Originally created 01/08/98

Company admits to tobacco plot



WASHINGTON -- A biotechnology company agreed Wednesday to plead guilty to conspiring to grow high-nicotine tobacco secretly in foreign countries so Brown & Williamson Tobacco Corp. could "control and manipulate the nicotine levels in its cigarettes."

In the first charges arising from the Justice Department's 3year-old tobacco investigation, criminal information was filed in Washington against DNA Plant Technology Corp. of Oakland. The company agreed to cooperate with the investigation, and no date was set for its plea.

The government cited the tobacco company as an unindicted co-conspirator but refused to name it. Individuals familiar with the investigation said it was Brown & Williamson, the third largest U.S. cigarette company, which makes Kool, Viceroy, Raleigh and other brands.

Last year, 18 Brazilian farmers admitted to The Associated Press they are growing high-nicotine leaf by the ton; many for more than five years. The AP reported the high-nicotine tobacco -- called fumo louco, or crazy tobacco, by the growers -- was the offspring of a genetically altered plant created in U.S. laboratories for Brown & Williamson.

The government said the goal of the plot between B&W and the biotech firm known as DNAP was to develop a reliable source of high-nicotine tobacco so B&W could "control and manipulate the nicotine levels in its cigarettes."

The Food and Drug Administration considers nicotine addictive -- the key to hooking smokers. Tobacco companies dispute nicotine's addictiveness, but the FDA has begun regulating the industry on the ground that cigarettes deliver an addictive drug. Photo and age IDs are required before some cigarette sales. FDA cigarette advertising regulations await resolution of a court challenge.

In the court documents filed Wednesday, the Justice Department charged DNAP secretly devised a scheme to improve highnicotine tobacco in Brazil and other countries because federal regulations ban commercial growing of high-nicotine tobacco in the United States.

The government charged the tobacco company contracted with DNAP in 1983 and gave it a strain of flue-cured tobacco, code-named Y-1, that was about 6 percent nicotine. That's twice the level of most tobacco.

The contract specified one goal as altering tobacco's chemical composition in ways that "could include production of lines with elevated nicotine content," court papers said. In April 1985, an expanded contract listed the first goal as "(d)evelopment of commercial high-nicotine varieties" of tobacco.

DNAP was charged with a misdemeanor count of conspiracy to violate the Tobacco Seed Export law, which until its repeal in 1991 prohibited export of tobacco seed without a permit.

Numerous times between 1984 and 1991, the Justice Department said, employees of the two companies illegally exported Y-1 and other tobacco seeds seeking good locations for growing Y-1 tobacco. Destinations included Brazil, Nicaragua, Honduras, Chile, Nigeria, Costa Rica, Argentina, Zimbabwe and Canada.

Former Brown & Williamson vice president Jeffrey S. Wigand, the highest-ranking executive to turn against the industry, has testified that Phil Fisher, chief of tobacco blending and testing for B&W in Louisville, Ky., flew to Brazil several times with Y-1 seed hidden in cigarette packs. Fisher -- now a part-time B&W consultant -- has declined to comment.

The government also charged that during the FDA's tobacco investigation in 1994, DNAP concealed information about its contract with the tobacco company and the export of tobacco seeds.

In 1994, FDA Commissioner David Kessler told a House subcommittee that federal investigators found Y-1 growing in Brazil and used in some Brown & Williamson brands sold in the United States. The findings followed B&W's assertion to the agency that breeding high-nicotine tobacco was not feasible.

And a year earlier, the FDA said, B&W used high-nicotine leaf in five U.S. cigarette brands, including three "light" cigarettes implied to be healthier: Viceroy King Size, Viceroy Lights King Size, Richland King Size, Richland Lights King Size and Raleigh Lights King Size. The FDA announced an investigation, and B&W said it stopped using Y-1 in those brands and canceled the project.

Brazilian farmers told the AP last year they still sell high-nicotine tobacco to Souza Cruz, a Brazilian company owned by B.A.T. Industries, the same British conglomerate that controls Brown & Williamson.

The AP learned that Souza Cruz, according to its own figures, shipped almost 8 million pounds of Y-1 to the United States for Brown & Williamson between 1990 and 1994 -- nearly double the amount the FDA knew about.

The maximum penalty for the misdemeanor violation is a fine of $200,000 or twice DNAP's gain under the contract.

Two federal grand juries are looking into whether tobacco companies withheld evidence from regulators or lied to Congress or regulators about the dangers and addictiveness of tobacco products.