Government Rests Tobacco Racketeering Case

After more than five years of litigation, federal prosecutors reduced their demands in their racketeering case against Philip Morris and its parent company, Altria Group, R.J. Reynolds Tobacco, Brown & Williamson Tobacco, British American Tobacco, Lorillard Tobacco, Liggett Group, Counsel for Tobacco Research-USA, and the Tobacco Institute.

Many analysts expressed surprise at the Bush administration's lack of zeal in following up its initial request that the tobacco industry fund a 25-year, $130 billion smoking-cessation program. Instead, the government's attorneys suggested a five-year, $10 billion program, along with educational campaigns, reductions in youth smoking rates, and restrictions on practices such as price discounts and in-store displays.

The American Public Health Association decried the Justice Department's lowered penalties, saying that the department had disregarded previous testimony from the government's own expert, Michael Fiore, a professor of medicine at the University of Wisconsin, that $130 billion would be necessary to fund the programs. “To lower penalties from $130 billion to $10 billion is unconscionable and places the financial interests of the industry above fighting this nation's leading cause of death,” said Georges C. Benjamin, MD, executive director of the association.

The prosecution's decision was inconsistent with the powerful case the government made that the tobacco companies engaged in a decades-long scheme to defraud the American public and market their deadly products to children, said Joel Spivak, of the Campaign for Tobacco-Free Kids, in a statement attributed to the American Cancer Society, American Heart Association, American Lung Association, and American Public Health Association. “Due to apparent political interference in this case, the Justice Department now is seeking a remedy that protects tobacco industry profits rather than public health,” he added.

A spokesman for the Department of Justice defended the agency's actions. “The government's suggested cessation program is only an initial requirement, based upon the compelling evidence that the defendants will continue to commit fraudulent acts in the future,” said Eric Holland. “If it is found by court-appointed monitors that the defendants continue to commit acts of fraud, the court can extend and expand the cessation program to exceed the $10 billion, five-year program proposed yesterday, in order to prevent and restrain the continuation of fraudulent activities by the tobacco companies.”

Democratic lawmakers also questioned the Justice Department's handling of the suit and called for an internal investigation to determine whether political appointees with ties to the tobacco industry had wielded improper influence. The department's Office of Professional Responsibility subsequently announced plans to review the decision to reduce the proposed sanctions.

The government's case centered on allegations that cigarette companies had conspired for decades to deceive the public about the dangers of smoking. An attempt earlier this year to seek restitution of $280 billion in tobacco profits was denied in an appellate court hearing. No decision has yet been made whether to appeal that ruling to the Supreme Court.