WASHINGTON, D.C., October 20, 2008 — A renegade network of Russian and Eastern European factories is behind at least $1 billion worth of contraband “Jin Ling” cigarettes pouring into Europe, according to a five-month investigation by the International Consortium of Investigative Journalists (ICIJ), a project of the Center for Public Integrity in Washington, D.C.

The story, “Made To Be Smuggled,” leads off a six-part ICIJ series on cigarette smuggling — Tobacco Underground — with interactive maps, undercover video, online interviews with experts, and links to groups and documents worldwide.

As delegates from nearly 160 countries meet in Geneva this week to negotiate a global protocol to crackdown on tobacco smuggling, the ICIJ team has pieced together the unique story of the world’s first ever cigarette brand designed and manufactured only for smuggling. “Jin Ling is the most disturbing new development anywhere in the world in the illegal tobacco trade,” said Luk Joossens, a World Health Organization expert in tobacco smuggling. “They are flooding into Europe.”

ICIJ first exposed the complicity of Big Tobacco in smuggling eight years ago, helping spark lawsuits and government crackdowns around the world. “Since ICIJ’s path-breaking investigative reporting in 2000, the illegal trade in contraband cigarettes has expanded with new players, new routes, and new techniques,” said Center Executive Director Bill Buzenberg. “The multi-billion illegal trade in cigarettes not only further damages public health, but contributes to the cash economy of criminal syndicates and steals vast sums from the public coffers in lost tax revenues.”

Using undercover video, public records and customs data, ICIJ reporters go inside the cigarette smuggling industry, starting with the Jin Ling plant run by the Baltic Tobacco Factory in Kaliningrad, Russia. The BTF network now claims to be able to produce over 24 billion cigarettes annually — equivalent to 7 percent of legal European Union cigarette imports.

The illicit trafficking of tobacco is a multibillion-dollar business, according to the ICIJ series, fueling corruption, organized crime, and terrorism; robbing governments of needed tax money; and spurring addiction to a deadly product. Once dominated by Western multinational companies, cigarette smuggling has morphed into a diverse new industry — with major players such as Chinese counterfeiters and Russia’s Baltic Tobacco Factory.

Experts believe that contraband accounts for 11 percent of all cigarette sales, or about 600 billion “sticks” annually. The cost to governments worldwide is massive: an estimated $40 billion to $50 billion in lost tax revenue during 2006.

The Tobacco Underground website uses interactive and multimedia resources, from a map of global smuggling routes to interviews with experts and undercover video, to help readers grasp the scope of the growing illicit trade in contraband tobacco. Among the other stories ICIJ is releasing online and in print today:

• Smoking Dragon, Royal Charm: A Tale of Four FBI Agents, 62 Chinese Smugglers, and a Billion Bogus Cigarettes. Today, China has become the world’s largest supplier of counterfeit cigarettes — producing roughly 200 billion sticks annually. ICIJ traces the path of two groundbreaking cases, including the story of a massive smuggling network that moved a billion counterfeit cigarettes from China into the United States.

• ‘The Guy in the Wheelchair’: How an El Paso Smuggler Moved a Half-Billion Cigarettes Across America. Jorge Abraham masterminded the trafficking of up to half a billion cigarettes across the United States, sold largely by smoke shop vendors on Indian reservations. Here’s how Abraham got off easy, saved by a “House of Death” and a compromised informant.

• Blame the Distributor: How Gallaher Stayed in the Smuggling Game. Since ICIJ first documented the cigarette industry’s role in smuggling, Big Tobacco has seemingly retreated from the practice. Yet for Britain’s largest cigarette manufacturer, Gallaher Tobacco, the smuggling continued, working through distributors to funnel large quantities of cigarettes to developing countries with no real market.

In the coming months, ICIJ will continue to unfold its year-long investigation into tobacco trafficking, from the underground factories of China to America’s own Indian reservations.

This project is supported by the Johns Hopkins School of Public Health, with organizational support provided by Carnegie Corporation of New York, the Ford Foundation, the JEHT Foundation, the John D. and Catherine T. MacArthur Foundation, the Park Foundation, the Rockefeller Brothers Fund and other generous institutional and individual donors.