Cig Settlement Funds: Up In Smoke

(CBS)  Mike Moore, Mississippi's attorney general, is one of the angriest men in America.

Angry, because he says most states are wasting the $250 billion settlement he helped win from Big Tobacco.

"A lot of legislators think that this money just fell out of heaven," he says. "This country is blowing the biggest opportunity to improve the public health of our country that we have ever had."

As CBS News Correspondent Wyatt Andrews reports, a much different Mike Moore once celebrated the settlement because state officials at the time were calling it a victory for public health. The problem is most states then spent the money outside of health care.

The money built harbors in Alaska; paid for flood protection in North Dakota; and perhaps incredibly, it has improved tobacco production in North Carolina. About $400,000 bought the water lines going to a new tobacco processing plant, and that's not all.

North Carolina has spent more than $40 million in tobacco settlement funds -- so far -- buying state-of-the-art equipment for tobacco farmers.

Farmers like Robert Boyette got direct grants to upgrade the furnaces in their curing barns.

"The industry was basically mandating this," he says.

The furnaces help create a tobacco leaf with fewer carcinogens and because of that, has helped 6,700 tobacco farmers stay in business.

"There's no doubt, we would not be able to sell (tobacco) without the heat exchangers," he says.

"Making more tobacco, killing more people, I mean how does that make any sense?" asks Moore. "I think it's crazy."

Officials in North Carolina, like House majority leader Phil Baddour, disagree, calling the grants to farmers a necessity. Without them, he says, the economy in the poorest areas of the state would have collapsed.

Baddour doesn't see any irony in using funds from a lawsuit that had to do with health care costs, on helping farmers get better at growing tobacco.

"The health of the community is dependent on our agricultural economy," he says. "So to the extent that we are spending money to aid those communities economically, we are doing a good thing."

Baddour also says the state put a quarter of the tobacco money in a health care trust fund.

But Moore, like a traveling country preacher, is telling every audience he can get that the states should be spending settlement money on programs to stop teen smoking.

It is just wrong, he says, to spend tobacco lawsuit dollars on tobacco itself.