By PETE YOST
The Associated Press
Thursday, July 20, 2006; 4:48 AM
WASHINGTON -- A Justice Department official who slashed the amount of money being sought from tobacco companies made misleading statements to Congress, says a former government lawyer who handled a landmark lawsuit against the industry.
The comments by attorney Sharon Eubanks follow Associate Attorney General Robert McCallum's decision a year ago to downsize a proposed smoking cessation program from $130 billion to $10 billion. That's the amount the government wants a judge to order cigarette companies to pay.
A month ago, McCallum sent written statements explaining his actions to the Senate Foreign Relations Committee, which was considering his nomination to be U.S. ambassador to Australia. The Senate subsequently confirmed McCallum, a former Yale classmate of President Bush, to the post.
Eubanks, who ran the department's tobacco litigation team, retired from government and now works for Citizens for Responsibility and Ethics in Washington. The private group sued the department and questioned McCallum for several hours Tuesday about documents he kept on the tobacco case.
The group wants to find out whether White House influence was brought to bear in the pending tobacco lawsuit.
"I don't remember ever receiving any directive from the White House about anything that had to do with the tobacco case," McCallum said in his sworn videotaped deposition.
The Justice Department's Office of Professional Responsibility said last month that McCallum's conduct was not influenced by any political considerations.
Internal Justice Department e-mails obtained by The Associated Press show that the White House OK'd an op-ed piece by McCallum in USA Today defending the department's drastic cut in the amount it was demanding the tobacco companies pay.
"Please hold up. The White House wanted some changes," one Justice Department employee wrote regarding McCallum's op-ed piece.
"WH says it's good to go," said an e-mail an hour later by another department employee.
In his testimony about the Justice Department suit against the tobacco companies, McCallum refused to say whether he had notes of contacts with industry representatives. He said he was barred from answering by an order the judge had issued in the case. The order itself is sealed, McCallum added.
On Wednesday, a Justice Department spokesman, Charles Miller, said "it's absolutely incorrect" to suggest that McCallum "was anything but truthful in what he said to the Senate."
Eubanks said McCallum mischaracterized a court order in his statements to Capitol Hill, making it appear that U.S. District Judge Gladys Kessler criticized the government's embrace of smoking cessation as a remedy in the lawsuit. McCallum cited the judge's order in explaining why he reduced the government's request.
Eubanks pointed out that the judge later rejected the tobacco industry's arguments and allowed Eubanks' expert witness to testify that the companies should pay $130 billion for smoking cessation.
McCallum said the decision to cut the amount of money being sought stemmed from a federal appeals court ruling in the case that requires forward-looking remedies aimed at preventing future violations rather than penalties for past misdeeds. McCallum said career attorneys in the department's organized crime and racketeering section recommended the change.
In his comments to the Senate, McCallum noted an order from the judge that the appeals court ruling "struck a body blow to the government's case."
Eubanks said the "body blow" language had nothing to do with a smoking cessation remedy and "to make that suggestion is misleading."
In his written statements to the Senate, McCallum said he had "no personal involvement even as to supervision and oversight, in the vast majority" of proceedings in the tobacco case.
Eubanks said the statement is technically accurate, but "extremely misleading."
"I had the guy's cell phone number and he told me to call him any time on the case and occasionally I did," said Eubanks. "On the significant and important things, he made it very clear that he was to remain in the loop and involved.
"Whenever we had meetings on this, Robert was at all of them, and we had a lot of them," said Eubanks. "This is a guy who's not involved?"
McCallum told the Senate that he had conferred with attorneys including the career lawyers leading the trial team, a characterization that Eubanks rejected.
"There was no conferring," said Eubanks. "I was taking orders."
At McCallum's direction, says Eubanks, political appointees at the department wrote almost every word of Eubanks' closing argument in which she asked the judge to order the industry to pay the reduced amount.
Eubanks has removed herself from her new employer's lawsuit against the Justice Department where she used to work.