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STATEMENT BY ASSISTANT ATTORNEY GENERAL DAVID OGDEN ON THE FILING

"Good morning.

"As the Attorney General has indicated, we allege that four and a half decades of misconduct by the cigarette companies has not only harmed the public health but it has cost the American taxpayer billions of dollars. That is why we are bringing this lawsuit today.

"The misconduct we allege spans more than 45 years.

"Based on internal documents, we allege that the chief executives of the cigarette companies met at the Plaza Hotel in New York City in January 1954 and agreed there to wage a "long-term" public relations campaign based on fraud and deception. We allege that in carrying out that campaign, they pulled no punches. For decades,

"They repeatedly and consistently denied that smoking cigarettes causes disease, despite their knowledge that it does.

"They repeatedly and consistently denied that cigarettes are addictive, even though they have long known and deliberately exploited the addictive properties of nicotine, and

"They repeatedly and consistently stated that they do not market cigarettes to children, despite using marketing strategies that ensure minors continue to serve as their major source of "replacement smokers" -- a phrase actually used by cigarette company officials in their internal memoranda to describe America's youth.

"We allege that the unlawful campaign went further than simple fraud. Under the campaign, we allege that the tobacco companies agreed to assure the public of their concern about issues of smoking and health. And, we allege that as part of that campaign, they promised to conduct independent, objective research to safeguard the public health, and to divulge whatever they learned.

"In fact, however, we allege that they designed a research campaign to ensure that damaging conclusions were not reached and to generate faulty studies to cast doubt on the truth. And when they did not like the conclusions they reached, those conclusions never saw the light of day. Based on their internal documents, we also allege that they agreed not to do research to make cigarettes safer, and not to compete with each other through safer cigarettes.

"As our complaint alleges, the tobacco companies targeted this campaign at existing smokers -- who they have understood to be addicted to nicotine -- and to young people who are the companies' major source of new smokers. Based on the companies' internal documents, we allege that their goal was to create doubt in the minds of the American public and to maintain an open controversy in public debate. If they could raise false doubt in addicted smokers about the risks of smoking, few would muster the strength to quit. The alleged campaign was very effective, as the death toll and staggering health bills attest.

"Today's suit relies upon three federal statutes. The first statute is the Medical Care Recovery Act or MCRA. MCRA provides that the United States government may sue to recover medical costs when three conditions are met; f7irst, a person is injured or suffers a disease; second, a circumstance exists where a third party is legally responsible for that injury or disease; third, the United States is authorized or required by law to provide or pay for the medical treatment.

"Here, we believe that millions of people have sustained injuries or suffered disease as a result of the unlawful conduct alleged in our suit. And, the United States through many federal programs including Medicare, Defense Department health programs, Veterans' Administration programs, and others, has paid for their medical treatment.

"The secondary payer provisions of the Medicare statute provides a second, independent basis for recovery. Both this statute, and MCRA, give the government a right to seek these funds separate and apart from any claims the individual patients might have. We allege that the tobacco companies violated tort law in several ways, including fraud, failure to warn, product defect, and voluntary undertaking, as well as violating state consumer protection statutes.

"Finally, we also are relying upon the civil provisions of the Racketeer Influenced and Corrupt Organizations statute or RICO. Under RICO, we allege that the tobacco companies committed numerous acts of fraud. As a result, we are seeking remedies including disgorgement of ill-gotten profits, full disclosure of all documents on smoking and health, and funds for public education and smoking cessation campaigns.

"In bringing this action, we owe a major debt to the state attorneys general who brought and pursued similar lawsuits against the tobacco companies -- lawsuits which settled for more than $200 billion paid out over the next 25 years. Those suits forced the companies to disclose millions of pages of previously secret documents that have revealed the scope of the tobacco companies' misconduct we allege in our complaint. While extremely successful, those lawsuits concerned only Medicaid payments, payments made on behalf of lower income Americans, which are borne both by the states, as well as by the federal government. But those state suits did not seek the billions of dollars the federal government spends on medical programs other than Medicaid. That is what today's suit seeks to do.

"I want to publicly thank, and acknowledge the extraordinary efforts of, our career Justice Department attorneys who have worked since February to put together this case. The lawsuit that we have brought today is the result of their careful review of the facts and their reasoned analysis of the law. I am profoundly grateful for all of their efforts and their assistance, and I believe that, upon the conclusion of this litigation, the American people will owe them a debt of gratitude.

"I would be happy to answer any questions you may have."

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