- U.S. judge orders tobacco companies to admit deception
- Congo rebels say will withdraw from Goma
- U.S. declines to name China currency manipulator
Posted: 27 Nov 2012 05:26 PM PST
WASHINGTON (Reuters) - Major tobacco companies that spent decades denying they lied to the U.S. public about the dangers of cigarettes must spend their own money on a public advertising campaign saying they did lie, a federal judge ruled on Tuesday.
The ruling sets out what might be the harshest sanction to come out of a historic case that the Justice Department brought in 1999 accusing the tobacco companies of racketeering.
U.S. District Judge Gladys Kessler wrote that the new advertising campaign would be an appropriate counterweight to the companies' "past deception" dating to at least 1964.
The advertisements are to be published in various media for as long as two years.
Details of the campaign - like how much it will cost and which media will be involved - are still to be determined and could lead to another prolonged fight.
Kessler's ruling on Tuesday, which the companies could try to appeal, aims to finalize the wording of five different statements the companies will be required to use.
One of them begins: "A federal court has ruled that the defendant tobacco companies deliberately deceived the American public by falsely selling and advertising low tar and light cigarettes as less harmful than regular cigarettes."
Another statement includes the wording: "Smoking kills, on average, 1,200 Americans. Every day."
The wording was applauded by health advocates who have waited years for tangible results from the case.
"Requiring the tobacco companies to finally tell the truth is a small price to pay for the devastating consequences of their wrongdoing," said Matthew Myers, president of the Campaign for Tobacco-Free Kids, an anti-tobacco group in Washington.
"These statements do exactly what they should do. They're clear, to the point, easy to understand, no legalese, no scientific jargon, just the facts," said Ellen Vargyas, general counsel for the American Legacy Foundation, which is known for its "Truth" advertising campaign that began in 2000 and was credited with curbing smoking by the young.
The largest cigarette companies in the United States spent $8.05 billion (5 billion pounds) in 2010 to advertise and promote their products, down from $12.5 billion in 2006, according to a report issued in September by the Federal Trade Commission.
The major tobacco companies, which fought having to use words like "deceived" in the statements, citing concern for their rights of free speech, had a muted response.
"We are reviewing the judge's ruling and considering next steps," said Bryan Hatchell, a spokesman for Reynolds American Inc.
Philip Morris USA, a unit of Altria Group Inc, is studying the decision, a spokesman said.
A spokesman for a third major defendant, Lorillard Inc, had no immediate comment.
The Justice Department, which urged the strong language, was pleased with the ruling, a spokesman said.
Kessler's ruling considered whether the advertising campaign - known as "corrective statements" - would violate the companies' rights, given that the companies never agreed with her 2006 decision that they violated racketeering law.
But she concluded the statements were allowed because the final wording is "purely factual" and not controversial.
She likened the advertising campaign to other statements that U.S. officials have forced wayward companies to make.
The Federal Trade Commission, she wrote, once ordered a seller of supposed "cancer remedies" to send a letter on its own letterhead to customers telling them the commission had found its advertising to be deceptive.
"The government regularly requires wrongdoers to make similar disclosures in a number of different contexts," Kessler wrote.
Early in the long-running case, the Justice Department hoped to extract $280 billion from the companies to pay for a smoking cessation program and other remedies.
It later dropped the demand to $14 billion, and then Kessler ruled she could not force them to pay for such a program at all.
When Kessler first ordered the advertising campaign in 2006 - setting off six years of debate on the wording - the statements were to run on major television networks, on cigarette packaging, as full-page newspaper ads and on corporate websites.
The idea was to "structure a remedy which uses the same vehicles which defendants have themselves historically used to promulgate false smoking and health messages," she wrote then.
But in the years since, "the types of media in which defendants convey commercial messages of this nature have changed dramatically," Kessler wrote on Tuesday.
Perhaps, she added, the ads should also be in the online versions of newspapers.
Analysts who follow tobacco companies declined to comment on Tuesday's ruling, saying it would be hard to estimate the impact of the court-ordered advertising campaign until all of the details are known.
Vargyas, of American Legacy, is expecting a drawn-out fight.
"The tobacco companies will appeal absolutely everything," she said.
The case is USA v. Philip Morris USA, et al, U.S. District Court for the District of Columbia, No. 99-cv-02496.
Separately, tobacco companies are battling in court with the U.S. Food and Drug Administration (FDA) over the warning labels on tobacco products. The FDA has proposed new graphic warning labels - one of which includes a photo of a man with a hole in his throat - that companies consider a free speech violation.
(Additional reporting by Lisa Baertlein in Los Angeles; Editing by Howard Goller, Gary Hill, Peter Galloway, Jim Marshall and Phil Berlowitz)
Copyright © 2012 Reuters
Posted: 27 Nov 2012 05:23 PM PST
GOMA, Democratic Republic of Congo (Reuters) - Rebels in the Democratic Republic of Congo said on Tuesday they would pull out of the eastern city of Goma in an apparent stalling of their drive to "liberate" the whole country.
The situation on the ground remained far from clear after the rebels' political and military leaders gave conflicting statements over their intentions, though U.N. peacekeeping chief Herve Ladsous said in New York "there were indications tonight that possibly the M23 elements were starting to withdraw."
"Of course that was already late in the evening, and that will have to be confirmed tomorrow," Ladsous told reporters after briefing the U.N. Security Council behind closed doors.
The eight-month insurgency has threatened to develop into an all-out war in a region dogged by nearly two decades of conflict that has killed more than 5 million people and is fuelled by competition over mineral resources.
The Ugandan military, which has coordinated talks with the M23 rebels, said earlier that M23 leader Colonel Sultani Makenga had agreed to a plan drawn up by regional heads of state for the rebels to leave Goma within 48 hours, with no conditions.
But the political head of M23, Jean-Marie Runiga, later told journalists in Goma they would withdraw from the city only if President Joseph Kabila agreed to their demands. The Congolese government dismissed the chances of this happening.
"There's no division, General Makenga has said that we'll withdraw, so that's what we're in the process of doing," deputy M23 spokesman Amani Kabasha told Reuters by telephone.
"If we withdraw the force, everyone leaves ... It's not contradictory (to Runiga's statement). He said we were prepared to withdraw from the town but that Kabila must listen to us."
Kabasha said the entire movement would head 20 km (12 miles) toward the town of Kibumba, directly north of the city.
Makenga confirmed the decision to pull out from Goma to Reuters by text message, without giving further details.
U.N. experts say the M23 rebels are backed by Rwanda. The rebels captured Goma last week after Congolese soldiers withdrew and U.N. peacekeepers gave up defending the city. Ladsous said the peacekeepers remained in control of the Goma airport.
Runiga had told reporters in Goma his forces would withdraw only if Kabila held national talks, released political prisoners and dissolved the electoral commission, a body accused by Western powers of delivering Kabila a second term in a flawed 2011 election.
He said Kabila's government was rotten with corruption, lamented the country's dilapidated roads and said Congo's only schools and hospitals had been left by Belgian former colonial rulers. He said any talks would have to tackle such issues.
"We are fighting to find solutions to Congo's problems. Withdrawal from Goma is not a precondition to negotiations but a result of them," Runiga had said.
NO SIGN OF PULL-OUT
The conflicting statements indicated a solution to the insurgency in eastern Congo, which has displaced 140,000 civilians according to the United Nations, was not close.
Lambert Mende, Congo's government spokesman, said the pullback was expected to take until Friday but that it was too early to say if it would definitely happen.
"We prefer to wait, these are not people who keep to their word," he told Reuters by telephone from the capital Kinshasa.
Ugandan military chief Aronda Nyakayirima told journalists in Kampala the plan specified M23 would begin its withdrawal on Tuesday. Government troops would enter Goma two days later, followed by a visit by regional defence chiefs "to evaluate the situation and find out whether all these timelines were met".
No rebel soldiers were visible in Goma on Tuesday evening.
"We haven't yet seen any significant troop movements out of the city," Hiroute Guebre Selassie, head of the UN mission in Congo MONUSCO's North Kivu office, told Reuters.
African leaders had at the weekend called on M23 to abandon their aim of toppling the government and to withdraw from Goma.
The Great Lakes heads of state also proposed that U.N. peacekeepers in and around the city should provide security in a neutral zone between Goma and new areas seized by M23.
POTENTIAL TO ESCALATE
In a potential further escalation, Rwanda said on Tuesday its troops clashed with Rwandan FDLR rebels who attacked three villages on its border with Congo.
FDLR spokesman La Forge Fils Bazeye said on Tuesday evening that his fighters had attacked Rwandan army positions on the border north of Goma.
"I want to confirm the clashes between our fighters and the Rwandan army, some of our fighters are still there, the fight continues," he told Reuters by telephone.
Rwanda has in the past used the presence of the FDLR as a justification for intervening in neighbouring Congo. But the rebel group, which experts say has dwindled in strength, has not mounted a significant attack on Rwanda in years.
Rwandan government spokeswoman and Foreign Affairs Minister Louise Mushikiwabo said they would not allow Tuesday's attack to interfere with the regional push to bring peace to eastern Congo.
"This morning's attack by the FDLR forces from their bases in DRC is clearly an attempt to take advantage of the volatile situation in eastern DRC," she said in a statement.
"We will counter any violation of Rwandan territory by the FDLR and continue to protect our borders but will not allow today's fighting to derail the ongoing regional peace process."
Congo and U.N. experts accuse Rwanda of backing the M23 group in eastern Congo, which has big reserves of gold, tin and coltan, an ore of rare metals used in making mobile phones.
That is denied by Rwandan President Paul Kagame who has long complained that Kabila's government and U.N. peacekeepers have not done enough to drive out the FDLR from eastern Congo.
(Additional reporting by Louis Charbonneau in New York, Elias Biryabarema in Kampala, Jenny Clover in Kigali, Stephanie Ulmer-Nebehay in Geneva; Writing by Yara Bayoumy, Richard Valdmanis and Bate Felix; Editing by Robert Woodward and Paul Simao)
Rwanda says FDLR rebels attacked villages, rebels deny this
Copyright © 2012 Reuters
Posted: 27 Nov 2012 04:36 PM PST
WASHINGTON (Reuters) - The Obama administration said on Tuesday that China's currency remained "significantly undervalued," but stopped short of labelling the world's second-biggest economy a currency manipulator.
Although Beijing controls the pace at which the yuan can rise, the U.S. Treasury said in a congressionally mandated semi-annual report that China did not meet the legal requirements to be deemed a currency manipulator.
The label is largely symbolic, but would require Washington to open discussions with Beijing on adjusting the yuan's value.
It has been 18 years since the U.S. Treasury has designated any country a manipulator. China was labelled a manipulator between 1992 and 1994.
The latest report reflected both the administration's desire to maintain good relations with its top creditor and an attempt to keep up pressure for changes in China that could benefit the U.S. economy and mollify domestic critics.
The report noted that the yuan, also known as the renminbi, had risen 12.6 percent against the U.S. dollar in inflation-adjusted terms since June 2010. An official said it was up 9.7 percent on a nominal basis through Tuesday, when it closed at a record high.
The Treasury also said China had "substantially" reduced its intervention in foreign exchange markets since the third quarter of 2011 and had loosened capital controls.
"In light of these developments, Treasury has concluded that the standards ... have not been met with respect to China," it said. "Nonetheless, the available evidence suggests the renminbi remains significantly undervalued," the report added, echoing the Treasury's last assessment in May.
Ted Truman, a Treasury official under former President Bill Clinton, said it was important to keep a watchful eye on China's currency policy.
"We have the aftermath of 10 years of misbehaviour," said Truman, who is now with the Peterson Institute for International Economics. "It would probably be unwise and too soon to declare victory."
During the U.S. presidential campaign, Republican candidate Mitt Romney pledged to label China a manipulator on his first day in office to show he would be tougher on the chief U.S. economic competitor than President Barack Obama.
Many U.S. businesses and lawmakers complain that Beijing keeps the value of its currency artificially low to gain an advantage in trade at the expense of American jobs.
But an international consensus is growing that the yuan is closing in on its fair value after about a decade at an artificially weak level. The International Monetary Fund softened its language on the yuan in July.
YUAN AT RECORD HIGH
Signs of a recovery in the Chinese economy and a new round of quantitative easing by the U.S. Federal Reserve have led traders to push the yuan higher.
But China's central bank has kept a lid on the move. The central bank allows the yuan to rise or fall by only 1 percent from whatever rate it sets each day.
Charles Schumer, the No. 3 Democrat in the U.S. Senate and a long-time critic of China's yuan policy, said the Treasury passed up an opportunity to level the trade playing field.
"It's time for the Obama administration to rip off the band-aid, and force China to play by the same rules as all other countries," the New York senator said in a statement.
But the U.S.-China Business Council, which represents U.S. companies that do business with China, applauded the decision.
"The exchange rate has little to do with the U.S. trade balance or employment," council President John Frisbie said. "We need to move on to more important issues with China, such as removing market access barriers and improving intellectual property protection."
The Treasury said further appreciation of the yuan would help China balance its economy toward consumption by giving households greater purchasing power.
It called on China to reduce its "exceptionally high" foreign exchange reserves and publish data about its intervention in currency markets.
The Obama administration also used the currency report to keep pressure on South Korea to limit its foreign exchange intervention.
South Korea says it intervenes to smooth the volatility of its won currency, but it has gone into the market throughout 2012, the Treasury report said. In July, the IMF said the won was undervalued by up to 10 percent.
"We will continue to press the Korean authorities to limit their foreign exchange interventions to the exceptional circumstances of disorderly market conditions," the report said.
Copyright © 2012 Reuters
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