Dickie Scruggs, a Hero to Michigan Tourism

By March 17, 2008Briefly Legal

From The Holland Sentinel, Michigan:

[Steve] Yencich, president of the Michigan Lodging and Tourism Association, told the House Tourism, Outdoor Recreation and Natural Resources Committee that the state should add a record $40 million to its tourism budget and, for the first time, promote winter recreation.

And he wasn’t alone.

On two days’ notice, 53 people from the tourism industry appeared to show their support before the committee, he said…

Funding would come from refinancing tobacco settlement bonds.

The $40 million would be used over two years for travel advertising. Another $20 million would be spent to promote business development under the legislation.

Dickie Scruggs, despite his guilty plea to conspiring to bribe a judge, continues to work his wonders.

Scruggs built his fame and fortune on the 1990s class-action tobacco lawsuit, which eventually transformed itself into the $209 billion “tobacco settlement,” shepherded through by the state attorneys general. It boiled down to a tax increase on tobacco achieved without legislative action.

Some states decided to securitize the revenue streams that resulted from the tobacco company payments, with the bond revenues going to all sorts of spending. The GAO reports that between 2000 and 2005, the states spent 30 percent of the proceeds (payments and bond revenues) on health, 23 percent on budget shortfalls, 6 percent on infrastructure, and 5.5 percent on education.

Now tourism! So when you’re snowmobiling up there on the UP, don’t forget to stop for a moment and say a silent thanks to Dickie Scruggs.

And consider where the next round of class-action suits — say, oh, against fatty foods — may eventually take us.

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