FEDS SEEK TOBACCO INDUSTRY MONITOR

New Request Comes Out of Racketeering Trial

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WASHINGTON (AdAge.com) -- As the government finished testimony in its nine-month-long civil racketeering case against tobacco marketers yesterday, it said it wanted to institute procedures to monitor the tobacco industry as well as make the industry pay billions to get consumers to quit smoking.

Objections
The request for a monitor was new and prompted immediate objections from tobacco company lawyers who argued it was an improper last-minute addition that should have been discussed earlier in the trial.

The government asked that tobacco makers be required to fund a $10 billion, five-year effort to get consumers to stop smoking. Democratic congressmen have called for a Justice Department inspector general to probe as to whether political influence played a role in the decision to seek only $10 billion rather than a $130 billion that had been suggested previously.

The government said the money would be in addition to new marketing curbs, including a ban on the term “light” and limits on in-store signage.

Racketeering evidence
Justice Department officials said tobacco makers' marketing efforts, such as the industry's continuing sponsorship of Nascar, use of the Marlboro Man as an advertising icon and the branding of some cigarettes as “light,” was evidence of racketeering.

Justice Department officials said their detailed proposal, due to be filed later, will seek monitors and an attorney to investigate tobacco companies and supervise their compliance to the federal proposals. The attorney would set up a process for probing complaints and hearing challenges and could order the $10 billion program extended in whole or part if the alleged racketeering continues. The monitor would also have leeway to order a single company to continue paying fines.

Five biggest tobacco companies
The federal court lawsuit, originally filed under the Clinton administration, names the five biggest tobacco makers at the time: Altria’s Philip Morris, R.J. Reynolds Tobacco Co., Brown & Williamson Tobacco Co., Liggett Group and Lorillard. The tobacco makers have argued that it would impose marketing curbs on them while not affecting their competitors. The five tobacco makers in 1998 settled state cases alleging fraud by agreeing to pay fines and make a number of marketing changes.

At today’s hearing Judge Gladys Kessler said her biggest question isn’t about whether the tobacco makers engaged in a conspiracy but what remedies are appropriate especially in light of an appellate court ruling barring the government from seeking tobacco makers' past profits.

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