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The Marketplace Report: Tobacco Suit Firestorm

ALEX CHADWICK, host:

Back now with DAY TO DAY. I'm Alex Chadwick.

There's a report today that the government's decision to significantly cut the penalties in a lawsuit against Big Tobacco companies was politically motivated. The New York Times has obtained a memo written by government attorneys that accuses a political appointee in the Justice Department of being the one to lessen the penalties against the tobacco industry, the proposed penalties. We're joined by "Marketplace's" John Dimsdale in Washington.

John, explain what's going on here, please?

JOHN DIMSDALE reporting:

Well, remember we talked last week about the closing arguments in this long-running trial of the government's accusations that tobacco companies conspired to cover up the dangers of smoking and marketed their products to minors.

CHADWICK: Yes.

DIMSDALE: The federal prosecutors surprised just about everyone last week when they slashed the penalty request from 130 billion to $10 billion. Now there was plenty of speculation at the time that the Justice Department was deciding to go easy on an industry that had contributed more than $2 1/2 million to Republicans last year. Now The New York Times has a memo that's written by career lawyers in the case that spells out the role played by their boss in the Justice Department, Associate Attorney General Robert McCallum. He's the one who made the call to cut the penalty against the tobacco companies. McCallum also appointed another lawyer who was more sympathetic to the lower penalty to prepare the final briefs in the case.

CHADWICK: So he is the person who did it, but he is in charge of the case, isn't he?

DIMSDALE: That's right. But it does raise some eyebrows. Before his appointment to the Justice Department by his good college friend, George Bush, McCallum was a partner in an Atlanta law firm that represented RJ Reynolds Tobacco, one of the defendants in the trial. That usually would be enough to disqualify a political appointee from influencing a case.

There are other connections between the administration and tobacco companies. For example, the attorney general's chief of staff represented Brown & Williamson Tobacco. All of this leaves a bad taste for anti-smoking activist like Matthew Myers.

Mr. MATTHEW MYERS (Activist): To have the political people overrule the career lawyers who tried the case and reduce the penalty to a level that will have no impact whatsoever, it simply is a green light to any corporate wrongdoer, `Do what you want and get away with it if you make enough political contributions.'

CHADWICK: John, last week, I know the Justice Department said there are good reasons for lowering this penalty. Has there been any response so far to this New York Times story today about political motivations?

DIMSDALE: There has. They don't deny the contents of the memo or that the associate attorney general, McCallum, had a role in the trial. But a spokesman says, you know, there was no political influence; rather, he was just trying to satisfy the requirements of an appeals court ruling that prohibited the government from seeking any redress for past actions by the tobacco industry.

DIMSDALE: Coming up later today on "Marketplace," a report on the King Tut exhibit. It's beginning a tour of the US for the first time in 20 years. This time, the Egyptian government's trying to cash in.

CHADWICK: John Dimsdale of "Marketplace" from American Public Media. Transcript provided by NPR, Copyright NPR.

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Alex Chadwick
For more than 30 years, Alex Chadwick has been bringing the world to NPR listeners as an NPR News producer, program host and currently senior correspondent. He's reported from every continent except Antarctica.
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