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Big Tobacco defends charges

From CNN News Editor Tom Watkins

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Justice Department lays out case against Big Tobacco.
• Amended Complaint  U.S. v. Philip Morris, et al. (FindLaw, PDF)external link
Justice Department

WASHINGTON (CNN) -- The tobacco industry has defended itself against charges in the United States that it engaged in a 50-year conspiracy to defraud the American public about the health risks of tobacco.

The federal government is seeking $280 billion in "ill-gotten gains" -- profits earned from people who began smoking as children -- in the civil case being heard in U.S. District Court.

The case is expected to last six months.

Claiming that it may have made mistakes in the past, the industry maintains it has mended its ways in recent years and is now a good corporate citizen.

"During the last several years, there has been such profound and fundamental change about how the hazards of smoking" are communicated to the public, said Ted Wells, co-counsel for Philip Morris USA, who led off five hours of testimony from the country's major tobacco makers.

On Tuesday, lead government attorney Sharon Eubanks laid out an "overarching scheme to defraud" by sowing doubt among the public about the risks of smoking by pretending there was a controversy about its danger, and by refusing to acknowledge that nicotine is addictive.

Wells rejected those criticisms saying tobacco companies now acknowledge that smoking causes heart disease, lung cancer and emphysema, among others.

In addition, they acknowledge that nicotine is addictive and that there is no such thing as a safe cigarette, regardless of how it is labeled.

Wells rejected the contention made Tuesday by government lawyers that the industry's lengthy record of fraudulent activity implied that it would be involved in such misdeeds in the future.

The likelihood of future fraudulent activity is critical to the government's monetary claim under the Racketeer Influenced and Corrupt Organizations (RICO) Act.

"It's inappropriate to use the past as a predictor of the future," Wells said. "The best predictor is where we are today."

Though the companies may have made "wrongheaded" decisions in the past, "we do not concede in any way, shape or form that there ever was a RICO conspiracy."

The government lawyers, in their opening statement Tuesday, cited a 1953 meeting of industry chiefs at a New York City hotel, where they created a public relations strategy allegedly to create doubt about whether the habit causes injury.

The meeting occurred as studies were emerging that linked smoking to lung cancer and as industry executives worried that smokers were quitting.

RICO requires the government to show that the fraud is ongoing, which it cannot do, Wells said.

The Tobacco Institute and the Committee for Tobacco Research -- the public relations organ and the funder of tobacco research that were created as a result of the meeting -- were disbanded in 1998 as part of the $246 billion Master Settlement Agreement with 46 states, Wells said.

David Bernick, representing Brown & Williamson, defended the industry's reluctance to acknowledge that nicotine is addictive as reflective of honest debate among scientists.

He cited the 1964 Surgeon General's report on smoking that referred to it as "habituation," not addiction.

Government lawyers contend that the industry developed "light" cigarettes as a way to persuade smokers that they could indulge in the habit more safely.

But Peter Biersteker, an attorney representing R.J. Reynolds, defended the low-tar and nicotine cigarettes developed during the 1970s as legitimate, though studies have shown that smokers tend to compensate for the lower amounts of nicotine by puffing more frequently and inhaling more deeply.

The industry was simply meeting public demand, Biersteker said.

In 1952, only 1 percent of cigarettes had filters, he said. But after studies emerged showing that the more a person smoked, the more likely he or she was to develop lung cancer, cigarette makers scrambled to offer filters.

By the end of the decade, nearly half of cigarettes were filtered, he said.

Soon after, "light" cigarettes were developed by tobacco makers, who were simply following the recommendations of the scientific and public health communities in developing such products, he said.

Webb said the comment made Tuesday by government attorney Eubanks -- that the changes were "too little, too late" -- was "simply not fair."

A new generation of executives has grown up inside the new Philip Morris and will soon be running the company, he said. "No way on the face of the earth they'll let it go back."

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