Correction to This Article
A June 21 article about the government's racketeering case against the tobacco industry incorrectly identified the Justice Department unit that is investigating whether the case was tainted by political interference. It is the Office of Professional Responsibility, not the Professional Responsibility Advisory Office.

Judge in Tobacco Case Urges Settlement

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By Carol D. Leonnig
Washington Post Staff Writer
Tuesday, June 21, 2005

The judge presiding over the government's troubled racketeering case against the tobacco industry summoned cigarette companies' chief executives, their lawyers and Justice Department attorneys for a closed-door meeting yesterday and urged both sides to settle the case.

U.S. District Judge Gladys Kessler explained in a court order late in the day that she closed the meeting to the public because she considered it "a routine, informal discussion with the parties urging them, once again, to consider the advantages of settling the case rather than the risks of litigating it."

Philip Morris chief executive Michael E. Szymanczyk and R.J. Reynolds Tobacco Co. CEO Susan M. Ivey and their lawyers were ushered into the private meeting yesterday through a secured entrance at the back of the federal courthouse. Both executives left the courthouse through a back entrance 2 1/2 hours later and declined to comment, as did their lawyers and spokesmen.

"The judge put this meeting under seal," Dan Webb, lead attorney for Philip Morris, said as he left the session. "We've been instructed by the judge not to talk about our meeting. We're just not going to discuss it, period."

Kessler's urging that the parties settle comes as the government's civil racketeering suit is in political turmoil and viewed with suspicion by anti-tobacco advocates. The government had claimed that America's six largest tobacco companies engaged in a 50-year conspiracy to conceal the dangers of smoking from the public -- and should have to pay to help 45 million Americans quit smoking.

But the Justice Department stunned activists during closing arguments June 7 when it announced it would seek $10 billion for smoking-cessation programs instead of the $130 billion that government lawyers previously argued was needed. Since then, news reports have said that senior political appointees at the Justice Department pressured career department lawyers to reduce penalties and soften the testimony of government witnesses.

Yesterday's meeting was the first opportunity for Kessler to meet with the parties since the eight-month trial ended June 9 and the allegations of political interference were reported. If the parties do not settle, Kessler will decide whether the industry engaged in a fraudulent conspiracy and what penalties, if any, it should face.

Acting on a request from 50 Democratic lawmakers, the Justice Department's Professional Responsibility Advisory Office has launched an investigation into whether political interference tainted the case. A group of senators have also asked Attorney General Alberto R. Gonzales to remove Associate Attorney General Robert D. McCallum Jr. from involvement in the case. McCallum, a former partner of a firm that represented R.J. Reynolds, told career government lawyers to reduce their recommended penalties. He said that the change was necessary because the government could seek money only to address the companies' future actions -- which anti-tobacco advocates dispute.

Yesterday, Democratic Reps. Henry A. Waxman (Calif.) and Martin T. Meehan (Mass.) wrote a letter urging the Professional Responsibility Office also to investigate whether Harvard University business professor Max H. Bazerman was threatened with being removed as a government witness if he did not water down his testimony. He had recommended that the court appoint a monitor to consider removing senior tobacco company management.

Bazerman said in an interview with The Washington Post that he was told by a career government trial lawyer that McCallum would not let him testify unless he changed his testimony to say that removing senior industry management would be "legally inappropriate" under several circumstances.

Such pressure "cannot possibly be justified," the lawmakers said in a statement. "But it did directly benefit senior tobacco executives -- many of whom are major donors to the Republican Party -- whose jobs could have been threatened by the remedies proposed by Professor Bazerman."

Kessler had privately urged the parties to enter settlement talks in February, after a panel of the U.S. Court of Appeals for the District of Columbia Circuit rejected the centerpiece of the government's case. In that ruling, the panel said the court could not order the industry to pay $280 billion as "ill-gotten profits" from their alleged fraud.

Anti-tobacco advocates said yesterday that they do not want the case to be settled. "The government should not settle this case now while it is under a cloud of political interference or under the weak terms proposed by the government in its closing argument," said William V. Corr, executive director of the Campaign for Tobacco-Free Kids.


© 2005 The Washington Post Company

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