JACKSON, Miss. (Legal Newsline) - Two tobacco companies will pay the state of Mississippi $15 million to settle allegations they didn't pay the state under a 1997 settlement, said Mississippi Attorney General Jim Hood.
Hood announced the settlement with R.J. Reynolds Tobacco Company and Brown and Williamson Tobacco Corporation on Monday.
“Several years ago, we discovered that Brown and Williamson manufactured cigarettes for a company called Star Tobacco, but failed to pay what they were required to pay us under the original 1997 tobacco settlement agreement,” Hood said. “The original settlement requires the company to pay Mississippi for every cigarette it makes and ships to the state.”
Hood added Brown and Williamson got around making the payment by manufacturing cigarettes for Star Tobacco, and then sold the cigarettes to consumers in the state. Hood's office discovered other instances when the two tobacco companies shortchanged the state, he says.
The $15 million is the principal and interest owed to the state that should have been paid years ago, Hood said. The companies will also pay the legal fees for the cost of the investigation.
“The 1997 settlement with the tobacco companies is perpetual, and contributes on average over $100 million per year to the State’s health care budget,” Hood said. “I will continue to closely monitor the tobacco companies and hold them accountable for their actions.”