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HomeNewsArchivesGET TOBACCO SETTLEMENT MONEY NOW

GET TOBACCO SETTLEMENT MONEY NOW

Dear Source:
I read your story on the ongoing tobacco settlement hearings under way in the territory.
As stated, as part of the nationwide tobacco settlement, the Virgin Islands stands to collect $49.5 million over the next 25 years starting this April. People have been using tobacco products since they settled Jamestown, but one wonders, are some of these tobacco companies going to be around in the next 20-25 years? Could the V.I. government be taking a risk with this payout taking 25 years? The tobacco industry is facing continuing pressure from smoking lawsuits. The most recent comes from flight attendants seeking relief for exposure to second-hand smoke. The tobacco industry will in all probability be vulnerable for years to come from the continuing pressure of these lawsuits.
Maybe the territory ought to consider cashing in their tobacco settlement by selling their rights to their payments to Wall Street investors — in exchange for all the cash up front. A lot of cities and states are awaiting payments from this multibillion-dollar tobacco settlement. I noted recently in a business magazine that some of the lawyers who negotiated the settlement are now thinking about selling their rights to payments for their legal fees. Do they know something? It seems to me that perhaps the V.I. might consider trading its claim to its share of the proceeds for a one-time payment, thereby transferring the risk, and investing some of the proceeds in a more reliable stream of income.
New York City and Nassau and Westchester Counties in New York recently sold $1.1 billion in bonds backed by their tobacco payments to Wall Street last fall. Other states may be considering doing the same thing. When that happens, there may be a limit to how much tobacco money the market will bear.
One thing to keep in mind: The boys on Wall Street don't do anything for free.
Perhaps most important, though, can we trust the V.I. government to invest and/or spend a $49 million windfall wisely?
Rick Ricardo
West Palm Beach, FL

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