Federal prosecutors charged Tuesday that the nation's tobacco companies colluded for half a century to addict Americans to nicotine in cigarettes that the industry knew caused cancer.
Opening the largest civil racketeering trial ever, Justice Department attorneys used the cigarette companies' internal documents to show how the industry set up sham research groups to counter medical evidence that smoking causes cancer and other diseases, even after industry scientists had secretly conceded the harmful effects on health.
Industry memos detailed how the companies were developing cigarettes to more effectively deliver addictive doses of nicotine even while industry executives publicly maintained there was no proof that nicotine was addictive, prosecutors said in opening arguments.
"Why did the defendants pursue this course of action?" asked U.S. Attorney Frank Marine. "Money, pure and simple."
The government is seeking a record $280-billion in "ill-gotten gains" the Justice Department maintains the tobacco industry earned through an ongoing fraud that has lasted more than 50 years.
The defendants in the case are the leading cigarette manufacturers and their representatives: 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 Tobacco Institute.
Attorneys for the tobacco companies will present their opening arguments today. But they are countering that industry practices did not constitute fraud.
"Fraud is, "I have a specific intention to mislead you or take money from you by deceiving you,' " Philip Morris USA attorney William Ohlemeyer said. "Fraud is a very high bar."
Opening a nonjury trial predicted to go on for six months, prosecutors outlined their case before U.S. District Judge Gladys Kessler.
Using a slide presentation to highlight the industry's internal documents, the prosecutors recapped the history of a "fraudulent enterprise" that was born at the Plaza Hotel in New York City in 1953.
At that meeting, the chief executives of the country's leading cigarette companies and officials of the Hill & Knowlton public relations firm developed a "unifying strategy" to "achieve their shared objectives through fraud," Marine said.
Prosecutors said the supposedly competitive companies cooperated to counter criticism of cigarettes as a health hazard.
They said the industry set up the Center for Tobacco Research, and later the Center for Indoor Air Research, as supposedly independent research arms, but the groups were really tools to thwart scientific findings about the harm of smoking and second-hand smoke. The industry also established the Tobacco Institute as a lobbying and public relations arm.
"The overriding purpose was to maximize defendants' profits through fraud," said Sharon Eubanks, director of the Justice Department's tobacco litigation trial team. The industry engaged in "a half-century campaign of deceptions, half-truths and flat-out lies."
The industry mantra was that the statistical inference did not prove that cigarette smoking caused cancer and other diseases _ even though internal documents indicated industry officials recognized the link, the prosecutors said.
In the past decade, the tobacco industry agreed to pay $246-billion to the states in a settlement of a lawsuit over the cost of smoking-related health care. That settlement included limits on advertising, marketing and lobbying.
Some observers say a $280-billion "disgorgement" of alleged "ill-gotten gains" would drive the tobacco industry into bankruptcy.