Lawsuit charges tobacco companies with smuggling conspiracy (fwd)

[Robert Weissman <rob@essential.org>]

Lawsuit charges tobacco companies with smuggling conspiracy
Source: CBC News, Tuesday, 12/21/99

OTTAWA - 

	The federal government is taking on the tobacco company Goliaths
in a $1 billion lawsuit.

	Justice Minister Anne McLellan announced Tuesday the government is
taking R.J. Reynolds Tobacco Holdings Inc., RJR-Macdonald Canada, the
Canadian Tobacco Manufacturers Council and several related companies to
court in the U.S. The charges are fraud and racketeering.

	The charges follow a court case that wrapped up in Binghampton,
New York, on Monday. Six men were convicted of taking part in a
multimillion-dollar smuggling ring that brought tobacco and liquor into
Canada illegally. The ringleader was sentenced to 17 and a half years in
jail and fined $20,000 US.

	McLellan said the evidence now exists to prove that in 1991 the
big tobacco companies established an "elaborate network of smugglers and
shell companies." Their aim, she said, was to "undermine" Canada's policy
to reduce tobacco use by increasing the price of cigarettes.

	That policy was "frustrated by tobacco smuggling," said the
minister, and the government was "forced to reduce taxes and duties."

	McLellan says the case was filed in the United States because much
of the smuggling took place there, and many of the witnesses are U.S.  
citizens.

	The government will seek to restrain the defendants from engaging
in further smuggling; compel them to surrender their profits; and force
them to pay substantial damages -- $1 billion dollars, according to
McLellan.

	Health Minister Allan Rock said the inability of the government to
raise the price of cigarettes has had a serious impact on smoking,
especially among young people. Rock quoted Health Department figures that
claim the level of smoking among 15 to 19-year-olds rose from 21 to 31 per
cent from 1991 to 1996.

	Rock said the lawsuit should send a message that the tobacco
industry "cannot and will not be allowed to frustrate Canadian health
policy."