At the close of a major trial that dozens of Justice Department lawyers spent more than five years preparing, the department stunned a federal courtroom last week by reducing the penalties sought against the industry, from $130 billion to $10 billion, over accusations of fraud and racketeering...

Mr. McCallum, No. 3 at the department, is a close friend of President Bush from their days as Skull & Bones members at Yale, and he was also a partner at an Atlanta law firm, Alston & Bird, that has done legal work for R.J. Reynolds Tobacco, part of Reynolds American, a defendant in the case...

In saying the decision was politically motivated, critics have pointed not only to Mr. McCallum's role at a law firm tied to the industry, a role that a Justice Department ethics office ruled did not prevent him from overseeing the case, but also to the industry's political contributions to the Republican Party. The industry gave $2.7 million to Republicans last year and $938,000 to Democrats...

The memorandum also questioned the handling of some government witnesses who were asked to alter their written testimony to reflect the department's concerns...

The explanations have not quieted complaints from Democrats. A group of 50 lawmakers sent a letter to Attorney General Alberto R. Gonzales on Wednesday urging him not to agree to an accord with the tobacco industry "based on the unreasonably weak demands made by the government last week."