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Thursday, July 19th, 2018Last Update: Friday, June 1st, 2018 10:41:02 AM

The Tobacco Settlement Endowment Trust

By: Theodore King

The Tobacco Settlement Endowment Trust (TSET) is a billion dollar smoked piggy bank for healthcare with very little healthcare being given to Oklahomans. Voters approved a constitutional amendment to create TSET as a state agency in 2000 to spend money from the 1998 Master Settlement Agreement (MSA) between the tobacco companies and 46 states, including Oklahoma, that sued the tobacco companies for the states' treating people with smoking-related illnesses. TSET today has collected payments amounting to a billion dollars. By 2025 it may have two billion dollars. Since 2001, TSET has spent the interest from those payments, which amounts to 290 million dollars. TSET is a cash cow milked mostly for the benefit of others, so remotely related to healthcare costs including Medicaid, as to be extraneous to those purposes for which the MSA money was intended.

Last June, a former Edmond mayor, corporation commissioner, and 2014 candidate for Congress, Patrice Douglas, was chosen by the TSET board to fill a newly created position as CEO at a salary of $250,000 a year! TSET already has a director who makes $120,000 a year and will stay with TSET, which has 22 employees. The TSET board contracted Recruiting of Tulsa for $35,000 to find a candidate. Given Ms. Douglas' high profile position in the state, it wouldn't have cost anything if the TSET board had only opened an Edmond phone book, called her, and asked for her resume.

Governor Mary Fallin, who makes $147,000 a year, and runs an entire state government, not just one agency, was not pleased with those shenanigans. Fallin said TSET's failure to file necessary hiring paperwork for a new, highly-paid chief executive position would violate the spirit of an executive order that she issued in February 2015. The executive order prohibits new hires, employee raises or bonuses unless an exception is approved by the statewide elected official who directs and manages the agency or the appropriate Cabinet secretary. She ordered Health and Human Services Secretary Terry Cline not to pay Douglas the $250,000 salary. "This salary sends the wrong message when our state is facing a difficult economic and budget climate. These are public trust funds, and the public will lose trust in this important agency if this salary takes effect," said Fallin. Here was TSET creating a new position with an extravagant salary at a time the state government was facing a 1.5 billion dollar shortfall. A few days later, Douglas announced she didn't want the job after all.

Yes, TSET has provided some money for the healthcare for which TSET was created, but it is very little, considering TSET's vast wealth. In May, it provided a $3.8 million grant for the training of emergency room physicians in Norman. Some money has been spent on cancer research and a tobacco quit line for people who want to quit tobacco. However, in the last six years alone, TSET has spent $124,934,895.67 on radio, television, billboard, and print ads about the health perils of smoking and the exaggerated dangers of secondhand smoke, along with ads encouraging the drinking of water, "Rethink your drink," and billboards encouraging the eating of peas. It has also spent money on grants to municipalities if they ban smoking on city property, and funded programming on the Oklahoma Educational Television Authority (OETA) that has nothing to do with healthcare.

VI Marketing and Branding handles the media buys for TSET. A legislator told me that when he was elected four years ago, an official of VI Marketing told him, "Whatever you do (in the legislature), don't touch TSET." The reason is VI Marketing has a good thing going with TSET. If money were redirected from media buys and instead used on healthcare, VI Marketing would lose a steady client. According to a TSET spokeswoman, VI Marketing has been paid $30,000 to make media buys the first half of this year. What is not clear, is how much does VI Marketing bill TSET for the creation of those expensive ads? Does VI Marketing make those ads? Casey Cornett, who is the son of Oklahoma City Mayor Mick Cornett, is in charge of social media for VI Marketing and Branding. One of TSET's social media programs is Free the Night on facebook. Free the Night encourages bars to go non-smoking, and promotes non-smoking bars on its facebook account. Free the Night has had a booth for several years at the Tulsa Gay Pride event held in June, which it has documented on its facebook page.

One publication in which TSET has frequently advertised is Community Spirit, a Christian quarterly magazine in the Tulsa area. The publisher Tom McCloud, is in a Republican run-off for House District 67 in Tulsa County. McCloud has provided editorial content in his Community Spirit about the evils of tobacco use and healthy lifestyles that mirror TSET's objectives. If elected, Tom McCloud would likely be supportive of TSET's agenda as he has already benefitted financially from TSET.

Last March, by a vote of 33 to 11, the state Senate passed Senate Joint Resolution 71 (SJR 71) by Senator Josh Brecheen of Coalgate. Had SJR 71 passed out of the legislature, it would have become a state question to be decided by voters. If approved by voters, the legislature would have the authority to spend on healthcare the millions of dollars from the interest on the billion dollars TSET has in its endowment fund. SJR 71 was sent to the state House, where it died in the Rules Committee. As a state representative told me, "The Rules Committee is where bills are sent to die." The one person in the State House who had the power to hold a vote on SJR 71 was Speaker Jeff Hickman. After the session ended, Jeff Hickman applied for the $250,000 a year job as CEO of TSET. Speaker Hickman placed his own interests ahead of the needs of the people, along with the right of the people to re-evaluate how TSET spends its money. And he did it for a job he didn't get.

During the legislative session, while budgets for healthcare were being cut, TSET received another $76 million in payments from the tobacco settlement. Money should be taken away from TSET and put into healthcare. A state question needs to be proposed to the voters, "Shall the interest from the Tobacco Settlement Endowment Trust be used for healthcare-related expenses?"

Every time you see, hear, or read one of those TSET ads about secondhand smoke, kids seduced by flavored tobacco, or why you should drink water, watch a television show on OETA paid for by TSET, just remember Oklahomans are not receiving the healthcare they should have been receiving during the 16 years after TSET was created. Going forward, this must change.

About Theodore King

Theodore J. King is an Oklahoma native who graduated from Northeastern State University in 1996. He spent a summer at the Republican National Committee in 1994, worked at the National Right to Work Committee, and spent time working on the Hill in Washington D.C. In 1999, he was a temporary employee with Congressman Kevin Brady of Texas and later worked for the Media Research Center in Alexandria, Virginia. He served as our Washington D.C. correspondent for our From Washington page before returning to Oklahoma in 2001, and continues his reports with The Federal Page. He recently authored a book, The War on Smokers and the Rise of the Nanny State, which is now available through Amazon, Barnes and Noble, Books a Million and iUniverse. You may contact him at:

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