State legislators last month approved $260,000 for the Nevada Taxation Department to hire a team of auditors to track cigarette sales by smaller tobacco corporations who were not participants in the 1998 national tobacco lawsuit settlement. Under that settlement, negotiated between several state attorneys general and the major tobacco corporations, payments are made to state governments to cover Medicaid and other costs caused by tobacco-related illnesses and paid for by taxpayers. Nevada was one of the last states to join the lawsuits.
The manufacturers who were a party to that agreement were Philip Morris USA, R. J. Reynolds Tobacco Company, Brown & Williamson Tobacco Corp., and Lorillard Tobacco Company.
But there are a number of smaller, little-known corporations that comply with the settlement but were not a party of it. They pay a portion of their tobacco sales into an escrow account. Up to now, no one has tracked whether the amounts they pay correctly reflect their share of the settlement.
“The team will enhance the tracking of what we call NPMs—non-participating manufacturers,” said state taxation chief William Chisel.
The need for the team is partly that, under the lawsuits settlement, a failure by a state to fully police all corporations’ payments could cause a reduction in payments by the majors.
When the news came that the new team is being formed to watch over the small companies, we got to wondering who’s watching over the big companies.
“Who’s minding the big guys if we’re minding the little guys?” Chisel asked whimsically when we called.
He wasn’t certain, so he checked with the state attorney general’s office. It turns out that no one is doing the job—at least, no one in the state.
As part of the original settlement, the National Association of Attorneys General (NAAG) set up a mechanism to cover the large companies. When we tried to find out how it works, we ran into another obstacle—no staff member at NAAG is permitted to talk to the press.