Justice Dept. Admits Ordering Conrail Sale Papers Destroyed

Justice Department attorneys reviewing the proposed Conrail sale were instructed last summer to destroy personal working papers and notes that might become a subject of congressional inquiry, the department acknowledged Saturday.

But Assistant Atty. Gen. Douglas H. Ginsburg, who heads the antitrust division, insisted that the directive from a senior career employee was short-lived and the result of a misunderstanding.

He denied that any substantive documents involving the proposed sale of the government-owned railroad were ever destroyed, although two “innocuous” notes were discarded.

Help to Freight Service

Conrail was formed by the federal government in 1976 out of the remains of the bankrupt Penn Central Railroad and several smaller lines in an effort to preserve freight rail service in the Northeast and Midwest. Conrail became profitable in the 1980s, making a sale back to the private sector feasible.

The Justice Department has taken on an increasingly significant role in the government’s attempt to sell Conrail to the Norfolk Southern Corp., because of criticism that a merger of the two large Eastern railroads would harm competition.

The sale must be approved by Congress. Transportation Secretary Elizabeth Hanford Dole, who has recommended selling the railroad to Norfolk Southern for $1.2 billion, has said that no deal can be completed without a Justice Department ruling about its effect on competition.

Charges that the department’s antitrust division might be trying to conceal working papers and draft reports on the Conrail sale proposal from congressional committees surfaced in a letter from Rep. John D. Dingell (D-Mich.) to Atty. Gen. Edwin Meese III.

Advised ‘to Destroy Files’

In the letter, dated Dec. 9 and released Saturday, Dingell said his staff had obtained information that Justice Department lawyers and economists were advised “to destroy personal files, including notes and all drafts of documents, and not to make notes or create work papers in the future.”

This directive “represent(s) an obvious effort to deny to committee members the benefits of learning the candid views of all department staff and officials with respect to this important issue,” said Dingell, chairman of the House Energy and Commerce Committee.

He also accused the department of not responding promptly to requests for information.

In a seven-page response to Dingell, the department insisted that the antitrust division has “done everything to facilitate the Congress’ efforts to consider the Conrail sale.”

Contention Disputed

Disputing Dingell’s contention that information has been withheld, Ginsburg said the department has taken “unprecedented steps” to make information available to Congress.

He said that this disclosure has brought complaints by some staff members and in August prompted a warning from a senior official that those working on the Conrail sale “should take care” in making notes and preparing drafts.