Judge Fines Cigarette Maker

A federal judge fined a British tobacco company $250,000 Monday for “egregious lack of candor” in violating an order in the Justice Department’s suit against the cigarette industry.

The fine imposed by U.S. District Judge Gladys Kessler relates to British American Tobacco’s continuing efforts to keep a potentially damaging memo out of the federal government’s racketeering suit against cigarette makers.

The company acknowledged last month that it falsely claimed an executive was able to answer questions from government lawyers about parts of the memo that had been publicly revealed, Kessler said. The judge had earlier ordered British American Tobacco to make available an executive who could talk about the memo.

Justice Department lawyers have been seeking the 1990 memo for two years, believing it could strengthen their argument that tobacco companies committed fraud by lying about the dangers of smoking and hiding that information from the public.

The memo by London-based lawyer Andrew Foyle advises an Australian subsidiary of the company on whether it should keep or destroy internal paperwork in light of increasing litigation.

Government lawyers haven’t seen the sealed Foyle memo but know what it concerns because an Australian appeals court decision two years ago quoted it.

Kessler ordered the memo released. The U.S. Court of Appeals for the District of Columbia Circuit said she erred, but allowed the government to continue efforts to obtain it.

“Our document retention policy has always complied with all laws,” British American Tobacco spokeswoman Teresa La Thangue said, noting the appeals court sided with the tobacco company.