How Minnesota uses $1.3 billion in upfront tobacco settlement payments will be the defining issue of the 1999 legislative session, according to Senate Majority Leader Roger Moe.
If Moe and other DFL lawmakers get their way, the definition could mean decades of lucrative contracts for numerous DFL stalwarts and their allies in the public health industry. DFLers seek to create a fund totaling more than $850 million in settlement proceeds for a private nonprofit organization that was almost singlehandedly created by former Attorney General Skip Humphrey.
The organization will have wide discretion to use earnings from the nest egg to fund ``tobacco-use prevention measures,'' often by contracting with entities whose executives sit on the organization's board.
Meanwhile, the organization has already begun steering business toward firms employing former officials of Humphrey's office -- including Humphrey himself.
The organization is called the Minnesota Partnership for Action Against Tobacco. Little scrutinized by the press, MPAAT was established in last spring's settlement agreement between tobacco firms and the state of Minnesota. MPAAT already has been granted $202 million in direct court-ordered payments, with no legislative approval required.
A bill authored by Moe would, in addition, fund a tobacco prevention endowment with half the upfront settlement payments the state will receive in the next five years -- some $650 million. The endowment would provide MPAAT with $33 million a year to spend on anti-smoking efforts. In all, MPAAT would have about $43 million to spend annually over the next two decades.
The Republican-controlled House has rejected the anti-tobacco endowment, voting instead for a modest increase in public agency efforts to reduce smoking.
Gov. Jesse Ventura has proposed different endowment plans for the tobacco money.
Much bargaining remains to reconcile these conflicting schemes.
But what is MPAAT -- this ``partnership'' that already possesses $202 million of taxpayers' tobacco settlement and could soon tap hundreds of millions more?
Under the court order, MPAAT is controlled by a 21-member board of directors. The governor, speaker of the House and Senate majority leader each named two members. The other 15 were named by Humphrey.
Board members include officials from numerous public health and anti-tobacco organizations -- the Mayo Clinic, American Lung Association, American Cancer Society, University of Minnesota Medical School, Minnesota SmokeFree Coalition, etc. Several are legislators, local government officials or representatives of community groups. Three or four members are moderate Republicans.
Honorary co-chairs of MPAAT are former U.S. Surgeon General C. Everett Koop and former Food and Drug Administration Director David Kessler -- both non-Minnesotans who are prominent leaders of the national anti-smoking movement.
Unless lawmakers require changes in its structure, MPAAT will be quite autonomous. Directors will serve three-year terms. Except for the eight seats filled by elected officials, departing board members' replacements will be elected by remaining board members. In short, the majority coalition of interests Humphrey put in place should be able to maintain control of MPAAT.
The reason Humphrey gave for creating MPAAT, and the reason Moe says it is the best vehicle for implementing Minnesota's anti-smoking initiatives, is precisely that the group is insulated from the political process. The tobacco industry, proponents say, has too much influence over elected officials and might find ways to undermine government anti-smoking strategies.
But others have objected to turning so much public money over to a private organization. Last fall, former Gov. Arne Carlson called MPAAT ``a scandal waiting to happen.'' His concerns attracted scant attention.
MPAAT's chief legal counsel, Tom Pursell, says MPAAT has adopted ethical safeguards most nonprofits don't observe -- a gift ban and salary caps modeled after those of state government; open-meeting requirements; etc.
Still, one interesting feature of MPAAT's bylaws is that the group can give grants or contracts to organizations with which board members are affiliated, so long as conflicted board members sit out those particular votes. It's easy to imagine a certain mutual admiration existing within the group, leading to contracts and grants for the Mayo Clinic, the U, the Lung Association and other organizations represented on the MPAAT board.
MPAAT work is already flowing toward former public officials who created the group and secured its funding. Pursell, now with the Lindquist & Vennum law firm, was a deputy attorney general under Humphrey and a chief architect of MPAAT.
What's more, until MPAAT hires its own communications staff, its public relations is being handled through a contract with the Bloomington firm Tunheim Santrizos. The firm's president, Kathy Tunheim, is the wife of U.S. District Judge Jack Tunheim, formerly Skip Humphrey's chief deputy.
Among the notable hires in recent months in a new public affairs division at Tunheim Santrizos are Douglas Blanke and Maureen Kucera, both former top Humphrey aides who worked on tobacco issues, and longtime Hennepin County Commissioner Mark Andrew, a former DFL state party chair and aide to Roger Moe.
Tunheim Santrizos also recently hired Skip Humphrey as a consultant on public-private partnerships.
Is any of this uncomfortably cozy? Do these arrangements leave an appearance that people in government service may have irrigated their own pastures by directing a long-term flow of public dollars into friendly hands?
Sen. Moe, Humphrey's running mate last fall, sees no problem. Humphrey and his lieutenants, Moe says, by virtue of their long involvement with tobacco and public policy, are ``the people most knowledgeable'' about these issues.
It's merely good fortune, apparently, that Minnesota's tobacco settlement just happens to be creating a rich market for their variety of expertise.
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