Tobacco industry escapes huge penalty

BBond

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Oct 3, 2004
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In a nation where the Supreme Court just ruled medical marijuana illegal, the Bush administration just handed the tobacco industry $120 billion dollars that should have been used to help addicts quit smoking cigarettes.

What's wrong with this picture?

Tobacco industry escapes huge penalty

U.S. seeks $10 billion instead of $130 billion

By Carol D. Leonnig
The Washington Post
Updated: 12:06 a.m. ET June 8, 2005


After eight months of courtroom argument, Justice Department lawyers abruptly upset a landmark civil racketeering case against the tobacco industry yesterday by asking for less than 8 percent of the expected penalty.

As he concluded closing arguments in the six-year-old lawsuit, Justice Department lawyer Stephen D. Brody shocked tobacco company representatives and anti-tobacco activists by announcing that the government will not seek the $130 billion that a government expert had testified was necessary to fund smoking-cessation programs. Instead, Brody said, the Justice Department will ask tobacco companies to pay $10 billion over five years to help millions of Americans quit smoking.

Before it was cut, the cessation program was the most significant financial penalty still available to the government as part of its litigation, which had been the largest civil racketeering and conspiracy case in U.S. history. The government contended that six tobacco companies engaged in a 50-year conspiracy to defraud and addict smokers and then conceal the dangers of cigarettes.

"We were very surprised," said Dan Webb, lawyer for Altria Group's Philip Morris USA and the coordinating attorney in the case. "They've gone down from $130 billion to $10 billion with absolutely no explanation. It's clear the government hasn't thought through what it's doing."

The Justice Department offered little explanation for the figure. Associate Attorney General Robert D. McCallum Jr. and members of the trial team declined to answer questions as the court session ended. In 2001, then-Attorney General John D. Ashcroft tried to settle or shelve the government's racketeering case against the industry before a public outcry forced its revival.

"It feels like a political decision to take into consideration the tobacco's company's financial interest rather than health interests of 45 million addicted smokers," said William V. Corr, director of the Campaign for Tobacco-Free Kids. "The government proved its case, but the levels of funding are a shadow of the cessation treatment program that the government's own expert witness recommended."

Arguments at Justice
Sources and government officials close to the case said the trial lawyers wanted to request $130 billion for smoking-cessation programs but were pressured by leaders in the attorney general's office, particularly McCallum, to make the cut. Arguments within the Justice Department continued behind the scenes through yesterday morning, according to the sources, who spoke on the condition of anonymity because of the controversy over the matter.

When the case began in 2004, the government sought to force the tobacco industry to pay $280 billion in allegedly ill-gotten profits. But in February, a federal appeals court ruled that the administration could not seek that penalty.

Michael Fiore, the government expert who recommended $130 billion for cessation programs, is a medical professor and director of a tobacco research center who chaired the subcommittee on tobacco cessation in the Department of Health and Human Services' Interagency Committee on Smoking and Health.

His testimony was widely considered to represent the sum the government was seeking for a cessation program, though Justice Department lawyers had made no formal demand until yesterday.

The strength of the government's case hinged on a large collection of internal tobacco company documents, many of which were never before made public. The government began its case in September by showing on an oversize projection screen the written memos of tobacco executives and scientists as they described their plans to keep customers in the dark about whether their habit was addictive or dangerous and to encourage young people to smoke.

Facing those same internal documents in another suit, the tobacco industry in 1998 agreed to pay $246 billion to settle a lawsuit filed by states to recover their costs for the medical treatment of smokers.

Justice Department spokeswoman Cynthia Magnuson said the department could ask the court to force the industry to pay more in future years for cessation programs, which include a staffed help line for smokers, treatment programs and possibly free medications. She suggested the penalty was designed to comply with the recent appeals court ruling that such penalties could not be used to punish past fraud. Sources close to the case said the cessation program is either a valid penalty or it's not; the dollar figure should not change that.

?A forward-looking remedy?
"This proposal has been designed to be a forward-looking remedy to prevent and restrain future wrongful conduct consistent with the recent Circuit Court opinion in this case," she said.

U.S. District Judge Gladys Kessler, who is presiding over the case, is expected to decide in the next few months whether the government proved its case of an industry-wide conspiracy and whether to order any penalties against the companies. Among the other remedies the government is still seeking are an industry-funded anti-smoking educational campaign and a court injunction to stop the companies from targeting youths in their marketing.

The government also wants the judge to appoint a court monitor to watch over industry practices and ensure that tobacco companies do not commit fraud in the future. Kessler has repeatedly expressed concern about how such proposals would work.

Defendants in the case include Philip Morris USA; R.J. Reynolds Tobacco Co. and Brown & Williamson, which have merged to form Reynolds American Inc.; British American Tobacco; the Lorillard Tobacco unit of Loew's Corp.; and Vector Group Ltd.'s Liggett Group Inc. They were to begin their closing arguments today.

Anti-smoking advocates assailed the decision as a self-inflicted blow that would help the tobacco companies' bottom line and miss a well-earned chance to help American smokers.

William B. Schultz, a former Justice Department official who oversaw the lawsuit under the Clinton administration, said that "it's disappointing, to say the least, that at the final stages of this litigation they have pulled their punches in such a significant way. This is the loss of a significant opportunity to advance public health. Smoking is the number one preventable disease. It kills 400,000 people a year."

Lead government attorney Sharon Eubanks had summed up the trial early yesterday, saying the government had proved the industry engaged in a "decades-long pattern of . . . misrepresentations, half-truths, deceptions and lies that continue to this day."
 

Stunt

Diamond Member
Jul 17, 2002
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Fast food is more costly than tabacco related illness. What's your take on cheap, unhealthy fast food "restaurants", I'm always interested to hear people's view on this. Because using harmful goods is an individual choice, and with private healthcare in the US, people are more responsible for their actions.
 

zendari

Banned
May 27, 2005
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So tobacco companies are supposed to now fund antismoking campaigns? :roll:

Please. They put a warning on the fvcking package, that's all anyone should need. If you choose to smoke today you deserve what is coming.
 

BBond

Diamond Member
Oct 3, 2004
8,363
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Originally posted by: Stunt
Fast food is more costly than tabacco related illness. What's your take on cheap, unhealthy fast food "restaurants", I'm always interested to hear people's view on this. Because using harmful goods is an individual choice, and with private healthcare in the US, people are more responsible for their actions.

I eat fast food about once every three months. AFAIK fast food establishments haven't been pumping up their products with addictive substances to make sure we come back for more.

Also, please read the articles before commenting on them. If you did read it, it appears you missed this:

Anti-smoking advocates assailed the decision as a self-inflicted blow that would help the tobacco companies' bottom line and miss a well-earned chance to help American smokers.

William B. Schultz, a former Justice Department official who oversaw the lawsuit under the Clinton administration, said that "it's disappointing, to say the least, that at the final stages of this litigation they have pulled their punches in such a significant way. This is the loss of a significant opportunity to advance public health. Smoking is the number one preventable disease. It kills 400,000 people a year."

Lead government attorney Sharon Eubanks had summed up the trial early yesterday, saying the government had proved the industry engaged in a "decades-long pattern of . . . misrepresentations, half-truths, deceptions and lies that continue to this day."
 

BBond

Diamond Member
Oct 3, 2004
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0
Doesn't anyone question why the administration would build a case against the tobacco industry then let them off the hook?

If you or I were dealing addictive drugs for decades and went so far as to increase the addictive content do you think the government would let us off the hook?

And what about the hypocrisy of their stance on medical marijuana while giving tacit endorsement to the tobacco industry for selling a defective and dangerous addicting product for centuries?
 

Genx87

Lifer
Apr 8, 2002
41,091
513
126
I believe it is illegal to bankrupct a corporation from a lawsuit.

Besides do you think the tobacco industry has 120 billion in assets available to pay?
If they dont then dont bother wasting time chasing money that isnt there.

 

zendari

Banned
May 27, 2005
6,558
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Originally posted by: BBond
And what about the hypocrisy of their stance on medical marijuana while giving tacit endorsement to the tobacco industry for selling a defective and dangerous addicting product for centuries?


The same could be said about the general liberal notion that people should be free to use drugs such as marijuana, then screaming at the tobacco industry for selling them.
 

Stunt

Diamond Member
Jul 17, 2002
9,717
2
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Originally posted by: BBond
Originally posted by: Stunt
Fast food is more costly than tabacco related illness. What's your take on cheap, unhealthy fast food "restaurants", I'm always interested to hear people's view on this. Because using harmful goods is an individual choice, and with private healthcare in the US, people are more responsible for their actions.

I eat fast food about once every three months. AFAIK fast food establishments haven't been pumping up their products with addictive substances to make sure we come back for more.

Also, please read the articles before commenting on them. If you did read it, it appears you missed this:

Anti-smoking advocates assailed the decision as a self-inflicted blow that would help the tobacco companies' bottom line and miss a well-earned chance to help American smokers.

William B. Schultz, a former Justice Department official who oversaw the lawsuit under the Clinton administration, said that "it's disappointing, to say the least, that at the final stages of this litigation they have pulled their punches in such a significant way. This is the loss of a significant opportunity to advance public health. Smoking is the number one preventable disease. It kills 400,000 people a year."

Lead government attorney Sharon Eubanks had summed up the trial early yesterday, saying the government had proved the industry engaged in a "decades-long pattern of . . . misrepresentations, half-truths, deceptions and lies that continue to this day."

You DON'T think fast food is addictive?!...wow...how bout all the medical experts who say obesity is a disease? How bout all the people with cravings, skyrocketing obesity in the population, and huge revenues of fast food companies?

I agree that tabacco companies have been ruthless, but in principle the industry as a whole is getting too much focus. Smoking is declining, obesity is skyrocketing.
 
Sep 12, 2004
16,852
59
86
Originally posted by: BBond
Originally posted by: Stunt
Fast food is more costly than tabacco related illness. What's your take on cheap, unhealthy fast food "restaurants", I'm always interested to hear people's view on this. Because using harmful goods is an individual choice, and with private healthcare in the US, people are more responsible for their actions.

I eat fast food about once every three months. AFAIK fast food establishments haven't been pumping up their products with addictive substances to make sure we come back for more.
That's not exactly true. Fast food companies, at least the big ones, have done studies on how fat content affects the taste of their products. They could make all their products healthier by lowering fat content within those of medical recommendations but keep them packed with fat anyway because that's what makes their food taste good and keep the customers coming back. Sure most offer-low fat alternatives on their menus. Cigarette companies offer low-tar and nicotine cigarettes too. Somehow that doesn't please the anti-smoking crew though.
 

BBond

Diamond Member
Oct 3, 2004
8,363
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0
Originally posted by: Stunt
Originally posted by: BBond
Originally posted by: Stunt
Fast food is more costly than tabacco related illness. What's your take on cheap, unhealthy fast food "restaurants", I'm always interested to hear people's view on this. Because using harmful goods is an individual choice, and with private healthcare in the US, people are more responsible for their actions.

I eat fast food about once every three months. AFAIK fast food establishments haven't been pumping up their products with addictive substances to make sure we come back for more.

Also, please read the articles before commenting on them. If you did read it, it appears you missed this:

Anti-smoking advocates assailed the decision as a self-inflicted blow that would help the tobacco companies' bottom line and miss a well-earned chance to help American smokers.

William B. Schultz, a former Justice Department official who oversaw the lawsuit under the Clinton administration, said that "it's disappointing, to say the least, that at the final stages of this litigation they have pulled their punches in such a significant way. This is the loss of a significant opportunity to advance public health. Smoking is the number one preventable disease. It kills 400,000 people a year."

Lead government attorney Sharon Eubanks had summed up the trial early yesterday, saying the government had proved the industry engaged in a "decades-long pattern of . . . misrepresentations, half-truths, deceptions and lies that continue to this day."

You DON'T think fast food is addictive?!...wow...how bout all the medical experts who say obesity is a disease? How bout all the people with cravings, skyrocketing obesity in the population, and huge revenues of fast food companies?

I agree that tabacco companies have been ruthless, but in principle the industry as a whole is getting too much focus. Smoking is declining, obesity is skyrocketing.

AFAIK McDonald's et al don't put nicotine in their food. To say that food is addictive is to say that oxygen is addictive.

The tobacco industry knowingly sold and addictive substance for many years knowing full well the harmful effects and even increasing the level of nicotine to keep people hooked.

PS Zenari, "liberals" must be around seventy two percent of the U.S. population because the last poll I read said that was the percentage of Americans who supported medical marijuana. No one is asking that marijuana be made legal for recreational use. Only medical use as prescribed by a doctor.
 

Amplifier

Banned
Dec 25, 2004
3,143
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Originally posted by: bthorny
This is just another example of Bush admin..... kissing the ass of big business...


No, more like stealing from the tobacco companies under the guild of morality....

Seriously, why aren't they attacking McDonalds. Those fat fvck faces I see eating there bother me way more than a smoker.
 

BBond

Diamond Member
Oct 3, 2004
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I can't believe no one is commenting on the obvious connection between the tobacco lobby and the Bush administration. If the tobacco industry doesn't have $130 billion to help treat the addicts they created it's because they've given it all to government officials who continue to let big tobacco off the hook.
 

Genx87

Lifer
Apr 8, 2002
41,091
513
126
Originally posted by: Amplifier
Originally posted by: bthorny
This is just another example of Bush admin..... kissing the ass of big business...


No, more like stealing from the tobacco companies under the guild of morality....

Seriously, why aren't they attacking McDonalds. Those fat fvck faces I see eating there bother me way more than a smoker.

They have tried and eventually you cant expect them to come up with a loophole in some law that will allow them to do it.

 

BBond

Diamond Member
Oct 3, 2004
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Originally posted by: TastesLikeChicken
Originally posted by: BBond
Originally posted by: Stunt
Fast food is more costly than tabacco related illness. What's your take on cheap, unhealthy fast food "restaurants", I'm always interested to hear people's view on this. Because using harmful goods is an individual choice, and with private healthcare in the US, people are more responsible for their actions.

I eat fast food about once every three months. AFAIK fast food establishments haven't been pumping up their products with addictive substances to make sure we come back for more.
That's not exactly true. Fast food companies, at least the big ones, have done studies on how fat content affects the taste of their products. They could make all their products healthier by lowering fat content within those of medical recommendations but keep them packed with fat anyway because that's what makes their food taste good and keep the customers coming back. Sure most offer-low fat alternatives on their menus. Cigarette companies offer low-tar and nicotine cigarettes too. Somehow that doesn't please the anti-smoking crew though.

d00d

Tastes good does not equal addiction. It tastes good.

I feel good when I breathe. If I have to stop I fell very bad very quickly. The more oxygen in the air the better it makes me feel. The less oxygen in the air the worse I feel.

I'm an oxygen addict.

You don't need to smoke to live but you do need to breathe and eat. Increasing nicotine content while knowing full well the negative health affects of smoking criminal. Making food taste good isn't. At least I hope not or we'll all be eating shredded wheat.
 

rahvin

Elite Member
Oct 10, 1999
8,475
1
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Originally posted by: BBond
In a nation where the Supreme Court just ruled medical marijuana illegal, the Bush administration just handed the tobacco industry $120 billion dollars that should have been used to help addicts quit smoking cigarettes.

What's wrong with this picture?

Maybe that the combined worth of all the tabacco companies is around 10billion and that's at values on the books, broken up and sold they would draw a LOT less money.
 

zendari

Banned
May 27, 2005
6,558
0
0
Originally posted by: BBond
PS Zenari, "liberals" must be around seventy two percent of the U.S. population because the last poll I read said that was the percentage of Americans who supported medical marijuana. No one is asking that marijuana be made legal for recreational use. Only medical use as prescribed by a doctor.

Actually, a lot of people are asking for it to be so.
 

BBond

Diamond Member
Oct 3, 2004
8,363
0
0
Originally posted by: zendari
Originally posted by: BBond
PS Zenari, "liberals" must be around seventy two percent of the U.S. population because the last poll I read said that was the percentage of Americans who supported medical marijuana. No one is asking that marijuana be made legal for recreational use. Only medical use as prescribed by a doctor.

Actually, a lot of people are asking for it to be so.

What is "a lot"?

I read polls that said seventy two percent of Americans support legal medical marijuana.
 

Stunt

Diamond Member
Jul 17, 2002
9,717
2
0
Originally posted by: BBond
Originally posted by: TastesLikeChicken
Originally posted by: BBond
Originally posted by: Stunt
Fast food is more costly than tabacco related illness. What's your take on cheap, unhealthy fast food "restaurants", I'm always interested to hear people's view on this. Because using harmful goods is an individual choice, and with private healthcare in the US, people are more responsible for their actions.

I eat fast food about once every three months. AFAIK fast food establishments haven't been pumping up their products with addictive substances to make sure we come back for more.
That's not exactly true. Fast food companies, at least the big ones, have done studies on how fat content affects the taste of their products. They could make all their products healthier by lowering fat content within those of medical recommendations but keep them packed with fat anyway because that's what makes their food taste good and keep the customers coming back. Sure most offer-low fat alternatives on their menus. Cigarette companies offer low-tar and nicotine cigarettes too. Somehow that doesn't please the anti-smoking crew though.

d00d

Tastes good does not equal addiction. It tastes good.

I feel good when I breathe. If I have to stop I fell very bad very quickly. The more oxygen in the air the better it makes me feel. The less oxygen in the air the worse I feel.

I'm an oxygen addict.

You don't need to smoke to live but you do need to breathe and eat. Increasing nicotine content while knowing full well the negative health affects of smoking criminal. Making food taste good isn't. At least I hope not or we'll all be eating shredded wheat.
BBond, ever heard of a nymphomaniac?...People who are addicted to sex...no, not because of niccotine, but because it feels good. People are addicted to countless things. Fast food and Smoking are two major ones, fast food is far more widespread.

Should birth control companies be obligated to pay for 1%-3% of all abortion costs/cost of raising a kid becasue they have known failure rates of these percentages?
 

BBond

Diamond Member
Oct 3, 2004
8,363
0
0
Originally posted by: Stunt

BBond, ever heard of a nympho?...People who are addicted to sex...no, not because of niccotine, but because it feels good. People are addicted to countless things. Fast food and Smoking are two major ones, fast food is far more widespread.

When you include an addictive substance in your product it is in another league. Don't you people understand that?
 

Stunt

Diamond Member
Jul 17, 2002
9,717
2
0
Originally posted by: BBond
Originally posted by: Stunt

BBond, ever heard of a nympho?...People who are addicted to sex...no, not because of niccotine, but because it feels good. People are addicted to countless things. Fast food and Smoking are two major ones, fast food is far more widespread.

When you include an addictive substance in your product it is in another league. Don't you people understand that?
How bout caffine?
Makes people drink more coke/pepsi/coffee...
Should we sue for all dentist fees?
 
Sep 12, 2004
16,852
59
86
Originally posted by: BBond
Originally posted by: TastesLikeChicken
Originally posted by: BBond
Originally posted by: Stunt
Fast food is more costly than tabacco related illness. What's your take on cheap, unhealthy fast food "restaurants", I'm always interested to hear people's view on this. Because using harmful goods is an individual choice, and with private healthcare in the US, people are more responsible for their actions.

I eat fast food about once every three months. AFAIK fast food establishments haven't been pumping up their products with addictive substances to make sure we come back for more.
That's not exactly true. Fast food companies, at least the big ones, have done studies on how fat content affects the taste of their products. They could make all their products healthier by lowering fat content within those of medical recommendations but keep them packed with fat anyway because that's what makes their food taste good and keep the customers coming back. Sure most offer-low fat alternatives on their menus. Cigarette companies offer low-tar and nicotine cigarettes too. Somehow that doesn't please the anti-smoking crew though.

d00d

Tastes good does not equal addiction. It tastes good.

I feel good when I breathe. If I have to stop I fell very bad very quickly. The more oxygen in the air the better it makes me feel. The less oxygen in the air the worse I feel.

I'm an oxygen addict.

You don't need to smoke to live but you do need to breathe and eat. Increasing nicotine content while knowing full well the negative health affects of smoking criminal. Making food taste good isn't. At least I hope not or we'll all be eating shredded wheat.
Maybe for some people "tastes good" does not equal addiction. For others tastes good mean overeating and severe obesity, a problem that is rampant in this country and is arguably a bigger problem and cost burden to society than smoking. Fat content is a big component of tastes good and McDonalds and others maintain their fat content at high levels to maintain the taste of their food. iow, they are doing something that is knowingly harmful to the public to make money off of them. Whether or not eating is necessary or not is inconsequential to that fact. You can eat without eating something that's potentially harmfull to you.

People don't get addicted to oxygen (actually, air, because most of what we breath is actually nitrogen, it's that oxygen is the usable component) because you can only use as much as your body needs since there's a natural regulatory system in the body to control it's intake. There's also no real pleasure response to excess oxygen intake, as opposed to eating or smoking. And, actually, excess oxygen intake can kill you. Try breathing pure oxygen for an extended period of time.
 

cKGunslinger

Lifer
Nov 29, 1999
16,408
57
91
Originally posted by: BBond
I can't believe no one is commenting on the obvious connection between the tobacco lobby and the Bush administration. If the tobacco industry doesn't have $130 billion to help treat the addicts they created it's because they've given it all to government officials who continue to let big tobacco off the hook.

Translation: "Dammit, I'm trying to get people on board to my little anti-Bush circle jerk, and they want to keep pointing out flaws in my argument or giving logical analogies to other industries that aren't under such fire."

What's that sound? Is conjur's "Waaahmbulance" on the way? :D
 

Vic

Elite Member
Jun 12, 2001
50,422
14,337
136
WTF should the tobacco companies pay for? The dangers of their product are widely known. As many other industries legally sell products widely known to be dangerous, I see no cause for liability.