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LIANE HANSEN, host:

Ten years ago, lawyers from the tobacco industry and eight state attorneys general reached agreement on the largest civil settlement in U.S. history. NPR's Debbie Elliott followed those tobacco talks and joins us to reflect on that landmark settlement. Good morning, Deb.

DEBBIE ELLIOTT: Hi there, Liane.

HANSEN: Tell us how this all began.

ELLIOTT: Well, the idea was first hatched down in Mississippi back in 1993. Recently, I traveled down to Mississippi and paid a visit to former Attorney General Mike Moore there as part of a series that will be airing this week on NPR looking back at the tobacco settlement. And he recalled when a friend of his, a lawyer by the name of Mike Lewis, came to him. Lewis' secretary's mother was dying of heart disease caused by a lifetime of smoking, yet Lewis didn't think he had the resources to take on Big Tobacco on behalf of this woman. But he started to think about, well, you know, maybe the state did have the resources, and maybe the state had a case. And here's how Moore remembers the idea coming to him.

Mr. MIKE MOORE (Attorney; Chairman of the Board, Partnership for a Healthy Mississippi; Board Member, Campaign for Tobacco-Free Kids; Former Mississippi Attorney General): He came up with an idea that maybe since the state was paying for her health care through the Medicaid program - she'd spent all her money and now was on Medicaid - that maybe the state could file a lawsuit to recover its losses.

ELLIOTT: Now, at this time, Big Tobacco was winning every single smoker lawsuit that was filed against it. They would win by saying smokers knew what the dangers are. They smoke anyway. It's their fault. This new idea of a state suing the tobacco industry took the smoker out of the equation.

HANSEN: So what affect did the Mississippi case have?

ELLIOTT: All of a sudden, other attorneys general started filing similar cases. And by 1997, you had about 40 states in all suing. You also had discovery going on. And some pretty interesting information was getting out into the public - what companies knew about the effects of smoking, what they knew about the addictive nature of nicotine. There was even a document that talked about a strategy to target children as, quote, "replacement smokers." So all of a sudden, there was not only the financial threat of these lawsuits, but a public relations nightmare. So the tobacco industry came to these attorneys general and said, you know, let's work this out.

HANSEN: What was in the settlement? Remind us?

ELLIOTT: Well, first there was money - $246 billion that would go to states over the first 25 years of the agreement. And the industry agreed to change some of its practices. It would no longer target children. Perhaps the most prominent thing that you and I might recognize is that we no longer see Joe Camel and the Marlboro Man on billboards or on taxicabs. No more outdoor advertising. Now the companies are having to be much more targeted in the way that they reach smokers. They have these elaborate databases. They use direct mail. And they're rewarding their most loyal customers with special giveaways and retreats. There's even something called the Marlboro Ranch out West. So they're spending double what they used to - about $13 billion a year - to get their message out.

HANSEN: And what's changed on the smoking landscape over the past 10 years then?

ELLIOTT: Smoking rates are certainly down. For kids, they've dropped from 36 to 20 percent over these last 10 years. For adults, from about 25 percent to just under 20 percent. The big controversy has been what states have done with their money. Many states facing tough budget situations use the money for other things: building schools, paving roads, some very laudable things. When you talk to some of these AGs, they're proud of what they accomplished, even though they're disappointed the money hasn't gone where it should. Here's former Mississippi Attorney General Mike Moore talking about how the money wasn't as important as what has happened in our culture.

Mr. MOORE: Most of all, we've changed the way people look at tobacco. You know, there's no question anymore in anybody's mind that it's harmful and that it will kill you.

HANSEN: That's former Mississippi Attorney General Mike Moore, who spoke with NPR's Debbie Elliott as part of the series she'll be doing this week about the tobacco settlement 10 years ago. Deb, thanks a lot.

ELLIOTT: Thank you, Liane.

HANSEN: You can hear Debbie Elliott's reports this week on All Things Considered and Morning Edition. And you can find out more about the settlement at our website, npr.org.

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