Thursday, July 28, 2005

Citizens' Commission Asks Judge Kessler for Inquisition into Remedy Change; Again Fails to Disclose Conflict of Interest

The Citizens' Commission to Protect the Truth has asked Judge Kessler to conduct an inquisition into the reasons for the Department of Justice's decision to reduce its requested remedy for a national smoking cessation program from $130 billion to $10 billion.

The Commission's letter to the judge suggests that political interference by Bush administration political appointees in the DOJ may have been the reason for the change in requested remedy, and that the purpose for the change was to protect the interests of the tobacco industry. The letter cites as a motive for this interference the fact that Associate Attorney General was previously a partner for a law firm that represented R.J. Reynolds and the fact that the tobacco industry has contributed large amounts of money to the Republican party.

According to the letter: "During closing arguments last week, attorneys for the Justice Department abandoned the expert testimony that they had presented to support forward-looking relief to fund national public education, smoking-prevention and smoking-cessation efforts. That testimony had indicated that $130 billion over 25 years would be required to mount effective efforts; at the last minute, Justice Department lawyers reduced the amount requested to $10 billion over 5 years and abandoned their earlier demand that the tobacco companies fund programs to help 45 million current smokers quit."

"It appears that these decisions were transmitted to the litigating attorneys by Robert McCallum, a political appointee who supervises the Civil Division and who ordered the attorneys to abandon their expert testimony in the case. Mr. McCallum came to his post from Alston & Bird, a law firm that has represented R.J. Reynolds, a defendant in this case. Moreover, the tobacco industry--led by co-defendants Philip Morris/Altria, R.J. Reynolds, and Lorillard-- contributed more than $2.7 million in 2004 alone to the Republican party."

The Rest of the Story

There's just one problem with this request to Judge Kessler.

It's called a conflict of interest, and it's to the tune of no less than $1.5 million.

The Citizens' Commission to Protect the Truth has a clear conflict of interest in seeking to intervene in the DOJ case because it is heavily funded by the American Legacy Foundation, an organization that stands to gain perhaps billions of dollars, depending on the remedies that are requested by the DOJ lawyers.

The Commission, which admits on its web site that "Principal funding for The Commission comes from the National Association of Attorneys General through a $1.5 million pass-through grant from the American Legacy Foundation," did not see fit to disclose its conflict of interest to Judge Kessler.

The Commission's letter to her fails to mention this small detail. Interesting: the letter emphasizes the $2.7 million that the Republican party received from the tobacco companies, but failed to reveal the $1.5 million that the Commission received from the American Legacy Foundation.

The remedies that the DOJ has already proposed should it prevail in its RICO lawsuit against the tobacco companies include a request for $2 billion for the American Legacy Foundation to run an anti-smoking media campaign. The Department also requested $10 billion for a national smoking cessation program that includes a media campaign, and it is at least possible that the Legacy Foundation stands to see a part of that money as well. And if the program is expanded to $130 billion, then the amount of money that Legacy could see is substantially higher.

Being on the dole from the American Legacy Foundation, it is clear that the Citizens' Commission itself stands to potentially reap in a huge pot of money should the DOJ prevail in the case and especially if the requested remedies call for larger amounts of money to go to the Legacy Foundation.

So I see a clear conflict of interest in the Citizens' Commission intervening in this case.

Am I suggesting that it was inappropriate for the Commission to submit this letter to Judge Kessler requesting an inquisition? No. But I am suggesting that it was the Commission's ethical and legal responsibility to disclose its potential conflict of interest to the Judge.

As I have already reported, the Commission failed to disclose this same conflict in its amicus brief which it filed back in February.

So this now marks two formal interventions into the case in which the Commission has failed to disclose its conflict of interest. It appears that Judge Kessler may not be aware that the Commission is actually just a front group for the American Legacy Foundation (or, to take my own interpretation of the situation out -- that the Commission recieves funding from the Legacy Foundation). I suspect that if she became aware of this, she would be none too pleased.

That the Justice Department provided a reasonable alternative explanation for the reduction in the proposed remedy (changing it from a backwards-looking and therefore impermissible remedy to a forwards-looking and therefore potentially permissible one), that McCallum does not have a clear conflict of interest or any clear ethical conflict, and that the fact that the Republican party received money from the tobacco companies proves nothing only go to question the merit of the substance of the Commission's request, especially since it is extremely intrusive and far less intrusive measures could (and are) being taken to investigate the situation.

But the rest of the story is not about the merits of the Citizens' Commission's request - it's about the very ethics of making such a request when its major funder - the American Legacy Foundation - stands to gain billions of dollars based on the requested remedies in the case, and yet the Commission has failed to disclose this blatant conflict of interest to a federal judge, as well as to the attorneys who have a right to know this critical missing piece of information.

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