Commentary

What Are They Smoking at the Justice Department?

Ten months after tobacco companies and 46 state attorneys general settled their differences for a skimpy $250 billion, the federal government decided that it wanted a piece of the pie. So the Clinton Justice Department filed suit, alleging that industry executives conspired to lie about the dangers of their product, manipulate nicotine content, and aim ads at kids. According to the complaint, those practices continue today.

Shortly after the Republicans took over, Attorney General John Ashcroft, who opposed the suit when he was in the Senate, decided not to fund the litigation because it was too weak for trial. Apparently there’s been a change of heart: No explanation, no new legal claims, just an astonishing demand for $289 billion in damages — with a trial planned for September 2004 if the industry doesn’t cave.

Never mind that the multi-state tobacco settlement already punished those same transgressions and forbid any future misbehavior. Never mind that the targeted kiddie ads — in adult magazines like Sports Illustrated and People — are protected by the First Amendment. Moreover, the ads promote brand allegiance, the antithesis of a collusive industry scheme.

In September 2000, federal judge Gladys Kessler dismissed most of the lawsuit out of hand. But she allowed a claim to go forward under the Racketeer Influenced and Corrupt Organizations (RICO) act, despite expressing some reservations about the government’s ability to prove damages. RICO was designed to be invoked against organized crime, but nowadays it’s a standard bullying tactic by plaintiffs’ attorneys. This time, however, the Justice Department had to deal with an embarrassing admission, tucked away in the final sentence of the press release that announced its lawsuit: “There are no pending Criminal Division investigations of the tobacco industry.” After a five-year, multimillion dollar inquiry by two dozen prosecutors and FBI agents, the government came up with one misdemeanor plea against an obscure biotechnology company. The government dissected allegations that tobacco executives perjured themselves when testifying before Congress. Prosecutors plowed through documents for evidence that cigarette makers manipulated nicotine levels. Whistle-blowers and company scientists testified before grand juries. The outcome: not a single indictment of a tobacco company or industry executive.

Nonetheless, President Clinton collared his attorney general and she, somehow, conjured up a RICO complaint that accused the industry of the same infractions for which grand juries could not find probable cause. Among 116 counts against the industry, Janet Reno and her minions included all sorts of foolishness to ratchet up the pressure for an exorbitant financial settlement. Here’s one example, count number three: In November 1959, the industry “did knowingly cause a press release to be sent and delivered by the U.S. mails to newspapers and news outlets. This press release contained statements attacking an article written by then-U.S. Surgeon General Leroy Burney about the hazards of smoking.” There you have it — racketeering, in all its sordid detail.

Clinton insiders knew the charges were trumped up. Former Clinton aide Rahm Emanuel put it this way: “If the White House hadn’t asked [Reno, she] would never have looked at it again.” So it is politics and money, not law, which is driving this litigation. The federal lawsuit is part of an all-out strategy to plunder big tobacco — while keeping it alive for future plundering, of course. Even prior to the November 1998 settlement, for every pack of cigarettes sold domestically, the industry earned about 23 cents, the feds got 34 cents, and the states averaged 37 cents. Thus, government got 71 of each 94 cents of pre-tax profits. In effect, the feds and the states were 76 percent stockholders in an enterprise that, according to government reports, kills 400,000 Americans every year. If indeed there’s been a RICO conspiracy, government has been the major co-conspirator.

The American public — voters and jurors — need to know that our legal system is rapidly becoming a tool for extortion. Sometimes the politicians seek money; sometimes they pursue a policy agenda; often they abuse their power. When Clinton was unable to persuade Congress to enact another tax on smokers, he simply bypassed the legislature and asked a federal court to impose damages in lieu of taxes. Bush can do better. Yes, he’s absorbed with establishing the rule of law around the globe, but the President needs to remind his Justice Department that the campaign begins at home. It’s time to call off the government’s anti-tobacco crusade.

Robert A. Levy is senior fellow in constitutional studies at the Cato Institute.