters in our. ads. Uh we're not going to give away. free cigarettes to minors.". >> At recess. >> Which is crazy.

Uh we uh are going to shut down these, you know, sort of shell research companies that. that are really just PR firms for us. >> Mhm. >> Dissolving those, uh we're going to. release all these documents, and we're. going to create a national foundation to. address underage tobacco use and. addiction. Uh and we're we promise to care this. time. >> Yeah. We're a newer, gentler, loving tobacco. company. >> That's right. >> Um they also created what's now known as. the Truth Initiative, which is this.

whole teen anti-smoking campaign that. was funded originally by the tobacco. companies. >> Those commercials were great. >> Yeah, they're still around, the truth. initiative is. They seem to have. migrated online, surprisingly. >> Yeah, I'm sure. >> I mean, I guess that's where kids are. these days or something. >> That's where the kids are. >> Um and so initially this agreement was. just before between these 46 states and. territories and DC um and the four. largest tobacco companies, which. represented. the vast majority of the market share of.

the tobacco industry in the United. States, Philip Morris, RJ Reynolds, Brown & Williamson, and Lorillard. >> I'd only heard of two of those. >> Uh yeah, for sure. Um I've heard of the. other ones, but I cannot tell you what. they make. Okay? >> Yeah, no idea. >> Let's just leave it at that. >> Maybe they make a Bucks. I remember. >> Yeah. >> Remember I think we talked about Bucks. in the cigarettes episode the golden. pantry. Those were the uh. those are the ones that I I think the. rumor was at least they were just made.

from the sweepings the trimmings and. sweepings up of factories. They would. just package them as Bucks. >> I'm quite sure that that is true to some. degree. There's a kernel of truth in. there. And there's probably kernels of. something in those Bucks cigarettes, too. >> just about to say that. >> So uh a bunch of manufacturers were. like, "We don't need to take part in. this. We didn't do that much damage.". They're called non-participating. manufacturers. They were typically. smaller players. I mean, if you weren't. one of the big four, you were basically. by. >> Yeah.

>> definition one of the smaller players. But the states were like, "Not so fast. You still are going to have to pay money. to us for each cigarette that you sell.". And those smaller players, most of them. were like, "Uh well, maybe we'll sign. this master settlement agreement after. all." So they really lassoed like a lot. of tobacco manufacturers into this this. whole agreement. >> Yeah, uh if you're wondering about dip, they had a different agreement, but it. was still an agreement kind of under. this banner with US Tobacco.

company, which makes Skoal and. Copenhagen. >> Mhm. >> Uh did you ever dip at all? >> Yes, I did. One thing I never really did. was chew. That was I I tried it once and. turned as green as you can get. >> Yeah, I chew tobacco early on. We might. have spoken about this when I was a. youth group member. >> [laughter]. >> at my church. It was pretty popular. >> Mhm. >> So I chewed like Red Man and Levi. Garrett occasionally and then here and. there in college I would dip. with friends who dipped, but it it never.

like all nicotine never got its hooks in. me, thankfully. >> Yeah, that is thankful, for sure, cuz. once it does, it's hard to get rid of. >> Yeah. For sure. But uh one difference with the. dip companies is uh they were giving out. I remember this was a big deal. They. used to just give out reams of uh of dip. to. minor league baseball and major league. baseball. That's why baseball was and. other sports too, but baseball was. always associated with dipping, but they. were like, you can't give this stuff. away to. like high school and college baseball.

teams anymore and minor league baseball. teams. >> Yeah, I think any sports team because. like kids look up to them, right? Which. is a big part of why they were doing. this. So. the sunflower seed companies rejoiced. >> Oh, for sure. >> So um there was another thing that came. up that was fairly unpopular, but also I. think people were just kind of um. what's not ambivalent, but where you're. of two minds and you're kind of tussling. over it internally? >> Yeah. >> The internal tussley, we'll call it. Um.

5.15 billion dollars went to the. National Tobacco Growers Settlement. Trust Fund. Um to compensate tobacco farmers because. they were going to. sell a lot less tobacco because of this. And. >> It's It's interesting to think about. >> Yeah, because you're like on the one. hand, like, who cares? It's tobacco. And. then on the other hand, you're like, these are often family farmers who have. been doing this for generations. So, I. kind of, yeah, I'm tussling internally.

over it. >> What word is it? I know what you're. talking about. >> Um. Uh. >> Yeah. >> I don't know. >> I don't know. Someone will write in. >> And then one other thing about this, too, that was part of the provision was. people were like, well, what about the. federal government? Because Medicaid is. this joint state-federal. partnership. And the feds fund a lot of. this. And the feds are like, no, we're. leaving ourselves out. We're waiving any. right to any of that money. This is the. state's game. And they did a great job. with it.

>> Yeah, uh, a lot of, um, public health. officials were like, not super happy. about that. Uh, because they were like, hey, listen, unless we have the the feds. overseeing this, how do we know the states are going to. use this money for? >> Mhm. >> Uh, and, you know, not to tease too aggressively, but I think we'll see an act three that. that was very much a valid concern. >> Yeah, for sure. Uh, the feds did come after them, though. They I think this is, um, they. were secretly going to do this when.

they're like, no, no, we're just going. to leave it to the states. And the. tobacco companies are like, woo. >> Yeah. >> And the feds are like, we have our own. thing we're about to do. There was US. versus Philip Morris et al. And they sought billions and billions of. dollars in compensation for health care. money that they had spent out. I guess. basically what they had shelled out as. part of the Medicaid program. Uh, they also went after them for RICO. as racketeers. And as being, um, if. you're convicted of racketeering as an.

organization, and you're allowed to. continue on as an organization, the feds. can basically garnish your profits for a. very long time. Or they can go back and. seek previous profits. >> Yeah. >> did. They looked for, um, they wanted a. portion of the company's proce-. from the past 45 years. In this case. that was um launched in 1999. >> Yeah, and in the meantime Philip Morris. was like. Hey, Philip Morris et al. Thanks a lot.

>> Mhm. >> Like what. Why is it always got to be us? >> [laughter]. >> They're like, you got a great name, Phil. Uh so the companies did not settle. this time. They're like, all right, we're getting bled dry by the states. Now the feds are coming after us. So we. were going to actually fight this thing. Uh and they lost. In 2006 a district. judge for the United States. ruled for the DOJ. Said, no, you guys. are racketeers. Um I'm going to greatly reduce that. financial penalty down to 10 million I'm.

sorry, 10 billion dollars. >> Yeah. >> from the hundreds they were asking for. But you know what? You got to admit to. fraud. You have to issue what are called. corrective statements. And we got we got. to see all those documents cuz we know. there are still more documents in your. coffers. >> Yeah. I think there is something like 14. million documents that were eventually. released, internal documents. >> Yeah. >> Uh and then finally, remember back as. part of like that first settlement. agreement that they tried to kick to the. feds to ratify, um that part of it was.

having the FDA. >> Oh yeah. >> start regulating tobacco. That was in. 1998. >> Yeah. >> In 2009 the federal government finally. got around to having the FDA regulate. the tobacco industry. >> Yeah. All right, let's take our second. break and we'll come back and talk about. what this all meant and means. right after this.

>> [music]. [music]. >> All right. We promised talk of what it all meant. and means and it kind of depends on who. you ask uh or when you ask as well. Because when it happened um an act the. effective national action to control. tobacco group said.

you know what uh and I think other. people too like American Cancer Society, the American Psychological Association. They all got together and said, you know. what? This isn't so great. Like that. McCain bill really had teeth. And that. didn't pass and we really wanted it to. So this is sort of a win for the. cigarette companies. Um it had a lot of like obvious. immediate impacts. And you know, I. talked about you know, why cigarettes. are so expensive now. It's this is. partially why because they're. what's not going to happen is the.

investors aren't going to lose any. money. So they're going to say like, we'll just start jacking up cigarette uh. costs and a lot less people are smoking. So let's jack them up even more because. we're not going to take a loss on this. >> going to do? Quit? >> Yeah, so that started almost immediately. as far as price hiking. Uh like 45 50. cents a pack right out of the gate is is. was just the tip of the iceberg. >> Yeah. I mean, did you say $20 a pack? I. I believe it but that's still. eye-popping.

>> I I think a smoker told me they were. like 20 bucks in New York. >> But I I haven't verified that. >> So um one of the things that really. happened that people point to the MSA as. being directly responsible for is that. like the youth smoking just dropped. precipitously. >> Yeah. >> Once they removed the ability for. tobacco companies to market directly to. kids and they simultaneously had. anti-smoking campaigns targeted towards.

kids. Like it really had an effect. Like. you said, went from like 34% to 3.8% in. 2021. I think it's even lower than that. now. The problem is we didn't learn. anything. that. or we didn't leave it open enough to. apply to future kinds of tobacco that. hadn't been around. So, companies like Juul and other um. e-cigarette and vape companies, they're. they don't face these same regulations. So, they can basically market to kids,

they can use celebrity endorsers, and. they do, but they still. get sued a lot. I think Juul paid out. 462 million to six different states in. 2023. So, it's still going on, but um that's. been a huge dent in the um the the. incredible success of the curbing teen. smoking. Um it's gone back up if you. include vaping and hookahs and stuff. like that, but I have also the. impression that um kids are a little.

smarter than we were at that age. >> Yeah. >> And they're they are seeing through a. lot of this and and it's not working. quite as well as it did on us in the. '90s. >> Yeah, and you know, more parental. oversight and just there's a lot of. factors for sure. Um on the e-cigs, I. think their day has come a little bit, but I think that that it's really. they're in in for some bad stuff moving. forward because of. just all the. all the stuff that goes into that juice,

you know. >> Yeah. Yeah, we we took a pretty solid. stand um or position on vaping. I think. we were If I remember correctly, we were. opposed to it in our episode on vaping. [laughter]. >> Uh that's right. The other thing that. the settlements led to was just a. just a turning of the tide not just with. kid smoking, but smoking in general, which is what they were after was like. let's just try and get smoking way down. overall, and individual states started. enacting bans. I think in '98 Utah and.

California were the were the first and. only ones to say like, "Hey, you can't. smoke in restaurants anymore. You can't. smoke in public places. Secondhand smoke. is a real thing.". And most states have these bans in place. now. And people just generally. uh look at smoking differently. Like, you know, when someone lights up in. public, I guess unless you're in. Philadelphia, there are a a lot of people now that. will look sort of like, "What are you. doing, dude?" Like. Who who still does that? >> Exactly. Or when you flick a cigarette.

filter out the window when you're done. with it? >> Ah, jeez. >> So. >> Sorry, I just went to a dark place. >> with you. I understand. >> So upsetting. Especially when one flicks. off your windshield and you see a spark. bounce. >> Well, that's kind of pretty. >> Well, just briefly, yes. >> So, there was a lot of. a lot of success directly from the. Master Settlement Agreement. Let's talk. about the problems with the Master. Settlement Agreement because a lot of. people are like, "This could have been. done better. We should have done the.

McCain bill, right?". And then really importantly, there were. only a couple of states that had the. foresight to designate the payments from. the. the Master Settlement Agreement from the. tobacco companies that are made annually. in perpetuity. I hadn't realized this. There's no end date to these payments as. far as I know. Um. which I don't fully understand because I. think they settled on like an actual. number, right? So, it doesn't quite make.

sense to me, but I've seen in multiple. places that these are in perpetuity. payments. Um. >> Yeah, the the only thing I can figure. out there is they're like, "Hey, you're. still selling cigarettes and this is. still a problem for Medicaid, so it's. not like that's ever going to stop.". That's the only thing I could figure. out. >> Yeah, I've got that I I get that, too. I. think that that's probably it. That's. the best argument for it, but then does. that mean that their ultimate payouts. are going to exceed that the the. hundreds of billions of dollars that. they agreed to pay out to the states. over 25 years. Like that's that's the.

part I don't get. >> But the the problem is is that the. states, very few states actually said. this money is designated for. anti-smoking programs to pay for. um health care for smokers or to to to. repay public costs for health care that. we we spend on smokers. Um. a lot of states don't do that and in. fact um most of the states use it to. like fill budget gaps, to build new roads. If they're strapped,

they do something called securitization. where they sell bonds against their. future annual payment from the tobacco. companies. Did you see that? >> Yeah. Yeah, that's kind of. uh you know, it's a it's a shell game. with the government in a way in a lot of. ways, I think. >> Yeah, because not only are they I mean, it's just unseemly in the first place, but secondly, when those bonds come due, when they get that Master Settlement. Agreement annual payment to the state, they have to pay out not just the face. value of the bonds that they sold, they.

have to use some of that money to pay. the interest, too. So, the state's. getting less than it would have if it. didn't sell those bonds ahead of time, right? So, that's that I think that's a. sign of poor management of a state. typically, if you ask me. >> Yeah, for sure. Uh I think in the end, less than 3%. of these funds uh have gone to smoking. prevention and cessation programs, which was a lot of the reason they. initially said they were you know, going. to do this. >> Mhm. >> Uh and uh I think no state has funded.

anti-tobacco programs at uh. CDC-recommended levels at all. >> Right. And some states even used them to help. the tobacco industry. I know North. Carolina. >> Oh, man. >> They spent 45 billion dollars, I think, on um. modernizing tobacco farms. Not hey, here's money for your losses." And I. think I said 45 billion. 45 million. >> 42 million. >> 42 million. Um not like, "Here's some. money to compensate you for your losses.

Here's some money to get better at. tobacco farming for the future." That's. what this That's what North Carolina. spent some of its money on. >> Yeah, I think North Carolina uh big. tobacco state, obviously. They used 75%. of their settlement funds for tobacco. production. >> That's crazy. >> Uh some of that to private tobacco. producers, like he talked about, that. had taken a hit. Uh but also, yeah, like. you said, like, "Hey, you want a. tobacco museum?". >> [laughter]. >> "We'll build it with that money.".

>> Right. And if we build it, they will come, the. tobacco companies. >> Oh, man. That's hard to believe on that. one. >> There's another thing, too. Like, tobacco companies haven't exactly paid. out all this money. They were supposed. to pay out the couple hundred, I think. What was it? 300 something billion. dollars over 25 years as part of the. settlement in 1998. They have paid out, according to a press. release from Vermont's um Attorney. General's office, 175 billion. So, I think a. less than half of what they said. And.

it's been a lot longer than 25 years. now, right? And one of the reasons why. is because as part of the agreement, the. tobacco companies, there two. calculations that have to be taken into. account. There has to be an inflation. calculation that that adjusts for. inflation, that so that the states are. getting their actual value of the. dollars that the tobacco companies. agreed to. That makes sense. There's also a sales formula that they. have to calculate every year for to take.

into account the amount of profits that. they're losing to companies that aren't. part of the Master Settlement Agreement, and therefore aren't hamstrung by those. payments, which means that in some. cases, some years, there have been um. the sales calculation has been larger. than the inflation calculation, right? So, the states have shouldered the the. burden of competition for these tobacco.

companies. Like, the states took on that. loss for the tobacco companies, which is. just disgusting to me. >> Yeah, and you know, when you just think. about what's happened with the raising. the cost of cigarettes, there's a lot of. people that look at the settlement of. like well, now you're just getting like. the tobacco companies aren't paying. states. Like. people who still smoke cigarettes are. just funneling money through the tobacco. companies to the states. >> Yeah, that's a that's a great way to put. it. Um okay, Chuck. So, one of the other.

things the legacies of the Master. Settlement Agreement is it it created a. blueprint. I think you said this kind of. early on. um for other ways that states could get. together and create real change against. corporate malfeasance. Specifically. again in cases where. there is harm that comes directly from. using a product as directed or intended, right? Not abusing it or something. You're just using it like it's supposed. to be used and you're being harmed. So,

you have things like um social media, opioids. Climate change is a trickier. one, uh but fast food. And the reason. why also they fit this Master Settlement. Agreement framework is these companies. are following like a lot of the same. techniques that the tobacco industry. laid down by starting back in the '50s. >> Yeah, it's interesting because there's. there are two playbooks. Uh on the one side, you have the. government now that's like, all right, now we got a playbook moving forward so.

we can sue uh Meta. uh about social media and the harms to. to children and the fact that they know. they're targeting children and harming. children. Uh or opioids, of course, uh with the. pharmaceutical companies, but then. there's that other playbook, like you. were talking about, where they were. they end up getting sued, but Meta and. the pharmaceutical companies were like, "Hey, you know what? If we can get kids. hooked on this stuff and market to. children, then we can make a lot more money for. our investors.". >> Yeah, a good example of that, not.

necessarily targeting children, but of. just this completely screwing up the. narrative for their own gain at the at. the expense of people's lives, the. opioid pharmaceutical industry with. opioids uh. basically floated this idea called. pseudoaddiction. to where the people who were supposedly. addicted to opioids weren't actually. addicted. What was happening is that. their pain wasn't being managed. adequately. That's why they needed to. take more and were going around from.

doctor to doctor, and the answer, the. solution, was to up their dose. Don't. cut them off. Don't put them in. treatment. Up their dose. That's what. they really need cuz it's not real. addiction cuz you can't get addicted to. opioids. They actually publicly said. stuff like that. And I mean, that's. cause to go after them alone, you know? >> Yeah. I mean, yeah, just as despicable. as uh. any of these huge corporations sort of. issuing these. uh really flimsy denials that the public.

just it just makes them look worse, you. know? The public doesn't buy this stuff. >> Yeah, it's true now. I think we did. before, you know? >> Yeah, you're probably right. >> Um you got anything else? >> I got nothing else. That's uh this is we. got to yeah, I feel like this is in a. suite of episodes we've done over the. years. First, Josh and Chuck take on the. world. >> Big industry. Uh well, Chuck doesn't have anything. else. Chuck said the world and I said. big industry, so that combination. obviously unlocked listener mail.

>> Uh hey guys, amongst my favorite things, and that's favorite with an O U, so I. think I know where Rebecca is from. >> Mhm. >> Or at least, you know, one of a few. places she could be from. Uh one of my favorite things about Stuff. You Should Know is Josh's jokes that. don't land. Wow, all right. Uh. absolutely hates my [music] jokes that. don't land, by the way, so you should. feel good. >> Did she say that? >> counting how many. No, no, no. >> Okay.

>> Uh and counting how many times Chuck. says, "That's right." in an episode. I. guess it I feel like I say "Sure." more. than more than "That's right." [music]. but. >> You say "For sure." "For sure.". >> Yeah, "For sure.". >> But just one time I was adding a "For. sure." to the first "For sure.". >> "For sure.". Uh my absolute favorite thing though, guys, have has [music] to be the. interlude jingles before and after. >> Yeah. >> I love how the jingle always matches the. theme of the show. For example, the. short stuff [music] on the benefits of. singing in a group had the barbershop. quartet. Episode about Shakespeare had. the Greensleeves style jingle, and. Schoolhouse Rock had the Queen style.

jingle. Uh my favorite one uh might have. been the techno [music] punk jingles on. the cyberpunk episode, which was. fantastic. All that to say, shout out to. Jerry [music] and the folks who produce. these. They are appreciated. And uh. Rebecca, I'm glad you brought this up. We said it a lot over the years, but uh. it always bears repeating that, you. know, these are written by Stuff You. Should Know listeners and produced and. performed. And we just get these, and. people are like, "Hey, use this thing. I made it as a love letter to the show.". and then Jerry does a great job of. selecting the episodes where it has a.

nice fit. So, uh we always like uh. reiterating this is how it works. Uh and. Rebecca sends kindest regards and a. [music] PS shout out to Rebecca's twin. sister, Lauren, who introduced Rebecca. to Stuff You Should Know many years ago, and they have been regularly discussing. episodes weekly since. >> That's awesome. Um yeah, thank you. We love it when a. family member or friend turns somebody. on to Stuff You Should Know, and then. they end up talking about it or. listening together. That's kind of the. point.

>> That's how a community is formed, everybody. >> Also, shout out to Dave and Ben, too, who also do a pretty boss job of. selecting jingles, but I think Jerry's. probably the goat. >> Agreed. >> Uh if you want to be like Rebecca and by. proxy Lauren um and get in touch [music]. with us via email, all you have to do is. send it off to. stuffpodcast@iheartradio.com. >> Stuff You Should Know is a production of. iHeartRadio. >> [music]. >> For more podcasts from iHeartRadio,

visit the iHeartRadio app, Apple. Podcasts, or wherever you listen to your. favorite shows. [music].