By Carol D. Leonnig
Washington Post Staff Writer
Thursday, March 22, 2007
The leader of the Justice Department team that prosecuted a landmark lawsuit against tobacco companies said yesterday that Bush administration political appointees repeatedly ordered her to take steps that weakened the government's racketeering case.
Sharon Y. Eubanks said Bush loyalists in Attorney General Alberto R. Gonzales's office began micromanaging the team's strategy in the final weeks of the 2005 trial, to the detriment of the government's claim that the industry had conspired to lie to U.S. smokers.
She said a supervisor demanded that she and her trial team drop recommendations that tobacco executives be removed from their corporate positions as a possible penalty. He and two others instructed her to tell key witnesses to change their testimony. And they ordered Eubanks to read verbatim a closing argument they had rewritten for her, she said.
"The political people were pushing the buttons and ordering us to say what we said," Eubanks said. "And because of that, we failed to zealously represent the interests of the American public."
Eubanks, who served for 22 years as a lawyer at Justice, said three political appointees were responsible for the last-minute shifts in the government's tobacco case in June 2005: then-Associate Attorney General Robert D. McCallum, then-Assistant Attorney General Peter Keisler and Keisler's deputy at the time, Dan Meron.
News reports on the strategy changes at the time caused an uproar in Congress and sparked an inquiry by the Justice Department. Government witnesses said they had been asked to change testimony, and one expert withdrew from the case. Government lawyers also announced that they were scaling back a proposed penalty against the industry from $130 billion to $10 billion.
High-ranking Justice Department officials said there was no political meddling in the case, and the department's Office of Professional Responsibility (OPR) concurred after an investigation.
Yesterday was the first time that any of the government lawyers on the case spoke at length publicly about what they considered high-level interference by Justice officials.
Eubanks, who retired from Justice in December 2005, said she is coming forward now because she is concerned about what she called the "overwhelming politicization" of the department demonstrated by the controversy over the firing of eight U.S. attorneys. Lawyers from Justice's civil rights division have made similar claims about being overruled by supervisors in the past.
Eubanks said Congress should not limit its investigation to the dismissal of the U.S. attorneys.
"Political interference is happening at Justice across the department," she said. "When decisions are made now in the Bush attorney general's office, politics is the primary consideration. . . . The rule of law goes out the window."
McCallum, who is now the U.S. ambassador to Australia, said in an interview yesterday that congressional claims of political interference were rejected by the OPR investigation, for which Eubanks was questioned. He said that there was a legitimate disagreement between Eubanks and some career lawyers in the racketeering division about key strategy and that his final decision to reduce the proposed penalty to pay for smoking-cessation programs was vindicated by the judge's ruling that she could not order such a penalty.
"Her claims are totally false in terms of [us] trying to weaken the case," McCallum said. "Her claims were looked into by the Office of Professional Responsibility and were found to be groundless."
In June 2006, the OPR cleared McCallum, concluding that his "actions in seeking and directing changes in the remedies sought were not influenced by any political considerations, but rather were based on good faith efforts to obtain remedies from the district court that would be sustainable on appeal."
Keisler and Meron did not return telephone calls seeking comment.
U.S. District Judge Gladys Kessler ruled last August that tobacco companies violated civil racketeering laws by conspiring for decades to deceive the public about the dangers of their product. She ordered the companies to make major changes in the way cigarettes are marketed. But she said she could not order the monetary penalty proposed by the government.
The Clinton Justice Department brought the unprecedented civil suit against the country's five largest tobacco companies in 1999. President Bush disparaged the tobacco case while campaigning in 2000. After Bush took office, some officials expressed initial doubts about the government's ability to fund the prosecution, Justice's largest.
Eubanks said McCallum, Keisler and Meron largely ignored the case until it became clear that the government might win. She recalled that "things began to get really tense" after McCallum read news reports in April 2005 that one government expert, professor Max H. Bazerman of Harvard Business School, would argue that tobacco officials who engaged in fraud could be removed from their corporate posts. Eubanks said she received an angry call from McCallum on the day the news broke.
"How could you put that in there?" she recalled him saying. "We're not going to be pursuing that."
Afterward, McCallum, Keisler and Meron told Eubanks to approach other witnesses about softening their testimony, Eubanks said.
Matthew Myers of the Campaign for Tobacco-Free Kids was one of the witnesses whom Eubanks asked to change his testimony. Yesterday, he said he found her account to be "the only reasonable explanation" for what transpired.
Two weeks before closing arguments in June, McCallum called for a meeting with Eubanks and her deputy, Stephen Brody, to discuss what McCallum described as "getting the number down" for the $130 billion penalty to create smoking-cessation programs. Brody declined to comment yesterday on the legal team's deliberations, saying that they were private.
During several tense late-night meetings, McCallum repeatedly refused to suggest a figure, Eubanks said, or give clear reasons for the reduction. Brody refused to lower the amount. Finally, on the morning the government was to propose the penalty in court, she said, McCallum ordered it cut to $10 billion.
The most stressful moment, Eubanks said, came when the three appointees ordered her to read word for word a closing argument they had rewritten. The statement explained the validity of seeking a $10 billion penalty.
"I couldn't even look at the judge," she said.
Staff writer Dan Eggen contributed to this report.