Key members of Congress are attempting to derail a high-stakes Justice Department lawsuit against the tobacco industry by cutting off a vital source of funds to finance the government's litigation.

The government is seeking tens of billions of dollars in damages from large tobacco companies to cover federal health care programs' costs of treating cigarette-related illnesses. The tobacco industry settled a similar lawsuit with the states in 1998 for $206 billion. As the industry pressed last week in federal court here to have the suit dismissed, some of its allies on Capitol Hill were adding provisions to fiscal 2001 spending bills that would effectively throttle the government's case. The effort is being spearheaded by tobacco state lawmakers--including Rep. Harold Rogers (R-Ky.)--who want to kill the lawsuit and appropriations committee leaders who disapprove of the administration shifting funds from the departments of Defense, Veterans Affairs, and Health and Human Services to underwrite the cost of the litigation. Attorney General Janet Reno warned recently that if the lawmakers prevail, it will "severely hamper" efforts to recover tens of billions of dollars and will set "an extremely troubling precedent" of lawmakers using the appropriations process to interfere with Justice Department policymaking. "To put an end to this litigation by defunding it now would deprive federal taxpayers of their day in court," Reno said in a letter to Congress. William Corr, executive vice president of the Campaign for Tobacco-Free Kids, an anti-tobacco group, complained that "it is clear that the Republican appropriators are trying to do one huge favor for the tobacco companies, which is to protect them from litigation." Added Roger Salazar, spokesman for the American Cancer Society: "Tobacco should not be allowed to short-circuit the legal process by going to Congress and asking for special protection." House Majority Leader Richard K. Armey (R-Tex.) replied yesterday that "we don't believe that the Justice Department ought to start down this road of 'Let's use class action lawsuits as a cash cow device.' " The move marks the second time this year that lawmakers have intervened in a controversial government case. In May, the House voted to bar the Defense Department from giving Smith & Wesson preferential treatment in government contracts, part of a new effort to block the Clinton administration from rewarding gun manufacturers that adopt safety measures. Administration officials agreed to leave Smith & Wesson out of any similar lawsuit against gun manufacturers after the company pledged to install trigger locks on its products and ban all gun sales without background checks. The federal government sued the tobacco industry in September for having allegedly "conspired to deceive and mislead the American public about the danger of their products in order to maintain and attract customers generally, and children in particular." The suit includes an effort to recover billions of dollars in past Medicare expenses under the Medical Care Recovery Act, as well as civil racketeering charges against the industry. Congress and the administration first clashed over the litigation late last year, when GOP leaders rebuffed a White House request for $14 million to finance the case. Desperate for the financial wherewithal to launch the litigation last fall, the administration seized on a provision of the spending law--called Section 109--that allows agencies enlisting Justice Department assistance in civil litigation to share in the cost of the government's defense. The Justice Department has received $36 million in reimbursements from other agencies over the past five years. In a twist on the original intent of Section 109, the administration decided to assess departments and programs that stand to benefit from the tobacco suit to help cover the expense of pursuing the case. In all, the Justice Department claimed about $8 million from other departments for the fiscal year beginning Oct. 1. When lawmakers learned of the administration's maneuver, they reacted angrily. Senate Appropriations Committee Chairman Ted Stevens (R-Alaska) inserted language in the new agriculture spending bill that would rescind Section 109. Democrats strongly objected to the move, and President Clinton on Tuesday threatened to veto the legislation if it contains "special-interest provisions for the tobacco industry." In the House, Rogers, chairman of the Appropriations subcommittee on Commerce, Justice and State, modified Section 109 to prevent the Justice Department from using other agencies' funds to initiate litigation, including the tobacco suit. Rogers, a strong ally of the tobacco industry, said he wants to kill the Justice Department lawsuit because it poses a threat to Kentucky tobacco growers and because he strongly objects to the Justice Department "going through the back door" to finance its litigation. "I don't like the litigation and I don't think they have the constitutional authority to bring it," Rogers said. "I wouldn't think that the Justice Department would be playing games with congressional intent." Stevens signaled recently that he was softening his position in the face of the president's veto threat, but Rep. Jerry Lewis (R-Calif.), chairman of the defense appropriations subcommittee, Rogers and Armey indicated that the House was likely to stand firm against the Justice Department. Staff writer Marc Kaufman contributed to this report.

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