Pete du Pont is the editor of IntellectualCapital.com. He is a former Republican governor and congressman from Delaware. His e-mail address is petedupont@intellectualcapital.com.

The only way to understand the Great Tobacco Heist of 1997 is to follow the money. To be sure, the proposed tobacco settlement is filled with chicanery, political career enhancement and good old-fashioned government power grabs. But it is the money that counts.

Follow the money

And there is a lot of it -- $370 billion -- flowing from the tobacco companies to the federal and state governments under the proposed settlement. Mississippi has already won $3.4 billion on its own. The federal government in Washington will get billions and the right to regulate to the micron everything and anything shaped like a tube and filled with bad things.

A big boost for Big Government

From a politician's perspective, the proposed tobacco settlement is a dream come true. First, billions of dollars will be available for expanding the size and scope of government. New programs of every kind, from health, social counseling and education, to police force expansion can be established, staffed and funded in perpetuity. There's $100 million a year in R&D money to learn how to discourage people from smoking; another hundred or so to help people to learn to quit; and even $75 million a year for sports teams that lose tobacco sponsorships. A new non-profit organization dedicated to anti-smoking education will receive half-a-billion dollars a year.

And very best of all, not a dime of the cost of doing any of this need come from the non-smoking public. Government spending is dramatically raised, but income taxes are not. The whole thing is paid for by the Darth Vaders of public health, the truly evil tobacco companies, and their allegedly addicted customers.

Last but not least, the concerned and caring politicians who brought us all these governmental riches will be re-elected from here to eternity. We are witnessing the birth of a whole new generation of politicians.

In short, it is a scam. And it is not only likely to come to pass, but it is also likely to begin a new political era in America.

So just what is it that the tobacco companies have done that will cost hundreds of billions of dollars in fines and all sorts of other restrictions and sanctions? They sold a product the public wanted to buy, under regulations approved by the government, with a tax structure that pays more than the public cost of the use of the product. For this, they are vilified.

Villains and hypocrites

While tobacco companies deserve their fair share of blame, there's plenty to go around. A large portion of the tobacco company payments will flow to the states to help cover their health care costs, the very same states that have been collecting billions of dollars of excise and sales taxes on the sales of tobacco products to their people.

The state of Florida -- which will receive a relatively healthy share of the payments -- at one time actually produced unfiltered cigarettes in its prisons to give to inmates and to sell to municipalities.

Even the federal government shares some of the blame. They weren't above selling cut-rate cigarettes on military bases.

Nevertheless, big tobacco must now pay the price of its success. The companies have signed an agreement to pay hundreds of billions of dollars in fines, drastically cut their product's advertising, and pay even more fines if consumers don't actually use less of their product. If underage smoking does not fall by 30% in five years, 50% in seven, and 60% in ten years, tobacco companies will pay as much as $2 billion a year in penalties. And the tobacco growers are lining up too -- they want $6 billion to help them switch to other crops and/or a protectionist requirement that a higher percentage of American tobacco be used in cigarettes.

The slippery slope of social engineering

But this may be only the beginning, for what tobacco hath sown, distilled spirits, cheeseburger and automobile companies may reap. Squeezing money for government programs out of the profits of companies selling things that can harm you may fund the next wave of America's social engineering.

We don't (yet) see the alcohol industry paying the costs of alcoholism. We don't blame the automobile industry when drivers choose to drive recklessly -- or to drink and drive -- and ends up killing themselves or others.

And, what about the fast food restaurants that are contributing every day to the number of deaths from heart disease and colon cancer? Should McDonalds be paying, say, $5 billion a year to Washington if cheeseburger sales do not decline?

What we are witnessing is the birth of Prohibition II. We have seen this movie before; it features bootlegged product, glamorization of its use, increases in crime, and public disgust with government.

Larger warnings of dire health threats on cigarette packages may only add cache to smoking. In England, Death Head cigarettes, which are sold in black-and-white packaging featuring the skull and crossbones, are a smashing success. Advertising bans are ineffective; Portugal has one of the highest smoking rates in Europe and yet cigarette advertising

The "Bitten & Hisses" car

has been banned for decades. At the recent Grand Prix of Great Britain cigarette advertising was banned on the racecars. So the Benson and Hedges car changed its wording, over top of the company logo, to "Bitten and Hisses."

Smoke 'em if you got 'em

In short, the whole scheme will not work, but so what? Everyone will get their cash, more agencies and "non-profits" will be created, the pols will be re-elected, and we did the right thing, didn't we?

Of course the Congress still must approve the agreement, so there is plenty of time to increase the government's take, expand regulations further, and harangue the big bad tobacco companies one more time.

There is still plenty of time for all involved to keep blowing smoke.