Advertisement
YOU ARE HERE: LAT HomeCollections

California: News and Insight on Business in the Golden
State

Biotech Firm Fined Over Potent Tobacco

Courts: Oakland-based DNAP must pay $100,000 for exporting seeds with very high nicotine levels.

September 23, 1998|HENRY WEINSTEIN | TIMES LEGAL AFFAIRS WRITER

DNA Plant Technology, an Oakland-based biotechnology company, was fined $100,000 by a federal judge in Washington on Tuesday after pleading guilty to illegally exporting seeds of a tobacco plant with unusually high levels of nicotine.

The action marked the first criminal conviction in the Justice Department's sweeping probe of the nation's major tobacco companies. John Russell, a department spokesman, said Tuesday that the investigation continues.

U.S. District Judge Norma Holloway Johnson imposed the fine, recommended by Justice Department officials after negotiations with DNA Plant Technology, which has been cooperating in the department's criminal investigation. The maximum the company could have been fined was $200,000.

In January, the government charged DNAP with cooperating with a U.S. tobacco company "to develop a reliable source of supply of high-nicotine tobaccos that the company could then use to control and manipulate the nicotine levels in its cigarettes."

For the Record
Los Angeles Times Thursday September 24, 1998 Home Edition Business Part D Page 3 Financial Desk 2 inches; 36 words Type of Material: Correction
Brown & Williamson Tobacco--The company did not say that "it was only trying to make cigarettes safer" when producing cigarettes using a tobacco plant with unusually high levels of nicotine. The statement was reported incorrectly in an article Wednesday.

The company was not named in the charge filed by the government, but it is known to be Louisville, Ky.-based Brown & Williamson Tobacco Corp., the nation's third-largest cigarette company. Brown & Williamson's attempt to develop the high-nicotine cigarette first emerged at congressional hearings in 1994.

Allegations of nicotine manipulation to hook smokers are a key component of legal actions against the tobacco industry around the country, including four massive suits--filed by Mississippi, Florida, Texas and Minnesota--that the industry has settled for more than $38 billion.

Opening statements in the state of Washington's case against the cigarette makers--which includes the same allegations--are scheduled to begin Monday.

Before the Minnesota case was settled in May, jurors heard Roger R. Black, the head of B&W's leaf-blending department, invoke his 5th Amendment protection against self-incrimination in response to questions about the company's efforts to develop a genetically altered, ultra-high-potency nicotine.

In January, the Justice Department charged that under a contract DNAP signed in 1983, the company was to grow and improve high-nicotine lines of tobacco, including a variety called Y-1, which had a nicotine content of twice the normal level in flue-cured tobacco.

The government also charged that DNAP conspired with Brown & Williamson and its Brazilian affiliate to violate a law that prohibited the export of tobacco seeds from the U.S. without a permit.

Additionally, the government alleged that employees of DNAP and the tobacco company, on numerous occasions between 1984 and 1991, conspired to illegally export Y-1 seed and other tobacco seeds to Brazil and a number of other countries, including Argentina, Canada, Chile, Costa Rica, Honduras, Nicaragua, Nigeria and Zimbabwe.

Initially, B&W officials told the FDA that breeding high-nicotine tobacco was not feasible. But the company later admitted in 1994 that it had 4 million pounds of Y-1 leaf in storage and had used it in five of the company's U.S. brands. The company said it was only trying to make cigarettes safer but agreed to stop using Y-1.

David Kessler, former commissioner of the Food and Drug Administration, who played a key role in bringing the Y-1 story to light, said Tuesday that he was pleased to hear about the fine. "The tobacco industry vigorously maintained that they did not manipulate nicotine levels. DNAP was involved in one of the most dramatic forms of manipulating nicotine levels," said Kessler, who is now dean of Yale University Medical School.

He said he awaited further developments in the Justice Department probe. "The real issue goes well beyond DNAP," Kessler said.

Clifford Douglas, an Ann Arbor, Mich., attorney who has been assisting Justice Department officials with the criminal probe, said: "This is a step in the right direction and a reminder that Justice's investigation is moving forward." Douglas said he had conversations in recent days with FBI agents who he said are actively working on the case.

Officials from DNAP and Brown & Williamson did not return calls seeking comment.

Advertisement
Los Angeles Times Articles
|
|
|