Tobacco Industry Lawyers Deny Fraud in Racketeering Trial

Tobacco industry lawyers accused the government Wednesday of relying on the past too heavily in a racketeering case that requires the Justice Department (search) to show cigarette makers are likely to commit fraud in the future.

The government is suing for $280 billion in earnings the industry allegedly made by defrauding the public about the hazards of smoking and its efforts to addict children.

The defendants are Philip Morris USA Inc. (search) and its parent, Altria Group Inc. (MO); R.J. Reynolds Tobacco Co. (RJR) ; Brown & Williamson Tobacco Co. ; British American Tobacco Ltd. (BTI); Lorillard Tobacco Co.; Liggett Group Inc. (VGR); Counsel for Tobacco Research-U.S.A.; and the Tobacco Institute.

However Philip Morris attorney Ted Wells reminded U.S. District Judge Gladys Kessler during opening arguments that the law requires the government to show not just that fraud occurred previously but that it will probably continue.

Wells said it would be impossible to demonstrate future fraud is likely since the industry now runs ads and posts information on Web sites detailing hazards of smoking and addictive nature of nicotine.

"It's an unambiguous and clear message," Wells said. The statements, he said, "are of a permanent, irreversible and everlasting nature."

Wells also cited restrictions on how cigarettes are marketed and sold today, changes that resulted from legal settlements worth $246 billion the industry reached with the states in the late 1990s.

Justice lawyers say past fraud is indicative of future behavior, and that the industry hasn't cleaned up its act.

They accuse tobacco companies of continuing to target teens, while denying doing so, and of denying secondhand smoke is hazardous to nonsmokers. The government lawyers also say the industry reformed itself only under threat of litigation.

"The defendants' recent superficial changes in behavior in reaction to this and other lawsuits are too little, too late," Deputy Associate Attorney General Matt Zabel told reporters Wednesday.

Tobacco lawyers tried to poke holes in the government's argument that the industry colluded to mislead consumers about the alleged health benefits of smoking "low-tar" and "light" cigarettes. Recent studies have shown no benefit to consumers who smoke such cigarettes, because people tend to inhale them more deeply or take more puffs.

But industry lawyers noted that the government previously advanced the idea in ads and public statements that it was better to smoke cigarettes with lower levels of tar and nicotine than regular ones.

"The government was out there telling people, 'If you aren't going to quit, switch,'" said R.J. Reynolds lawyer Peter Biersticker.

The government's case rests on internal industry documents in which tobacco executives seem to be saying things that conflict with their public statements. But industry lawyers say the Justice Department has not put some documents in their proper context.

For example, Justice lawyers Tuesday displayed a Philip Morris document from the 1970s stating that a study showed, "Marlboro Light cigarettes were not smoked like regular Marlboros."

However, Biersticker said the study included few people and had conflicting findings.

Lorillard attorney William Newbold responded to allegations the industry manipulates nicotine levels in cigarettes to make sure smokers stay addicted.

"The evidence will be that we don't spike our cigarettes," he said.

One government theory is that companies add ammonia to boost the effects of nicotine.

Newbold said some companies add it, but only "to improve the quality and the taste" of cigarettes.

It's taken five years for the lawsuit, first filed by the Clinton administration, to reach trial.

The government has spent $135 million on the case thus far.