Thursday, June 09, 2005

Judge queries reason behind tobacco remedy cut


Judge queries reason behind tobacco remedy cut
Wed Jun 8, 2005 8:47 PM ET

WASHINGTON (Reuters) - The judge in the racketeering case against cigarette makers on Wednesday questioned whether "additional influences" prompted the government to drastically reduce a sanction it is seeking against the industry.

During a second day of closing arguments in the trial, U.S. District Judge Gladys Kessler speculated about the Justice Department's decision to seek a $10 billion, 5-year quit-smoking program, far smaller than a $130 billion, 25-year program proposed last month by a government witness.

"Perhaps it suggests that there are some additional influences being brought to bear on the government's position in this case," Kessler said.

The government's reduced request, outlined in court on Tuesday, has provoked speculation by tobacco analysts and some lawmakers that politics played a role in the decision.

"Big Tobacco is one of the top donors to Republicans, and it is getting what it paid for," New Jersey Democrat Frank Lautenberg said in a statement.

A Justice Department spokesman said the $10 billion proposed quit smoking plan is "only an initial requirement." Spokesman Eric Holland said the smoking cessation program could be extended beyond the five-year term if a court-appointed monitor thinks it is necessary.

In his statement, Holland said the administration had argued "vigorously" for a much larger $280 billion remedy earlier in the case before that idea was ruled out by a federal appeals court.

A lawyer for Philip Morris told Kessler that the drastic change in the government's position proved the entire idea of imposing a national quit smoking program was ill-conceived.

"Whether the price of the smoking cessation program is $130 billion or $10 billion or 99 cents, it is still a fatally flawed program," Philip Morris lawyer Ted Wells told the judge.

Wells said the quit smoking program was a public health initiative that should be debated by Congress, and not a legal remedy designed to prevent any future wrongdoing.

"Your honor should not take up the government's invitation to engage in social policy engineering," Wells said.

Targeted in the lawsuit, filed in 1999, are Altria Group Inc. and its Philip Morris USA unit; Loews Corp.'s Lorillard Tobacco unit, which has a tracking stock, Carolina Group ; Vector Group Ltd.'s Liggett Group; Reynolds American Inc.'s R.J. Reynolds Tobacco unit and British American Tobacco Plc unit British American Tobacco Investments Ltd.

The companies deny they illegally conspired to promote smoking and say the government has no grounds to pursue them after they drastically overhauled marketing practices as part of a 1998 settlement with state attorneys general.

A lawyer for the Justice Department made the scaled-back request on Tuesday as the government summed up its case in the eight-month trial that accuses major tobacco companies of conspiring to mislead the public about the dangers of smoking.

"Our concern is that now there are political considerations," said William Corr, executive director of the Campaign for Tobacco Free Kids.

A group of Democrats, including Lautenberg, called at a news conference for an inspector general investigation into possible political interference in the case.

Even with the reduced figure, Kessler on Tuesday questioned whether the quit smoking program would satisfy an appeals court ruling from February that required any remedies to stop future misconduct rather than punish past behavior.

In that ruling, the appeals court threw out the Justice Department's initial remedy proposal which would have allowed the government to seize $280 billion in past industry profits that it said were ill-gotten.