Jenifer B. McKim, Orange County Register

After two years of wrangling, they settle with California, agreeing to annual audits,
testing and paying legal fees.

Children who eat popular Mexican candies available in local stores shouldn't
have to worry about getting lead with many of their spicy favorites after three
top candy makers Wednesday signed a first-of-its-kind settlement with the state
of California

The candy makers, including subsidiaries of Mars and Hershey, agreed to
annual audits of their companies and chili suppliers, lead testing, and a
one-time cash payment of nearly $1million to reduce lead industrywide and pay
legal fees.

Health advocates and government officials who spent two years wrangling with
the top makers of tamarind- and chili-based candies hailed the agreement as a
victory for children's health. Lead accumulates in the body and even at low
levels can affect a child's behavior and ability to think.

"Untold hundreds of thousands of children will now be safe and have a
better life," said Los Angeles City Attorney Rocky Delgadillo, one of the
plaintiffs in the suit. "Lead is poison. This settlement will have impact
well beyond California."

The settlement comes two years after an Orange County Register investigation
showed state and federal regulators knew for more than a decade about
contaminated candies linked to lead-poisoned children but did little to inform
the public or get products off shelves.

The series revealed how unwashed chilis were a major source of lead and that
candy makers sold unclean, less-safe products in Mexico,
which often made their way to Southern California
store shelves.

The Attorney General's Office led a coalition of government agencies and
non-profit groups months later to sue candy makers under provisions of
Proposition 65, the state's anti-toxics law. The law, approved by ballot
initiative in 1986, requires warning labels on anything that could cause
cancer, birth defects or other reproductive harm.

The Alameda County district attorney, the
Oakland-based Center for Environmental Health and the San Diego-based
Environmental Health Coalition also were involved in the suit.

"This is a tremendous victory for children, parents and everyone who
cares about protecting our health," said Luz Palomino, a community
organizer with the San Diego-based health coalition, who worked with mothers
calling for government action for more than five years.

"As soon as they learned that the candy so loved by their children
could be poisoning them, the women took action: They bought candy at their
local stores, had it tested, and once the results were in, they began their
crusade to get the lead out of all candy."

Candy companies who agreed to the settlement say they are confident they
already meet stricter guidelines. They include Lucas-brand candy maker Effem de
Mexico, a subsidiary of Mars Inc.; Grupo Lorena, now part of Hershey Co.; and
four Mexican-based companies under the umbrella company Vero.

Attorneys were awaiting official signed documents late Wednesday and
expected to file the agreement in Los Angeles Superior Court today.

"Our clients are pleased we are able to amicably resolve the matter,''
said attorney Robert Falk, emphasizing companies were working to eliminating
lead sources in candy before the litigation. "Others who wish to
settlewill have to make those investments. They can be substantial."

The state sued 33 companies but ended up talking with the three largest
manufacturers. Other candy makers must join the settlement or face litigation.
These companies make other popular candies such as Serpentinas and Bolorindo.

"We are hopeful they will still sign on to this agreement," said
Attorney General Bill Lockyer. "If there are malingerers that fight back,
then the enforcement and regulatory action will be more severe."

The settlement, to be reviewed by a judge next month, includes:

Mandatory audits by an independent company checking for lead for three
years, and internal company audits after that.

A maximum lead level in candy of 0.1 parts per million, a level consistent
with a new draft guideline proposed by the U.S. Food and Drug Administration
and still under consideration. Candy makers will provide testing results to
show goal is being met.

A public list of companies who comply and whose products are safe.

An "opt-in" provision for other companies to join the settlement.
Small companies could receive matching funds to pay for audits.

Dennis Ragen, deputy attorney general, said consultants and money provided
under the settlement would help smaller companies meet the strict requirements.
The nearly $1million fund also will pay for public outreach to inform local
communities about lead risks.

"We've created a way to get the lead out of candy and we've created a
template for companies to get the expertise they need to sell a popular tasty
product in a safe way," Ragen said.

As part of the litigation, the state and other plaintiffs hired an auditor
to visit candy makers and chili suppliers in Mexico and look for lead sources.
The auditor confirmed that dirty chili was a major source of lead. Washing the
chili pods could reduce the lead contamination to a fraction, auditors found.

State officials say the finding and new requirements should help the entire
candy industry clean up its manufacturing processes.

At this point, state officials say candy companies that produce the popular
Baby Lucas and Pelon Pelo Rico already are safe. However, they said older,
unsafe versions of the candies could still be on local shelves.

"If there is old candy, I would not be sure it would be wise to eat
it," Lockyer said.

Also, companies that have not joined the settlement could still be producing
toxic candy, officials said.

Last year the state Legislature passed a law making it a crime to sell
lead-tainted candies.

Stalled by lack of funding, it requires the state to
test candies and warn health departments and candy makers about contaminated
products. Gov. Arnold Schwarzenegger proposed at $1million allotment to fund
the bill in the next budget.