CIGARETTE MAKER LIGGETT ADMITS: `WE LIED' : NICOTINE IS ADDICTIVE FIRMS TARGETED TEENS CIGARETTES CAUSE CANCER TOBACCO COMPANY CONFESSES.

Byline: Knight-Ridder Tribune News Wire

Breaking ranks with the tobacco industry, the maker of Chesterfield cigarettes admitted Thursday that smoking is addictive and deadly and that companies have long targeted teens as customers.

The decision by the Liggett Group makes the rest of the industry more vulnerable to lawsuits that could seriously cripple them.

The Liggett Group, the smallest of the major manufacturers, made the admissions in a settlement with 22 states that are suing tobacco companies to recover the costs of treating illnesses attributed to smoking.

In addition, Liggett promised to release thousands of documents that state prosecutors said would show that tobacco executives long knew cigarettes were dangerous, yet deliberately deceived Congress and the public.

``I believe this is the beginning of the end for this conspiracy of lies and deception that has been perpetrated on the American public,'' Arizona Attorney General Grant Woods told reporters in announcing the settlement in Washington. ``Someone is finally telling the truth.''

Mike Moore, the attorney general of Mississippi, who will spearhead his state's lawsuit in a trial beginning in June, declared, ``We are finally going to have insiders, witnesses testify. . . . We got the wheelman. Now we're going to go after the bank robbers.''

The attorneys general said they would not offer any deals to the other cigarette companies.

The settlement with Liggett requires it to pay 25 percent of its pretax profits over the next 25 years, and an additional $25 million if it merges with another tobacco company. Moore said he did not think Liggett had a pretax profit last year.

As part of the settlement, Liggett agreed to add a warning to its cigarettes that ``smoking is addictive'' and to comply with certain other restrictions, such as a ban on use of cartoon characters in tobacco advertising. Besides Chesterfield, Liggett makes Lark and L&M cigarettes.

In exchange for Liggett's promises, the states pledged to drop their suits against Liggett. In a statement, Liggett said the agreement also, upon court approval, would protect Liggett from class-action and individual suits.

``We are pleased to have reached these historic settlements,'' said Bennett LeBow, Liggett's chief executive officer. ``We believe that peaceful coexistence on reasonable terms makes far more sense for the tobacco industry than continuing denial.''

Some financial analysts took a dim view of LeBow's motives - noting that a year ago, when Liggett settled lawsuits with five states, it was because LeBow was trying to take over RJR Nabisco Holdings Corp. Thursday's settlement contained some clauses that would make it more difficult, if not impossible, for Liggett to transfer its negotiated immunity to any other company.

Despite the breakthrough, the four bigger tobacco companies - Philip Morris, R.J. Reynolds, Brown & Williamson and Lorillard - showed no signs of weakening.

Indeed, they obtained a temporary court order from a North Carolina state judge barring Liggett's release of industry documents. They argued that a ``joint attorney-client privilege'' prevented the disclosures.

But state prosecutors said the order would have no effect outside North Carolina.

``I don't believe a judge in Mississippi is going to care very much about what a judge in North Carolina says,'' Moore said. ``I am 70 days away from my trial. We will bring these other four tobacco companies to their knees.'' Matthew Myers, lawyer for the Campaign for Tobacco-Free Kids, a leading anti-smoking group, called the settlement historic. ``This dramatically increases the liability of every tobacco company,'' he said.

Liggett's admissions, he said, also bolstered the case of the Food and Drug Administration to regulate the tobacco industry. The agency is battling the industry in federal court in Greensboro, N.C., over the right to restrict cigarette advertising and marketing that appeals to teens.

Nat Walker, a spokesman for R.J. Reynolds, defended his company's historic view that tobacco has not been proved to be addictive.

``What we have said in the past is, `how do you define addiction?' '' he said. ``People use addiction in very careless ways. Some people say jogging is addictive. It gets silly after awhile.

``There are 45, 50 million people today who are former smokers. Ninety-five percent of them quit on their own without help from anyone, so people can and do quit smoking,'' Walker said.

But Woods of Arizona said, ``Liggett admits and acknowledges that smoking causes lung cancer, heart disease and emphysema. It acknowledges and admits that nicotine is addictive, and that the tobacco industry markets to young people.

``Youth,'' he explained, ``means children 14-18.''

In addition to the lawsuits filed by the states, there are 15 to 20 class-action suits and 500 claims by individuals in U.S. courts, according to the Tobacco Products Liability Project in Boston.

Besides documents that implicate the tobacco industry's knowledge about nicotine's addictiveness and dangers, Liggett will allow all its employees - including those with ties to other tobacco companies - to testify in court.

``We haven't had many tobacco company witnesses, and they were always former employees,'' said J.D. Lee, a Knoxville, Tenn., lawyer who has sued tobacco companies in Tennessee and Florida. ``These (Liggett workers) cannot be said to be disgruntled. They would just be echoing what their own CEO says. Boy, this has to throw the tobacco companies into a tizzy.

``They've probably got documents we haven't seen,'' he said. ``Documents of research shared by the entire industry . . . could show that they knew in the 1960s how devastating cigarette smoking was.''

If the Liggett documents and witnesses do provide such evidence, ``it would have a tremendous effect because it would establish what they knew and when they knew it,'' said Joseph A. Page, a Georgetown University law professor specializing in personal-injury law. ``It's another step in the crumbling of the citadel.''

CAPTION(S):

3 Photos

Photo: (1) Joe Tamburro

Brooklyn, N.Y.

(2) Joe Shabbouis

Woodland Hills

(3) Nicole Flum