In Favor of Business

Thomas E. Kauper (pronounced koyper) is a quiet, self-effacing man whose patience has finally reached its limit. Last week, after four years as Assistant Attorney General in charge of antitrust activities, the nation's senior trustbusting job, Kauper resigned and prepared to go home to Ann Arbor, Mich. Beginning in August, he will return to a teaching post at the University of Michigan Law School, from which former Attorney General Richard Kleindienst lured him in mid-1972.

Kauper said no harsh words about the Administration, but it would not be surprising if he had. He wanted to quit a year ago, but was talked out of it by Attorney General Edward Levi. Since then, Kauper has had the rug pulled from under his feet on several important occasions by none other than Gerald Ford, whose sympathy for big business is an obstacle in the path of congressional attempts to strengthen antitrust law. At the same time, opinion in legal and political circles, led by the Burger Supreme Court, has changed markedly in favor of business. Among lawmakers, there now seems to be a greater willingness to believe traditional business arguments that bigness is both a cause and a result of efficiency and competitiveness.

Two specific incidents undoubtedly helped to speed Kauper on his way back to Ann Arbor. In March, the Justice antitrust division suffered a humiliating defeat in one of its showcase antimonopoly suits. It was forced to withdraw a complaint against the Goodyear and Firestone rubber companies, charging them with monopolizing the replacement-tire market. Reason: the charges were not provable under current law. The retreat played havoc with morale among the division's 440 lawyers.

Two weeks later, Kauper suffered another humiliation. As an Administration witness before Congress, he had endorsed a bill that, among other things, would give state attorneys general the power to sue on behalf of injured consumers. Kauper's view was approved by the Office of Management and Budget, but not by the President, who subsequently sent a letter to House Minority Leader John Rhodes withdrawing support for the bill. Kauper's pride was wounded, and so were the legislation's chances for unimpaired passage.

President Ford's dislike of new trust-fighting measures was also evident in the Senate, which finally approved a diluted antitrust bill last week after ten days of filibustering floor debate and 70 roll-call votes. Two key sections of the bill--one granting the same new power to sue and another that would hold up major mergers while antitrusters studied their effects--were drastically weakened after the White House formally withdrew its support. A third section, providing a kind of broader civil subpoena power to antitrust investigators, slipped through even though the White House refused to lobby for it. The bill now heads for a House-Senate conference committee, where it faces further delay and more crippling amendment attempts.

Despite a 37% expansion in legal staff under Kauper, the antitrust division is still undermanned and overworked. Partly as a consequence, division lawyers are toning down their claims of direct consumer benefit from two of the major antitrust actions still pending: a suit to force divestiture by American Telephone & Telegraph of its subsidiary, Western Electric, and one against IBM aimed at reducing its influence in the digital computer market.

One of Kauper's major accomplishments in office was to lobby successfully for stiffer penalties against price-fixers (threeyear prison sentences for individuals and $1 million corporate fines v. the previous one-year sentences and $50,000 fines). But after 19 months on the books, the new felony penalties have never been successfully invoked. More to Kauper's credit has been the rise in public awareness of antitrust and its relation to consumer wellbeing. Says one department official: "There is now a constituency for antitrust." Unfortunately for Kauper's successor, who may be Cornell University Law Professor Donald Baker, a former Kauper aide, that constituency does not seem to include the White House.

This file is automatically generated by a robot program, so viewer discretion is required.