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US accuses big tobacco of fraud racketeering { June 8 2005 } Original Source Link: (May no longer be active)
http://www.nytimes.com/2005/06/08/politics/08tobacco.htmlhttp://www.nytimes.com/2005/06/08/politics/08tobacco.html
June 8, 2005
U.S. Finishes Tobacco Racketeering Case
By MICHAEL JANOFSKY
WASHINGTON, June 7 - Government lawyers wrapped up their eight-month case against the nation's leading tobacco companies on Tuesday, telling a federal district court that the volume of evidence proved that the companies violated racketeering laws and should be held accountable.
"The United States has met its burden of proof," said one of the lawyers, Sharon Eubanks, in closing arguments before Judge Gladys Kessler in a civil racketeering case that began in 1999. "The United States has proved that the defendants have engaged in a 50-year campaign of fraud, a decades-long pattern of material misrepresentations, half-truths, deceptions and lies that continue to this day."
Lawyers for the seven defendants - Philip Morris and its parent company, Altria; R. J. Reynolds; Brown & Williamson; Lorillard; Batco; and Liggett - are scheduled to present their summations over five hours on Wednesday and 90 minutes on Thursday, followed by a rebuttal period of 90 minutes for the government.
Four government lawyers shared the closing arguments, reviewing evidence that they said showed how the companies misled the public over the adverse effects of smoking.
And for the first time, they provided details of proposed sanctions, also known as remedies, that could cost the companies billions of dollars if Judge Kessler accepts them. They said, for example, that the companies should be forced to pay $10 billion over five years to help smokers quit. Just weeks ago, a government witness testified that an effective nationwide stop-smoking program would cost $130 billion over 25 years.
In contemplating the intricacies of some of the government's proposals, Judge Kessler raised a host of questions that interrupted the presentations, forcing the lawyers to divert from their scripts and promise that answers would be submitted in post-trial papers.
While she reminded lawyers from both sides at the outset that her questions should not suggest that she had reached any conclusions, she nonetheless sounded concerned about how the remedies would be fashioned and who would be charged with monitoring compliance. At one point, she told Stephen Brody, a government lawyer: "Asking for judicial oversight of private corporations is a very weighty matter. So let me make clear the depth of my concerns."
Later, after Mr. Brody suggested that an injunction to stop the companies from making false statements about their products was not enough to deter future misconduct and that the companies should be forced to recast their public statements in a truthful light, Judge Kessler jumped in again.
"Who drafts those statements?" she asked. "What about the First Amendment? Do monitors come up with draft language? Do I make the decision about the exact language each and every defendant has on its Web site?"
The government lawyers were not deterred by Judge Kessler's expressions of concern. Throughout their summations, they argued for the need for strict outside supervision to ensure proper behavior by the companies.
Besides seeking money for a nationwide stop-smoking program, the government wants the companies to pay for a counter-marketing campaign to offset what it considers dubious company claims. Other remedies it has suggested include full disclosure of all the companies' scientific documents, prohibitions against the use of words like "light" or "low tar" to describe cigarettes, and court-appointed officers to oversee whatever remedies are imposed.
Judge Kessler also expressed skepticism about how a cessation program could fulfill a requirement of the racketeering laws that any remedy be devised "to prevent and restrain" future misconduct.
Mr. Brody responded, "Because it would remove the incentive for the defendants to engage in the type of activities they are engaged in."
The government lawyers also spent a large part of their closing arguments trying to convince Judge Kessler that the conduct of the companies since 1954 amounted to a conspiracy under federal mail fraud and wire fraud statutes, a claim the companies have disputed since the start of the case. The United States is alleging 145 racketeering acts.
Taking Judge Kessler through various associations and relationships over the years, another Justice Department lawyer, Andrew Goldfarb, referred to the Racketeer Influenced and Corrupt Organizations Act, and said, "It's hard to imagine a case with more evidence proving a RICO enterprise."
"They have marched in carefully coordinated lockstep for 50 years," Mr. Goldfarb said.
Proving that an enterprise was formed to carry out a conspiracy is central to establishing liability in any civil racketeering case.
The government also spent time trying to discredit witnesses with ties to the companies. Ms. Eubanks showed Judge Kessler pictures of 18 current and former tobacco industry executives, pointing out inconsistencies in their testimony and other sworn statements.
"Much of what you heard from tobacco company experts is at odds with their prior testimony and contemporary documents," Ms. Eubanks said.
In concluding the government arguments, Mr. Brody appealed to Judge Kessler's civic-mindedness, insisting that the high death rates from smoking-related illness would continue if she failed to hold the companies liable.
"Impose equitable relief," Mr. Brody said, "and assure the American public that they're not going to suffer this extraordinary harm."
Copyright 2005 The New York Times Company
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