Last fall Federal District Judge Gladys Kessler gave the go-ahead for DOJ to proceed against the tobacco industry under RICO (see the Court's decision).  Under the Act, the DOJ has one power that no other civil litigant has – it alone can seek disgorgement of all the ill-gotten gains the industry has received as a result of its 47-year-long disinformation campaign.  Beginning in 1954, when the industry falsely advertised that it disbelieved the emerging scientific data that smoking caused lung cancer and that it intended to discover the truth and share it with public health authorities, the industry’s fraudulent behavior has discouraged smokers from quitting.  It has also confused young people about the dangers of starting to smoke and provided cover for politicians taking money from the industry to refrain from enacting regulatory measures that would have protected the public. 

As a result, the industry sold many more cigarettes than it would have otherwise, making large “ill-gotten” profits.  In this lawsuit the DOJ can recoup these profits, beginning in 1954, with interest.  The total amount of the industry’s ill-gotten gains may exceed its current assets.

 The DOJ has a very strong hand, whether at trial or in settlement negotiations.

 Why then is DOJ spreading the story that it has a weak hand, and seeks the best “settlement” that the tobacco industry will give it?  That is similar to a general with a commanding position leaking the rumor that his troops are demoralized, the legislature won’t appropriate money to continue the fight, and that he’ll take any peace treaty the enemy offers.

 Could it be that, as the beneficiary of huge campaign largess from the tobacco industry, the Bush administration is afraid of winning the case?