Witness: Tobacco Firms Hid Risks

Bennett LeBow, chief executive of Liggett Group parent Vector Group Ltd., testified Monday that he knew smoking was harmful and addictive and that tobacco companies intentionally hid information about the health risks of smoking.

Internal documents LeBow saw in 1996 showed that cigarette makers knew smoking caused lung cancer at a time when they weren’t publicly acknowledging it and that they tried to get kids hooked on smoking, LeBow said in a deposition submitted in the Justice Department’s racketeering suit against U.S. tobacco companies. On the witness stand Monday, LeBow affirmed his earlier testimony.

LeBow said he “concluded that certain U.S. tobacco companies, not including Liggett, had been targeting the sale of tobacco products to those under 21 years of age, including those under 18 years of age,” according to his deposition.

Testimony resumed in the case Monday after a Washington appeals court ruled Friday that cigarette makers, including Altria Group Inc., couldn’t be forced to forfeit $280 billion in past profits, as the U.S. government had sought. The court said the racketeering law was aimed at preventing future violations and didn’t allow the U.S. to seek recovery of alleged “prior ill-gotten gains.”

Despite the victory for the tobacco industry last week, the Justice Department said it would continue pursuing its claims at the trial in Washington, where government lawyers are asking U.S. District Judge Gladys Kessler to order changes in industry marketing practices. In court Monday no mention was made of the appeals court ruling.

LeBow became a pariah in 1996 when he broke with the tobacco industry and Liggett became the first company to settle a health-related smoking suit. Liggett later turned over documents that were damaging to the industry during negotiations with state authorities. In 1998, 46 states reached a $206-billion settlement with the tobacco industry.

The government claims the tobacco industry engaged in a 50-year conspiracy to mislead the public about the dangers of smoking, in violation of the federal Racketeer Influenced and Corrupt Organizations Act, or RICO.

The government had sought to recover federal healthcare funds used to treat sick smokers. In 2000, Kessler, who will decide the case without a jury, threw out the government’s cost-recovery claims, allowing the RICO suit to proceed. In May, the judge denied the companies’ request that she block the government’s demand for the $280 billion.

In addition to Altria’s Philip Morris USA, defendants include Reynolds American Inc.’s R.J. Reynolds Tobacco and Brown & Williamson Tobacco Corp. subsidiaries, Loews Corp.’s Lorillard Tobacco Co., a unit of British American Tobacco and Vector’s Liggett Group.