One of the many things worng with the Master Settlement Agreement between the States and the big tobacco companies is the perverse incentive it delivers to the States in that the “compensatory” payments they receive from tobacco companies are dependent on last years sales. This is currently on display in South Carolina, which faces a budget shortfall owing to a decline in cigarette sales. The idiocy of this arrangement is obvious even to the State Attorney General:
“It’s another lunacy of this program,” said Trey Walker, spokesman for South Carolina Attorney General Henry McMaster. “(Attorney General McMaster) finds himself the tobacco regulator in South Carolina, and put in a position where he has to prop up big tobacco to make sure they sell enough cigarettes to make payments to the states.
“That shouldn’t be the role of government. (McMaster) has said this is one of the most disgraceful abuses of the legal system that he’s ever seen.”
CEI’s CAP project exists to challenge this lunacy in court. Trial lawyers, by the way, benefitted from the MSA to the tune of $13 billion, which works out to an hourly rate of tens of thousands of dollars. Nice work if you can get it.