Professor Blakey is a former federal prosecutor and the author of the federal RICO statute, which has been used to prosecute members of the mob. He was hired by Ronald Motley to develop the civil racketeering portion of the Texas and Florida Medicaid cases. Both states ended up settling their cases, but the racketeering element of the cases threatened the tobacco companies with bankruptcy. Below are excerpts from the interview with Blakey in which he expresses his opinions, and compares the structure of the cigarette industry to the structure of the Mafia and recommends using RICO laws to criminally prosecute the industry. He is currently a Professor of Law at Notre Dame University. This interview was conducted in 1998.
Interviewer: How has the tobacco industry changed?
Robert Blakey: The tobacco industry morphed in 1953 from a legitimate industry to an illegitimate industry and it became a front for the selling of a drug, not cocaine, not heroin, but nicotine.
In 1953, studies came out that cigarettes cause cancer and it was now like scientifically established and the reaction of the industry was not let’s clean the product up and do it right, it was to treat it as a public relations problem, cover it up. And they knew now that if used as directed –it killed, and instead of stopping it or cleaning it up, they covered it up. They morphed from a legitimate industry into a front for the sale of a, of a illicit drug, in the sense that it is a lethal drug and when they lie about its character, they become a front for the sale of drugs.
Interviewer: They would say, ‘what we did was try to examine what this scientific research was. People already knew they were coffin nails, they weren’t necessarily good for you, that there was risk involved.’
Robert Blakey: What you’ve just said to me is part of the propaganda they created. Science has standards about how you investigate it, how you analyze it and how you make it public. They didn’t do that. When the Surgeon General came to them in ’64 and said, tell me what you know about tobacco, they didn’t tell him. They hid it. They treated it as a public relations question, designed by the lawyers to avoid legal responsibility, rather than, this is a common problem that all Americans have, with the health of a product.
If they had been open and candid, we have a product here that we think there’s a problem in and we’re trying to clean it up, these are the risks. If you want to use it, these are the risks, assume them, that’s one thing. But what they did is they created a bogus scientific controversy. The research that they were doing, they didn’t tell anybody about. At least initially, it looked like they thought they could clean it up and the more search they did, they found out they couldn’t clean it up.
Did they come clean? Did they make a safer product? No, the lawyers told them, don’t make a safer product because that’s an admission that your existing product is unsafe. They engaged in a complex scheme to defraud the American people. It’s just that simple.
Interviewer: Over a 40 year period?
Robert Blakey: Beginning in 1953. They are today a $45 billion- $50 billion industry that causes $60, $65 billion worth of damage. As many as 450,000 die each year using this product, as directed. They must replenish the people from whom they do it and this is the sinister problem about it. We talk about drug pushers. The only really drug pushers in this country are the tobacco industry. They have to addict as many as 3,000 people a day. The statistics show that a majority of those people, over 50% of those people are addicted at under age 18. This industry targeted young people and induced them into using nicotine products and nicotine addiction is harder to break than heroin addiction.
Interviewer: When you say racketeering, people think of organized crime, the Cosa Nostra. Why do you believe this industry is like them and how widely is RICO applied?
Robert Blakey: In the early 1930s, the families of le Cosa Nostra, the mob, put together a national organization to coordinate their illegal and legal activities. In 1953, the cigarette industry put together a similar organization, headed by the lawyers, headed by a bogus scientific research group and a public relations group and if you just look at the structure of the national syndicate of organized crime and look at the structure of the national syndicate of the tobacco industry, you’ll see how they are the same, hand in glove.
Interviewer: Now, you say the lawyers, that’s the committee of counsel. What is the committee of counsel?
Robert Blakey: The particular scheme to defraud that the industry put together was, in fact, designed, implemented, structured, by the lawyers. The ligation in Florida that I was involved in established in court hearings that these lawyers were not performing as lawyers, providing traditional legal services. In fact, they engaged in what in the law is known as a crime fraud exception…
The lawyers, not the scientists, designed the research. The lawyers decided what was to be disclosed publicly about the research. Now, there’s nothing wrong with legal advice. Lawyers should do that, but there’s a difference a lawyer and the house counsel for the Mafia. These law firms, just as the industry morphed, these law firms morphed into providing criminal advice, criminal advice to the industry. They orchestrated a fraud and a crime and that’s precisely what we established in Florida.
It– normally, the lawyer client privilege is sacrosanct. There’s an exception to that. If you can establish prima facie, that is, on first face, that the behavior of the lawyers is not advancing a legitimate industry in a legitimate way, but rather, a crime fraud, you can get the disclosure of the conversations between the client and the lawyer and we got those documents in Florida under precisely that standard.
Interviewer: This group of lawyers was known as the committee of counsel?
Robert Blakey: That’s correct, which were lawyer representatives of each of the major firms in the tobacco industry.
Interviewer: But, some people would say many industries do that. It’s their First Amendment right to do that.
Robert Blakey: Well, it’s your First Amendment right to say, in public, whatever you want to. It’s not in your First Amendment right to counsel the commission of a crime. Justice Holmes once said, you can’t yell fire in a crowded theater and the same thing is, you can’t tell a person falsely that a product is not addictive if it is addictive. You can’t tell him that it’s not lethal, you know, if it is lethal.
You can’t induce children with sophisticated advertisement to think that it’s an adult thing to smoke. You can’t target children when the sale of tobacco to children is illicit. And that’s what that industry did. The first Amendment rights were abused by engaging in a scheme to defraud and there’s a difference between saying what’s on your mind and lying and lying is illegal.
Interviewer: But lying, sir–there are very serious charges you’re making. People can lie, industries can lie. It doesn’t necessarily mean that you’re breaking the law.
Robert Blakey: If in fact, an industry systematically misrepresents the nature of its product in an effort to sell that product to a child and that product is addictive and lethal, that’s a federal felony.
Interviewer: Do you believe you could prove this beyond a reasonable doubt?
Robert Blakey: I’ve been a federal prosecutor, a staff member in the House and the Senate and a teacher of the federal criminal law for 30 years. I didn’t do anything in Florida for Attorney General Bloodworth, I didn’t do anything in Texas for Attorney Morales that I couldn’t do for Attorney General Reno. I could design a federal criminal RICO case and the evidence here is sufficient to pass muster beyond a reasonable doubt.
Interviewer: And you came to the conclusion that this is a racketeering enterprize?
Robert Blakey: I sat down and went over the evidence with the staff in Florida and we put together the RICO count. I drafted the Florida RICO statute in 1977. Know it cold. And you could just take the evidence on each of the elements and it just fit. What you need to do is don’t think of a cigarette as tobacco, aimed at your tongue. Think of it like a syringe and it’s going to put the drug not in your vein, it’s gonna put it in your lung and go right to your head. All, all cigarettes are is a delivery system for nicotine and nicotine is addictive and also happens as a byproduct of it, to be lethal.
Interviewer: But it’s legal.
Robert Blakey: It’s not legal when you sell it to kids under 18. It’s unlawful to advertise it to kids, it’s unlawful to sell it to kids and the statistics indicate that adults don’t take up cigarettes. Adults don’t take it up. Kids do. These people are pushers for an illicit, illegal, lethal drug for children. It’s just that simple and once you’re addicted, that addiction continues into adulthood.
Interviewer: The Justice Department has a special tobacco task force, at least, apparently 11 attorneys, 9 FBI agents full time. They’ve chosen not to do RICO. Why?
Robert Blakey: If you can do a conspiracy to defraud and they tell me they can do that, I can do it as a RICO and I’ll tell you, while it may impose on you, the paradox is it permits you to do what you do more effectively and it radically changes the nature of the trial. More evidence will come in. The American people will see more of the story. They won’t just see the fraud, they’ll see the organization behind the fraud and the remedies that you get are the end are more significant.
You could get forfeiture, you get long term imprisonment and you get, as a parallel remedy to the criminal case, civil sanctions, modeled on antitrust and just as DuPont was required to divest themselves of ownership in General Motors, because it was a monopoly, you could great up the cigarette industry and require them too become what they were in 1952, a legitimate industry. Clean your product up or don’t sell it.
If you do sell it, sell it only to knowledgeable adults. Don’t sell it to children.
Interviewer: What is 1001?
Robert Blakey: 1001 is 18 USC, which is volume 18 of the United States Code and it’s Section 1001 and basically what is says is don’t tell a material lie to the government. And if you submit written documents or oral documents to the government and they are materially false, it’s a felony.
Interviewer: We have heard that the Justice Department is focusing on submissions of the tobacco industry to the FDA during the comment period. That would qualify?
Robert Blakey: Absolutely, but those same submissions, in all likelihood, were mailed and if they were mailed, part of a national conspiracy, originating in the early 50s, to obfuscate the issues, to hide from the American people or to confuse the American people, about addiction and about the lethal character of cigarettes, that’s also a scheme to defraud. A scheme to defraud that’s been in operation, orchestrated by the lawyers, participated in by the major figures in the industry from 1953 to today. Show me the organization of the industry, show me that it has an enterprise in it, show me that the scheme to defraud has been orchestrated for this period of time, you just showed me a RICO.
If they can make that case, 1001, I can make a mail fraud. If I can make a mail fraud, given what I know about the organization of the industry, I can make a RICO. If I can make a RICO, I can come in civilly and reorganize the industry.
Interviewer: What are the criminal violations that you see? And what’s the evidence that you’ve reviewed about the tobacco industry?
Robert Blakey: The easy one’s are false statements to the government. Which is 18USC 1001. And when you have false statements to the government, you would also have mail fraud. That is, were the false statements sent through the mail? Or, were their statements sent through the mail part of a scheme to defraud. You have wire fraud. Which is to say, is if it’s sent through, ah, fax as opposed to a letter it’s federally something that you can take cognizance of. This is at heart a fraud that involves lying and cheating. And, and more so, it’s a fraud that, that targets children. And thus you potentially have the interstate transportation of, of what’s federally called an immoral product. Immoral, in this context, because selling cigarettes to children, ah, is immoral.
Interviewer: In your opinion, tax fraud?
Robert Blakey: There is some indication that some of the documents filed by organizations had false statements in them about the nature of the organizations. So that you’d have false statements, ah, to obtain tax exemptions. And those kinds of things.
If you look at this case, for example, as perjury before Congress and you focus on a single line in the statement by the CEO before the Waxman committee. Is it perjury? Is it prosecutable as perjury? And the answer is probably not. Because it was lawyered.
If you step back and stop looking at the trees and look at the forest and ask, what was it done? When was it done? Why it was done? You’ve got a classic scheme to defraud. If you bring, for example, psychologists in to analyze the advertisement and ask, who is this advertisement aimed at? When they, for example, put in Teenage magazine, don’t smoke. That’s an adult thing. Literally it means, don’t smoke. But advertising executives will tell you, psychologists will tell you, children want to be adults. By telling them not to do it, because it’s an adult thing, you’re really telling them to do it. And if you target your advertising at kids that’s illegal. Particularly, if you publicly say, we don’t target kids.
Interviewer: In your opinion, can they make a conspiracy to defraud, looking at the forest and at the trees, when they have to deal with these lawyered statements?
Robert Blakey: The answer is yes. Get the documents. And parallel them out. This is what they’re saying publicly. This is what the documents are saying privately. Is there a difference? Why is there a difference? If there is a substantial difference between what you say publicly and what you say private, that’s an [inditia] of an attempt to defraud. If you say you’re making a safe cigarette or safer cigarette publicly, and privately you know you’re not, that’s an [inditia] of a scheme to defraud. If you say you’re not targeting children publicly, and your internal studies are of what do we have to do to get access to the youth market, that’s an [inditia] of a scheme to defraud. Put all that together, you’ll make your scheme to defraud. It requires imagination and understanding of the industry. If they won’t take the time…if justice won’t take the time and trouble to master the documents and understand the crisis the industry faced in fifty-three…they had a product that potentially was lethal, and as they got into it, they found out it was lethal and addictive. They had to either clean it up or get out of the business. And they were making too much money to get out of the business. So they covered up the nature of the product. They lied to all the regulatory people in an effort to prevent themselves from being regulated. They came to the congress to get cigarette warnings on the labels. Why? Because they wanted to be honest with us? Give me a break. What they wanted in that legislation was to pre-empt state claims for relief. So that private people couldn’t sue them in state courts.
Pull all of that out of their records. Put them on the stand. Ask them questions to explain this. Contrast their public statements before congress to their private statements. Put that before an American jury. And there’s not an American juror in the world that will believe that these people are still honest business men. Just because lawyers…I don’t say this intentionally…blow smoke, it doesn’t mean that American people have to have smoke in their eyes…that got common sense. Read it with common sense. Stop being a lawyer. And start using common sense. Present to the jury the whole story and this is eminently a scheme to defraud.
Interviewer: So you’re saying you believe that these tobacco executives and their companies should be held accountable criminally for this conduct?
Robert Blakey: I believe that they should be held accountable personally to the people that they have injured. And that means civily. I think they ought to be held accountable to the tax payers of the United States both federally, and all of the states, who have paid for the poor people who have suffered and died because of these cigarettes. And to the degree that you can identify individuals in the companies and lawyers in the law firm that have participated in the fraud, yes. I think that the law ought to be equally applied on Mulberry street to the mob, on Wall street to illicit industries, and on tobacco row to people who morf from a legitimate industry into an illicit industry. Why shouldn’t they be held accountable just like everybody else? Because their shirts are white? Ah, the white collar offender is not responsible like the blue collar offender of the guy who can’t wear a shirt? Yes. Civily and criminally. Personally and institutionally responsible. We have not enough responsibility in this society today.
Interviewer: The national settlement, however, could get in the way of a criminal case?
Robert Blakey: That’s true. And a criminal case could get in the way of the national settlement. That’s just one of those things we have to work out. I don’t know why we have to give up the criminal case to get a national settlement. These people need the national settlement. We need the national settlement. Maybe what they do is, they do what a lot of people do. They plead guilty. And they work out a settlement. What they’d like to do now is work out a settlement and not plead guilty. That’s not the American way. What you do is you confess responsibility. Accept responsibility. And then you work out your rehabilitation. They want the rehabilitation before they accept responsibility.
Interviewer: But just recently Geoffrey Bible said, in testimony in Minnesota, I’m horrified at these documents. I don’t know where they came from. I don’t know anything about them. I don’t even know about the committee of counsel.
Robert Blakey: All I can think of is Claude Raines in “Casablanca” saying, I’m shocked. There’s gambling in this casino.
Interviewer: But the Mafia–that’s racketeering, prostitution, murder…And this is a legitimate industry.
Robert Blakey: In fact, it’s not a legitimate industry. This is an outline of the Rico statute. You have to have a corporations up here, that’s the first thing. The second thing you have to have is an enterprise. And what you saw previously, was the organization of organized crime. This is the organization of the tobacco industry. Now, what do they do over here. A pattern of racketeering activity. Let me show you that pattern. This is the industry’s scheme to defraud. Here’s the statute again. Person, enterprise, pattern of racketeering activity. And here it is, the intentional sale of a defective product that’s both addictive and lethal. The failure to market a safer product. And you can go down this list at each stage, taken collectively, these are the trees of the forest to show that this product was no longer legitimate and legitimately marketed. It’s illegitimate and illegitimately marketed. And in particular, targeted to the children. Despite the fact that in fifty states the sale of cigarettes to children is illegal. This is not a legal product when it’s sold to children. It’s the same thing functionally as cocaine or heroine. This is a drug industry. Not a tobacco industry. Rico was designed to deal with the drug industry. And that’s exactly what it does in this situation. It’s just that the drug, instead of heroine and cocaine, is nicotine.
The form of it is not wholly illicit. The form of it is front. A legitimate industry behind which it is in fact selling drugs to our children. And it is the beauty of their success for so long that they’ve convinced us that they are the legitimate industry that they were before nineteen fifty-three. After nineteen fifty-three, they morfed into this…what amounts to a Rico enterprise. A scheme to defraud to addict our children and to kill our children by selling a product unlawfully.
Interviewer: I can see people out there saying, give me a break. We’ve got Fortune 500 companies; we’ve pension funds that are invested in their stock…the idea of prosecuting them as a racketeering criminal enterprise…
Robert Blakey: This is exactly what the attorney general in Florida did using this theory. It’s exactly what the attorney general in Texas did using exactly this theory. These are exactly the allegations that appear in both of those complaints. And this is exactly the basis on which they settled for over ten billion dollars in Florida and over fifteen billion dollars in Texas. Rather than try this case, they settled.
Interviewer: Now if we were to go and interview a member of the lawyers….the Committee of Counsel, someone who was in those meetings, what should we ask him?
Robert Blakey: You want to ask him point by point, paragraph by paragraph, whether the complaints in Florida were true, whether the complaints in Texas were true. And if they weren’t true, why did they settle the case?
Interviewer: So, in summary, why do you believe that it’s the role of lawyers, consigliaries if you will, that is key to keeping this racketeering enterprise going?
Robert Blakey: Lawyers can do both legal advice that’s lawful, and legal advice that’s unlawful. Some of the lawyers here gave legal advice that was lawful. But a core of lawyers orchestrated the fraud. One of the things proven in Florida was precisely that these lawyers and their communications were not confidential, that they should be disclosed because of the crime fraud exception that was found after an adversary hearing in Florida. We broke the chain of silence, or the lawyer client privilege, by establishing the fact of fraud.