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Antitrust Chief Raps Soft Judges : Ginsburg Says They Hamper Attack on White-Collar Crime

Times Staff Writer

The Justice Department’s new antitrust chief complained Thursday that lenient judges are undermining antitrust enforcement by ignoring tough department sentencing recommendations, letting white-collar criminals perform community services and avoid jail terms or fines.

Douglas H. Ginsburg, opening a hard-line offensive for a department under attack by Democrats as too easy on white-collar crime, dismissed community service as “the penal equivalent of a boondoggle.”

As a “uniquely outrageous” example, he cited the case of a convicted antitrust felon who was sentenced to perform the “community service” of organizing a Red Cross golf tournament instead of the heavy fine and jail sentence the Justice Department had recommended.

“That penal servitude was such that (the criminal) said he’d like to do it again next year,” Ginsburg said.

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First News Conference

At his first news conference since becoming assistant attorney general in charge of the antitrust division, Ginsburg also:

- Declared that he will give top priority to investigating and prosecuting bid rigging and similar fraud by companies that contract with the federal government, particularly the Pentagon. He said the emphasis will be on routine supplies, such as soap or toilet paper, rather than on high-technology equipment or weapons systems.

- Pronounced the department’s current guidelines for overseeing corporate mergers and enforcing the anti-monopoly section of the Clayton Antitrust Act as “right on the money.” He said the guidelines, which concede more latitude to merging corporations than was permitted in the 1960s and 1970s, reflect an “evolution” in legal philosophy from the “follies” of a more rigid application of the law.

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- Confirmed that an interagency task force, which this week began a review of whether to repeal or overhaul 19th-Century antitrust laws, would submit recommendations to the Cabinet-level Domestic Policy Council by the end of the year.

Treble Damages Questioned

Ginsburg said he would keep an open mind on whether these laws--the Clayton and Sherman acts--should be scrapped as obsolete. But he expressed doubt over whether the legal remedies and penalties prescribed in them--treble damages in most civil antitrust cases--are still effective.

“Treble damages seems insufficient to deter bid rigging and price fixing,” Ginsburg said, noting that the same penalty also works to deter perfectly legal innovative practices by small entrepreneurial businesses.

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“We need to revisit the question of how best to formulate penalties to deter theft but not deter innovative practices,” he said.

But Ginsburg said that he was most upset by the failure of courts to apply criminal penalties to persons convicted of fraud and other crimes under the antitrust laws. The Justice Department, he said, recommended jail terms in 40 of some 50 antitrust felony convictions during the past 12 months, but the courts sent only 10 defendants to jail.

“We need a serious commitment from the courts,” Ginsburg said. “In some cases, these were recidivists who had been convicted of felonies before--yet some of these people get sentences involving community service. That makes a mockery of the whole thing.”

In recent similar cases, he said, convicted white-collar criminals were directed to lecture business groups on antitrust law--and he recalled a unique case in which a $2-million fine was returned on condition that the guilty businessman endow a chair of business ethics at the University of Nebraska.

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“There is the old saying that some rob with a gun, others with a pen,” Ginsburg said. “I’m in charge of the pen group--and I want to see them in the pen.”


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