EX-TOBACCO LAWYER TESTIFIES FOR STATE ABOUT RESEARCH

He looked so much like the two dozen other lawyers in the room, with
his pin-striped suit and power tie. But the words that came off
Lawrence Meyer's lips - the ones about conspiracy and threats - were
some of the most damning to his opponents.

Meyer, who is former outside counsel to the Liggett tobacco company,
testified for the state of Washington yesterday. He was an important
man for Liggett, and it was the first case of a tobacco-industry
lawyer cooperating with anti-tobacco plaintiffs.

Meyer testified about the secret "XA" project to make a "safer"
cigarette, which involved blending chemicals in cigarettes to
neutralize cancer-causing compounds in smoke. The tobacco industry
squashed the project because, he said, its lawyers thought a "safe"
cigarette, in effect, would be an admission that all other cigarettes
were dangerous. It would undermine the industry and mean infinite
lawsuits from smokers.

Meyer was subpoenaed to testify for Washington state in its
several-billion-dollar lawsuit against the tobacco industry. He agreed
to testify after Liggett waived its attorney-client privilege.
Liggett, based in Durham, N.C., settled with Washington and 20 other
states in March 1997, agreeing to pay the states about $25 million,
plus 2.5 percent of its pretax profits over the next 25 years. Part of
the deal also was that Liggett would help anti-tobacco plaintiffs.

Washington state's lawsuit accuses Big Tobacco of conspiring to
violate antitrust laws and consumer-protection laws. Washington also
charges that the industry hid health research, manipulated nicotine
levels and marketed to children. The state is seeking $2.2 billion to
reimburse Medicaid costs, but that number could double with penalties
for antitrust and consumer-protection violations.

Meyer, who worked for Liggett from 1974 to 1986, said the industry
threatened Liggett, although he sometimes seemed unsure of himself
when he used the word "threat." Meyer recounted his conversations with
Joseph Greer, Liggett's general counsel, who died in 1985 of lung cancer.

According to Meyer's testimony, Greer said a lawyer for Brown &
Williamson Tobacco warned there would be consequences if Liggett went
ahead with the "XA" project. The "XA" cigarette did not cause
cancerous tumors on mice in skin tests and showed some promise at
being a "safer" cigarette, Meyer said.

The lawyer for Brown & Williamson "was just concerned that this
project was idiotic and . . . that it would be ruinous for the
industry and it would be ruinous for Liggett," Meyer said.

The lawyer warned that if Liggett went ahead with the "XA" project the
company would not be allowed to participate in the industry's joint
defense on lawsuits, Meyer testified.

He said the "XA" project was important for Liggett. "It was something
that . . . was going to transform Liggett's position in the industry,
and perhaps the industry itself," Meyer said. Liggett had dropped from
one of the leading tobacco companies to one of the smallest, holding
less than 5 percent of the market. Meyer said the "XA" project would
create a product that "was going to sell itself" and revive Liggett.

But Meyer also testified that while tests showed "XA" eliminated up to
100 percent of cancerous tumors on mice, there was no evidence that
the special cigarette did not cause illnesses like heart disease and
emphysema.

Information from The Associated Press was used in this
report.

Checked-by: Rich O'Grady