- The Washington Times - Thursday, August 17, 2006


A federal judge ordered tobacco companies yesterday to admit they lied about the harmful effects of smoking cigarettes and to warn consumers in advertisements and packaging that tobacco is addictive.

U.S. District Judge Gladys Kessler ruled that the industry conspired for decades to deceive the public about the dangers of smoking and now must pay to help smokers kick the habit.

She declined to order the companies to fund large-scale programs to help smokers quit.

Sharon Eubanks, who recently stepped down as the head of the government’s tobacco team, said of the cigarette makers, “This is the first time they’ve been found to violate the racketeering statute. For crying out loud, that’s significant. They’re racketeers.”

Civil racketeering laws require a finding that fraud occurred. If a judge does make that finding, action must be taken to prevent it from occurring again.

In her ruling, the judge said, “Over the course of more than 50 years, defendants lied, misrepresented and deceived the American public, including smokers and the young people they avidly sought as ‘replacement smokers,’ about the devastating health effects of smoking and [secondhand smoke].”

Judge Kessler said adoption of a national stop-smoking program, as sought by the government, “would unquestionably serve the public interest” but that she was barred by an appeals court ruling that requires remedies to be forward-looking and not penalties for past actions.

The government had asked the judge to make the companies pay $10 billion for smoking-cessation programs, though the Justice Department’s own expert said $130 billion was needed.

That reduction in remedies led to accusations that Associate Attorney General Robert McCallum, a Bush administration political appointee, tried to weaken the case. However, an internal Justice Department examination cleared him of wrongdoing, saying he was supporting a figure he thought could be sustained on appeal.

Tobacco companies denied committing fraud and said changes in how cigarettes are sold now make it impossible for them to act fraudulently in the future.

Mark Smith, a spokesman for R.J. Reynolds Tobacco Co., said company officials were “gratified that the court did not award unjustified and extraordinarily expensive monetary penalties.”

At the same time, Mr. Smith said, the company was disappointed by the judge’s finding that the companies had conspired to violate federal law and deceive consumers. He said company attorneys would analyze the decision and decide a course of action.

The Justice Department, which filed the lawsuit, expressed disappointment in Judge Kessler’s decision not to impose financial penalties against cigarette makers.

“Nevertheless, we are hopeful that the remedies that were imposed by the court can have a significant, positive impact on the health of the American public,” the department said.

The tobacco companies — except for one defendant, Liggett Group Inc. — were ordered to pay the government’s cost for pursuing the lawsuit. The government’s costs, according to the most recent Justice Department estimate, were more than $140 million.

The lawsuit was filed in 1999 under the Clinton administration. The Bush administration pursued it after receiving early criticism for openly discussing the case’s perceived weaknesses and attempting unsuccessfully to settle it.

A separate court issued an interim ruling in the case last year, finding that civil racketeering laws did not permit the government to seek $280 billion from the companies for money the government said they earned over many years through fraud.

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