The AAI favors vigorous public and private enforcement.
Blawgletter just read a troubling item in Corporate Crime Reporter. The title — "Connor Says Antitrust Division Becoming Increasingly Irrelevant In Fight Against Cartels" — refers to an interview with an Economics professor, John Connor, of Purdue University. Dr. Connor last month finished a 93-page report for the pro-enforcement American Antitrust Institute. Among his findings:
- Since 1990, the Antitrust Division has collected only 20 percent of the fines and settlements that government agencies and private plaintiffs have garnered from antitrust law violators.
- The number of criminal cartel cases that the Division brought dropped 49 percent from 1995-99 to 2004-06.
- The Division devotes just 29 percent of its staff and budget to detecting and prosecuting cartels.
The Division’s dismal performance has provoked us to comment, too. Posts have included:
- Antitrust Division: Going Straight for the Capillary.
- Antitrust Division Disbands, Declares Competition Safe.
- Joy! A New Price-Fixing Investigation.
- Edentulous Antitrust Law?
- Antitrust Crime Watch.
- Annals of Antitrust Enforcement: Where Have All the Price-Fixers Gone?
The Corporate Crime Reporter item also quotes Antitrust Division representative Scott Hammond, who responded thus to suggestions that the private antitrust bar does more than the Division for effective enforcement:
I have been with the Division for 20 years. I am familiar with every single international cartel investigation that we have opened. I can tell you that there is not a single example, not one, where we have learned about an international cartel that was detected by the private bar before we began an investigation. There is not a single case where the private bar has detected the cartel activity before we did where we subsequently brought a criminal prosecution.
Hmmm. The statement means either that the Division always beats the private bar to the punch or that it never brings a case if the private bar uncovers cartel activity first. Mr. Hammond also said:
Furthermore there is not a single case brought by the plaintiff bar where as the result of their discovery they have advanced one of our international cartel prosecutions or investigations.
Those pesky private lawyers are useless!
Last week we heard Mr. Hammond address the Dallas Bar Association’s antitrust section and asked him what policy the Division has for following up on investigations that it hears about from antitrust enforcers in Europe. He said that the Division works quite a lot with the European Commission, but he offered no explanation for why the EC brings so many more cases than the Division does. He nonetheless touted the marine hose prosecution, which principally benefits multinational oil companies. (They use the big tubes to transfer petroleum from tankers to storage facilities.)
Mr. Hammond also praised the Division’s work in foiling bid-rigging plots and kickback schemes, particularly in connection with government contracts and the federal e-rate program. That doesn’t strike us as the core mission of the Antitrust Division, and yet it absorbs 71 percent of the Division’s resources. No wonder, as Professor Connor said, "fewer than 20 percent of the world’s cartels are being investigated and prosecuted."