Lawyers Fought U.S. Move to Curb Tobacco Penalty
WASHINGTON, June 15 - Senior Justice Department officials overrode the objections of career lawyers running the government's tobacco racketeering trial and ordered them to reduce the penalties sought at the close of the nine-month trial by $120 billion, internal documents and interviews show.
The trial team argued that the move would be seen as politically motivated and legally groundless.
"We do not want politics to be perceived as the underlying motivation, and that is certainly a risk if we make adjustments in our remedies presentation that are not based on evidence," the two top lawyers for the trial team, Sharon Y. Eubanks and Stephen D. Brody, wrote in a memorandum on May 30 to Associate Attorney General Robert D. McCallum that was reviewed by The New York Times.
The two lawyers said the lower penalty recommendation ordered by Mr. McCallum would weaken the department's position in any possible settlement with the industry and "create an incentive for defendants to engage in future misconduct by making the misconduct profitable."
At the close of a major trial that dozens of Justice Department lawyers spent more than five years preparing, the department stunned a federal courtroom last week by reducing the penalties sought against the industry, from $130 billion to $10 billion, over accusations of fraud and racketeering.
... The newly disclosed documents make clear that the decision was made after weeks of tumult in the department and accusations from lawyers on the tobacco team that Mr. McCallum and other political appointees had effectively undermined their case. Mr. McCallum, No. 3 at the department, is a close friend of President Bush from their days as Skull & Bones members at Yale, and he was also a partner at an Atlanta law firm, Alston & Bird, that has done legal work for R.J. Reynolds Tobacco, part of Reynolds American, a defendant in the case.
"Everyone is asking, 'Why now?' " said a Justice Department employee involved in the case who insisted on anonymity for fear of retaliation. "Why would you throw the case down the toilet at the very last hour, after five years?"
Ultimately, Mr. McCallum overruled the objections from the trial team, and the documents and interviews suggest that his senior aides took the unusual step of writing parts of the closing argument that Ms. Eubanks delivered last week in federal court in seeking the reduction in penalties.
Officials who insisted on anonymity said the change on the penalties provoked such strong objections from the trial team that some lawyers threatened to quit. Department officials have now proposed that a lower-level lawyer who has outlined the reasons for reduced penalties take over crucial parts of the remainder of the trial.
... In saying the decision was politically motivated, critics have pointed not only to Mr. McCallum's role at a law firm tied to the industry, a role that a Justice Department ethics office ruled did not prevent him from overseeing the case, but also to the industry's political contributions to the Republican Party. The industry gave $2.7 million to Republicans last year and $938,000 to Democrats.
In their seven-page memorandum, Ms. Eubanks and Mr. Brody offered a point-by-point rebuttal to what they characterized as Mr. McCallum's "watered down approach." They said the higher penalty, as outlined by a health expert last month, was in keeping with the appellate court's "forward looking" approach and would help millions of people quit smoking in the next 25 years.
The trial team lawyers also suggested that resistance to the $130 billion plan by senior Justice Department officials grew out of "sticker shock" over the costs that the industry would pay for the stop-smoking program.
The lawyers also expressed some frustration that Mr. McCallum had already reached a preliminary decision to reduce the proposed penalty "without reviewing the evidence that supports our factual and legal arguments." They said "it is regrettable that no one would even review" their rationale "and tell us where it went wrong."
The memorandum also questioned the handling of some government witnesses who were asked to alter their written testimony to reflect the department's concerns.
One witness, Matthew Myers, president of the Campaign for Tobacco-Free Kids, said in an interview Wednesday that Ms. Eubanks called him last month, hours before his final written testimony was due to be filed, and told him that Mr. McCallum and other senior officials wanted him to eliminate part of the testimony. The part the department wanted to omit, Mr. Myers said, centered on antismoking steps that he believed were wrongly omitted from the tobacco settlement in 1997, including limits on advertising.
"Eubanks was the good trouper, and she didn't let on at all what she thought of the request" to omit part of his testimony, Mr. Myers said. "But I said: 'No, I won't change it. It is what it is.' "
In the end, the only change he agreed to was an additional line that he did not know the steps the department would seek in the current case. Mr. Myers said he remained troubled by the case.
"To have the lawyers work on a case this long," he said, "and then just have the department basically throw it out seems despicable to me."
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