STATE'S ETHICS ON TOBACCO CHALLENGED

No matter how much the state says its lawsuit against the tobacco
industry is not about what it has or has not done to prevent smoking
among its citizens, Washington's policies keep coming up.

At least, they do every time the Big Tobacco lawyers get the
floor.

Yesterday, during the cross-examination of an ethics expert who had
called tobacco-company practices unethical, industry lawyers extracted
an acknowledgment that the state hasn't always taken the high road
when it comes to tobacco and money.

Tobacco lawyers said the state depends so heavily on revenue from
cigarette taxes that it has never taken serious action to discourage
smoking.

"The state knows that when the price goes up, consumption goes down,"
said Bob McDermott, a lawyer for R.J. Reynolds. "And the state has
never enacted a tax increase that decreased consumption to the point
of lost revenue."

Tobacco lawyers also charged that the state provides cigarettes to
adult prison inmates, that it refuses to divest itself of
tobacco-industry investments and that until very recently, it provided
cigarettes to jailed juveniles.

The lawyers further asked whether it was fair for the state to refuse
nicotine patches and other quit-smoking devices to Medicaid patients
when it provided those same benefits to state employees.

"Is it ethical for the state to say the life and health of a Medicaid
patient is worth less than the life and health of a state employee?"
asked McDermott.

No, said Thomas Donaldson, the University of Pennsylvania
business-ethics expert on the witness stand for the state. Donaldson
reluctantly acknowledged yesterday during the cross-examination that,
if true, the tobacco lawyers' charges raise serious ethical questions.

"The state has an obligation to protect," he said.

But the state's lawyers downplayed the implications of questions
raised, saying it's not the state that is on trial here.

"The state's conduct, and whether the state has done anything wrong,
is not relevant here," said John Hough, senior assistant attorney
general, during a break in the trial. "This is an antitrust case."

The state is suing the tobacco industry for $5.7 billion, seeking $3
billion in Medicaid reimbursements and $2.7 million in damages.

It claims tobacco companies violated antitrust and consumer-protection
laws by conspiring to hide the dangers of smoking, manipulating
nicotine levels to ensure addiction and promoting false advertising,
and threatening to retaliate against companies that tried to sell a
safer cigarette.

The landmark trial, which began about six weeks ago, in King County
Superior Court, is being closely watched by state's attorneys and
tobacco lawyers across the nation.

Of the 41 states that have filed lawsuits against the powerful tobacco
industry, four have accepted a settlement from the industry.
Mississippi, Minnesota, Florida and Texas have collected a total of
$36.8 billion to offset the states' costs of treating people sick from
smoking.

Checked-by: Patrick Henry