COMPANY FINED OVER EXPORT OF HIGH-NICOTINE TOBACCO SEEDS

DNA Plant Technology, an Oakland, Calif.-based biotechnology company,
was fined $100,000 by a federal judge in Washington, D.C., yesterday
after pleading guilty to illegally exporting seeds of a tobacco plant
with unusually high levels of nicotine.

The action marked the first criminal conviction in the sweeping
federal criminal probe of the nation's major tobacco companies. John
Russell, a department spokesman, said the investigation is ongoing.

U.S. District Judge Norma Holloway Johnson imposed the fine, which had
been recommended by Justice Department officials after negotiations
with DNA Plant Technology, which has been cooperating in the inquiry.
The maximum the company could have been fined was $200,000.

Last January, the government charged DNAP with cooperating with a U.S.
tobacco company "to develop a reliable source of supply of
high-nicotine tobaccos that the company could then use to control and
manipulate the nicotine levels in its cigarettes."

The company was not named in the charge filed by the government, but
it is known to be Louisville, Ky.-based Brown & Williamson Tobacco
Corp., the nation's third-largest cigarette company. Brown &
Williamson's attempt to develop the high-nicotine cigarette first
emerged at congressional hearings in 1994.

Allegations in lawsuits

Allegations of nicotine manipulation to hook smokers are a key
component of legal actions against the tobacco industry around the
country, including four massive suits - filed by Mississippi, Florida,
Texas and Minnesota - that the industry has settled for a total of
more than $38 billion. Opening statements in the state of Washington's
case against the cigarette makers are expected to begin Monday.

Before the Minnesota case was settled in May, jurors heard Roger
Black, the head of B&W's leaf-blending department, invoke his Fifth
Amendment protection against self-incrimination in response to
questions about the company's efforts to developed a genetically
altered, ultra-high-potency nicotine.

Last January, the Justice Department charged that under a contract
DNAP signed in 1983, the company was to grow and improve high-nicotine
lines of tobacco, including a variety called Y-1, which had a nicotine
content of twice the normal level in flue-cured tobacco.

The government also charged that DNAP conspired with Brown &
Williamson and its Brazilian affiliate to violate a law that
prohibited the export of tobacco seeds from the United States without
a permit. Additionally, the government alleged that employees of DNAP
and the tobacco company, on numerous occasions between 1984 and 1991,
conspired to illegally export Y-1 seed and other tobacco seeds to
Brazil and a number of other countries, including Argentina, Canada,
Chile, Costa Rica, Honduras, Nicaragua, Nigeria and Zimbabwe.

Company's admissions

Initially, B&W officials told the Food and Drug Administration that
breeding high-nicotine tobacco was not feasible. But the company later
admitted in 1994 that it had 4 million pounds of Y-1 leaf in storage,
and had used it in five of the company's U.S. brands. The company
agreed to stop using Y-1. Last February, in response to an Associated
Press story that the company had resumed using Y-1 in American
cigarettes, B&W said it would stop using Y-1 in 1999.

David Kessler, the former FDA commissioner who played a key role in
bringing the Y-1 story to light, said yesterday that he was pleased to
hear about the fine: "The tobacco industry vigorously maintained that
they did not manipulate nicotine levels. DNAP was involved in one of
the most dramatic forms of manipulating nicotine levels," said
Kessler, who is now dean of the Yale University Medical School.

Officials from DNAP and Brown & Williamson did not return calls
seeking comment.

Checked-by: Patrick Henry