Evidence in tobacco suit fuels probe of law firms

DALLAS (AP) Evidence gathered in Texas' lawsuit against tobacco
companies is fueling a federal probe of law firms representing the
industry, a newspaper reported.

Agents of the U.S. Department of Justice are mining the Texas case for
documents and witnesses to advance an investigation into whether the
industry conspired with lawyers to hide the dangers of smoking, according
to today's edition of the Dallas Morning News, which cited sources familiar
with the federal probe.

In Washington, a Justice Department spokesman confirmed that prosecutors
have visited several states, including Texas, in pursuit of evidence.

It has been known that there are several ongoing inquiries into allegations
that tobacco firms have lied or intentionally withheld information from
Congress and the government.

But the newspaper reported that Texas' $8.6 billion Medicaid lawsuit, set
for trial Oct. 14 in Texarkana, is pumping new life into the specific
investigation of the law firms because the state has turned up previously
unseen evidence on that front.

Especially interesting to the federal government is a sworn statement by
Gary Huber, a University of Texas Health Center at Tyler medical professor
and longtime tobacco industry consultant.

State lawyers believe that Huber, who might recently have turned into a
whistleblower, will provide "powerful" evidence that tobacco executives
and their lawyers have engaged in "longstanding fraud."

According to court records reviewed by the newspaper, Huber's testimony
includes evidence that the industry and lawyers suppressed information
about smoking through means that include witness intimidation.

So far, the Justice Department has not been able to obtain that document,
the newspaper said. It and almost all paperwork related to Huber are now
under courtordered seal.

He said, however, that the state is supplying federal officials with
information and records not under seal.

The state is seeking tobacco industry reimbursement of money it says was
spent over two decades to treat smokingrelated illnesses through Medicaid
and other programs.

Federal prosecutors and three FBI agents made several trips to Texarkana in
the last few weeks, asking for documents and witness statements, people
familiar with the visits told the newspaper.

They took away copies of dozens of internal industry papers that are not
under seal. Among the documents:

* A 36page Tobacco Research Council report from 1964 that states, "The
lawyers are the most powerful group in the smoking and health situation."
The memo adds that the industry's Policy Committee of lawyers exercises
"close control" over all aspects of industry decisionmaking.

* A 1978 Lorillard Tobacco Co. research division report that states, "We
have again abdicated the scientific research ... to the lawyers with
virtually no involvement on the part of the scientific or business
management side of the business."

In an open hearing last week, state lawyers argued that the documents show
that tobacco executives have been illegally using lawyers to hide evidence
behind the legal doctrine of lawyerclient confidentiality.