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USDOJ Tobacco Lawsuits and Settlements (Just a~First 5~Footnote to the 2016 TOC Intro.)(publ. 12-15-2016)

Published as a “work in process” Dec. 15, 2016, at about 6,500 words.  “I’ll be back!!”

I don’t know that a link to this FamilyCourtMatters page USDOJ Tobacco Lawsuits and Settlements (Just a~First 5~Footnote to the 2016 TOC Intro.) will be put in my blog sidebar;** it is published here to produce a link to  a “footnote” in my Table of Contents 2016 post in context of a comment about the impact upon public services (particularly welfare-related, which in effect also includes marriage/fatherhood public relations and advocacy programming).

[**8/1/2017 update; I had cause to review this information (it came up again in the course of blogging] and see that sometime last year I did add a link to this informal (?) page to the sidebar. I also last night moved that link closer to the top of the “Vital Info/Links” blogroll because I believe these tobacco lawsuits and anti-smoking campaigns ARE vital to understand in the 21st century…] [Case-sensitive, WP-generated shortlink for this Page (not post) ends “-5e8”]

It is neither final nor in-depth, but just for a point of reference to support a statement made in the TOC.

USDOJ Tobacco Lawsuits and Settlements (Just a~First 5~Footnote to the 2016 TOC Intro. (a Page with WordPress-generated, case-sensitive shortlink ending “-5e8”   Page formatting changed, but not much content (no added images but I enlarged some of them) 8/1/2017 for easier reading. )

A more complete statement would include some of my existing write-ups and understandings of where this money went, at the state level and how those entities were named.  And then read different state CAFRs and see the amounts involved!  Including that just now is not in my blogging schedule; what’s not already posted may come here later.  Or, better yet, readers may look this up, always a good process to engage in for the collateral learning acquired in that process.  (How do you think I learned what’s up here? It certainly wasn’t spoon-fed, organized, and assembled for easy comprehension on Day 1!)

See top-left image:

After writing most of this page (quickly, I admit), I took at look at the Intervenor Tobacco-Free Kids Action Fund in D.C., which files a Form 990O (and has a Related Schedule-R entity, a 990-filing 501©3 it shares paid employees, etc., with) only to find:  the prior year it was $11M in deficit (despite showing $23M in Savings at the beginning of this year) and particularly focused on stopping tobacco usage in “low and middle income foreign countries” — as reflected in both its grants, and wire transfers.  Out of the $29 MILLION of Contributions received the current year, only $7M went to grants and of those $7+M of grants, only $500K stayed Domestic to the USA.  That plus the continually fragmented reporting (“see additional data” used repeatedly without real need for it), their major subcontractor (out of only two) being a “Health and Public Education Foundation” with a Moscow address, and their highest paid employees (and only one paid over $100K) being for international legal, I am sure curious about the motivation of its “intervention” in the above lawsuit, other than, it’s possible to smell a LOT of money a long distance away.

The website is TobaccoFreeKids.org.  Let’s take a look at that website:


“States collect $26.6 billion in tobacco revenue, spend less than 2% to fight tobacco use” (New Report, “Broken Promises to Our Children.”).

(and from an article on this report just posted Dec. 14, 2016, “yesterday” as I write this):

States’ Prevention Funding Falls Short Despite Billions in Tobacco Revenue

Dec. 14 2016

Media Contacts:
Mina Radman, Campaign for Tobacco-Free Kids, 202-296-5469
Jill Courtney, American Cancer Society Cancer Action Network, 202-585-3278
Retha Sherrod, American Heart Association, 202-785-7929
Allison MacMunn, American Lung Association, 312-801-7628
Cynthia Hallett, Americans for Nonsmokers’ Rights, 510-460-0748
Nicole Dueffert, Truth Initiative, 202-454-5589

WASHINGTON, D.C. – The states are missing a golden opportunity to save millions of lives and billions of dollars in health care costs because they continue to shortchange proven programs that prevent kids from smoking and help smokers quit, according to a report released today by a coalition of public health organizations. The report challenges states to do more to fight tobacco use – the nation’s No. 1 preventable cause of death – and help make the next generation tobacco-free.

This year (fiscal year 2017), the states will collect $26.6 billion from the 1998 tobacco settlement and tobacco taxes. But they will spend less than two percent of it – just $491.6 million – on tobacco prevention and cessation programs, according to the annual report assessing state funding of such programs.

The report – “Broken Promises to Our Children: A State-by-State Look at the 1998 Tobacco Settlement 18 Years Later” – was released by the Campaign for Tobacco-Free Kids, American Cancer Society Cancer Action Network, American Heart Association, American Lung Association, the Robert Wood Johnson Foundation, Americans for Nonsmokers’ Rights and Truth Initiative.

The “Campaign for Tobacco-Free Kids is a related organization to one of the Intervenors, above.  I see from the common website http://www.tobaccofreekids.org/who_we_are/‘s self-description of “who we are” that no reference is made to their 501©4 which might draw a connection between the two events — the USDOJ funding, and this 501©3!  Does this description make any reference to the Tobacco-Free Kids Action Fund?

Saving Lives in the U.S. and Around the World

In the United States, we advocate at the national, state and local levels for the proven policies that reduce tobacco use and save lives.

Internationally, the Campaign for Tobacco-Free Kids supports governments and non-governmental organizations in promoting and implementing these policies. We are a partner in the Bloomberg Initiative to Reduce Tobacco Use, which focuses on low- and middle-income countries where more than 80 percent of tobacco-related deaths will occur in the coming decades.

While we have made enormous progress in the United States, tobacco still kills more than 480,000 Americans every year. The worldwide death toll is six million a year and climbing. With your support, we can win the fight against the world’s leading cause of preventable death.

Created in 1996, the Campaign for Tobacco-Free Kids is a 501(c)(3) non-profit organization that accepts no government or tobacco industry funding. We rely on contributions from individuals, philanthropic foundations, corporations and other non-profit organizations.

Learn more about our work:

This 501©3 (“Campaign” is the 501©3 and “Action Fund” the 501©4) owns several trademarks, among them (i.e., not all of them), on the website, we can see:


It’s also only fair to take a look at how they, too, are utilizing their funds.  At first glance, I’m just not impressed, and given that 100% of these donations are marked “private” (where not from membership or fund-raising) I am really wondering if some of it doesn’t come from the wealthy associations who also filed for “intervenors” in the USDOJ lawsuit, or direct payments from whoever the tobacco companies were ordered to pay into.  Splitting between 501©3 and ©4 is common, and it’s classic obfuscation practice in the nonprofit realm; separately organizations look more reasonably sized, and what average individual will pore over the tax returns and get to “Schedule L” (transactions with interested persons) or realize what % of the revenues and expenses are JUST not discernible, or traceable?

Total results: 3Search Again.

Tobacco-Free Kids Action Fund DC 2015 990O 71 $39,581,300.00 52-1974904
Tobacco-Free Kids Action Fund DC 2014 990O 70 $23,540,558.00 52-1974904
Tobacco-Free Kids Action Fund DC 2013 990O 46 $35,977,889.00 52-1974904

(I would like to add a parallel image to the one shown for Related organization below, but don’t have the time yet, with other deadlines.  By now I hope readers have developed some sense of how I go through tax returns, and might be able to make observations about the filing organization’s “business as usual” and activities from them; I cannot personally annotate and post image + pdf to  every organization I post on!)

Related Entity: (and this year $2.7M of shared employees were stated, as well as some funds exchanged between them, as well as BOTH utilized the contractor from Moscow).


Excerpt from its most current (FY2014) available Page 1 shows “Prior year” received $8.8M “Contributions” and ended with a $9M deficit, probably explained under “Other expenses.”

campaign-for-tobacco-free-kids-ein521969967-a-5013-part-of-p1-fye2015-screen-shot-2016-12-15pm campaign-for-tobacco-free-kids-ein521969967-a-5013-pt1-excerpt-fy-march312015-annotated-excrpt-scrn-shot-2016-12-15pm (<==Click for image details)

Top 5 Contractors for "Campaign for Tobacco-Free Kids" (The 501©3 related to Tobacco Action Fund for Kids) shows the main one is also in Moscow (of 7 total), Contribs to this org. this year were $36M, most grants ($2M+) went overseas

Top 5 Contractors for “Campaign for Tobacco-Free Kids” (The 501©3 related to Tobacco Action Fund for Kids) shows the main one, “HEALTH AND DEVELOPMENT FOUNDATION” is also in Moscow (of 7 total), Contribs to this org. this year were $36M, most grants ($2M+) went overseas

<==re: Independent contractors image t to left (not annotated) see caption, or for full-sized, see Pt VIIA of the returns from table provided below.

Total results: 3Search Again.

Campaign for Tobacco-Free Kids DC 2015 990 71 $44,999,523.00 52-1969967
Campaign for Tobacco-Free Kids DC 2014 990 59 $28,167,527.00 52-1969967
Campaign for Tobacco-Free Kids DC 2013 990 50 $37,751,589.00 52-1969967

On Schedule I (referring to just a few domestic grants), Supplemental Information Part IV, there’s a long detailed description of who “CTFK” (this org.) works with, this is just part of it.  However, MOST of its grants are going overseas, and those are listed by region and NOT by recipient (!!):


I should bring up here that both organizations were formed (say their IRS forms) in 1996, two years AFTER the states and territories began multiple, and multi-billion-dollar lawsuits against the tobacco companies.

Under “independent subcontractors” by both the above nonprofits (related), I looked up the Health and Development Foundation mentioned. Reading it, I am reminded of Pavlov..and behavioral modification experiments.

In English translation, its site “About us” relates:

Who we are  (website: http://www.fzr.ru/eng/aboutus.html)

The Health and Development Foundation, formerly known as Healthy Russia, is a non-profit, non-governmental organization acting in the field of development and conducting programs aimed at public health improvement and behavior change. We have 10 years of experience in designing and implementing comprehensive educational and outreach programs to improve the health and healthy lifestyle skills of Russians, including programs targeting health care professionals.

What we do

While many non-profits specialize in a specific area of expertise, we are able to implement programs across a broad range of topics thanks to our experienced staff and strong relationships with expert partners. The foundation focuses on development in the following areas:   {click to read}

further down on the page, the US “CDC” makes the list of “selected partners” alongside UNICEF, WHO, et al.:

Selected partners

Russian state bodies and agencies: municipal and regional administrations and departments of education, the Russian Federation Ministry of Health and Social Development, the Russian Federation Ministry of Education and Science, the Russian Federation Ministry of Sport, Tourism, and Youth Policy, Medical Center of Obstetrics, Gynecology, Neonatology and Perinatology (Kulakov Center), National Research Center on Substance Abuse of the Ministry of Health, Moscow Research Institute of Pediatric Medicine and Surgery of the Ministry of Health.

Russian institutions of higher education: Moscow State University, St. Petersburg Postgraduate Medical Academy, Irkutstk State Institute of Continuing Medical Education, Orenburg State Medical Academy, Moscow State Medical Stomatological University, Moscow Regional Institute of Obstetrics and Gynecology (MONIIAG).

International public and governmental organizations: UNESCO, WHO, UNODC, UNDP, UNICEF, UNAIDS, International and Russian Red Cross, BabyCenter, Centers for Disease Control and Prevention, Johns Hopkins University, Emory University, National Healthy Mothers, Healthy Babies Coalition, etc.

Russian and International Business Partners: Johnson & Johnson, MSD Pharmaceuticals, Merck, Levi’s, Voxiva, Edelman, Gedeon Richter (Russia), GlaxoSmithKline Trading, Nestle Russia, Eurochem.

Two examples of “Master Settlement Agreements” re: lawsuits by the States (preceded the later one by the USDOJ).

I found a 2008 web page by Georgia Policy Institute (itself a nonprofit) which summarizes the situation and gives some $$ and % figures.  My images from this link are somewhat arbitrary and simply intend to show that a MSA (Master Settlement Agreement) did result in distributions as a result of that agreement, but without enforceable (strict) provisions on how it is to be spent. It also points out that the state still earns a lot of tobacco-related revenues (i.e., see taxes!), and there are options on how to allocate those revenues.  Again, the writer criticizes Georgia for not spending more on tobacco-related (smoking prevention) causes.  Another point made is that, probably in part relating to some of these lawsuits, the amounts being paid under the MSA have been declining.  Not to minimize, however, the still staggering amounts!  I should point out that (again, please double-check my statement, this isn’t my “area” as to specific legal actions) the MSA referred to here, and in the next site from Ohio Attorney General, as the lawsuit brought by the USDOJ on more Defendants, whose “Opinion” cover sheet tops this blog page.  The states suing =/= the federal government, suing, obviously.  More on the USDOJ (federal government) lawsuit, below these two references, which still take some time to reference:


This an next two images below are from Georgia Policy Institute 2008, by the above authors (T. Sweeney, S. Ray), posted a site labeled “earncentral.org”

screen-shot-2016-12-15-at-3-38-37-pm screen-shot-2016-12-15-at-3-40-27-pm


Also, I found as an Ohio Attorney General (.gov) file, a Master Settlement Agreement (MSA) referring to 40 different states and many (not all) of the involved Manufacturers.  It has no spacing between paragraphs, and I DNK how official.  I am just doing a fast scan (read, skimming the contents) of it now.

But I do want to point out the dissolution of two nonprofits, and as part of the agreement, stipulations (if that’s the right word) about subsequent Trade Associations or Research Institutes.  Point in case — be aware of what’s taking place in Trade Associations and Research Institutes in general (and not just regarding tobacco, as my annotations on one of these enclosed images says).

Second point, it also shows some respective amounts, and then recommends payments to a “National Public Education Foundation” (in context, referring to usage within the agreement, and may not be the actual name).  The third entity (Center for Indoor Air Research, Inc.) was not referenced as a non-profit, nor any reference to in which state it had been incorporated, which is odd. Quoting from the link above:

(o) Dissolution of The Tobacco Institute, Inc., the Council for Tobacco Research-U.S.A., Inc. and the Center for Indoor Air Research, Inc.

(1) The Council for Tobacco Research-U.S.A., Inc. (“CTR”) (a not-for-profit corporation formed under the laws of the State of New York) shall, pursuant to the plan of dissolution previously negotiated and agreed to between the Attorney General of the State of New York and CTR, cease all operations and be dissolved in accordance with the laws of the State of New York (and with the preservation of all applicable privileges held by any member company of CTR).

(2) The Tobacco Institute, Inc. (“TI”) (a not-for-profit corporation formed under the laws of the State of New York) shall, pursuant to a plan of dissolution to be negotiated by the Attorney General of the State of New York and the Original Participating Manufacturers in accordance with Exhibit G hereto, cease all operations and be dissolved in accordance with the laws of the State of New York and under the authority of the Attorney General of the State of New York (and with the preservation of all applicable privileges held by any member company of TI).

(3) Within 45 days after Final Approval, the Center for Indoor Air Research, Inc. (“CIAR”) shall cease all operations and be dissolved in a manner consistent with applicable law and with the preservation of all applicable privileges (including, without limitation, privileges held by any member company of CIAR).

(4) The Participating Manufacturers shall direct the Tobacco-Related Organizations to preserve all records that relate in any way to issues raised in smoking-related health litigation.  (5) The Participating Manufacturers may not reconstitute CTR or its function in any form. (6) The Participating Manufacturers represent that they have the authority to and will effectuate subsections (1) through (5) hereof.

(p) Regulation and Oversight of New Tobacco-Related Trade Associations.

(1) A Participating Manufacturer may form or participate in new tobacco-related trade associations (subject to all applicable laws), provided such associations agree in writing not to act in any manner contrary to any provision of this Agreement. Each Participating Manufacturer agrees that if any new tobacco-related trade association fails to so agree, such Participating Manufacturer will not participate in or support such association.

(2) Any tobacco-related trade association that is formed or controlled by one or more of the Participating Manufacturers after the MSA Execution Date shall adopt by-laws governing the association’s procedures and the activities of its members, board, employees, agents and other representatives with respect to the tobacco-related trade association. Such by-laws shall include, among other things, provisions that:

Still from the MSA (Master Settlement Agreement) regarding the establishment of a National Public Education Fund and a national “Foundation”, I find it odd that when the problems arose facilitating RICO in part between two non-profit institutes and a ?? Center for Indoor Air Research, Inc. of unknown legal domicile and tax status (exempt or not, at this point), the solution is to set up another 501©3 — but this time more central and involve the NAAG (National Association of Attorneys General, I’m guessing), the NGA (National Governors’ Association) and the NCSL (National Conference? for State Legislatures), organizations I’ve already cited on this blog as problems in attempting to centralize operations upon the various state legislatures without timely public cognizance of the policy or the relationships involved in those particular entities (the NGA, as I’ve pointed out, has its very own nonprofit “Center for Best Practices” and the NCSL is itself a nonprofit, I DNK just now about the NAAG):

(a) Foundation Purposes. The Settling States believe that a comprehensive, coordinated program of public education and study is important to further the remedial goals of this Agreement. Accordingly, as part of the settlement of claims described herein, the payments specified in subsections VI(b), VI(c), and IX(e) shall be made to a charitable foundation, trust or similar organization (the “Foundation”) and/or to a program to be operated within the Foundation (the “National Public Education Fund”). The purposes of the Foundation will be to support (1) the study of and programs to reduce Youth Tobacco Product usage and Youth substance abuse in the States, and (2) the study of and educational programs to prevent diseases associated with the use of Tobacco Products in the States.
(b) Base Foundation Payments. On March 31, 1999, and on March 31 of each subsequent year for a period of nine years thereafter, each Original Participating Manufacturer shall severally pay its Relative Market Share of $25,000,000 to fund the Foundation. The payments to be made by each of the Original Participating Manufacturers pursuant to this subsection (b) shall be subject to no adjustments, reductions, or offsets, and shall be paid to the Escrow Agent (to be credited to the Subsection VI(b) Account), who shall disburse such payments to the Foundation only upon the occurrence of State-Specific Finality in at least one Settling State. (c) National Public Education Fund Payments.

(1) Each Original Participating Manufacturer shall severally pay its Relative Market Share of the following base amounts on the following dates to the Escrow Agent for the benefit of the Foundation’s National Public Education Fund to be used for the purposes and as described in subsections VI(f)(1), VI(g) and VI(h) below: $250,000,000 on March 31, 1999; $300,000,000 on March 31, 2000; $300,000,000 on March 31, 2001; $300,000,000 on March 31, 2002; and $300,000,000 on March 31, 2003, as such amounts are modified in accordance with this subsection (c). The payment due on March 31, 1999 pursuant to this subsection (c)(1) is to be credited to the Subsection (c) Account (First). The payments due on or after March 31, 2000 pursuant to this subsection VI(c)(1) are to be credited to the Subsection VI(c) Account (Subsequent).
(2) The payments to be made by the Original Participating Manufacturers pursuant to this subsection (c), other than the payment due on March 31, 1999, shall be subject to the Inflation Adjustment, the Volume Adjustment and the offset for miscalculated or disputed payments described in subsection XI(i). (3) The payment made pursuant to this subsection (c) on March 31, 1999 shall be disbursed by the Escrow Agent to the Foundation only upon the occurrence of State-Specific Finality in at least one Settling State. Each remaining payment pursuant to this subsection (c) shall be disbursed by the Escrow Agent to the Foundation only when State-Specific Finality has occurred in Settling States having aggregate Allocable Shares equal to at least 80% of the total aggregate Allocable Shares assigned to all States that were Settling States as of the MSA Execution Date.
(4) In addition to the payments made pursuant to this subsection (c), the National Public Education Fund will be funded (A) in accordance with subsection IX(e), and (B) through monies contributed by other entities directly to the Foundation and designated for the National Public Education Fund (“National Public Education Fund Contributions”).
(5) The payments made by the Original Participating Manufacturers pursuant to this subsection (c) and/or subsection IX(e) and monies received from all National Public Education Fund Contributions will be deposited and invested in accordance with the laws of the state of incorporation of the Foundation.

(d) Creation and Organization of the Foundation. NAAG, through its executive committee, will provide for the creation of the Foundation. The Foundation shall be organized exclusively for charitable, scientific, and educational purposes within the meaning of Internal Revenue Code section 501(c)(3)


Again, I do not know the status of this document, or whether it represents the final agreement, or just a model for agreements state by state.

On further reading, this document:  (1) seems to pre-date 2002 and be conditional on how the litigation went after then, and (2) is definitely not in any executed form (no signatures by the various state attorneys-general listed), and of course (3) is not in normal, proper format for such documents (there are not even any page numbers).  However, it does tell what was wanted!  In one section they ask for payments “in perpetuity” starting around $2.5Billion in 2002 and by this year, over $8 billion to be paid.

Readers are encouraged, however, to become aware of the state-level (and corresponding county- or local-level) finance receptacles (government structures, or if outsourced to the private sector, corporate/nonprofit structures) set up to receive the billions (nationwide) of tobacco industry settlements.  Thanks to ( basic search results, near the top) “The BMJ Publishing Group” (BJM is for “British Medical Journal”) for the first summary, and for a Mitchell Hamline School of Law “Public Health Law Center” regarding the 1999 lawsuits from 1999 to current.

I am not the expert on the matter, I have just seen the impact at the state level, on both coasts and at least one midwest state (Ohio).  Whenever a major influx of cash goes to the state level, it’s in the public interest to start comprehending what is being done and has been done with it. As well as with its interest, dividends, or sales of assets (if there are some) proceeds.

Correlated to this is how public DEBT (liability) is allocated, but that’s a matter of the CAFR (Comprehensive Annual Financial Reports) theme, reported by me separately since 2012, and by others who I’ve provided many links to over the years.
Again, regarding THIS lawsuit,again:

Basically, money from federal tobacco lawsuit settlement/s were distributed [by some means and/or through specific entity/entities] to the states.  I will keep my quotes to a minimum (but did include information on who published the first one, which is of general interest).

Just so you’re aware, the charges were under RICO.  Two paragraphs of the Introduction from that Final Opinion (dated 2016):


On September 22, 1999, the United States brought this massive lawsuit against nine cigarette manufacturers of cigarettes and two tobacco-related trade organizations. The Government alleged that Defendants have violated, and continue to violate, the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961-1968, by engaging in a lengthy, unlawful conspiracy to deceive the American public about the health effects of smoking and environmental tobacco smoke, the addictiveness of nicotine, the health benefits from low tar, “light” cigarettes, and their manipulation of the design and composition of cigarettes in order to sustain nicotine addiction. As Justice O’Connor noted in Food and Drug Administration, et al. v. Brown & Williamson Tobacco Corporation, et al., 529 U.S. 120, 125 (2000), “[t]his case involves one of the most troubling public health problems facing our Nation today: the thousands of premature deaths that occur each year because of tobacco use.”

In particular, the Government has argued that, for approximately fifty years, the Defendants have falsely and fraudulently denied: (1) that smoking causes lung cancer and emphysema (also known as chronic obstructive pulmonary disease (“COPD”)), as well as many other types of cancer; (2) that environmental tobacco smoke causes lung cancer and endangers the respiratory and auditory systems of children; (3) that nicotine is a highly addictive drug which they manipulated in order to sustain addiction; (4) that they marketed and promoted low tar/light cigarettes as less harmful when in fact they were not; (5) that they intentionally marketed to young people under the age of twenty- one and denied doing so; and (6) that they concealed evidence, destroyed documents, and abused the attorney-client privilege to prevent the public from knowing about the dangers of smoking and to protect the industry from adverse litigation results.

So, if that same behavior is found in other context, it would still be considered “very bad” and RICO (so long as it was proved, obviously).  Next paragraph shows what the Court “enjoined” defendants from doing in the future, and what “corrective” actions to take, using this wording (italics mine):

In particular, the Court is enjoining Defendants from further use of deceptive brand descriptors which implicitly or explicitly convey to the smoker and potential smoker that they are less hazardous to health than full flavor cigarettes, including the popular descriptors “low tar,” “light,” “ultra light,” “mild,” and “natural.”

The Court is also ordering Defendants to issue corrective statements in major newspapers, on the three leading television networks, on cigarette “onserts,” and in retail displays, regarding (1) the adverse health effects of smoking; (2) the addictiveness of smoking and nicotine; (3) the lack of any significant health benefit from smoking “low tar,” “light,” “ultra light,” “mild,” and “natural” cigarettes; (4) Defendants’ manipulation of cigarette design and composition to ensure optimum nicotine delivery; and (5) the adverse health effects of exposure to secondhand smoke. [one para split into two]

Finally, the Court is ordering Defendants to disclose their disaggregated marketing data to the Government in the same form and on the same schedule which they now follow in disclosing this material to the Federal Trade Commission. All such data shall be deemed “confidential”…[etc.]

I’d also like to point out that this Opinion states that as the lower court had already determined that remedies under RICO are to be forward-looking, the Government (DOJ) (the lawsuit being also with the named Intervenors) didn’t get everything wanted and asked for:

Unfortunately, a number of significant remedies proposed by the Government could not be considered by the Court because of a ruling by the Court of Appeals in United States v. Philip Morris, USA, Inc., et al., 396 F.3d 1196 (D.C. Cir. 2005). In that opinion, the Court held that, because the RICO statute allows only forward-looking remedies to prevent and restrain violations of the Act, and does not allow backward-looking remedies, disgorgement (i.e., forfeiture of ill-gotten gains from past conduct) is not a permissible remedy

I’d be interested to know if that is an accurate holding regarding RICO (probably, it is) and if disgorgement of ill-gotten gains from past conduct is NOT permissible, what real incentive or deterrent is there in the future to those individuals running the corporations who may have already made millions, and billions (enough to last them a lifetime), from doing so again, only in differently formed “associations” (that is corrupt ones) and around different subject matter.  This lawsuit was a major one:

The seven-year history of this extraordinarily complex case involved the exchange of millions of documents, the entry of more than 1,000 Orders, and a trial which lasted approximately nine months with 84 witnesses testifying in open court. Those statistics, and the mountains of paper and millions of dollars of billable lawyer hours they reflect, should not, however, obscure what this case is really about. It is about an industry, and in particular these Defendants, that survives, and profits, from selling a highly addictive product which causes diseases that lead to a staggering number of deaths per year, an immeasurable amount of human suffering and economic loss, and a profound burden on our national health care system. Defendants have known many of these facts for at least 50 years or more. Despite that knowledge, they have consistently, repeatedly, and with


enormous skill and sophistication, denied these facts to the public, to the Government, and to the public health community. Moreover, in order to sustain the economic viability of their companies, Defendants have denied that they marketed and advertised their products to children under the age of eighteen and to young people between the ages of eighteen and twenty-one in order to ensure an adequate supply of “replacement smokers,” as older ones fall by the wayside through death, illness, or cessation of smoking. In short, Defendants have marketed and sold their lethal product with zeal, with deception, with a single-minded focus on their financial success, and without regard for the human tragedy or social costs that success exacted.

Finally, a word must be said about the role of lawyers in this fifty-year history of deceiving smokers, potential smokers, and the American public about the hazards of smoking and second hand smoke, and the addictiveness of nicotine. At every stage, lawyers played an absolutely central role in the creation and perpetuation of the Enterprise and the implementation of its fraudulent schemes. They devised and coordinated both national and international strategy; they directed scientists as to what research they should and should not undertake; they vetted scientific research papers and reports as well as public relations materials to ensure that the interests of the Enterprise would be protected; they identified “friendly” scientific witnesses, subsidized them with grants from the Center for Tobacco Research and the Center for Indoor Air Research, paid them enormous fees, and often hid the relationship between those witnesses and the industry; and they devised and carried out document destruction policies and took shelter behind baseless assertions of the attorney client privilege.2

Here is a summary (footnotes 4 & 5) from p.10, footnote 5 lists the defendants, and 4 is the Court’s comments that perhaps RICO isn’t the best way to handle litigation of this magnitude; Congress might be a better way.  (click link to read full-sized):

usa-v-philip-morris-usa-et-al-excerpt-p10-intro-from-final-opinion-amended-2016see-publichealthlawcenterorgsitesdefaultfilesresourcesdoj-final-opinionpdf usa-v-philip-morris-usa-et-al-excerpt-p10-intro-from-final-opinion-amended-2016see- publichealthlawcenter.org sitesdefaultfilesresourcesdoj-final-opinionpdf-png (Click to read full-size; I also added a comment at the bottom).


(BMJ Oct 2, 1999, “US to Sue Tobacco Companies” from website NCBI.NIM.NIH.gov, Copyright and License information ▼ Copyright notice):  [BMJ. 1999 Oct 2; 319(7214): 874.      PMCID: PMC1174621]

The United States Justice Department has filed a massive civil lawsuit against the country’s major tobacco companies, seeking to recover billions of dollars in long term costs related to treating ill smokers covered by the government health programmes. The lawsuit alleges that cigarette smoking causes lung cancer and other diseases that have resulted in an estimated $25bn (£15.6bn) in annual health claims paid by the government. The suit also claims that tobacco firms conspired to conceal the risks of smoking from the public. In terms of damages sought, the suit is the largest ever brought by the Department of Justice. The landmark filing was announced by the attorney general, Janet Reno, and brought at the behest of President Clinton as announced in his State of the Union address earlier this year. The tobacco industry has been under intense legal pressure since 1994, when states began to file multibillion dollar claims against the tobacco industry, to recoup the cost of caring for people with smoking related disease through Medicaid (the federal state health insurance programme), which pays for the health care of poor and disabled people. Those suits were settled last year for $246bn—of which $206bn came in one large settlement by 46 states—which will be paid by smokers through higher cigarette prices. The settlement with the states came after the collapse of an effort to write federal legislation that would have substantially increased the cost of cigarettes through taxes and would have restricted the marketing of tobacco. “Smoking is the nation’s largest preventable cause of death and disease, and American taxpayers should not have to bear the responsibility for the staggering costs,” Ms Reno said. “For more than 45 years, the cigarette companies conducted their business without regard to the truth, the law, or the health of the American people.” …

Mary Arronson, a Washington based legal and financial analyst, said that the federal lawsuit has the potential to dwarf the big Medicaid suits filed against the states. [?? the states sued tobacco, and Medicaid = federal == sued the states??] The filing is likely to “significantly weaken the tobacco industry,” she said. The suit alleges that in 1954, tobacco executives met at the Plaza Hotel in New York to plan a long term campaign to conceal the health risks of smoking. The lawsuit is based largely on industry documents made public in the state lawsuits, which accused the industry of promoting biased research, wrongly asserting that nicotine was not addictive, and falsely denying that they were targeting their products at children. The suit alleges that the heads of tobacco companies pledged to pool their resources to establish a public relations enterprise that would function “as an organized association … to achieve, through illegal means, the shared goals of maximizing their profit and avoiding the consequences of their actions.” In a news conference Ms Reno said that the aim of the lawsuit was to “require the tobacco companies to restore the funds that they acquired through their unlawful conduct.”

(Sentence in blue) so, the USDOJ is alleging a form of racketeering (RICO), sounds like — forming a public relations enterprise as if a genuine organization to illegally profit and avoid punishment. WOW — that is looking like (though I can’t speak to size) EXACTLY what I am seeing in the coordinated effort to take over — “for good purposes, though” — public institutions (courts, above, schools) and expand base of operations, doing this tax-exempt and through tax-exempts, and coordinated among groups of foundations (which should be properly understood as the warehouses of corporate wealth, sometimes which equates to family wealth depending on the families behind the corporations, this generation or more often, previous ones…).   It sure sound a whole lot like what I discovered in the marriage/fatherhood promotional field (establishing all kinds of quasi-entities which, on closer examination, either are not real entities, or did not maintain their status at the state (or IRS) level while continuing to solicit funds and publish propaganda about the best ways to relieve poverty, crime, and other social problems.

“From a legal standpoint, it’s just pure politics,” said Michael York, a lawyer for Philip Morris, the nation’s largest cigarette manufacturer. “When we look back we’ll find the best legal minds in the Justice Department thought the facts and law didn’t support it. It’s hypocrisy to think the tobacco companies misled the federal government about the risks of smoking.” Experts believe that the tobacco companies, as with the states last year, are likely to try to work on a settlement rather than fight the government in court, but Justice Department officials declined to comment on any negotiations.

    Articles from The BMJ are provided here courtesy of BMJ Group

    The quote is from what appears to be a UK on-line publication… In fact, I see that in June, 2014, the name change to “The BMJ” was from “The British Medical Journal” — see next extended quote:

    Copyright © 2016 BMJ Publishing Group Ltd.

    (More on that, see bottom of this post, “About the BMJ” quote:


    SOURCE #2 — Mitchell Hamline School of Law:  Overview of Lawsuit

    (There is also a well-developed sidebar of links on this page, recommmended reading).  This links to a USA 2016 Amended Opinion. which shows defendants and intervenors.

    In 1999, the United States Department of Justice (DOJ) sued several major tobacco companies for fraudulent and unlawful conduct and reimbursement of tobacco-related medical expenses.  The circuit court judge dismissed the DOJ’s claim for reimbursement, but allowed the DOJ to bring its claim under the Racketeer Influenced and Corrupt Organizations Act (RICO).  The DOJ then sued on the ground that the tobacco companies had engaged in a decades-long conspiracy to (1) mislead the public about the risks of smoking, (2) mislead the public about the danger of secondhand smoke; (3) misrepresent the addictiveness of nicotine, (4) manipulate the nicotine delivery of cigarettes, (5) deceptively market cigarettes characterized as “light” or “low tar,” while knowing that those cigarettes were at least as hazardous as full flavored cigarettes, (6) target the youth market; and (7) not produce safer cigarettes.

    In February 2005, the U.S. Court of Appeals for the D.C. Circuit ruled that disgorgement of illegal profits, a remedy aimed at past violations, is not a valid remedy since it does not prevent or restrain future RICO violations.  In July 2005, the circuit court granted health group organizations, including the Tobacco-Free Kids Action Fund, motion to intervene in the lawsuit for the purpose of being heard on the issue of the permissible and appropriate remedies that the court should order.


    On August 17, 2006 Judge Kessler issued a 1,683 page opinion holding the tobacco companies liable for violating RICO by fraudulently covering up the health risks associated with smoking and for marketing their products to children.  “As set forth in these Final Proposed Findings of Fact, substantial evidence establishes that Defendants have engaged in and executed – and continue to engage in and execute – a massive 50-year scheme to defraud the public, including consumers of cigarettes, in violation of RICO.”

    The tobacco companies filed an appeal to the U.S. Court of Appeals. The court granted the motion, and on May 22, 2009 the three-judge panel unanimously upheld Judge Kessler’s decision finding the tobacco companies liable. The court upheld most of the ordered remedies, but denied additional remedies sought by public health interveners and the Department of Justice.  The court also found that the First Amendment does not protect fraudulent statements, stating that “Defendants knew of their falsity at the time and made the statements with the intent to deceive. Thus, we are not dealing with accidental falsehoods, or sincere attempts to persuade.” The court dismissed the defendants’ argument that their statements were protected by the First Amendment.


    About The BMJ

    Welcome to thebmj.com.

    The BMJ (formerly the British Medical Journal) is an international peer reviewed medical journal and a fully online first publication. The website is updated daily with original articles, podcasts, videos, and blogs and organised into four main content streams—research, education, news and views, and campaigns. In addition, the site is fully searchable, with an archive back to 1840 and numerous topic collections on clinical and non-clinical subjects. Articles of relevance to specific countries and regions are grouped together on country portals.

    Although the editorial office is located in London, we have editors throughout the world, including in Europe, North America, South Asia, China, and Australia.

    Original research is published in full on thebmj.com, with open access and no limits on word counts. Our mission is to lead the debate on health and to engage, inform, and stimulate doctors, researchers, and other health professionals in ways that will improve outcomes for patients. We aim to help doctors make better decisions.

    In May 1995 The BMJ became the first online general medical journal and celebrated its 20th anniversary online in 2015Continuous daily publication on thebmj.com started in July 2008, with all content posted online before appearing in print…

    In June 2014 The BMJ received a special received a Patients Included certificate, to acknowledge and encourage the journal’s focus on the involvement of patients in medical publishing.

    Sources of revenue

    The BMJ accepts revenue from a range of sources to ensure wide and affordable access while maintaining high standards of quality and full editorial independence. The sources of income include subscriptions from institutions and individuals; classified advertising for jobs and courses; display advertising for pharmaceutical and non-pharmaceutical products; events (exhibitions, sponsorship, and visitor fees); sale of reprints, rights, and royalties; sponsorship; and open access publication fees.
    Where content has been supported by sponsorship—for example, as a result of an unrestricted educational grant—this is clearly indicated.

    Useful links

    Owner and publisher

    The BMJ is published by BMJ (BMJ Publishing Group Ltd), a wholly owned subsidiary of the British Medical Association. The BMA grants editorial freedom to the editor of The BMJ (currently Fiona Godlee). The views expressed in the journal are those of the authors and may not necessarily comply with BMA policy….

    Written by Let's Get Honest|She Looks It Up

    December 15, 2016 at 8:10 pm

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