Speaker 1: Welcome to Stuff You Should Know, a production of iHeartRadio.
Speaker 2: Hey, and welcome to the podcast. I'm Josh, and there's
Speaker 2: Chuck and Jerry's here too, and this is stuff you
Speaker 2: should Know. I think part of our ongoing corporate mouthfeas.
Speaker 1: In this edition, Yeah for sure. And the beginning of
Speaker 1: this episode ties in a lot with we did an
Speaker 1: episode about the history of the cigarette, sure, like just
Speaker 1: the thing that you shouldn't put in your mouth, but
Speaker 1: people do, right, And so we're going to talk a
Speaker 1: little bit about that here at the beginning, because you
Speaker 1: need to know a little bit about that as it
Speaker 1: leads up to what were the you know this lawsuits
Speaker 1: against big Tobacco. And we should start by saying that
Speaker 1: it's been a long time that we've known that tobacco
Speaker 1: and smoking was really bad for you and would kill you.
Speaker 1: Like the nineteen twenties we knew for sure, the fifties
Speaker 1: we really really knew. And in the nineteen sixties is
Speaker 1: when John F. Kennedy finally came out via his Surgeon
Speaker 1: General Luther Terry, and said, all right, everybody, it's nineteen
Speaker 1: sixty four. I'm finally going to issue a government report
Speaker 1: based on you know about a dozen studies with lots
Speaker 1: of data about a million male smokers, and this stuff
Speaker 1: is really bad for you. So we're going to have
Speaker 1: to start putting warning labels on packages.
Speaker 2: Yeah. The great thing about those warning labels, though, is
Speaker 2: you were educated to imagine Sammy Davis Junior saying it
Speaker 2: in your head.
Speaker 3: That's right.
Speaker 2: So the cigarette companies this is the beginning of their playbook,
Speaker 2: and their playbook was basically, nah, yeah, prove it. You
Speaker 2: can't prove it. This is the whole idea of settled science,
Speaker 2: the idea that which is just a complete oxymoron, science
Speaker 2: has never settled. It's a constant, ongoing process. But the
Speaker 2: idea that you have to have one definitive proof before
Speaker 2: you can even begin talking about whether something is harmful
Speaker 2: or not, and really exploiting and manipulating the public through
Speaker 2: really horrible means, this is where that all started. And
Speaker 2: the first response that cigarette companies came up with was
Speaker 2: to say, all right, how about we put filters on cigarettes, Because,
Speaker 2: as everybody knows, cigarettes make your throat kind of scratchy.
Speaker 2: Sometimes they can make you hoarse, and that's okay, that's
Speaker 2: a part of smoking. These new filters are going to
Speaker 2: help with all of that, and there you go. Cigarettes
Speaker 2: are healthy everybody.
Speaker 1: That's right. In the sixties and seventies, that's when we
Speaker 1: saw lighter cigarettes or low tar cigarettes. In the fifties,
Speaker 1: they got really sort of organized and official about their
Speaker 1: PR campaigns. I guess they're propaganda campaigns. When they formed
Speaker 1: the Tobacco Industry Research Committee under the guise of studying
Speaker 1: the health hazards of smoking, but it was very much
Speaker 1: just a PR move. They put out an ad called
Speaker 1: a Frank Statement the cigarette smokers early on, which said like, hey,
Speaker 1: we're really like, your health is paramount to us as
Speaker 1: we sell you cigarettes. It's hard not to laugh because
Speaker 1: this is just so dumb to think about that people
Speaker 1: would have bought this.
Speaker 2: Yeah, but also just so cynical that they would need
Speaker 2: for sure this too, you know.
Speaker 1: But they said, all right, we're really going to pledge
Speaker 1: to research this everyone because we care about your health.
Speaker 1: But also again, like, you can't really prove that it's
Speaker 1: just a cigarettes, Like, how do you know that these
Speaker 1: people dying of lung cancer didn't also get it from
Speaker 1: all the other stuff that's going on in the world.
Speaker 2: Yeah, And actually that would become kind of codified in
Speaker 2: what's called the Roper proposal. There was a Tobacco Institute
Speaker 2: vice president, so in addition to the Tobacco Industry Research Committee,
Speaker 2: they also came up with the Tobacco and this Institute,
Speaker 2: and then they renamed the TRC the Council for Tobacco Research.
Speaker 2: No word of the industry in it, so it's even
Speaker 2: more trustworthy, right, And Fred Panzer was vice president of
Speaker 2: the Tobacco Institute, and he wrote a memo in nineteen
Speaker 2: seventy two that said, essentially, here's what we should do.
Speaker 2: We need to create doubt about the health charge without
Speaker 2: actually denying it. And essentially it's a variation on the
Speaker 2: theme that the case is not proved. And he said,
Speaker 2: kind of what you were saying that like these are
Speaker 2: like you can't really prove that it's cigarettes. So for example,
Speaker 2: extroverts are more likely to smoke cigarettes, but they're also
Speaker 2: more likely to get out in the world and drop out.
Speaker 3: Of a heart attack.
Speaker 2: So maybe it's just that extroverts smoke cigarettes, or that
Speaker 2: there was one called the constitutional hypothesis that was people
Speaker 2: who get sick from smoking are biologically predisposed to get
Speaker 2: sick in general, so it's really them. This was all
Speaker 2: just thrown about in nineteen seventy two to basically lie
Speaker 2: to the public and confuse the public about whether or
Speaker 2: not cigarettes were unhealthy or harmful.
Speaker 1: Yeah, so they're pushing this campaign out behind the scenes.
Speaker 1: They're just throwing in the back file drawer every study
Speaker 1: that they had that showed that nicotine was addictive, that
Speaker 1: smoking was bad for you, Like, they're suppressing that information
Speaker 1: as well as at the same time targeting children with,
Speaker 1: you know, product placement in movies, specifically Superman two in
Speaker 1: nineteen eighty one with Marlborough. Obviously we've talked about camel
Speaker 1: Joe before in the history of the cigarette. That was
Speaker 1: what I say, cammel Joe. Yeah, I like camel Joe. Okay,
Speaker 1: I think we should leave all this in there except
Speaker 1: the beep, although there's plenty of those episodes.
Speaker 3: Yeah, let's get the beep out.
Speaker 1: So that was in nineteen eighty eight. I like camel Joe.
Speaker 3: I like so called you.
Speaker 1: I always called them camel Joe. I didn't know that
Speaker 1: wasn't the name.
Speaker 2: I'm sure there's some retired tobacco industry guy who was like, man,
Speaker 2: we should have called him Camel Joe. That is way better.
Speaker 1: Here's a gen X stat for you, which is fairly
Speaker 1: staggering but completely believable. Youth smoking, like kids and teenager smoking,
Speaker 1: had been on the decline kind of through the seventies
Speaker 1: and eighties for the most part, and then in the
Speaker 1: nineties when gen X came around to like prime smoking age,
Speaker 1: it really jumped. It hit an all time high in
Speaker 1: nineteen ninety seven of thirty six point four percent of
Speaker 1: youth were smoking. Adults were smoking at twenty four point
Speaker 1: seven percent at the time, and that's just a staggering number.
Speaker 1: I think it's at like three point something percent now.
Speaker 1: So gen xers were smoking at a rate of thirty
Speaker 1: six percent.
Speaker 3: Yeah.
Speaker 2: And there's two things that they suggest had to do
Speaker 2: with that huge jump in youth smoking. One was this
Speaker 2: big campaign and push to target youth smokers. The tobacco
Speaker 2: industry called them replacement smokers. They would replace the other
Speaker 2: lifelong smokers that died off from smoking, right. And that's
Speaker 2: the thing too, is like one of the things about smoking,
Speaker 2: very few people start smoking as adults. We call them
Speaker 2: total morons. Most people who smoke started smoking in adolescents.
Speaker 2: So the tobacco industry had every incentive to go after kids.
Speaker 2: They just knew that society would not allow them to
Speaker 2: do that if they did it overtly, so they had
Speaker 2: to do it, you know, kind of under the radar
Speaker 2: with Camel Joe. The other thing is that there was
Speaker 2: a price war that started in the mid nineties, and
Speaker 2: that they think that the drop in the price of cigarettes, Yeah,
Speaker 2: made it more likely for younger kids to smoke, because
Speaker 2: younger kids are more price sensitive than older people who
Speaker 2: are smokers.
Speaker 1: Remember how cheap cigarettes were back then. Yeah, it's like
Speaker 1: a buck buck twenty five a pack or something for sure. Yeah.
Speaker 1: I mean I wasn't a regular smoker. I occasionally smoked,
Speaker 1: as we talked about before, So I wasn't like buying packs,
Speaker 1: but I sold them at the Golden Pantry in Athens,
Speaker 1: Georgia on the East Side. And cigarettes were cheap, and
Speaker 1: they're somebody told me the day that they were like
Speaker 1: twelve to fifteen dollars in like twenty something bucks in
Speaker 1: New York a pack.
Speaker 2: I believe that. I totally believe that.
Speaker 1: Oly. Well, we'll see why here in a minute.
Speaker 2: So yeah, one of the other things too, that they're
Speaker 2: doing at the same time, besides suppressing studies sewing doubt
Speaker 2: and confusion among the public about the harm of cigarettes,
Speaker 2: they're just out and out denying publicly that not only
Speaker 2: your cigarettes not harmful, they're not even addictive. That as
Speaker 2: recently as nineteen ninety four, Yeah, they were publicly saying,
Speaker 2: like the head of Philip Morris was saying in interviews,
Speaker 2: we do not believe cigarettes are addictive. In the nineties,
Speaker 2: people had known, like all you had to do is
Speaker 2: ask a smoker back in fifties if they were addicted
Speaker 2: to cigarettes, and they could tell you that they probably were.
Speaker 2: And like this, the industry in the nineties still wouldn't
Speaker 2: fess up to that. Like that was their tactic. Just
Speaker 2: a complete solid wall with zero cracks in it, over
Speaker 2: and over again being reinforced publicly.
Speaker 1: Yeah. Actually, in the nineteen fifties, I think they probably said, like, no,
Speaker 1: I don't think they're addicted, but do you have a cigarette?
Speaker 1: Can I have a cigarette?
Speaker 3: Right?
Speaker 1: I see a guy where they're smoking, you think he
Speaker 1: has an extra cigarette for me?
Speaker 3: Right?
Speaker 1: All right? So in the nineteen fifties, we need to
Speaker 1: start with sort of lawsuit talk. There were a lot
Speaker 1: of lawsuits all unsuccessful. By the mid nineties, when they
Speaker 1: were still saying that it wasn't addictive, there were at
Speaker 1: least four hundred lawsuits that they never lost, they never settled.
Speaker 1: They had one hundred percent record.
Speaker 3: That's crazy, which is.
Speaker 1: Staggering to learn. They had obviously a ton of money
Speaker 1: to form like the best legal representation they could, but
Speaker 1: they were also actively low being state governments about making
Speaker 1: it harder to sue about tort reform because like, hey,
Speaker 1: tobacco's a natural product, so cigarettes fall into that category,
Speaker 1: like despite all the other stuff that's in there, so
Speaker 1: you can't sue somebody for packaging a natural thing and
Speaker 1: selling it to people.
Speaker 3: Yeah.
Speaker 2: That was the other thing they were doing, too, is
Speaker 2: they were really lobbying government really effectively.
Speaker 3: Like they spent a lot of money on.
Speaker 1: Lobbyists, right, not like now.
Speaker 2: So yeah, they were like the teflon down of industries.
Speaker 3: I guess, yeah, tobacco industry.
Speaker 2: Was what did you just say, not like now, because
Speaker 2: I picked up like atastic, Yeah, what were you mentioning?
Speaker 1: I'm sure they're still pouring tons of money into the lobby.
Speaker 2: Oh sure, sure, yeah, I'm sure too. But so they
Speaker 2: were they were just completely untouchable, Like, I mean, if
Speaker 2: you have one hundred percent record, that in and of
Speaker 2: it self will prevent people from filing suit against you.
Speaker 1: Right, yeah, because it's expensive, it is, right.
Speaker 2: And you're just like, I'm not gonna win, or the
Speaker 2: chances of me winning are so low, I might not
Speaker 2: even file suit. So the state also, we should mention
Speaker 2: Congress is doing almost nothing about this at this point.
Speaker 2: So the state attorneys general, William Safire just smiled from heaven.
Speaker 2: Led by a guy named Michael Moore, he was the
Speaker 2: attorney general from Mississippi. They got together and they said, well,
Speaker 2: if the federal government's I can't do anything about it,
Speaker 2: we're going to Yeah, and one state might not be
Speaker 2: able to take on the tobacco industry, but every state,
Speaker 2: territory and DC together definitely can take on the tobacco industry.
Speaker 2: Not only can we take them on, we can seriously
Speaker 2: threaten to bankrupt the entire tobacco industry right out of
Speaker 2: existence if we really try.
Speaker 1: Yeah, and they play their cards right, because they were like,
Speaker 1: how can we best go at them? Maybe medicaid is
Speaker 1: the way to do it, because we have these medicaid
Speaker 1: programs through our individual states that are not going bankrupt,
Speaker 1: but they're they're in bad shape in a lot of
Speaker 1: cases because they're treating all these smokers who are really
Speaker 1: expensive to get through, like you know, lung cancer treatment,
Speaker 1: and they have deceived us for all these years. So
Speaker 1: let's go after him for RICO status like fraud and racketeering.
Speaker 1: And that'll send a shiver even through the spine of
Speaker 1: a teflon don. And they were turning up, like Livia says,
Speaker 1: like literal truckloads of documents from the industry about them
Speaker 1: selling to teenagers, bearing studies covering up what they knew
Speaker 1: about how addictive everything was. And there were I mean,
Speaker 1: this would be a good sort of thriller movie, almost
Speaker 1: like a Soderberg kind of thing. You probably do a
Speaker 1: great job with it. Where like they're racing like documents
Speaker 1: out of offices while they're trying to actively like bury
Speaker 1: these documents, Like I think the guy from Texas was
Speaker 1: literally trying to put papers on a private jet so
Speaker 1: they could be taken to a district judge before the
Speaker 1: state court could seal them up because once the Feds
Speaker 1: are investigating, it can't be sealed at the state.
Speaker 2: Level, right or even if they do steal it at
Speaker 2: the state level. This federal district judge is like, that
Speaker 2: doesn't apply to me, so I can I can make
Speaker 2: these public are part of a court case, right, So yeah,
Speaker 2: I mean yeah, that is like a thriller. And there
Speaker 2: is something that kind of touched on this. It was
Speaker 2: the Insider with who is the Australian actor he used
Speaker 2: to get in fights all the time?
Speaker 1: Russell Crowe?
Speaker 2: Yeah, Russell Crowe is Jeffrey Wiggand I think yeah, who
Speaker 2: was like this whistleblower a movie back on Industry?
Speaker 3: It was great.
Speaker 2: I think that was a Michael Man movie.
Speaker 1: Michael Mann, Man, I nailed it. You should nailing all
Speaker 1: of it.
Speaker 2: I should be a guest on movie Crush.
Speaker 1: Oh man, if only.
Speaker 2: But one of the other things you kind of touched
Speaker 2: on their strategy, like the focusing on lying to the
Speaker 2: public and targeting teens. That was a really smart strategy
Speaker 2: because if they were just like cigarettes are harmful and
Speaker 2: we need to get rid of them, a lot of
Speaker 2: adults are like, you don't need to tell me whether
Speaker 2: I should smoke or not. I can kill myself if
Speaker 2: I want to. So they left that part alone and
Speaker 2: they went after the fact that they were targeting teens
Speaker 2: and lying to the public, because the public sentiment can
Speaker 2: get behind those two things like yeah, kids are out
Speaker 2: of bounds, we don't want them smoking, and you know
Speaker 2: we were lied to all these years by these same people. Yeah,
Speaker 2: go get them. So that was a really smart strategy
Speaker 2: that these attorneys general like took on, like it was amazing,
Speaker 2: an amazing court angle, I think is what they call them,
Speaker 2: what a court angle?
Speaker 1: Look at that, Yeah, for sure. And the writing was
Speaker 1: on the wall for investors because we're talking about hundreds
Speaker 1: of billions of dollars at stake, and they were like, hey,
Speaker 1: this is this is going to look really bad and
Speaker 1: our stock prices are going to really go in the tank.
Speaker 1: And so you got to cut a deal here, which
Speaker 1: the tobacco company never had thought about, you know, because
Speaker 1: they had not only lost, never lost, they never settled anything.
Speaker 1: So finally in April of ninety seven, they were set
Speaker 1: to go to trial in a few months and they're like,
Speaker 1: all right, let's get a meeting set up with this
Speaker 1: Michael Moore character from Mississippi, not the movie guy obviously,
Speaker 1: and an attorney for Tobacco Free Kids who was working
Speaker 1: with the States about all the marketing toward you know,
Speaker 1: kids with Joe, Cammel Joe and everybody. So they started negotiating, like,
Speaker 1: all right, out of the gate, let's just say we'll
Speaker 1: get rid of Camel Joe. We love him, kids love him,
Speaker 1: but we'll get rid of him and the marble or
Speaker 1: man if that makes you happy. And then a few
Speaker 1: months later in June, they said, all right, we got
Speaker 1: to start talking, like hash out the money part. So
Speaker 1: how does three hundred and sixty eight and a half
Speaker 1: billion dollars sound over twenty five years as just an
Speaker 1: opening salvo?
Speaker 2: Yeah, And the States were like, I was not expecting
Speaker 2: that actually, but they so they were like, okay, here's
Speaker 2: the problem though, These are like we need to bring
Speaker 2: the Feds in, like that Congress has to approve of
Speaker 2: this deal the way that we've set it up. And
Speaker 2: there were some federal aspects to it. One was that
Speaker 2: the FDA would start regulating tobacco products. Another one was
Speaker 2: that the companies, these tobacco companies would be protected against
Speaker 2: any further civil and class action lawsuits.
Speaker 1: This is the big one.
Speaker 3: Yeah, Yeah.
Speaker 2: In exchange, they would create a fund to pay some
Speaker 2: of those people off, and then there would also be
Speaker 2: federal restrictions on indoor smoking. And this did not go
Speaker 2: very far because of that protection of the companies.
Speaker 1: Right, yeah, I mean that was the sticking point. I
Speaker 1: think they could have not too happily lived with the
Speaker 1: rest of it, but that was a big one as
Speaker 1: far as Congress, and soon enough the American people were like,
Speaker 1: uh uh, we can't have that. No, So Congress had
Speaker 1: a build to ratify or at least considering a bill
Speaker 1: to ratify it, Universal Tobacco Settlement Act S fourteen fourteen.
Speaker 1: They were debating it, all this disclosure comes out and
Speaker 1: they're like, man, they were really awful companies and it's
Speaker 1: worse than we thought even and the idea of them
Speaker 1: being protected moving forward, like is it going to fly?
Speaker 1: So the late Senator John McCain said, all right, how
Speaker 1: about S fourteen fifteen where there's more money, like had
Speaker 1: this five hundred and twenty billion sound and we're not
Speaker 1: going to protect you from now on like you you
Speaker 1: can be sued moving forward too.
Speaker 3: Yeah.
Speaker 2: The industry lobbied like they've never lobbied before to keep
Speaker 2: this from getting passed through. And again you mentioned the
Speaker 2: stock prices when all these stuff, the stuff is going on,
Speaker 2: their stocks are tanking. When you know there would be
Speaker 2: a win for in the negotiations for the tobacco companies,
Speaker 2: their stock prices would go back up. It's all very cynical.
Speaker 2: And this stock price went back up after McCain's bill
Speaker 2: did not get passed. And one of the reasons it
Speaker 2: wasn't passed is because other senators added like riders that
Speaker 2: had nothing to do with tobacco, and I'm guessing unpopular writers,
Speaker 2: probably at the behest of the tobacco companies. I could
Speaker 2: not find the writers to save my life, to basically
Speaker 2: sink this bill. You know, like, imagine if you had
Speaker 2: this great bill and then somebody's like, I'm also adding
Speaker 2: a rider to repeal the requirement for child sexual predators
Speaker 2: from having to register and they can live by schools. Now,
Speaker 2: your bill's not going to pass. And I get the
Speaker 2: impression that that's kind of what happened to McCain's bill.
Speaker 1: Yeah, for sure, there was another thing we just sort
Speaker 1: of should mention in passing at least, so it was
Speaker 1: another suit in October of ninety seven. This is why
Speaker 1: they're debating these original bills in Congress where they did settle.
Speaker 1: It was a separate class action suit that was filed
Speaker 1: ninety one by flight attendants in the United States saying like, hey,
Speaker 1: smoking sections and planes are like killing us and it's
Speaker 1: pretty awful. So it was a husband and wife team
Speaker 1: named Stanley and Susan Rosenblatt who filed this one, and
Speaker 1: they ended up settling for three hundred million dollars to
Speaker 1: fund medical research. And they said this was a big
Speaker 1: sort of turning point, and that's the first time they
Speaker 1: officially caved. And again this is while they're debating these
Speaker 1: bills in the Congress.
Speaker 2: Right, Chuck, I feel like we set things up pretty
Speaker 2: well for a break, Like we deserve an.
Speaker 1: Ad we deserve a break today.
Speaker 4: Let's do it, okay, Okay.
Speaker 2: So things are just kind of not going quite well
Speaker 2: because the whole thing was handed over from the states
Speaker 2: to Congress, and Congress just fumbled it.
Speaker 3: As they do.
Speaker 2: So some of the states went on and we're like,
Speaker 2: we're gonna just keep going and negotiating our own agreements
Speaker 2: with the tobacco companies Florida, Minnesota, Mississippi, who had led
Speaker 2: the charge originally in the first place, and Texas. They
Speaker 2: all came up with their own settlements and like pretty
Speaker 2: eye popping amounts, Texas got more than seventeen and a
Speaker 2: half billion dollars out of their agreement. Minnesota got a
Speaker 2: nice chunk of change. But they also had the foresight
Speaker 2: to say, not only are you going to settle with money,
Speaker 2: part of this is that you have to disclose public records.
Speaker 2: All internal documents that are part of discovery in this
Speaker 2: process are going to be made public after this, and
Speaker 2: the tobacco companies had to agree with that. So that
Speaker 2: was where a lot of these disclosures came from. That
Speaker 2: they had just been lying, lying, lying, because these troves
Speaker 2: of documents that came up in discovery during these cases,
Speaker 2: just journalists went crazy. It was like a feeding frenzy
Speaker 2: on them.
Speaker 1: Oh yeah, for sure. They saw the writing on the
Speaker 1: wall once again. So they got together with the other
Speaker 1: remaining states who were all plaintiffs at this point in
Speaker 1: November of nineteen ninety eight and agreed to what would
Speaker 1: end up being the Tabasco Tabasco, the Tobacco Oh man,
Speaker 1: the Tabasco Settlement. Can you imagine the numbers? The Tobacco
Speaker 1: Master Settlement Agreement, the MSA, which would include two hundred
Speaker 1: and six billion dollars paid out over twenty five years
Speaker 1: to forty six states, five territories in DC. Yeah, and
Speaker 1: they would allocate it according to like how many smokers
Speaker 1: they estimated each state had and how much It was
Speaker 1: still based on the medicaid thing, so how much they had,
Speaker 1: you know, had to pay out and Medicaid for all
Speaker 1: these related costs. They said, Well, also stop targeting miners,
Speaker 1: even though they really like to smoke, as it turns out,
Speaker 1: and they love cartoon camels, So no more cartoon characters
Speaker 1: and our ads. We're not going to give away free
Speaker 1: cigarettes to miners at recess, which is crazy. We are
Speaker 1: going to shut down these you know, sort of shell
Speaker 1: research companies that are really just PR firms for US,
Speaker 1: dissolving those We're going to release all these documents, and
Speaker 1: we're going to create a national foundation to address underage
Speaker 1: tobacco use and addiction. And we promised to care this time.
Speaker 2: Yeah, we're a newer, gentler loving tobacco company.
Speaker 1: That's right.
Speaker 2: They also created what's now known as the Truth Initiative,
Speaker 2: which is this whole teen anti smoking campaign that was
Speaker 2: funded originally by the tobacco companies.
Speaker 1: Those commercials were great.
Speaker 2: Yeah, they're still around. The Truth Initiative is they seem
Speaker 2: to have migrated online.
Speaker 1: Surprisingly, Yeah, I'm sure.
Speaker 2: I mean, I guess that's where kids are these days
Speaker 2: or something.
Speaker 1: That's where the kids are.
Speaker 2: And so initially this agreement was just before or between
Speaker 2: these forty six states and territories in DC and the
Speaker 2: four largest tobacco companies which represented the vast majority of
Speaker 2: the market share of the tobacco industry in the United States,
Speaker 2: Philip Morris, R. J. Reynolds, Brown and Williamson and Laurellard.
Speaker 1: I'd only heard of two of those.
Speaker 2: Yeah, for sure, I've heard of the other ones, but
Speaker 2: I cannot tell you what they make.
Speaker 1: Okay, Yeah, no idea, let's just leave it at that.
Speaker 1: Maybe they make a Bucks I remember, Yeah, I remember.
Speaker 1: I think we talked about Bucks in the cigarettes episodes
Speaker 1: were at the Golden Pantry. Those were the Those are
Speaker 1: the ones that I think the rumor was, at least
Speaker 1: they were just made from the sweepings, the trimmings and
Speaker 1: sweepings up of factories. They would just package them as Bucks.
Speaker 2: I'm quite sure that that is true to some degree.
Speaker 2: There's a kernel of truth in there, and there's probably
Speaker 2: kernels of something in those buck.
Speaker 3: Cigarettes just about to say that.
Speaker 2: So a bunch of manufacturers were like, we don't need
Speaker 2: to take part in this. We didn't do that much damage.
Speaker 2: They're called non participating manufacturers. They were typically smaller players.
Speaker 2: I mean, if you weren't one of the big four,
Speaker 2: you were basically by definition, one of the smaller players.
Speaker 2: But the States are like, not so fast. You still
Speaker 2: are going to have to pay money to us for
Speaker 2: each cigarette that you sell. And those smaller players, most
Speaker 2: of them were like, well, maybe we'll sign this master
Speaker 2: settlement after all the mask So they really lasted, like
Speaker 2: a lot of tobacco manufacturers into this, this whole agreement.
Speaker 1: Yeah, if you're wondering about DIP, they had a different agreement,
Speaker 1: but it was still an agreement kind of under the
Speaker 1: spanner with US Tobacco Company, which makes Skull and Copenhagen.
Speaker 1: Did you ever dip at all?
Speaker 3: Yes? I did.
Speaker 2: One thing I never really did was chew. That was
Speaker 2: I tried it once and turned as green as you
Speaker 2: can get.
Speaker 1: Yeah, I chewed tobacco early on. We might have spoken
Speaker 1: about this when I was a youth group member at
Speaker 1: my church. It was pretty popular. So I chewed like
Speaker 1: Redman and Levi Garrett occasionally and then here and there.
Speaker 1: In college, I would dip with friends who dipped, but
Speaker 1: it never, like all nicotine never got its hooks and
Speaker 1: me thankfully.
Speaker 2: Oh that is thankful, for sure, because once it does,
Speaker 2: it's hard to get rid of.
Speaker 1: Yeah, for sure. But one difference with the dip companies
Speaker 1: is they were given out and I remember this is
Speaker 1: a big deal. They used to just give out reams
Speaker 1: of dip to minor league baseball and major league baseball.
Speaker 1: That's why baseball was and other sports too, but baseball
Speaker 1: was always associated with dipping. But they were like, you
Speaker 1: can't give this stuff away to like high school and
Speaker 1: college baseball teams anymore. In minor league baseball teams.
Speaker 2: Yeah, I think any sports team because like kids look
Speaker 2: up to them, right, which is a big part of
Speaker 2: why they were doing this. So the sunflower seed companies.
Speaker 1: Rejoiced, oh for sure.
Speaker 3: So there was.
Speaker 2: Another thing that came up that was fairly unpopular. But
Speaker 2: also I think people were just kind of what's not ambivalent,
Speaker 2: but where you're of two minds and you're kind of
Speaker 2: tussling over it internally, Yeah, the internal tussley we'll call it.
Speaker 2: Five point one five billion dollars went to the National
Speaker 2: Tobacco Growers Settlement Trust Fund to compensate tobacco farmers because
Speaker 2: they were going to sell a lot less tobacco.
Speaker 3: Because of this.
Speaker 1: And it's interesting to think about.
Speaker 2: Yeah, because you're like, on the one hand, like, who cares,
Speaker 2: it's tobacco, and then on the other hand, you're like,
Speaker 2: these are often family farmers who have been doing this
Speaker 2: for generation. So I kind of to yeah, I'm tussling
Speaker 2: internally over it.
Speaker 1: What word is it? I know what you're talking about. Yeah,
Speaker 1: I don't know. I don't know somewhere right.
Speaker 2: In And then one other thing about this too that
Speaker 2: was part of the provision was people were like, well,
Speaker 2: what about the federal government because Medicaid is this joint
Speaker 2: state federal partnership and the feds fund a lot of this,
Speaker 2: And the Feds were like, no, we're leaving ourselves out.
Speaker 2: We're waiving any right to any of that money. This
Speaker 2: was the state's game, and they did a great job
Speaker 2: with it.
Speaker 1: Yeah, a lot of public health officials were like not
Speaker 1: super happy about that because they were like, hey, listen,
Speaker 1: unless we have the Feds overseeing this, How do we
Speaker 1: know what the states are going to use this money for?
Speaker 1: And you know, not to tease too aggressively, but I
Speaker 1: think we'll see an Act three that that was very
Speaker 1: much a valid concern.
Speaker 2: Yeah, for sure. The Feds did come after them though
Speaker 2: they I think this was they were secretly going to
Speaker 2: do this, and they're like, no, no, We're just going
Speaker 2: to leave it to the states. And the tobacco companies
Speaker 2: are like, whoa, and the Feds are like, we have
Speaker 2: our own thing we're about to do. There was us
Speaker 2: versus Philip Morris at all, and they saw billions and
Speaker 2: billions of dollars in compensation for healthcare money that they
Speaker 2: had spent out I guess basically what they had shelled
Speaker 2: out as part of the Medicaid program. They also went
Speaker 2: after them for RICO as racketeers and as being if
Speaker 2: you're convicted of racketeering as an organization and you're allowed
Speaker 2: to continue on as an organization, the Feds can basically
Speaker 2: garnish your profits for a very long time, or they
Speaker 2: can go back and seek previous profits, and they did.
Speaker 2: They looked for they wanted a portion of the company's
Speaker 2: profits from the past forty five years in this case
Speaker 2: that was launched in nineteen ninety nine.
Speaker 1: Yeah, and in the meantime, Phil Morris was like, hey
Speaker 1: Phil Morris at all, thanks a lot, Like why why
Speaker 1: has it always got to be us? They're like, you
Speaker 1: got a great name, Phil. So the companies did not
Speaker 1: settle this time. They're like, all right, we're getting bled
Speaker 1: dry by the States. Now the Feds are coming after us.
Speaker 1: So we were going to actually fight this thing, and
Speaker 1: they lost. In two thousand and six, the District judge
Speaker 1: for the United States a rule for the DOJ said no,
Speaker 1: you guys are racketeers. I'm going to greatly reduce that
Speaker 1: financial penalty down to million I'm sorry, ten billion dollars, yeah,
Speaker 1: from the hundreds they were asking for. But you know what,
Speaker 1: you got to admit to fraud. You have to issue
Speaker 1: what are called corrective statements. And we got to see
Speaker 1: all those documents because we know there are still more
Speaker 1: documents in your coffers.
Speaker 3: Yeah.
Speaker 2: I think there's something like fourteen million documents that were
Speaker 2: eventually released internal documents.
Speaker 1: Yeah.
Speaker 2: And then finally, remember back as part of like that
Speaker 2: first settlement agreement.
Speaker 3: That they tried to kick to the FED to ratify that.
Speaker 2: Part of it was having the fdah, yeah, start regulating tobacco.
Speaker 3: That was in nineteen ninety eight.
Speaker 2: Yeah, in two thousand and nine, the federal government finally
Speaker 2: got around to having the FDA regulate the tobacco industry.
Speaker 1: Yeah, all right, let's take our second break, and we'll
Speaker 1: come back and talk about what this all meant and
Speaker 1: means right after this, all right, we promise talk of
Speaker 1: what it all meant and means. And it kind of
Speaker 1: depends on who you ask or when you ask as well,
Speaker 1: because when it happened and Act, the Effective National Action
Speaker 1: to Control Tobacco Group said you know what, and I
Speaker 1: think other people too, like the American Cancer Society, the
Speaker 1: American Psychological Association, they all got together and said, you
Speaker 1: know what, this isn't so great, Like that McCain bill
Speaker 1: really had teeth and that didn't pass, and we really
Speaker 1: wanted it to. So this is sort of a win
Speaker 1: for the cigarette companies. It had a lot of like
Speaker 1: obvious immediate impacts. And you know, I talked about, you
Speaker 1: know why cigarettes are so expensive, now this is partially
Speaker 1: why because they're what's not going to happen is the
Speaker 1: investors aren't going to lose any money, so they're going
Speaker 1: to say, like, well, just start jacking up cigarette costs,
Speaker 1: and a lot less people are smoking, so let's jack
Speaker 1: them up even more because we're not going to take
Speaker 1: a loss on this.
Speaker 3: Yeah, what are they gonna do? Quit?
Speaker 1: Yeah, So that started almost immediately. As far as price hiking,
Speaker 1: like forty five to fifty cents a pack right out
Speaker 1: of the gate was just the tip of the iceberg.
Speaker 2: Yeah, I mean, did you say twenty dollars a pack?
Speaker 2: I believe it, but that's still ipop.
Speaker 1: I think a smoker told me they were like twenty
Speaker 1: bucks in New York, but I haven't verified that.
Speaker 2: So one of the things that really happened that people
Speaker 2: point to the MSA as being directly responsible for is that,
Speaker 2: like the youth smoking just dropped precipitously.
Speaker 1: Yeah.
Speaker 2: Once they removed the ability for tobacco companies to market
Speaker 2: directly to kids and they simultaneously had anti smoking campaigns
Speaker 2: targeted towards kids.
Speaker 3: Like it really had an effect.
Speaker 2: Like you said, went from like thirty four percent to
Speaker 2: three point eight percent in twenty twenty one. I think
Speaker 2: it's even lower than that.
Speaker 3: Now.
Speaker 2: The problem is we didn't learn anything that or we
Speaker 2: didn't leave it open enough to apply to future kinds
Speaker 2: of tobacco that hadn't been around. So companies like Jewel
Speaker 2: and other e cigarette and vape companies they don't face
Speaker 2: these same regulations and basically marketed kids. They can use
Speaker 2: celebrity endorsers, and they do, but they still get sued
Speaker 2: a lot. I think Jewel paid out four hundred and
Speaker 2: sixty two million to six different states in twenty twenty three,
Speaker 2: So it's still going on. But that's been a huge
Speaker 2: dent in the incredible success of the curbing teen smoking.
Speaker 2: It's gone back up if you include vaping and hookahs
Speaker 2: and stuff like that. But I have also the impression
Speaker 2: that kids are a little smarter than we were at
Speaker 2: that age. Yeah, and they are seeing through a lot
Speaker 2: of this and it's not working quite as well as
Speaker 2: it did on us in the nineties.
Speaker 1: Yeah, and you know, more parental oversight and just there's
Speaker 1: a lot of factors for sure. On the egs. I
Speaker 1: think their day has come a little bit, but I
Speaker 1: think that it's really there and for some bad stuff
Speaker 1: moving forward because of just all the all the stuff
Speaker 1: that goes into that juice you know.
Speaker 2: Yeah, Yeah, we took a pretty solid stand or position
Speaker 2: on vaping. I think we were if I remember correctly,
Speaker 2: we were opposed to it in our episode on vaping.
Speaker 1: That's right. The other thing that the settlements led to
Speaker 1: was just a turning of the tide, not just with
Speaker 1: kids smoking, but smoking in general, which was what they
Speaker 1: were after, was like, let's just try and get smoking
Speaker 1: way down overall, and individual states started enacting bands. I
Speaker 1: think in ninety eight, Utah and California were the first
Speaker 1: and only ones to say, like, hey, you can't smoke
Speaker 1: in restaurants anymore, you can't smoke in public places. Second
Speaker 1: hand smoke is a real thing, and most states had
Speaker 1: these bands in place now and people just generally look
Speaker 1: at smoking differently, like, you know, when someone lights up
Speaker 1: in public, I guess unless you're in Philadelphia, there are
Speaker 1: a lot of people now that will look sort of like,
Speaker 1: what are you doing dude?
Speaker 3: Yeah?
Speaker 2: Like who still does that exactly? Or when you a
Speaker 2: cigarette filter out the window when you're done with it.
Speaker 1: JESU, so sorry, I just went to a dark place.
Speaker 3: Now, I'm with you, I understand.
Speaker 1: So upsetting, Yeah, especially when one flicks off your windshield
Speaker 1: and you see a spark bounce.
Speaker 3: Well that's kind of.
Speaker 1: Well, just briefly, Yes.
Speaker 2: So there was a lot of a lot of success
Speaker 2: directly from the Master Settlement Agreement. Let's talk about the
Speaker 2: problems with the Master Settlement Agreement, because a lot of
Speaker 2: people are like, this could have been done better, we
Speaker 2: should have done the McCain bill right. And then really importantly,
Speaker 2: there were only a couple of states that had the
Speaker 2: foresight to designate the payments from the Master Settlement Agreement
Speaker 2: from the tobacco companies that are made annually in perpetuity.
Speaker 2: I hadn't realized this. There's no end date to these
Speaker 2: payments as far as I know, which I don't fully
Speaker 2: understand because I think they settled on like an actual number, right,
Speaker 2: So that doesn't quite make sense to me. But I've
Speaker 2: seen in multiple places that these are imperpetuity payments.
Speaker 1: Yeah. The only thing I can figure out there is
Speaker 1: they're like, hey, you're still selling cigarettes and this is
Speaker 1: still a problem for medicaid. So it's not like that's
Speaker 1: ever going to stop. That's the only thing I can
Speaker 1: figure out.
Speaker 3: Yeah, I've got that. I get that too.
Speaker 2: I think that that's probably it that's the best argument
Speaker 2: for it. But then does that mean that their ultimate
Speaker 2: payouts are going to exceed that the hundreds of billions
Speaker 2: of dollars that they agreed to pay out to the
Speaker 2: states over twenty five years. Like, that's the part I
Speaker 2: don't get. But the problem is that the states, very
Speaker 2: few states actually said this money is designated for anti
Speaker 2: smoking programs, to pay for health care for smokers, or
Speaker 2: to repay public costs for healthcare that we spend on smokers.
Speaker 2: A lot of states don't do that, and in fact,
Speaker 2: most of the states use it to like fill budget
Speaker 2: gaps to build new roads. If there's rap, they do
Speaker 2: something called securitization, where they sell bonds against their future
Speaker 2: annual payment from the tobacco companies.
Speaker 3: Did you see that?
Speaker 1: Yeah, yeah, that's kind of you know, it's a shell
Speaker 1: game with the government in a way, In a lot
Speaker 1: of ways, I think.
Speaker 2: Yeah, because not only are they I mean, it's just
Speaker 2: unseemly in the first place, but secondly, when those bonds
Speaker 2: come due, when they get that Master Settlement Agreement annual
Speaker 2: payment to the state, they have to pay out not
Speaker 2: just the face value of the bonds that they sold,
Speaker 2: they have to use some of that money to pay
Speaker 2: the interest too, So the state's getting less than it
Speaker 2: would have if it didn't sell those bonds ahead of time. Right,
Speaker 2: So I think that's a sign of poor management of
Speaker 2: a state typically if you.
Speaker 1: Ask me, Yeah, for sure. I think in the end,
Speaker 1: less than three percent of these funds have gone to
Speaker 1: smoking prevention and cessation programs, which was a lot of
Speaker 1: the reason they initially said they were going to do this.
Speaker 1: And I think no state has funded anti tobacco programs
Speaker 1: at CDC recommended levels at all.
Speaker 2: Right, and some states even used them to help the
Speaker 2: tobacco industry. I know North Carolina, Oh man, they spent
Speaker 2: forty five billion dollars, I think on modernizing tobacco farms,
Speaker 2: not hey, here's money for your losses. And I think
Speaker 2: I said, forty forty two million, not like, here's some
Speaker 2: money to compensate you for your losses. Here's some money
Speaker 2: to get better at tobacco farming for the future. That's
Speaker 2: what That's what North Carolina spent some of its money on.
Speaker 1: Yeah, I think North Carolina big tobacco state. Obviously, they
Speaker 1: use seventy five percent of their settlement funds for tobacco production.
Speaker 1: It's crazy some of that to private tobacco producers like
Speaker 1: you talked about that had taken a hit. But also yeah,
Speaker 1: like you said, like, hey, you want a tobacco museum,
Speaker 1: will build it with that money.
Speaker 2: Right, And if we build it, they will come to
Speaker 2: the tobacco company.
Speaker 1: Oh man, that's hard to believe on that one.
Speaker 2: There's another thing too, The tobacco companies haven't exactly paid
Speaker 2: out all this money. They were supposed to pay out
Speaker 2: the couple hundred I think what it was, three hundred
Speaker 2: something billion dollars over twenty five years as part of
Speaker 2: the settlement in nineteen ninety eight. They have paid out,
Speaker 2: according to a press release from Vermont's Attorney General office,
Speaker 2: one hundred and seventy five billion, So I think less
Speaker 2: than half of what they said. And it's been a
Speaker 2: lot longer than twenty five years now, right. And one
Speaker 2: of the reasons why is because as part of the
Speaker 2: agreement the tobacco companies, there are two calculations that have
Speaker 2: to be taken into account. There has to be an
Speaker 2: inflation calculation that it's just for inflation, so that the
Speaker 2: states are getting their actual value of the dollars that
Speaker 2: the tobacco companies agreed to. That makes sense. There's also
Speaker 2: a sales formula that they have to calculate every year
Speaker 2: to take into account the amount of profits that they're
Speaker 2: losing to companies that aren't part of the Master Settlement
Speaker 2: Agreement and therefore aren't hamstrung by those payments, which means
Speaker 2: that in some cases, some years there have been the
Speaker 2: sales calculation has been larger than the inflation calculation. Right,
Speaker 2: So the states have shouldered the burden of competition for
Speaker 2: these tobacco companies, Like the States took on that loss
Speaker 2: for the tobacco companies, which is just disgusting to me.
Speaker 1: Yeah, and you know, when you just think about what's
Speaker 1: happened with the raising the cost of cigarettes, there's a
Speaker 1: lot of people that look at the settlement of like, well,
Speaker 1: now you're just getting like the tobacco companies aren't paying states,
Speaker 1: Like people who still smoke cigarettes are just funneling money
Speaker 1: through the tobacco companies to the states.
Speaker 2: Yeah, that's a great way to put it, okay, Chuck.
Speaker 2: So one of the other things the legacies of the
Speaker 2: Master Settlement Agreement is it created a blueprint. I think
Speaker 2: you said this kind of early on for other ways
Speaker 2: that states could get together and create real change against
Speaker 2: corporate malfeasance, specifically, again in cases where there is harm
Speaker 2: that comes directly from using a product as directed or
Speaker 2: intended right, not abusing it or something you're just using
Speaker 2: it like it's supposed to be used and you're being harmed.
Speaker 2: So you have things like social media, opioids, climate change
Speaker 2: is a trickier one, but fast food and the reason
Speaker 2: why also they fit this Master Settlement Agreement framework is
Speaker 2: these companies are following like a lot of the same
Speaker 2: techniques that the tobacco industry laid down by starting back
Speaker 2: in the fifties.
Speaker 1: Yeah, it's interesting because there's there are two playbooks. On
Speaker 1: the one side, you have the government. Now that's like
Speaker 1: all right, now, we got a playbook moving forward, so
Speaker 1: we can sue Meta about social media and the harms
Speaker 1: to children and the fact that they know they're targeting
Speaker 1: children and harming children, or opioids of course with the
Speaker 1: pharmaceutical companies. But then there's that other playbook like you
Speaker 1: were talking about, where they end up getting sued. But
Speaker 1: Meta and the pharmaceutical companies were like, hey, you know
Speaker 1: what if we can get kids hooked on this stuff
Speaker 1: and market to children, then we can make a lot
Speaker 1: more money for investors.
Speaker 2: Yeah, a good example of that, not necessarily targeting children,
Speaker 2: but of just this completely screwing up the narrative for
Speaker 2: their own gain at the expense.
Speaker 3: Of people's lives.
Speaker 2: The opioid pharmaceutical industry with opioids basically floated this idea
Speaker 2: called pseudo addiction to where the people who were supposedly
Speaker 2: addicted to opioids weren't actually addicted. What was happening is
Speaker 2: that their pain wasn't being managed adequately. That's why they
Speaker 2: needed to take more. We're going around from doctor to doctor,
Speaker 2: and the answer the solution was to up their dose,
Speaker 2: don't cut them off, don't put them in treatment.
Speaker 3: Up their dose.
Speaker 2: That's what they really need, because it's not real addiction
Speaker 2: because you can't.
Speaker 3: Get addicted to opioids.
Speaker 2: They actually publicly said stuff like that, and I mean
Speaker 2: that's cause to go after them alone, you.
Speaker 1: Know, yeah, I mean, yeah, just as despicable as any
Speaker 1: of these huge corporations sort of issuing these really flimsy
Speaker 1: denials that the public just it just makes them look worse.
Speaker 1: You know, the public doesn't buy this stuff.
Speaker 2: Yeah, it's true now I think we did before.
Speaker 1: Yeah you know, yeah, you're probably right.
Speaker 3: You got anything else?
Speaker 1: I got nothing else. That's uh, this is we gotta Yeah.
Speaker 1: I feel like this is in a suite of episodes
Speaker 1: we've done over the years. Josh and Chuck take on the.
Speaker 2: World, big Industry. Well, Chuck doesn't have anything else. Chuck
Speaker 2: said the world, and I said big industry, So that
Speaker 2: combination obviously unlocked listener mail.
Speaker 1: Hey, guys, amongst my favorite things, and that's favorite with
Speaker 1: an ou So I think I know where Rebecca's from,
Speaker 1: or at least you know one of a few places
Speaker 1: she could be from. One of my favorite things about
Speaker 1: stuff you should know is Josh's jokes that don't land. Wow,
Speaker 1: all right, absolutely hates my jokes that don't land, by
Speaker 1: the way, so you should feel good and counting how
Speaker 1: many no, no, no, okay, and counting how many times
Speaker 1: Chuck says that's right in an episode, I guess i'd
Speaker 1: feel like I say sure more.
Speaker 2: Than more than that's right, but you say for sure
Speaker 2: for sure, yeah for sure, But just one time I
Speaker 2: was adding a for sure to the first for sure
Speaker 2: for sure.
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Speaker 1: I love how the jingle always matches the theme of
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Speaker 1: I made it as a love letter to the show.
Speaker 1: And then Jerry does a great job of selecting the
Speaker 1: episodes where it has a nice bit, so we always
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Speaker 2: do a pretty boss job of selecting jingles, but I.
Speaker 3: Think Jerry's probably the goat.
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