State wins clearance to grill trio in tobacco case

Texas seeks information on confidential strategies

By CLAY ROBISON
Copyright 1997 Houston Chronicle Austin Bureau

AUSTIN Lawyers for the state of Texas can question one tobacco lobbyist
and two former tobacco officials about their confidential strategies for
influencing state laws, a federal magistrate has ruled.

U.S. Magistrate Judge Wendell C. Radford said in a ruling Friday that the
information is "highly relevant" to the state's lawsuit to collect billions
of dollars in damages from tobacco companies for healthcare costs
associated with smoking.

Ron Dusek, spokesman for Texas Attorney General Dan Morales, declined to
discuss what the state could gain from questioning the three men. But he
said the tobacco industry has consistently fought antismoking efforts in
the Legislature, including a bill that was passed earlier this year to
crack down on teen smoking.

Another source close to the state's case said Texas' lawyers hope to use
testimony from cigarette lobbyists to weaken one of the industry's defenses
their claim that state officials are partly to blame for any damages
that cigarette smoking has caused.

The defendants argue that the state has never effectively reduced smoking
and continues to collect billions of dollars in tax revenue from cigarette
sales.

"We want to know how they (cigarette companies) influenced the political
process, how deep their tentacles ran," the antitobacco source said. "This
is an industry that speaks out of both sides of its mouth."

The tobacco defendants tried to block the state's efforts to take
depositions, or sworn testimony, from Jack Dillard, an Austin lobbyist for
Philip Morris Inc., and Kurt Malgrem and Stan Bowman, two former employees
of the Tobacco Institute, an industry trade group.

Malgrem's and Bowman's responsibilities included the hiring and supervision
of lobbyists in Texas.

Philip Morris and the Tobacco Institute, in motions to block the
depositions, argued that the questioning would infringe upon their rights
of free speech and political association and interfere with their right to
petition the government.

But Radford said the state's interests were "sufficiently compelling" to
allow the depositions to proceed.

"By means of the information gathered from these depositions, the state
seeks to attack what it alleges to be a fraudulent scheme of immense
proportions which has threatened the health and welfare of its citizens,"
he wrote.

Jack Maroney, an Austin attorney for Philip Morris, called Radford's
interpretation of the "proper scope" of the proposed depositions "too
broad" and said the industry probably will appeal his ruling.

"We believe that depositions of these individuals will provide no relevant
information to the state," Maroney said.

Radford is assisting U.S. District Judge David Folsom of Texarkana in
handling pretrial motions. The state contends the tobacco industry engaged
in a scheme to defraud the public about the dangers of smoking and has
tried to addict minors to nicotine.

The lawsuit was scheduled to go to trial this fall in Texarkana but has
been delayed for several weeks while Folsom undergoes treatment for
prostate cancer.

The Legislature last spring enacted a new law that, effective Jan. 1, will
slap new penalties including fines of up to $250 on people younger
than 18 who smoke or possess tobacco. It also increases penalties for store
owners who negligently sell tobacco to minors and puts new restrictions on
cigarette vending machines.

The law was passed despite a huge lobbying effort by the tobacco industry.

"I sat out there one day and watched them work the House, and it was
awesome," said one antitobacco lobbyist, who did not want to be named.

Two years ago, cigarette makers lobbied for a bill that antitobacco groups
said would have gutted tough anti smoking ordinances passed by Texas
cities. The Legislature passed that bill, but Gov. George W. Bush vetoed
it.