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During closing arguments last month in the federal government’s lengthy racketeering trial against the tobacco industry, the Department of Justice surprised many observers by slashing its largest proposed remedy — a $130 billion smoking cessation program over a 25-year period — to a more modest five-year program costing $10 billion. Had political appointees at the DOJ interfered with the trial lawyers to help Big Tobacco, as suggested in news reports? Or did senior DOJ lawyers try, albeit belatedly, to address lingering questions about the government’s remedies — questions that had been raised repeatedly by the judge? The answers to these questions illuminate a common problem of the shallow press coverage too often allotted to lengthy and complex trials. Although the tobacco trial lasted eight months, it was rarely covered by mainstream journalists. The trial took place in the D.C. federal courthouse, yet The Washington Post — not to mention The New York Times and the Los Angeles Times — barely showed up until the end of the case. During and after closing arguments, however, each of these publications has carried stories of alleged interference by DOJ political appointees. Those stories have included charges that senior officials forced a change in the largest remedy proposed and that they tried to meddle in the testimony of two witnesses. Unnamed lawyers on the DOJ trial team have been cited as sources, and internal memorandums have been leaked. On the heels of these stories, anti-tobacco activists, newspaper editorialists, and leading Democratic Party figures have called for an investigation into the DOJ’s actions, and the DOJ inspector general has reportedly begun looking into the matter. Unfortunately, those same press reports ignored key facts that suggest a far more benign explanation for the DOJ’s actions. While we await U.S. District Judge Gladys Kessler’s ruling in the case, which is not expected for a number of months, it’s useful to go back to the beginning. LENGTHY LITIGATION In September 1999, the federal government sued the tobacco industry to recover health care costs associated with tobacco use. A year later, Judge Kessler dismissed that part of the case, but let stand a separate claim that the industry had violated the federal Racketeer Influenced and Corrupt Organizations (RICO) statute. After several years of preliminary proceedings, the dispute finally went to trial in September 2004. The heart of the government’s case was a claim for disgorgement of all proceeds earned by the tobacco defendants as a result of their alleged violations of RICO — $280 billion by the government’s reckoning. Just prior to trial, Judge Kessler certified for appeal the hotly-contested legal issue of how disgorgement should be calculated. The appeal and trial proceeded simultaneously. In February 2005, the U.S. Court of Appeals for the D.C. Circuit ruled that disgorgement is not available under RICO because it is not a “forward-looking” remedy designed to “prevent and restrain” future violations. Judge Kessler promptly observed that this ruling was a “body blow” to the DOJ’s case and gave the government an opportunity to come up with new remedies that would fit the forward-looking standard. The judge then set a separate remedies phase of the trial to begin immediately after the close of evidence on liability. In the remedies phase, the government argued that the industry should fund a variety of programs, the most eye-popping of which was a 25-year smoking cessation program at an annual cost of $5.2 billion, for a total of $130 billion. While not quite the $280 billion originally sought, it was certainly a large enough figure to command attention. Yet this new remedy was practically dead on arrival, and here is where the difficulty begins with the press. In Order No. 886, entered on Feb. 28, a clearly frustrated Judge Kessler wrote that while it would be “premature” to rule out any of the government’s nondisgorgement remedies, she was concerned that most of them read as if the appeals court had “never written” its intervening decision. Yet the government went forward. The court repeatedly asked during the remedies phase, and then again in closing arguments, how the government could square the cessation program with the appellate ruling, but no one had a satisfactory answer. Indeed, the government’s main witness on the cessation program, University of Wisconsin Medical School professor Michael Fiore, testified that the DOJ lawyers told him not to worry about how a cessation program would prevent future violations of the law, because “the lawyers” would deal with it. Problem is, the only argument offered by the DOJ lawyers was that if fewer people smoked, there would be less incentive for the industry to violate the law — a notion of which the judge appeared skeptical. Although the mainstream press has ignored the judge’s skeptical comments in its coverage of the “controversy” that has since erupted, one observer who covered just about every day of the trial did voice similar concerns. While Gene Borio runs a notably anti-tobacco Web site, www.tobacco.org, he called it as he saw it, frequently criticizing the DOJ lawyers and praising the judge for her patience and perseverance. Like Judge Kessler, he kept wondering aloud, so to speak, when the DOJ would come up with a coherent legal rationale for a cessation program that would satisfy the appeals court’s standard. A second problem overlooked by the mainstream press is how the government ever came up with $130 billion as the cost for a national smoking cessation program. The government’s witness on this issue was Dr. Fiore, a highly credentialed medical expert. But Fiore is no economist or accountant, and he could not defend such astronomical figures. As Borio stated in his May 18 blog, the cross-examination of Fiore “seemed to establish that there was very little science-based evidence for many of the figures on which [Fiore] based the utilization and cost of his National Action Plan for smoking cessation.” Indeed, just before Fiore testified, the government was forced to produce an internal document from the Office of Management and Budget — which does have expertise in costing out such programs — showing that the program could be funded for a mere $250 million per year. That document was used to cross-examine Fiore, but gets no mention in press accounts about the trial. The defendants took further aim at the cessation program in their part of the remedies phase, and Judge Kessler again asked questions showing deep skepticism of both the rationale and cost basis for the program. In short, going into closing arguments it was crystal clear to anyone who had been sitting in the courtroom for the preceding few weeks that the government’s remedies were in big trouble. It should come as no surprise that the DOJ had internal discussions about what to do, and it should be no surprise that senior officials were involved in those discussions. The real question is “What took so long?” The judge had signaled this train wreck before the DOJ even started its remedies case. No doubt, some members of the trial team thought it best to simply stick to the $130 billion program, lest they show “weakness.” But that would have left Judge Kessler in a bad position. Others — particularly those not involved in the day-to-day court activities and not vested in the weak testimony supporting $130 billion — might have been in a better position to argue for a change in course. Ultimately, the course change prevailed: In closing, the government “stunned” a packed courtroom by suddenly announcing that it would seek funding of only $2 billion per year for five years, with the possibility of a five-year extension, for a maximum of $20 billion. To be sure, the DOJ handled this poorly — the judge should not have heard for the first time in closing arguments that the biggest remedy was changing. Instead, the DOJ lawyers should have found a way to signal ahead of time: “We’ve been listening to the court’s questions, and in closing we will be making some changes that squarely address your concerns.” A SKEPTICAL JUDGE Recent press coverage of charges that DOJ officials tried to interfere with the testimony of two witnesses has also failed to lay out all the key facts. On June 9, The Washington Post reported that one of the government’s remedies witnesses, Matthew Myers, who heads the anti-tobacco Campaign for Tobacco Free Kids, had been asked to scale back his proposed testimony at the request of senior DOJ officials. Myers says he refused to accede to this request. What the Post and other news organizations failed to report, however, is Judge Kessler’s reaction to Myers’ testimony. An unusual feature of the trial was that each witness submitted direct testimony in writing several days before taking the stand to be cross-examined. Kessler would read the written testimony and deal with any objections to its admission. Over many objections, she admitted almost all testimony. But Myers was a different case. After reviewing his written testimony, Judge Kessler called it a “political speech” and granted a defense motion to strike a huge portion of Myers’ offering. Could it be that senior DOJ lawyers, reading Myers’ testimony before it was filed, had the same visceral reaction, and sought to stave off the embarrassment of having his testimony stricken? On June 20, the Post reported that another remedies witness, Dr. Max Bazerman of the University of Rochester, also says that DOJ officials sought to change his testimony. Yet the story did not point out that when faced with objections to Bazerman’s testimony, Judge Kessler declared it “troubling on many grounds.” Ultimately, the judge denied a defense motion to strike Bazerman’s testimony for failing to meet the Daubert standard for scientific testimony, but she left no doubt that she had lingering concerns. The judge also asked that the DOJ specifically address in its post-trial briefing the principal remedy advocated by Bazerman, which was to appoint “monitors” who would then recommend to the court whether to remove senior tobacco executives. The court was skeptical of the legal basis for this remedy, and for good reason. The DOJ cited no prior case giving court-appointed monitors such authority. At a minimum, significant additional fact-finding hearings would be needed before any executive could be removed. Thus, once again, it could simply be that senior lawyers at the DOJ were trying their best to head off the very problems with Bazerman’s testimony that the court immediately pounced upon, rather than trying to weaken his testimony as a political payoff to the tobacco industry. Most recently, on July 18, the DOJ asked the Supreme Court to hear a challenge to the D.C. Circuit’s ruling on the disgorgement issue. An Associated Press story portrayed this move as a flip-flop in response to the “intense criticism” of the DOJ for slashing its smoking cessation remedy. But the DOJ has never wavered in its efforts — both at trial and on appeal — to impose the disgorgement penalty. Finally, there is the matter of the various unnamed lawyers associated with the DOJ trial team who leaked information to the press. They have done a profound disservice to their own case by talking out of school and suggesting there is dissension in their ranks. Any one of them could have gone to the DOJ Office of Professional Responsibility or the inspector general if they truly thought there had been political meddling. But going to the press only raises serious questions about their motives. By the same token, DOJ Civil Division chief Robert McCallum, who has been singled out in the press as a source of “interference,” should have known better than to get involved. As reported in the press, McCallum was formerly a partner at a law firm that did work for defendant R.J. Reynolds. While McCallum says he was cleared by the professional responsibility gurus to participate, he should have known his involvement would give the wrong appearance and become a lightning rod if things went awry. Now, of course, the fire is spreading. Politicians are calling for an investigation; interest groups are howling; and the press, which paid so little attention to the case for so long, finally has itself a story, albeit one of dubious lineage.
Kenneth N. Bass represented the Brown & Williamson Tobacco Corp. in the federal government’s tobacco trial. Following trial, he left Kirkland & Ellis, where he had been a litigator for 21 years, to pursue a new career in writing.

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