Tobacco industry denies fraud
Justice Dept. sues for $280 billion in racketeering case
WASHINGTON -- The tobacco industry never purposely lied to the American public about the dangers of smoking, though individual tobacco company officials made mistakes and showed poor judgment in dismissing evidence of health risks, industry attorneys said yesterday.
In their opening statements for the largest civil racketeering trial in US history, tobacco industry attorneys contended that government claims of a massive, industry-devised fraud rely almost entirely on events of the distant past.
The six companies on trial argued that the government will fail to prove its two central points over the next 12 weeks: that the industry plotted to deceive Americans that smoking caused cancer and other diseases and is likely to mislead the public again.
At stake is $280 billion in tobacco profits, which the government calls "ill-gotten gains" from industry fraud and which US District Judge Gladys Kessler could order the companies to forfeit if she sides with the government. The case is not being heard by a jury.
"We do not concede in any shape or form that there was a [racketeering] conspiracy," said Ted Wells, an attorney for
As the trial opened Tuesday, government attorneys introduced internal industry documents dating back decades that they said showed that tobacco officials were lying to the public even as they acknowledged the dangers of smoking to one another.
Wells said tobacco companies now fully acknowledge that "we're in the business of selling a dangerous product. . . . Each of the defendants say to the American public in a clear and unambiguous manner that smoking is dangerous."
But Kessler questioned whether the tobacco industry made that point so directly to its customers. "Is that succinct and pithy phrase actually on any cigarette packaging or on any company websites anywhere?" she asked. Wells said it was, in various forms from company to company.
An attorney for the Justice Department said at a news conference later that the companies' admission was "remarkable" and the "only surprise" in the day's testimony.
Dan Webb, another attorney for Philip Morris, told the judge that attorneys for the Justice Department who made their opening statements Tuesday largely ignored the "profound and permanent" changes in the way the industry sells and markets cigarettes since it reached pacts in the late 1990s of lawsuits brought by numerous states. The pacts cost the industry $246 billion in payments to states and banned much of its traditional youth advertising, including the famed Joe Camel character.
Public health advocates and trial lawyers who have sued tobacco companies reject industry claims of reform. Critics noted that in June 2001, a California judge fined R. J. Reynolds $20 million for violating the settlement's prohibition on marketing to children and that in ongoing lawsuits the companies still contest a causal link between smoking and disease.
"They have one face in this court and another face everywhere else," said Edward L. Swerda Jr., a lawyer with the Tobacco Product Liability Project.
But Steve Yerrid, a lawyer who fought the tobacco industry, acknowledged the weaknesses of the government's case.
"I'm not hopeful the federal government will prevail, because to say the industry hasn't changed is to ignore reality," Yerrid said. "Now, they changed because we put a gun to their head, not because they're nice people and wanted to change."
