Ten-Year Anniversary of Dirty Tobacco Deal

See New YouTube Video on the $250 Billion Backroom Deal

Washington, D.C., November 20, 2008—The notorious tobacco Master Settlement Agreement (MSA) was signed 10 years ago this month by 46 state attorneys general and major tobacco companies. The deal imposed a $250 billion hidden tax on smokers and set up a cartel between the states and Big Tobacco, all without any elected official openly taking responsibility.

A new video by the Competitive Enterprise Institute re-imagines the backroom deal.


CEI is challenging the tobacco settlement in federal district court, on the grounds that states failed to get Congress to approve the deal. Article I, Section 10 of the U.S. Constitution forbids states to enter into compacts with one another without the consent of Congress.

“The tobacco Master Settlement Agreement is a corrupt, unconstitutional agreement between state attorneys general and Big Tobacco,” said Sam Kazman, CEI General Counsel. “It represents the highpoint of using lawsuits and settlement agreements to impose new taxes and regulations on citizens, and it should be halted by the courts.”

In the 1990s, state attorneys general launched massive, unprecedented lawsuits against major tobacco companies, claiming the companies owed the states for the past costs of treating sick smokers. The tobacco “Master Settlement Agreement” was signed in November 1998 by 46 state attorneys general and major tobacco companies. Four states reached separate settlement agreements.