06:04 PM ET 04/28/98

Liggett to cooperate in US Justice criminal probe

	 
	(Adds quotes from Congress on tobacco legislation)
	    By James Vicini
	    WASHINGTON (Reuters) - The Justice Department said Tuesday
that the nation's fifth biggest cigarette maker, Liggett Group,
has agreed to cooperate in the government's criminal
investigation of the tobacco industry.
	    The first cigarette maker to break with the rest of the
industry and settle state civil lawsuits,  Liggett now becomes
the first to agree to cooperate in the long-running probe into
whether tobacco company executives lied to Congress about
whether nicotine is addictive or committed any other criminal
violations.
	    ``The department's agreement with Liggett contains no grant
of immunity from prosecution,'' the Justice Department said in
announcing that Liggett, a division of Brooke Group Ltd  would
cooperate fully in the probe. The department told Liggett in a
letter it ``retains full discretion'' to bring appropriate
criminal charges in the future against the firm, its executives
or other employees.
	   The Justice Department's criminal division said Liggett had
agreed to provide ``truthful, complete and accurate''
information about the industry's knowledge of the health
consequences of smoking cigarettes and nicotine's addictive
nature. Sources close to the probe said it could provide
valuable information about the four other big tobacco firms.
	    Also Tuesday, Senate Commerce Committee Chairman John
McCain, chief author of a Senate tobacco bill that the cigarette
makers say could bankrupt them, lashed out at the industry's
advertising campaign against it.
	    ``They want to change the subject,'' the Arizona Republican
said, adding that the companies were using ``buzzwords'' like
''taxes'' and ``bureaucracy'' to divert attention from health
and teen smoking.
	    After breaking with Congress on efforts to pass a bill, the
industry this month launched a newspaper advertising campaign
against legislation which would cost them more and give them
less legal protection than the proposed deal they signed off on
with 40 states suing them last June.
	   Recently the industry has also started radio and television
ads in selected markets, attacking legislation that the
companies say could put them out of business, threaten up to 2
million tobacco-dependent jobs, and raise prices so high that a
black market for cigarettes would emerge.
	   But McCain said he believed the American people would not be
taken in by the ads, and he would not be intimidated.
	   ``I believe the American people know this is an industry that
enticed our children to use tobacco, that lied to the American
people, and the American Congress,'' he said in a floor speech.
	   According to the Justice Department, Liggett will provide
information on how the industry targeted children and
adolescents, the manipulation of nicotine, and the role of the
Council for Tobacco Research, including special projects
conducted under the trade group's auspices.
	   Further, Liggett will provide information about the
involvement of lawyers in crafting false or misleading
statements by any of the tobacco companies to Congress, the Food
and Drug Administration and American consumers, the department
added.
	    It said Liggett will ``actively assist'' the Justice
Department's efforts to get evidence, including evidence of
crime and fraud in documents that other tobacco companies insist
is protected by attorney-client privilege.
	    Liggett's parent company, Miami-based Brooke Group Ltd., is
owned by Bennett LeBow. Liggett makes L&M, Lark and Chesterfield
cigarettes.
	     ``More than two years ago, Liggett broke ranks with big
tobacco and we have consistently pursued a policy of cooperation
rather than confrontation,'' LeBow said in a brief statement.
	    ``We are now cooperating not only with Justice, but also
with 41 states where we have settlement agreements and with
numerous other parties. We intend to continue to play a
constructive role in this important process,'' he said.
	    In March 1996, Liggett shocked fellow cigarette makers by
agreeing to settle suits brought by attorneys general trying to
recoup health care costs of smokers. LeBow in 1997 became the
first tobacco executive to admit nicotine is addictive.
	    Liggett will be the second known company that has agreed to
cooperate in the three-year-old investigation.
	    In January, a California biotechnology firm, DNA Plant
Technology Corp., agreed to cooperate as part of plea deal in
which it admitted its guilty to one count of conspiring to
violate the tobacco seed export law.
	    Department officials said Brown & Williamson Tobacco Corp.,
the nation's third largest cigarette maker and a unit of B.A.T
Industries Plc of Britain, was an unindicted co-conspirator in
the alleged scheme with the California firm to develop a
genetically altered tobacco plant with high nicotine.
	 ^REUTERS@