Lawyers, financial advisers and underwriters will get paid $1.29 million to sell part of the settlement cigarette manufacturers have been paying Louisiana over the years.
The Tobacco Settlement Financing Corp., the board that oversees the millions of dollars that come into the state every year since a lawsuit was settled in the 1990s, approved the fee structure Thursday on a 7-1 vote.
James H. Napper II, executive counsel for the Treasury Department and a member of the board, opposed the fees, saying the state should get bids before deciding whom to hire.
But the experts from the Division of Administration recommended keeping the team that handled a similar tobacco settlement transaction a couple years ago. Mark Goodson, of PRAG Inc., the board’s financial adviser, said the fees were reasonable in comparison to other tobacco settlement deals around the country.
If the Legislature approves, the state would raise $300 million from the sale of the settlement sometime before June 30; another $300 million for the fiscal year that begins July 1; and the remaining amount for $150 million for the fiscal year that begins July 1, 2016.
Basically, the state would sell bonds to immediately realize a lump sum, then repay those loans with the proceeds that the tobacco companies would pay over the years.
The Jindal administration would use 80 percent of the money to help pay for TOPS, the popular college-paying tuition program that is formally known as the Taylor Opportunity Program for Students, under the Jindal administration plan. Twenty percent of the proceeds would go to fund coastal restoration projects.
The law firms receiving the contracts for the work are Hawkins Delafield & Wood LLP, of New York; Foley & Judell LLP, of New Orleans; and Breazeale, Sachse & Wilson LLP, of Baton Rouge. Contracts for part of the fees also go to a trustee and counsel, financial advisers, rating agencies, tobacco consumption consulting, rating agencies and others.
Follow Mark Ballard on Twitter, @MarkBallardCNB.
For more coverage of government and politics, follow our Politics Blog at http://blogs.theadvocate.com/politicsblog/