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Saturday, May 27th, 2017Last Update: Thursday, May 4th, 2017 02:03:55 PM

The Oklahoma Tobacco Settlement Endowment Trust

By: Theodore King

The Oklahoma Tobacco Settlement Endowment Trust (TSET) has spent hundreds of millions of dollars, and none of that money has gone toward reimbursing the state for treating smoking-related illnesses, the original intention behind the 1998 Master Settlement Agreement (MSA) between tobacco companies and 46 states including Oklahoma. MSA was and is the source of the creation of TSET.

Begun in 2001, TSET is a public trust created by the State of Oklahoma as a result of the 1998 MSA. The purpose of the MSA was to reimburse states for their Medicaid costs associated with treating patients with tobacco-related illnesses like emphysema and lung cancer. Although TSET was not set up to reimburse Oklahoma for those Medicaid costs, it should be involved with reimbursement.

TSET was designed as a funding mechanism, a sort of nanny state, social engineering racket. It uses the interest on payments from the tobacco companies to fund its grant programs. According to a deputy in State Treasurer Ken Miller's office, Oklahoma has received thus far over a billion dollars from the MSA, and the money is invested; 75% of the interest goes to TSET. The rest goes to the Attorney General's Evidence Fund and the legislature. TSET received 50% of that interest in 2002 and an additional 5% every year thereafter until it reached 75% in 2007. From fiscal years 2010 to January 2015 alone, TSET had spent a whopping $132,933,373.97 in grants, media ads, and research.

It would appear, given the hundreds of millions TSET has already received, that Oklahoma is being reimbursed for what it spends on Medicaid.

According to Governor Fallin's dontsmokeonme.com campaign against tobacco use:

"The Oklahoma Medicaid program spends approximately $78.7 million in state dollars and an additional $139.2 million in federal dollars per year in smoking-related costs for Medicaid recipients." But as TSET's website states, TSET is not reimbursing the state: "TSET is a grant making state agency. Our grants focus on preventing tobacco use, reducing tobacco use and preventing obesity. The TSET Board of Directors has also invested in grants to scientists working in cancer research in Oklahoma."

I asked the deputy in the treasurer's office why TSET doesn't spend any of its hundreds of millions of dollars from the MSA on paying some of the Medicaid costs of smoking- related illnesses, and he responded that TSET seeks the long term approach of changing the culture rather than addressing the Medicaid debt. His response is compatible to TSET's mission as proclaimed in its website, but the money from the MSA is to be used to reimburse the state and not just to educate its citizens about the dangers of smoking. We Oklahomans have been bullied nonstop ad nauseam about smoking.

From Fiscal Year (FY) 2010 to January 2015, TSET spent $33,295,078.21 in "Health Communications." Health Communications are media ads on television, radio, and billboards and in print. TSET has been very clever in an attempt to sway news content. For example, it purchased full page color ads in The Oklahoma Publisher, the newsletter of the Oklahoma Press Association. In the June 2012 issue, TSET had one such ad between stories lamenting the decline of newspapers. These ads in the press association newspaper are a not too subtle reminder to struggling newspapers that they need TSET's money; so write editorials in favor of TSET's agenda.

In the January 2015 issue of The Oklahoma Publisher, TSET had a quarter size black and white ad about secondhand smoke in an effort to sway editorial writers before the legislature convened in February. It's not just newspapers TSET seeks to influence. Community Spirit, a free quarterly Christian publication in the Tulsa area often displays full page color ads from TSET warning of the evils of tobacco use and secondhand smoke. Community Spirit has written a few anti-tobacco stories over the years.

The Oklahoma Education Television Authority (OETA) has benefitted from TSET's largesse in the form of grants. OETA has mentioned TSET as a program sponsor on a number of occasions. Last January, TSET produced a slick half-hour documentary on OETA about its first 15 years. Various state luminaries were interviewed, including Governor Mary Fallin, former Governor Frank Keating, former Attorney General Drew Edmondson (who took part in the lawsuit against the tobacco companies), and former Treasurer Robert Butkin. TSET placed quarter page ads in major state newspapers promoting the documentary. My calls to the OETA foundation regarding the number of TSET grants and the amounts were not returned.

In 2003, the state legislature passed an indoor smoking ban that contained a few exceptions: stand-alone bars, restaurants with a separately ventilated room, tobacco shops, and private clubs. Oklahoma has a preemption law that prohibits municipalities from banning tobacco use on private property beyond what the state law allowed in the 2003 ban. In the winter of 2012 and again in 2013, TSET spent a lot of "Healthy Communications" money on television and radio and print ads continuously during January and February encouraging a change in the law. In 2013, the legislature considered a bill that would end preemption laws in Oklahoma regarding indoor smoking, in other words, would allow municipalities to ban smoking in bars, private clubs, etc. The proposed bill ending preemption was rejected in a Senate committee. Because TSET is a state trust, it could not say: tell your legislators to support this local control bill. TSET said that it would be great if "Oklahoma communities could choose smoke-free air." This was unnecessary as the state already has a broad ban on indoor smoking.

Last fall and into winter, TSET had television spots with a guy wearing a white lab coat, talking about the 70 cancer causing chemicals in secondhand smoke and then asking: "Are you okay with that?" It also had radio, print, and billboard pieces with the same message. The purpose of this campaign was the same as it was in 2013 and the years before, i.e. to encourage the legislature to do TSET's bidding by passing more laws restricting tobacco use. If TSET were to spend its resources solely on encouraging smokers to quit, that would be in line with its mission. TSET has an advantage no other state agency has in that it can use its revenue in media ads to sway public opinion and the legislature. It is important to note that any additional smoking ban would not include casinos, which are on Indian land and, therefore, exempt from state law.

From FY 2010 to January 2015 TSET, spent $33,368,719.26 on what it calls Community Based Grants, which include Healthy Community grants to municipalities and counties if they ban tobacco use at their properties, i.e. courthouses, city halls, parks, etc. Municipalities receive even larger grants if electronic cigarettes are included in a ban. This happened in 2013 for Ada, which received a $100,000 grant. That same year, Bixby considered banning tobacco on municipal property to get a grant. I spoke with the city attorney and asked him, "So if you ban tobacco, you get the money?" He said, "That's correct." I said, "And if you don't ban tobacco, you don't get the money?" Again he responded, "That's correct."

TSET spends money on billboards throughout the state denouncing the evils of secondhand smoke; its other billboards tell us to eat our peas and tell us fruits are "appetizing."

A couple of things TSET does that are mission-focused are a tobacco help quit line for smokers and funding cancer research in the state.

It is an injustice that when the MSA took place, the leadership of the State of Oklahoma did not do the morally right thing by putting all of that MSA money to reimburse Oklahoma. TSET's mission should be narrowed away from lobbying the legislature and social engineering.

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