A New York state judge ordered Friday that two tobacco-funded research entities be placed in receivership pending the outcome of a motion filed by the state seeking to close them permanently.
State judge Stephen Crane ordered that the Tobacco Institute Inc. and the Council for Tobacco Research USA, the two tax-exempt entities, be placed temporarily in receivership, said New York Attorney General Dennis Vacco.Vacco filed a petition in state court Thursday to shut down the two tax-exempt entities.
He said the two entities were created ostensibly to provide the public with honest research and information but instead served as propaganda arms for the industry.
Vacco wrote in the petition that the two entities acted in a "persistently fraudulent and illegal manner by using their tax-exempt status to advance the efforts of the for-profit tobacco companies."
The Council for Tobacco Research and the Tobacco Institute are New York not-for-profit corporations whose certificates of incorporation were filed in 1971 and 1958, respectively.
Crane appointed retired state judge Walter Schackman and attorney Milton Gould to serve as temporary receivers of the entities pending a June 8 hearing on dissolution.
Vacco said he filed his petitions to dissolve the research entities after major tobacco companies said they would not participate in proposed federal legislation to deal with tobacco litigation and reduce underage smoking.