Tobacco exec challenged about key stance in trial

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The departing executive chairman of Reynolds American Inc. refused to concede that cigarette smoking causes disease during testimony on Monday in the government’s $280 billion tobacco industry racketeering trial.

Long-time Reynolds executive Andrew Schindler defended Reynolds’ view that cigarettes “may contribute” to disease in “some individuals” as a government attorney raised the company’s position as an example of how cigarette makers have deceived the public about the dangers of smoking.

U.S. public health officials concluded decades ago that smoking leads to lung cancer and a range of other serious diseases. Some other tobacco companies, such as Altria Group Inc.’s Philip Morris USA, a co-defendent, now concede the point unequivocally.

Schindler was asked to explain why Reynolds still does not acknowledge - without conditions - that smoking causes lung cancer and other diseases.

He said he had decided against changing the company’s stance several years ago after consulting with scientists at company.

“They all concluded that they were comfortable with the Web site the way it is,” said Schindler, who stepped down as chief executive of R.J. Reynolds Tobacco Holdings last summer when it bought Brown & Williamson in 2004 and emerged from the deal with a new name.

He was met with skepticism when he told the presiding judge that the company’s current position is “a pretty straightforward expression of my own feelings” on the issue.

“If it’s so straightforward, why not use simple language to convey it?” asked U.S. District Judge Gladys Kessler.

Schindler is due to leave Reynolds American next week.

The government’s suit, filed in 1999, targets Altria and its Philip Morris unit; Loews’ Lorillard Tobacco unit, which has a tracking stock, Carolina Group; Vector Group Ltd.’s Liggett Group; Reynolds American Inc.’s R.J. Reynolds Tobacco and British American Tobacco Plc unit British American Tobacco Investments Ltd.

The Justice Department wants the industry to give up $280 billion in past profits and is seeking tougher rules on marketing, advertising and warnings on tobacco products.

Tobacco companies deny they conspired to promote smoking and say the government has no grounds to pursue them after they drastically changed marketing practices as part of the 1998 settlement with state attorneys general.

Justice Department attorney Sharon Eubanks showed the judge a list of statements by Reynolds over the years that she said were designed to confuse the public.

The statements included a 1990 letter responding to a group of school children that said scientists “do not know the cause or causes of diseases associated with smoking.”

Reynolds’ stance on the hazards of smoking, as posted on the company Web site, reads: “We produce a product that has significant and inherent health risks for a number of serious diseases, and may contribute to causing these diseases in some individuals.”

Schindler told the judge the company planned to drop the word “may” to come in line with Brown & Williamson, a unit of British American Tobacco that Reynolds acquired last year.

“You could change the Web site in a heartbeat if you wanted to,” Eubanks told Schindler. 

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