Tobacco case puts programs in danger

Monday, March 31, 2003 | 11:23 a.m.

CARSON CITY -- State Treasurer Brian Krolicki said today he has "grave concerns" that Philip Morris USA won't be able to make its $15 million payment to Nevada to fund such things as Millennium Scholarships and health programs.

Krolicki said the state has already covered the money paid to students of the University and Community College System of Nevada for this semester. But he said it "would challenge us" to make the scholarship payments to the students starting the fall semester if the tobacco money is not forthcoming.

Philip Morris notified the nation's attorneys general last week that it is "presently uncertain" whether it will make $2.6 billion in tobacco settlement payments next month to state governments.

Nevada gets three checks a year, with the biggest payment comes in April, Krolicki said.

Greg Bortolin, press secretary to Gov. Kenny Guinn, said that money "is critical to Millennium and Senior RX," the low-cost prescription drug program for senior citizens.

"We're hoping the attorney general, working with others, will take the necessary action that will preserve this money," said Bortolin.

Attorney General Brian Sandoval said, "We are working with the National Associations of Attorney Generals to assure that Nevada receives all payments due -- and in a timely fashion."

Philip Morris recently lost a $10 billion class action suit to smokers in Madison County, Ill. It must post a $12 billion bond to appeal the judgment. The company said if it cannot post the bond by April 25, there is no appeal and the plaintiffs could execute immediately on the judgment.

Philip Morris is one of four companies that entered into a settlement to pay the states $206 billion through 2025. The share of Philip Morris is slightly higher than half the settlement.

Sandoval said Nevada is "hoping that the court bond issue will work out so that there is no delay or default on payments, but if not, we're prepared to pursue this immediately."