Most interesting aspect, to this non-American observer, is this:
The government is relying on RICO, originally crafted to go after
mobsters, because that law is designed to achieve remedies where
there has been a group effort to violate fraud statutes, said
William Schultz, a former Justice Department lawyer who headed
the case during the Clinton administration.
The government is seeking $280 billion in "ill-gotten gains"
earned by the industry.
That's some association, there... RJR and Sammy Gravino.
Ken.
--- cut here ---
$280B Tobacco Industry Trial Begins
By NANCY ZUCKERBROD
Associated Press Writer
WASHINGTON (AP) - The nation's biggest tobacco companies worked together
for decades to mislead the public about the dangers of smoking, a
federal lawyer alleged Tuesday at the start of a civil racketeering
trial in which the government seeks a record $280 billion from the
industry.
In his opening statement, Justice Department attorney Frank Marine said
starting in the 1960s the industry spent hundreds of millions of dollars
on organizations set up to counter the growing body of scientific
evidence linking smoking to cancer.
He cited internal industry documents showing company executives knew
they were trying to deceive the public.
"The problem to them was that the public might stop smoking because of
health concerns," he said.
The industry created the Center for Tobacco Research and the Center for
Indoor Air Research to rebut scientific findings about smoking and the
dangers of second hand smoke, and set up the Tobacco Institute to
promote their findings and otherwise serve as a public relations and
lobbying arm, he noted.
Marine said the goal was to create a controversy where none existed. He
said the "massive scheme" was successful and has had devastating
consequences, citing the nearly half-million Americans who die from
smoking-related illnesses each year.
The government's opening statement was expected to take all day Tuesday.
Industry lawyers were scheduled to make their opening statement
Wednesday.
The defendants in the case are Philip Morris USA Inc. and its parent,
Altria Group Inc.; R.J. Reynolds Tobacco Co.; Brown & Williamson Tobacco
Co.; British American Tobacco Ltd.; Lorillard Tobacco Co.; Liggett Group
Inc.; Counsel for Tobacco Research-U.S.A.; and the Tobacco Institute.
Industry lawyers have acknowledged tobacco executives may have expressed
doubts about public health concerns in the past, but say that doesn't
amount to fraud.
"Fraud is, 'I have a specific intention to mislead you or take money
from you by deceiving you,'" said Philip Morris USA attorney William
Ohlemeyer. "Fraud is a very high bar."
The industry settled lawsuits with the states over smoking-related
health costs for $246 billion. Those agreements, reached in the late
1990s, led to limits on advertising and marketing and shuttered industry
lobbying and research organizations.
The government brought the racketeering case in 1999, when the Clinton
administration was in power, and has spent $135 million pursuing it. The
non-jury trial is being heard by U.S. District Judge Gladys Kessler and
is expected to take up to six months.
In a statement issued just before the start of the trial, Attorney
General John Ashcroft called the case "an important effort to prevent
fraudulent activity and uphold corporate integrity."
In addition to disagreeing about whether fraud occurred in the past,
cigarette makers and Justice lawyers also disagree on what the
government must demonstrate about the future to win the case.
The industry says following the settlement with states companies
significantly changed the way they sell and market cigarettes. They say
that makes it impossible for the government to prove fraud is likely to
occur in the future, something the government must show to win its case.
Justice lawyers argue that evidence of past fraud is enough to conclude
that future wrongdoing is likely to occur.
David Bernick, attorney for Brown & Williamson Tobacco Corp., says the
government's case ignores those reforms.
"It blinks away the reality of the profound changes that have taken
place both within the tobacco industry and in how tobacco is perceived
by people outside the industry," Bernick said.
Like the states, the government initially sued to recover the costs of
treating sick smokers. Kessler ruled the government couldn't do that but
did allow the Justice Department to sue under the Racketeer Influenced
and Corrupt Organizations Act.
The government is relying on RICO, originally crafted to go after
mobsters, because that law is designed to achieve remedies where there
has been a group effort to violate fraud statutes, said William Schultz,
a former Justice Department lawyer who headed the case during the
Clinton administration.
The government is seeking $280 billion in "ill-gotten gains" earned by
the industry. Justice lawyers also want new restrictions on the
industry, which might include limiting in-store promotions or banning
product descriptions such as "low tar" or light."
The judge has said the government can go after the companies' old
earnings, but the industry appealed that ruling. A higher court is
considering the issue even as the trial gets under way.
"If you steal something, or you take something by fraud that doesn't
belong to you, you should not profit from that," said Robert Kline, a
senior attorney at the Tobacco Control Resource Center, a think tank at
Northeastern University in Boston.
---
On the Net:
Justice Department tobacco litigation site:
http://www.usdoj.gov/civil/cases/tobacco2/
2004-09-21 15:15:23 GMT
