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A federal judge ruled Thursday that the nation’s top cigarette makers violated racketeering laws, deceiving the public for years about the health hazards of smoking, but said she couldn’t order them to pay the billions of dollars the government had sought. Judge Gladys Kessler of the U.S. District Court for the District of Columbia did order the companies to publish in newspapers and on their Web sites “corrective statements” on the adverse health effects and addictiveness of smoking and nicotine. She also ordered tobacco companies to stop labeling cigarettes as “low tar,” “light,” “ultra light” or “mild,” since such cigarettes have been found to be no safer than others because of how people smoke them. In her ruling, the judge said, “Over the course of more than 50 years, defendants lied, misrepresented and deceived the American public, including smokers and the young people they avidly sought as ‘replacement smokers,’ about the devastating health effects of smoking and environmental tobacco smoke (second-hand smoke).” Kessler said that adoption of a national stop-smoking program, as sought by the government, “would unquestionably serve the public interest” but that she was barred by an appeals court ruling that said remedies must be forward-looking and not penalties for past actions. The government had asked the judge to make the companies pay $10 billion for smoking cessation programs, though the Justice Department’s own expert said $130 billion was needed. That reduction in recommended remedies led to accusations that Robert McCallum, an associate attorney general appointed by President Bush, had tried to weaken the case. However, an internal Justice Department investigation cleared him of wrongdoing, saying he was supporting a figure he thought could be sustained on appeal. McCallum currently serves as U.S. ambassador to Australia. Kessler’s decision came nearly a decade after the states reached legal settlements with the industry worth $246 billion and aimed at recovering health care costs. Those settlements imposed some restrictions on the industry, such as banning ads on billboards and public transportation. In the federal case, tobacco companies had denied committing fraud and had said changes in how cigarettes are sold now make it impossible for them to act fraudulently in the future. Mark Smith, a spokesman for R.J. Reynolds Tobacco Co., said company officials were “gratified that the court did not award unjustified and extraordinarily expensive monetary penalties.” At the same time, Smith said, the company was disappointed by Kessler’s finding that the companies had conspired to violate federal law and deceive consumers. He said company lawyers would analyze the decision and decide a next course of action. The Justice Department, which filed the lawsuit, expressed disappointment in Kessler’s decision not to impose financial penalties against cigarette makers. “Nevertheless, we are hopeful that the remedies that were imposed by the court can have a significant, positive impact on the health of the American public,” the department said. Sharon Eubanks, who recently stepped down as the head of the government’s tobacco team said, “We won. It’s clear the government won. This is the first time they’ve been found to violate the racketeering statute. For crying out loud, that’s significant. They’re racketeers.” The tobacco companies — except for one defendant, Liggett Group Inc.– were ordered to pay the government’s cost for pursuing the lawsuit. The government’s costs, according to the most recent Justice Department estimate, were over $140 million. The suit was first filed in 1999 under the Clinton administration. The Bush administration pursued it after receiving early criticism for openly discussing the case’s perceived weaknesses and attempting unsuccessfully to settle it. A separate court issued an interim ruling in the case last year, finding that civil racketeering laws did not permit the government to seek $280 billion from the companies for money they allegedly earned over many years through fraud. During the trial, Kessler heard accusations that the companies established a “gentleman’s agreement” in which they agreed not to compete over whose products were the least hazardous to smokers. That was to ensure they didn’t have to publicly address the harm caused by smoking, government lawyers said. Tobacco lawyers denied the contention. The defendants in the federal lawsuit were: Philip Morris USA Inc. and its parent, Altria Group Inc.; R.J. Reynolds Tobacco Co.; Brown & Williamson Tobacco Co.; British American Tobacco Ltd.; Lorillard Tobacco Co.; Liggett Group Inc.; Counsel for Tobacco Research-U.S.A.; and the now-defunct Tobacco Institute. The only cigarette maker excluded from Kessler’s ruling was Liggett. Copyright 2006 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

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