The U.S. government yesterday accused the nation's largest tobacco companies of conspiring over the past 50 years to deceive the public about the proven dangers of smoking to protect billions of dollars in profits the industry earned from cigarette sales.
On the opening day of the largest civil racketeering trial ever brought by the Justice Department, government lawyers repeatedly cited industry officials' own words from confidential documents to demonstrate that tobacco companies lied to the public even as the companies privately confided the truth to each other. The government showed hundreds of internal tobacco industry memos and reports from decades past, many never before seen in public, on a ceiling-high screen in a Washington courtroom.
In 1970s-era documents, tobacco industry officials said they needed to "bury the research" that showed nicotine was an addictive drug. In one memo, a tobacco company official described how to hide sensitive documents so they could not be subpoenaed in future lawsuits and said "the documents could be destroyed" if necessary.
The Justice Department contends that the six largest tobacco companies conspired to commit fraud under a racketeering law that was originally designed to punish criminal gang leaders. The civil lawsuit, filed when President Bill Clinton was in office and once nearly dropped by the Bush administration, is five years in the making and already has generated 120 million pages of documents.
There is no jury in the case; the outcome depends on one federal judge's decision about whether the industry was engaged in a pervasive, coordinated campaign of deception.
The government has asked U.S. District Judge Gladys Kessler to order the industry to reform its business practices and turn over a record $280 billion in "ill-gotten" profits. The government alleges the companies earned the money by lying about smoking's health risks, nicotine's addictive powers and industry efforts to entice teenagers to start smoking.
The companies sued are Philip Morris USA Inc. and its parent, Altria Group Inc., R.J. Reynolds Tobacco Co., Brown & Williamson Tobacco Co., British American Tobacco Ltd., Lorillard Tobacco Co. and Liggett Group Inc. Two now-defunct tobacco industry organizations, the Counsel for Tobacco Research-U.S.A and the Tobacco Institute, are also defendants.
The internal papers dating back to 1957 highlighted yesterday showed that the tobacco companies privately acknowledged that smoking causes cancer and other diseases, and the companies began devising a coordinated public relations campaign to keep the public from believing there was a link.
"Obviously, the amount of evidence accumulated to indict cigarette smoking as a health hazard is overwhelming," a top R. J. Reynolds scientist warned in a 1963 memo to company officials. The industry created a seemingly independent organization, the Tobacco Research Council, government lawyers said, and ordered it to convince news media, lawmakers and the public that such evidence of health risks was far from conclusive.
"The most important type of story is that which casts doubt on the cause and effect theory of smoking and cancer," read one internal council memo presented by the government. "Public relations is key . . . to getting us out of this hole."
That posture continued, the government argued, showing a videotaped clip of tobacco industry spokeswoman Brennan Dawson in a 1989 interview on "Good Morning America." She dismissed the theory of health risks as "just statistics. The causal relationship between smoking and cancer has not yet been established."
Tobacco company lawyers said yesterday that industry executives raised doubts about studies suggesting a link between smoking and health problems, but that does not mean the officials were conspiring to defraud the public.
"You can look at those documents and say maybe people made some mistakes, maybe they did some things they shouldn't have, but I don't think that shows intentional fraud," Philip Morris USA lawyer William Ohlemeyer said. "It's certainly not conduct the companies would tolerate today. But it doesn't prove what the government has to prove here."
Ohlemeyer said Kessler will be "hard-pressed" to find that any fraud is ongoing or that the industry is likely to engage in future fraud, key thresholds for the lawsuit, because the companies now acknowledge smoking's health risks and have overhauled cigarette marketing. Those actions were required in settlements with states in the late 1990s that cost the industry $246 billion.
"That's the big gap in the government's case," he said. "You heard a lot about the past. But the government has ignored the profound changes in the industry."
The Justice Department argues that it only must show a past pattern of conspiracy that probably would be repeated.
Justice Department lawyer Frank Marine told Kessler that the industry's campaign of "misrepresentations, half-truths and outright lies" has had "devastating consequences" and noted that nearly 500,000 Americans die each year from smoking-related illnesses.
He noted a 1978 Lorillard memo in which a marketing official trumpeted the "fantastic" success of the Newport brand with teenagers: "The base of our business is the high school student."
Matt Myers, of the Campaign for Tobacco-Free Kids, said the government's case is probably the most comprehensively documented picture of the tobacco industry's behavior ever presented.
"If there was a scintilla of doubt left that the industry had not engaged in a decades-long, coordinated campaign to deceive the American public, the documents cited by the Justice Department today eliminate even that shred of doubt," Myers said.
Bush administration officials, including Attorney General John D. Ashcroft, originally considered the government case weak, and Congress once proposed cutting the Justice Department budget for tobacco litigation. But the suit was revived after significant criticism that the Bush administration should not let the industry duck a trial.
Yesterday, Ashcroft released a statement praising his lawyers' work and said he looked forward to an end to the marketing of tobacco to teenagers and to taxpayers' recouping industry profits. "The government's case against the tobacco industry is an important effort to prevent fraudulent activity and uphold corporate integrity," he said.
William Ohlemeyer, a lawyer for Altria Group Inc., said there was no intentional fraud.