Angelos fee deal looks very attractive

Many advantages: Even if Maryland were not cash-strapped, the offer promises dividends.

January 11, 2002

GOV. PARRIS N. Glendening and Peter G. Angelos appear to be reaching an agreement in the rancorous dispute over the fee owed to Mr. Angelos' firm for work on the national settlement with Big Tobacco.

We suggest that Mr. Glendening pounce on the opportunity for the sake of the state's strained coffers - if there are no hidden traps or disadvantages.

A successful outcome would give Mr. Angelos as much as $250 million and allow the state to pursue its anti-tobacco campaign at full throttle.

If the fee can be set by negotiation, Mr. Angelos would step away from a lawsuit in which he asks the state to honor a contract that would give him a cool billion dollars - 25 percent of the $4 billion Maryland will receive over 25 years as its part of the national settlement.

Mr. Angelos and other lawyers successfully forced tobacco companies to compensate states for medical costs incurred in treating smokers.

The $250 million fee Mr. Angelos proposes now is way below the 25 percent figure and less than half an earlier compromise in which he had agreed to accept half the 25 percent. The state insists on an even lower number - but calls prospects for an agreement very high.

Mr. Glendening should avoid overplaying his hand.

The $250 million request represents about five percent of the total settlement if the total is calculated to be around $4.3 billion. Because the settlement actually grows over the years and because the time value of money becomes a factor, the percentages vary.

There's agreement, though, that $250 million significantly lowers figures used until now. For that reason, the state must surely hope to avoid the risk of a trial.

That the talks, initiated with the Orioles owner by the governor during a baseball game in Baltimore, have continued is a hopeful sign in itself.

In those gloomy fall days, with a recession draining surpluses, Mr. Glendening must surely have wondered how he would balance his budget. More money now would help, of course - and the lower figure puts considerable pressure on the governor to settle. Mr. Angelos' offer may not remain on the table indefinitely, and the matter would begin its trek through the courts in late spring.

Under court order, $120 million is already in escrow to cover a fee, which could be as high as 25 percent of the total figure.

From the moment of final agreement forward, that money would be released and the state could have many more millions for cancer research, an effort to get Maryland farmers out of the tobacco-growing business and an anti-smoking campaign.

Those programs, after all, are the point. Mr. Glendening and Mr. Angelos should continue their talks, and work for a speedy resolution.

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