Award Limit in Tobacco Case Sets Off a Strenuous Protest
WASHINGTON -- A Justice Department decision to seek $10 billion for a stop-smoking program in its suit against the country's leading tobacco companies, instead of the $130 billion suggested by one of its expert witnesses, set off a firestorm this week, according to a New York Times report.
Several Democratic lawmakers with a longtime interest in smoking and health issues attacked the department for what they said was a politically motivated decision, as did public health groups.
The Times reports that Judge Gladys Kessler of Federal District Court, who is presiding in the trial here against the companies, took note of the sudden change, telling the court, "Perhaps it suggests that additional influences have been brought to bear on what the government's case is."
The move infuriated lawmakers who have long been critics of the tobacco industry. "It reeks of an administration whose heart isn't really in this case," said Senator Frank R. Lautenberg of New Jersey, at a news conference with other Democrats who suggested that Justice Department officials with ties to the tobacco industry might have grown uncomfortable with a large financial demand as part of the government's case against the companies.
The payments are intended to finance a stop-smoking program that a government witness said would cost $130 billion over 25 years. In court on Tuesday, a government lawyer, Stephen D. Brody, said the government would ask for a program costing only $10 billion to be paid out over five years.
In a statement issued Wednesday evening, the Justice Department said, "The government's suggested smoking cessation program is only an initial requirement, based on the compelling evidence that the defendants will continue to commit fraudulent acts in the future."
A department official said that $10 billion figure represented an effort to ask for an amount that would comply with adverse rulings by a court of appeals. "This is not politics," said the official. "This is exactly the contrary. This is trying to stay within the law and trying to stay within a decision with which we disagreed."
Despite the lower figure, if the judge, who is hearing the case without a jury, rules against the companies, she can impose financial penalties of any size, no matter what the government has requested.
The appeals decision cited by the administration official occurred five months into the trial. The ruling held that under civil racketeering laws, the tobacco companies could not be forced to relinquish past profits. Instead, the court said, the government could only seek sanctions that involved payments for new programs ordered by the judge.
Tobacco company lawyers expressed surprised delight at the change, saying they believed the government lawyers realized that Judge Kessler would not grant them as much as $130 billion.
The original figure was based on testimony from Dr. Michael C. Fiore, an expert on tobacco addiction, who said an effective nationwide program that included a telephone help-line, access to medical treatment and counseling and a budget for advertising and promotion would cost $5.2 billion a year for 25 years.
"Why, in the middle of a lawsuit, would you give up, which is exactly what this administration has done?" Sen. Richard J. Durbin, D-Ill., said to the Times. "Was it because of the power of the tobacco lobby? Was it their close connection with people within the administration? Was it the fact that they'd never had the stomach to tackle this special interest group in Washington?" He added, "I think it's all of the above."
Rep. Henry A. Waxman, D-Calif., made public a letter he had written to the inspector general of the Justice Department asking for an investigation into whether improper political interference had led to the change in request and what role might have been played by Associate Attorney General Robert D. McCallum Jr., a former classmate of President Bush at Yale and partner in an Atlanta law firm that represented one of the defendants in the case, R. J. Reynolds.
McCallum, who attended court on Tuesday and Wednesday, declined to discuss the issue, saying he would answer questions after closing arguments concluded Thursday. Department officials would not discuss whether ethics officials in the department had reviewed his involvement in the case.
But they said no one who had represented any party in tobacco litigation was participating in the lawsuit.
William V. Corr, director of the Campaign for Tobacco-Free Kids, a health group that has fought the tobacco industry for years, said he and leaders of other antismoking groups, could only deduce from the retreat that the Bush administration did not want to inflict undue harm on the tobacco companies.
"Here we are, at the last minute of the case, with senior political officials interfering with the trial team's materials and decisions," Corr said. Referring to antismoking groups, he added, "We've had a widespread sense since 2001 that the Bush administration was trying to kill the lawsuit."
The tobacco case, which was filed by President Bill Clinton's Justice Department in 1999, has been bathed in political intrigue since President Bush took office in 2001, setting off widespread speculation that the new administration had no real interest in pursuing a case against a big American industry.
On Wednesday, lawyers for all the tobacco companies took their turns in closing arguments, as, one by one, they tried to convince Judge Kessler that their clients did nothing over the years that could be construed as a racketeering violation.
David Bernick, a lawyer for Brown & Williamson, which merged last year with Reynolds, said at the outset, "The government's case is fatally flawed." He proceeded to argue that the government had failed to prove any of its claims against any of the defendant companies: Philip Morris; its parent, Altria; Brown & Williamson; Reynolds; Lorillard; Liggett; and Batco, a British company that no longer does business here.
Several Democratic lawmakers with a longtime interest in smoking and health issues attacked the department for what they said was a politically motivated decision, as did public health groups.
The Times reports that Judge Gladys Kessler of Federal District Court, who is presiding in the trial here against the companies, took note of the sudden change, telling the court, "Perhaps it suggests that additional influences have been brought to bear on what the government's case is."
The move infuriated lawmakers who have long been critics of the tobacco industry. "It reeks of an administration whose heart isn't really in this case," said Senator Frank R. Lautenberg of New Jersey, at a news conference with other Democrats who suggested that Justice Department officials with ties to the tobacco industry might have grown uncomfortable with a large financial demand as part of the government's case against the companies.
The payments are intended to finance a stop-smoking program that a government witness said would cost $130 billion over 25 years. In court on Tuesday, a government lawyer, Stephen D. Brody, said the government would ask for a program costing only $10 billion to be paid out over five years.
In a statement issued Wednesday evening, the Justice Department said, "The government's suggested smoking cessation program is only an initial requirement, based on the compelling evidence that the defendants will continue to commit fraudulent acts in the future."
A department official said that $10 billion figure represented an effort to ask for an amount that would comply with adverse rulings by a court of appeals. "This is not politics," said the official. "This is exactly the contrary. This is trying to stay within the law and trying to stay within a decision with which we disagreed."
Despite the lower figure, if the judge, who is hearing the case without a jury, rules against the companies, she can impose financial penalties of any size, no matter what the government has requested.
The appeals decision cited by the administration official occurred five months into the trial. The ruling held that under civil racketeering laws, the tobacco companies could not be forced to relinquish past profits. Instead, the court said, the government could only seek sanctions that involved payments for new programs ordered by the judge.
Tobacco company lawyers expressed surprised delight at the change, saying they believed the government lawyers realized that Judge Kessler would not grant them as much as $130 billion.
The original figure was based on testimony from Dr. Michael C. Fiore, an expert on tobacco addiction, who said an effective nationwide program that included a telephone help-line, access to medical treatment and counseling and a budget for advertising and promotion would cost $5.2 billion a year for 25 years.
"Why, in the middle of a lawsuit, would you give up, which is exactly what this administration has done?" Sen. Richard J. Durbin, D-Ill., said to the Times. "Was it because of the power of the tobacco lobby? Was it their close connection with people within the administration? Was it the fact that they'd never had the stomach to tackle this special interest group in Washington?" He added, "I think it's all of the above."
Rep. Henry A. Waxman, D-Calif., made public a letter he had written to the inspector general of the Justice Department asking for an investigation into whether improper political interference had led to the change in request and what role might have been played by Associate Attorney General Robert D. McCallum Jr., a former classmate of President Bush at Yale and partner in an Atlanta law firm that represented one of the defendants in the case, R. J. Reynolds.
McCallum, who attended court on Tuesday and Wednesday, declined to discuss the issue, saying he would answer questions after closing arguments concluded Thursday. Department officials would not discuss whether ethics officials in the department had reviewed his involvement in the case.
But they said no one who had represented any party in tobacco litigation was participating in the lawsuit.
William V. Corr, director of the Campaign for Tobacco-Free Kids, a health group that has fought the tobacco industry for years, said he and leaders of other antismoking groups, could only deduce from the retreat that the Bush administration did not want to inflict undue harm on the tobacco companies.
"Here we are, at the last minute of the case, with senior political officials interfering with the trial team's materials and decisions," Corr said. Referring to antismoking groups, he added, "We've had a widespread sense since 2001 that the Bush administration was trying to kill the lawsuit."
The tobacco case, which was filed by President Bill Clinton's Justice Department in 1999, has been bathed in political intrigue since President Bush took office in 2001, setting off widespread speculation that the new administration had no real interest in pursuing a case against a big American industry.
On Wednesday, lawyers for all the tobacco companies took their turns in closing arguments, as, one by one, they tried to convince Judge Kessler that their clients did nothing over the years that could be construed as a racketeering violation.
David Bernick, a lawyer for Brown & Williamson, which merged last year with Reynolds, said at the outset, "The government's case is fatally flawed." He proceeded to argue that the government had failed to prove any of its claims against any of the defendant companies: Philip Morris; its parent, Altria; Brown & Williamson; Reynolds; Lorillard; Liggett; and Batco, a British company that no longer does business here.