Minnesota's $200 million private antismoking agency decided Wednesday to stay with a lawyer whose firm represents a tobacco company, then moved to keep its investments away from any taint of tobacco at an estimated long-term cost of $14 million.

In addition to dealing with thorny conflict-of-interest questions, the board of the Minnesota Partnership for Action Against Tobacco approved its first $2.3 million in antismoking grants. It also adopted plans for a $400,000 TV-advertising attack on secondhand smoke beginning next month. The partnership was established and funded by court order as part of the state's $6.1 billion settlement with the tobacco industry two years ago. Since shortly after its inception, it has been represented by attorney Tom Pursell, previously an assistant on the tobacco lawsuit to former Attorney General Hubert Humphrey III. Pursell now works at the Minneapolis law firm of Lindquist & Vennum, whose clients include the cigarettemaker Liggett Group. Because the partnership's bylaws bar it from doing business with anyone taking tobacco money, some board members urged removing Pursell. Others, however, said that the law firm has sufficient barriers between Pursell and its lawyers who work for Liggett, and that nearly all major law firms have some ties to tobacco. On a divided vote, the board decided to keep Pursell. "We have to put our principles aside in order to do the right thing," said board member and Hennepin County Commissioner Randy Johnson. Recently, board members said, similar principles dissuaded the William Mitchell College of Law in St. Paul from seeking a grant from the partnership because the school had accepted a $350 gift from Philip Morris Inc. that matched a gift from a donor who worked for the firm's Kraft Foods subsidiary. Conflict-of-interest worries also reigned Wednesday with a board vote not to place any of its investment portfolio in mutual funds that might include small percentages of tobacco stocks. The portfolio, now at $135 million and growing by $10 million a year, is expected to earn $14 million less over the 25-year life of the partnership because of that decision. The grant awards Wednesday's grant awards represented the first major taps of the partnership's endowment. They included $793,560 to the Minnesota Smoke-Free Coalition for two-year projects to eliminate exposure to secondhand smoke throughout the state and to counteract tobacco-industry political influences through lobbying and other efforts. The coalition is considered to be the state's leading grass-roots antitobacco organization. Grants also went to units of the American Cancer Society and the American Lung Association for regional projects to combat second-hand smoke and to Asian and Hispanic organizations for antitobacco efforts aimed at their ethnic groups. In another action Wednesday, the board moved up from 2004 to next year plans to launch a statewide telephone service to help smokers quit. The move came after representatives of Blue Cross and Blue Shield of Minnesota presented plans for a similar $3 million-a-year effort aimed at the estimated 300,000 smokers among its 1.7 million members in the state. The Blue Cross phone line will be promoted with more than $1 million in TV advertising that now is in test-marketing, said company spokesman Marc Manley. The antismoking agency's phone line would coordinate with stop-smoking efforts by all major health plans as well as serving uninsured Minnesotans, said acting executive director Christine Rice. The partnership's own advertising plans include running spots against secondhand smoke that developed in other states through December, then mounting a $3.5 million campaign of its own during the first half of 2001, Rice said.

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