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Not Just Blowing Smoke

Few thought the case would get this far. Five years after its filing, the federal lawsuit against the tobacco industry is nearing trial.

September 12, 2004|Myron Levin | Times Staff Writer

When George W. Bush became president, anti-smoking groups worried that his administration would snuff out the federal government's massive lawsuit against the tobacco industry.

After the 2000 election, "we had a meeting in this office to talk about what could be done to prevent the case from being settled cheaply," recalled Matthew L. Myers, president of the Campaign for Tobacco-Free Kids. "We were deeply concerned."

Meanwhile, cigarette makers had plenty of reason to hope that Myers' fears would be realized.

The companies had long been major donors to the Republican Party. Bush's top political advisor, Karl Rove, had served as a political consultant to Philip Morris. And Bush offered some encouragement during his presidential campaign against Al Gore. "I think we've had enough suits," he told a reporter on a swing through Michigan. "The lawyers I talk to don't feel they have a case" over at the Justice Department.

But to the surprise of people on both sides of the tobacco wars, the government's racketeering case hasn't gone away -- and is now about ready for trial. Opening arguments are scheduled for Sept. 21 -- five years, minus a day, from the date the case was filed by the Clinton administration. The trial in U.S. District Court in Washington is expected to last well into next year.

Justice Department lawyers are demanding stiff controls on the industry beyond the marketing curbs contained in the companies' landmark 1998 settlement with the states. More ominous for the industry, the U.S. is seeking disgorgement of $280 billion in allegedly ill-gotten gains -- the largest amount ever sought by Justice in a civil case.

Government lawyers will portray the tobacco industry as an outlaw enterprise that launched a conspiracy of lies in the 1950s, when research linking smoking and lung cancer presented the first serious threat to the companies.

They plan to introduce a slew of internal documents in which industry figures bluntly acknowledged what they disputed in public: that smoking was dangerous and addictive, that their research programs were designed for public relations purposes and that they marketed their brands to children. Some of these documents have been previously introduced, but never in such a prominent case.

The government also will try to prove that the industry distorted the risks of secondhand smoke, manipulated nicotine to "create and sustain addiction" and falsely promoted low-tar cigarettes as safer than other brands. In all, it has alleged 145 acts of wire and mail fraud, linked to specific ads, news releases and pamphlets disseminated by the industry.

For their part, the cigarette makers accuse the Justice Department of rewriting history, in part by ignoring how the government "endorsed, participated in and often regulated much of the conduct about which it now complains."

Said Bob McDermott, a lawyer for R.J. Reynolds Tobacco Co.: "The actions of the companies were perfectly understandable, perfectly reasonable in the context of the times, and we will lay that out in the course of the trial."

According to cigarette makers, the Justice Department also has failed to acknowledge changes in the companies' conduct, including their admission that smoking is dangerous and their pledge not to market to kids.

Few thought the litigation would get this far. Ordered up by President Clinton, who had bashed the cigarette industry like a pinata, the case did not fit usual Republican notions about the role of government.

"The Bush administration inherited" the case, noted William S. Ohlemeyer, vice president and associate general counsel of Altria Group Inc., parent of Philip Morris USA. "It is a prototypical effort to legislate through litigation, which is something they are on record as opposing."

Early on, there were hints that the Bush administration was seeking a way to scuttle the suit. It initially budgeted only $1.8 million for work on the case, leading anti-tobacco lawmakers to complain that it would die of neglect. Then, after hinting that the case was weak, Justice Department officials sat down with tobacco executives in the summer of 2001 to talk about a settlement.

But those discussions ended abruptly when Justice Department officials declared that a deal would require a substantial payment, participants said. Lawyers at the department have been going full throttle ever since.

"We don't talk about our internal deliberations," said Mark Corallo, a spokesman for Atty. Gen. John Ashcroft, when asked about the resilience of the case. "If we take a matter to court, it's because that's where it belongs."

Several observers said administration officials apparently saw little to gain -- and much to lose -- by pulling the plug. "There's no political upside for doing anything" on behalf of the tobacco companies, said an industry representative who would not speak for attribution.

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