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Liggett helps tobacco probe
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April 28, 1998: 3:57 p.m. ET
Cigarette-maker agrees to disclose industry's knowledge of health factors
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NEW YORK (CNNfn) - In a blow to the tobacco industry, Liggett & Myers agreed Tuesday to cooperate with the Justice Department in the government's criminal investigation of tobacco firms.
Under the agreement, the first of its kind with a major tobacco firm, Liggett will provide truthful, complete and accurate information about the industry's knowledge of the health consequences of smoking cigarettes and nicotine's addictive nature.
The Justice Department said the agreement with Liggett contains no grant of immunity from prosecution.
Liggett, which sells the Chesterfield and Lark brands of cigarettes, is owned by the Brooke Group holding company (BGL).
"More than two years ago, Liggett broke ranks with Big Tobacco, and we have consistently pursued a policy of cooperation rather than confrontation," said Bennett LeBow, chairman and chief executive of Brooke.
"We are now cooperating not only with Justice, but also with 41 states where we have settlement agreements and with numerous other parties," LeBow said. "We intend to continue to play a constructive role in this important process."
Sources said Liggett's agreement to cooperate is significant because the company may be able to provide direct insight into industry marketing and nicotine research and alleged manipulation.
Liggett, based in Durham, N.C., also will "actively assist" the Justice Department's efforts to obtain evidence, including evidence of alleged crime and fraud in documents that other tobacco companies insist is covered by attorney-client privilege, a Justice statement said.
The federal investigation centers on whether industry leaders made false statements to Congress and provided government agencies with misleading documents about the alleged addictive properties of nicotine and marketing, particularly to juveniles.
Liggett is the smallest of the five major tobacco companies, claiming about 2 percent of the market.
The company told regulators it will provide information about the targeting of children, the manipulation of nicotine, control of research by the Council for Tobacco Research, and the involvement of lawyers in crafting false or misleading statements by any of the tobacco companies to Congress, the Food & Drug Administration and American consumers, the department said.
Shares of Brooke Group Ltd., (BGL), were trading at 13-7/8 per share following the announcement, up 1/8.
--from staff and wire reports
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