In an extraordinary admission, one of the nation's major cigarettemakers acknowledged Thursday that tobacco is addictive and causes cancer and said tobacco companies had for decades consciously marketed their products to children as young as 14.
Those concessions by the company, the Liggett Group Inc., the smallest of the country's five leading cigarettemakers, are central provisions in its agreement to settle lawsuits filed by 22 states that accuse the industry of hiding knowledge of the adverse health effects of tobacco. The suits seek compensation from the industry for the estimated $6-billion in annual state health care costs tied to smoking.
Liggett's public confession, announced at a news conference here called by the attorneys general of the 22 states, was the first in which any American tobacco marketer had ever admitted knowledge of the addictive nature of nicotine or drawn a direct causal link between smoking and cancer. It was also the first in which a cigarettemaker had ever acknowledged a conscious industry strategy of luring teenagers into a lifelong cigarette habit.
Under its agreement with the states, the company, whose cigarette brands include Chesterfield, L&M and Lark, will also turn over thousands of pages of internal documents that the attorneys general believe will prove their charge that the industry has carried out a willful 30-year conspiracy of silence and deceit.
And, for the first time ever, a major cigarettemaker will place a warning label on all its brands stating that smoking is addictive. That warning will be in addition to the one, long required by the government, that alerts consumers to smoking's health hazards.
Liggett's settlement agreement, however, leaves the company free to keep making and selling cigarettes.
Vice President Al Gore called the settlement "a historic victory for the American people" and said Liggett had "publicly acknowledged what we have all known for years" about the behavior of the tobacco industry and the effects of smoking.
But the company's four bigger rivals accused Bennett LeBow, chairman of Liggett's parent, Brooke Group Ltd., of reversing earlier sworn testimony in court on whether tobacco was addictive and accused him of legal "shenanigans" motivated by self-interest.
Gov. Lawton Chiles called LeBow's statement "one of the most explosive documents ever produced in the fight against tobacco." LeBow could well become a witness in Florida's $1.4-billion lawsuit against other tobacco companies, Chiles said.
LeBow first breached the solid wall of tobacco industry refusal to negotiate legal settlements a year ago, when he reached accord with five of the 22 states that struck a far broader agreement with him Thursday, including Florida. He said Thursday that the tobacco companies' longstanding health and marketing claims were false.
"We are pleased to have reached these historic settlements that will protect Liggett from virtually all smoking-related claims," LeBow said. "We believe that peaceful coexistence on reasonable terms makes far more sense for the tobacco industry than continuing denial of the legal and political reality of today's situation."
The attorneys general applauded LeBow's concession and said his agreement to waive the confidentiality of company documents and discussions with lawyers would allow them to pierce industry secrecy.
"Someone is finally telling the truth," said Grant Woods, attorney general of Arizona. "Using their own documents interpreted by their own people," Woods said, "we will break the back of this conspiracy of lies and deception by the tobacco companies."
The documents that Liggett has agreed to turn over to the states chronicle not only the company's own research results and marketing plans but also confidential discussions involving the four other big tobacco companies.
Those competitors quickly went to court Thursday in North Carolina, where Liggett is based, to block the release of the documents,which include notes of the Committee of Counsel, a group of in-house tobacco company lawyers that coordinates industry strategy under the auspices of the Tobacco Institute, a trade association.
Judge William Freeman of Forsythe County Superior Court in Winston-Salem, N.C., issued a temporary restraining order that limits disclosure of proprietary information about the four companies: Philip Morris, R.J. Reynolds, Lorillard and Brown & Williamson.
But many of the records belonging solely to Liggett are being turned over to state lawyers. Florida Attorney General Bob Butterworth said the records confirm how vital information was kept from the public and how tobacco companies targeted young Americans.
Under another term of the agreement announced Thursday, Liggett will pay 25 percent of its pretax profits for the next 25 years to the 22 states. But the company has been struggling for several years, and the payments are not expected to yield much revenue.
The Liggett settlement, which was negotiated over the past several months with the 22 attorneys general and does not require court approval, includes the states of Arizona, Connecticut, Hawaii, Illinois, Iowa, Kansas, Maryland, Michigan, Minnesota, New Jersey, New York, Ohio, Oklahoma, Texas, Utah, Washington and Wisconsin.
The deal expands upon Liggett's previously announced agreement with Florida, Louisiana, Massachusetts, Mississippi and West Virginia. That deal, reached last year, provided for the company to pay these five states $1-million immediately, $440,000 a year over the next nine years, and 2.5 percent of annual pretax income over the next quarter-century.
Rep. Henry Waxman of California said he was gratified by Liggett's admission and it proved that top industry executives lied before his subcommittee three years ago.
The Justice Department has been investigating whether the tobacco executives committed perjury. Federal prosecutors said they would examine the documents as possible evidence of fraud and false statements to Congress.
Some state officials at Thursday's news conference likened Liggett's action to a low-level drug dealer's pleading to lesser charges in exchange for testimony against major traffickers.
"We got the least important culprit to turn state's evidence and give testimony against the really bad guys," said Michigan Attorney General Frank Kelley. "If by giving Liggett some concessions we can obtain incriminating documents, it will aid us immeasurably in the lawsuits we are going to be trying."
_ Times staff writer Lucy Morgan contributed to this report.