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By Mr. KOHL (for himself, Mr. LEAHY, and Mr. HATCH):
S. 3259. A bill to amend subtitle A of the Antitrust Criminal Penalty Enhancement and Reform Act of 2004 to make the operation of such subtitle permanent law; to the Committee on the Judiciary.
Mr. KOHL. Mr. President, I rise today to introduce the Antitrust Criminal Penalties Enforcement and Reform Act of 2004 Extension Act. This legislation makes permanent a critical component of the Antitrust Criminal Penalty Enforcement and Reform Act of 2004, set to expire on June 22, which encourages participation in the Antitrust Division's leniency program. As a result, the Justice Department will be able to continue to detect, investigate and aggressively prosecute price-fixing cartels which harm consumers.
The Antitrust Division of the Department of Justice has long considered criminal cartel enforcement a top priority, and its Corporate Leniency Policy is an important tool in that enforcement. Criminal antitrust offenses are generally conspiracies among competitors to fix prices, rig bids, or allocate markets of customers. The Leniency Policy creates incentives for corporations to report their unlawful cartel conduct to the Division, by offering the possibility of immunity from criminal charges to the first-reporting corporation, as long as there is full cooperation. For more than 15 years, this policy has allowed the Division to uncover cartels affecting billions of dollars worth of commerce here in the United States, which has led to prosecutions resulting in record fines and jail sentences.
An important part of the Division's Leniency Policy, added by the Antitrust Criminal Penalties Enforcement and Reform Act of 2004, limits the civil liability of leniency participants to the actual damages caused by that company--rather than triple the damages caused by the entire conspiracy, which is typical in civil antitrust lawsuits. This removed a significant disincentive to participation in the leniency program--the concern that, despite immunity from criminal charges, a participating corporation might still be on the hook for treble damages in any future antitrust lawsuits.
Maintaining strong incentives to make use of the Leniency Policy provides important benefits to the victims of antitrust offenses, often consumers who paid artificially high prices. It makes it more likely that criminal antitrust violations will be reported and, as a result, consumers will be able to identify and recover their losses from paying illegally inflated prices. The policy also requires participants to cooperate with plaintiffs in any follow-on civil lawsuits, which makes it more likely that the plaintiff consumers will be able to build strong cases against all members of the conspiracy.
Since the passage of ACPERA, the Antitrust Division has uncovered a number of significant cartel cases through its leniency program, including the air cargo investigation, which so far has yielded over a billion dollars in criminal fines. In that investigation, several airlines pled guilty to conspiring to fix international air cargo rates and international passenger fuel surcharges. Not only were criminal fines levied but one high-ranking executive pled guilty and agreed to serve 8 months in prison. In fiscal year 2004, before the passage of ACPERA, criminal antitrust fines totaled $350 million. Criminal antitrust fines in fiscal year 2009 surpassed $1 billion. Scott Hammond, the Deputy Assistant Attorney General for Criminal Enforcement in the Antitrust Division, has stated that the damages limitation has made its Corporate Leniency Program ``even more effective'' at detecting and prosecuting cartels. In fact, in the first 5 years after passage, leniency applications increased by 25 percent, and the Antitrust Division experienced ``unprecedented'' success in criminal enforcement.
ACPERA's damages limitation is set to expire in June, so we must act quickly to extend it. Otherwise, the Justice Department will lose an important tool that it uses to investigate and prosecute criminal cartel activity. The strong evidence that this program works means it is time to make it permanent. Permanence will give all parties--the government, potential amnesty applicants, and potential private litigants--a clear sign that criminal cartel enforcement continues to be a top priority, and that the amnesty program is a key and continuing component of that enforcement program. This certainty is likely to lead to increased participation in the amnesty program, the discovery of more cases, the receipt of more criminal fines, and a higher likelihood of consumers being able to recover their losses in civil litigation.
Some have raised questions about whether the leniency program could be made more effective by changing the requirements for leniency applicants to cooperate in private litigation, or by increasing the incentive for whistleblowing. Currently, there is insufficient evidence to show that changes are needed and the Department of Justice is concerned that any changes could have the unintended consequence of reducing the incentives to use the Leniency Program. Therefore, at this time we are hesitant to tinker with success. However, in response to the concerns, the Antitrust Criminal Penalties Enforcement and Reform Act of 2004 Extension Act of 2010 requires a GAO study to consider the effectiveness of the incentives for leniency applicants to cooperate in private litigation, and specifically whether such cooperation is made in a timely fashion. The Antitrust Criminal Penalties Enforcement and Reform Act of 2004 is meant to facilitate both government and private enforcement of the antitrust laws, and the GAO study will shed some light on whether it strikes the correct balance. When we receive the study, we will review it and act accordingly, changing the law if necessary.
I urge my colleagues to support this important legislation.
Mr. President, I ask unanimous consent that the text of the bill be printed in the RECORD.
There being no objection, the text of the bill was ordered to be printed in the RECORD
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