Philip Morris Blasts State Spending

WASHINGTON -- The nation's largest cigarette manufacturer is criticizing state governments for failing to use tobacco settlement money to curb youth smoking. But health advocates say Philip Morris USA is being disingenuous.

New York-based Philip Morris released a statement to coincide with the next round of payments to 46 states as part of a $206 billion settlement reached in 1998 for tobacco-related health costs. The industry makes such payments twice a year. The next payment, for more than $2 billion, was due yesterday.

"We are disappointed that, to date, more states have not taken advantage of the opportunity to use these funds to support programs that can help reduce youth smoking," said Carolyn Levy, the company's senior vice president for youth smoking prevention.

Philip Morris cited a National Conference of State Legislators study that found only 5 percent of the settlement funds are being spent on tobacco prevention. Much of the rest is being used to plug budget holes.

Bill Corr, executive vice president of the Campaign for Tobacco-Free Kids, said Philip Morris is trying to improve its public image without making any changes in the way it does business.

Philip Morris spokesman Tom Ryan said reducing youth smoking was one of the stated goals of the settlement agreement and that the company hopes the states do more on that issue, adding the company has spent $300 million on those efforts since 1998.