September 23, 1999. Copyright 1999. Graphic News. All rights reserved.

RENO PURSUES TOBACCOÕS ÒILL-GOTTENÓ PROFITS

LONDON, September 23 Graphic News: U.S. TOBACCO companies, led by the worldÕs largest tobacco company Ð Philip Morris Companies Inc., makers of the popular Marlboro brands Ð vowed to fight the civil lawsuit filed by the Justice Department seeking to recover much of $20 billion in smoking-related costs incurred by the government each year.
ÒWe do not believe that this kind of politically-motivated lawsuit is in anyoneÕs interest,Ó counsel for Philip Morris said in reaction to the filing. ÒWe will mount a vigorous defence and will not settle this lawsuit.Ó
The statement was made following a news conference at which U.S. Attorney General Janet Reno revealed that the Justice Department had filed a massive lawsuit accusing the tobacco industry of fraud and deceit since the 1950s, and seeking to recover billions of dollars spent by the federal government every year on smoking-related illnesses.
ÒIn the complaint, the United States alleges that for the past 45 years, the companies that manufacture and sell tobacco have waged an intentional, coordinated, campaign of fraud and deceit,Ó Reno told reporters.
ÒEach year, 400,000 Americans die from smoking cigarettes,Ó Reno said. ÒEach year, American taxpayers spend billions of dollars due to the actions of the cigarette companies. TodayÕs suit seeks to recover those expenses.Ó
The suit Ð filed under federal racketeering laws previously used to prosecute Mafia and other organised crime groups Ð alleges the tobacco firms, since 1954, coordinated efforts to hide their knowledge about the devastating health effects and addictive nature of smoking.
The suit alleges that top tobacco executives met in 1954 at the Plaza Hotel in New York City and agreed to wage a long-term campaign to mislead the American public and conceal information about the harmful effects of smoking.
The campaign was aimed specifically at retaining smokers already addicted to nicotine as well as actively seeking to capture the youth market even though the industry has denied directing their products at children.
The lawsuit presents the tobacco industry with its gravest legal challenge yet, exposing it to potentially huge liability, in a politically-§charged case supported by President Bill Clinton but opposed by some Republicans in Congress.
The 88-page lawsuit named Philip Morris Inc. ; Philip Morris Companies Inc.; R.J. Reynolds Tobacco Co. ; American Tobacco Co.; Brown & Williamson Tobacco Corp. ; British-American Tobacco PLC ; British-American Tobacco (Investments) Ltd.; Lorillard Tobacco Co. Inc.; Liggett and Myers Inc.; The Council for Tobacco Research USA Inc.; and the Tobacco Institute Inc.
But commentators say that itÕs not an open and shut case.
ÒThe government has to prove tobacco companies are at fault,Ó Marc Cohen of Goldman Sachs said. ÒMore importantly, it must prove why people smoke? Is the government being put in a position where it is treating these sick people because of something tobacco companies did or because people wanted to smoke?
ÒThe government can allege anything it wants and have an audience for it, but it has to prove it in a courtroom and thatÕs no small task,Ó Cohen said.
/ENDS
Sources: Reuters, Associated Press, BBC World Service