OKPOLICY.ORG
Last spring, Oklahoma’s Tobacco Settlement Endowment Trust (TSET) announced its investment returns had allowed for an additional $150 million that would be awarded statewide under a “Legacy Grants” program.
Following a selection process with 167 applicants, TSET began funding health infrastructure projects last week, launching an effort to improve health systems and expand access to care. Spread throughout the state, the 14 legacy grants include funding for research and healthcare access, healthcare workforce development, nutrition, and community collaboration.
Speaking of legacies, former Attorney General Drew Edmondson, who ran twice but never served as governor of Oklahoma, will have a legacy that would be the envy of many who served in the office.
Edmondson, who served as attorney general from 1995 to 2011, is largely responsible for the $2.2 billion tobacco trust that continues to grow and fund high grade research into cancer and other smoking related illnesses and to work on prevention, including the fight against Oklahoma’s two leading causes of preventable death—cancer and cardiovascular disease.
As attorney general, Edmondson headed Oklahoma’s lawsuit against the tobacco industry in the late 1990s. All prior attempts to hold the industry accountable had failed, and the tobacco companies were experts at avoiding responsibility.
The leading tobacco companies concealed damaging research about their products by sharing it with their law firms and claiming attorney-client privilege to avoid disclosure. Oklahoma was among the rare states, possibly the only one, to sue law firms as well as public relations and tobacco companies, based on the “crime-fraud” exception to the attorney-client privilege. The privilege does not apply if legal services are used to help someone commit or plan a crime or fraud that the client is aware of.
In November 1998, the state Attorneys General of 46 states, five U.S. territories, the District of Columbia and the four largest cigarette manufacturers in America reached a settlement called the Master Settlement Agreement.
The agreement required the tobacco companies to pay an annual sum in damages to those state and territorial governments, along with D.C. for the cost of the harm done to their citizens and placed restrictions on tobacco advertising, sponsorships, and product placement.
But it was now up to the state legislatures of those states to determine what to do with the settlement money. Edmondson watched state after state immediately cut taxes because they had this new money coming into the state.
Other states sold their judgments to Wall Street for an immediate lump sum which they could use for projects like infrastructure or any other expenses, particularly popular with governors. There was sentiment in Oklahoma to take the money up front.
Other states had statutory trust endowments, but Edmondson understood legislative decisions can be reversed, so he proposed a constitutional trust that would need a vote of the people rather than just legislative action.
With a Republican governor, Frank Keating, and a Democratic legislature led by Senate President Pro Tempore Stratton Taylor and House Speaker Larry Adair, Edmondson negotiated a ballot measure ultimately giving the trust 75 percent of the lawsuit proceeds with limitations on expenditures to certain health-related purposes. The legislature received 25 percent in a revolving fund. The state question was approved overwhelmingly by the voters.
The legislature recently attempted to alter how the Board of Directors is appointed to gain control of the funding, but the Supreme Court ruled this move unconstitutional. In the future, perhaps the legislature and the trust could achieve more by pooling their resources.
Looking at how other states have handled their funding from the Master Settlement Agreement, what Oklahoma has done through the constitutional trust is a point of pride. Edmondson would likely be the first to say that nothing in government is accomplished by only one person, but I think it’s fair to say that it wouldn’t have happened without him.
