Statements on Introduced Bills and Joint Resolutions

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. DEWINE (for himself and Mr. KOHL):

S. 1797. A bill to implement antitrust enforcement enhancements and cooperation incentives; to the Committee on the Judiciary.

Mr. KOHL. Mr. President, I rise today, with my colleague Senator DeWine, to introduce the "Antitrust Criminal Penalty Enhancement and Reform Act of 2003." This important bipartisan antitrust reform bill will strengthen the procedures under which antitrust settlements are reviewed by the courts, will increase criminal penalties for the most egregious antitrust violations, and will enhance the Justice Department's existing leniency program to encourage more antitrust criminal wrongdoers to come forward and thereby significantly assist the Department in detecting and preventing antitrust conspiracies.

This bill will accomplish three important goals. First, it will strengthen the review of the Justice Department's civil antitrust settlements under the Tunney Act. The Tunney Act is an important statute, passed nearly thirty years ago, that insures the public interest and consumers are protected when the Justice Department settles civil antitrust cases. The Tunney Act requires that, before entering any proposed consent judgment proposed by the Justice Department, the court must determine that the judgment is in the public interest. The statute also contains strict procedures for the public disclosure of proposed antitrust consent decrees and an opportunity for public comment.

The Tunney Act was passed in 1974 in response to concerns that some Justice Department settlements were motivated by inappropriate political pressure and were simply inadequate to restore competition or protect consumers. Congress concluded that review by the district courts to be an essential safeguard to deter the Justice Department from settling cases without regard for the public interest or the interest of affected consumers. The Tunney Act was enacted to end the then-prevalent practice of district judges "rubber stamping" antitrust consent decrees.

Unfortunately, in recent years, many courts—including specifically the U.S. Court of Appeals for the District of Columbia Circuit—have misconstrued the plain meaning of the Tunney Act and have returned to the practice of "rubber stamp" review of antitrust settlements. The controlling precedent in the D.C. Circuit is now that trial courts must enter antitrust consent decrees as long as they do not make a "mockery of the judicial power." This standard is contrary to the intent of the Tunney Act and effectively strips the courts of the ability to engage in meaningful review of antitrust settlements.

Our bill will restore the original intent of the Tunney Act by First, providing that courts are to independently determine that antitrust settlements are in the public interest, second, setting forth a specific list of factors that a court must examine in the course of its public interest review—rather than may consider as the statute is currently written, and third, requiring the government establish that substantial evidence and reasoned analysis supports the government's belief that the consent judgment is in the public interest. These provisions will make clear that the court has the authority to conduct a meaningful review to ensure that antitrust settlements are not contrary to the public interest, or to competition.

Second, the bill will enhance criminal penalties for those who violate our antitrust laws. It will increase the maximum corporate penalty from $10 to $100 million, will increase the maximum individual fine from $350,000 to $1 million, and increase the maximum jail term for individuals who are convicted of criminal antitrust violations from three to ten years. These changes will send the proper message that criminal antitrust violations—crimes such as price fixing and bid rigging—committed by business executives in a boardroom are serious offense that steal from American consumers just as effectively as does a street criminal with a gun. We have all learned through unfortunate experience in the last few years at some of our largest at most respected corporations the serious consequences of crime in the boardroom, with literally tens of millions of dollars being looted from shareholders. These examples of corporate malfeasance teach us that criminal sanctions for white collar crime must be serious enough to deter such misbehavior, and our bill will help ensure our antitrust penalties are strong enough to accomplish this mission.

Finally, this bill will give the Justice Department significant new tools under its antitrust leniency program. The leniency program rewards the first member of a criminal antitrust conspiracy to admit its crime to the Justice Department by granting the wrongdoer criminal amnesty. This is an important tool for law enforcement officials to detect and break up cartels that fix prices and limit supply in our economy. This new provision will give the Justice Department the ability to offer those applying for leniency the additional reward of only facing actual damages in civil suits arising out of the antitrust conspiracy, rather than the treble damage liability to which they would otherwise be subject. This statutory change will remove a significant disincentive to those who would be likely to seek criminal amnesty and should result in a substantial increase in the number of antitrust conspiracies being detected.

Each of these three reforms are important measures will significantly enhance the enforcement of our nation's antitrust laws. I urge my colleagues to support this important measure.