Antitrust Chief Discloses 146 Price-Fixing, Bid-Rigging Probes

The Justice Department disclosed Thursday that it has nearly 150 grand juries looking into allegations of criminal price-fixing and bid-rigging in a wide variety of industries ranging from defense contracting and gasoline retailing to soft drinks and kosher food.

The agency is also in the midst of developing ways to use antitrust laws for the first time against organized crime.

The Justice Department’s new antitrust chief, in an effort to dispel criticism that the Reagan Administration has stopped enforcing the antitrust laws by allowing too many corporate mergers, provided an unprecedented glimpse of his agency’s ongoing activities.

Charles F. Rule, in his first press conference since being confirmed by the Senate as head of the antitrust division, said the department has nearly tripled its active investigations of price-fixing conspiracies from 50 when President Jimmy Carter left office to 146 today.

“My No. 1 priority . . . is simple: criminal cases and more criminal cases,” said Rule, who served as acting antitrust chief for nearly a year before officially taking over on Aug. 3.

“The purpose (of disclosing the number of active investigations) is to . . . put to rest the argument that the law is not being enforced,” he said.

The Justice Department is overseeing 35 grand jury probes of alleged bid-rigging in government procurement, Rule said, and is actively pursuing about a dozen cases each in electrical contracting, road building, soft drinks and waste disposal. In addition, the agency is looking into criminal charges in industries ranging from billboards and school buses to automobile engines and concrete pipe.

While the Administration generally has not challenged large corporate mergers unless they directly threaten consumers, its focus on price-fixing has been directed mostly at smaller companies.

Rule, defending the shift in emphasis, said critics “have wrongly interpreted a change in enforcement patterns as a failure to enforce the laws.”

In a separate interview, Rule said previous administrations “wasted a lot of resources” and produced a “chilling effect on industry” by pursuing “misguided efforts” to prove that excessive concentration or aggressive competition aimed at undercutting existing firms violated the antitrust laws.

But Rule, commenting on growing public dissatisfaction with the airline industry, acknowledged that the department is in no position to prevent airlines from imposing higher prices on routes serving hub airports where one carrier dominates the market.

“We’d do more harm than good if the Justice Department attempted to break up airlines or re-regulate the industry just because carriers are charging too high a price on a few routes,” Rule said. “There are market-oriented solutions to the problems in the airline industry that are better than filing a lot of court cases.”

At his press conference, Rule defended the Administration’s antitrust policy on the familiar grounds that the rise of international competition means that “we can no longer afford to attack American companies that are using innovative techniques to keep costs and prices down.”

Rule, in disclosing the new attempt to use antitrust laws against organized crime, said: “Don’t get me wrong--I don’t think you can crush the mob with the Sherman (Antitrust) Act alone.”

But he noted that organized crime figures entering legitimate business often force their competitors “to fall in line, basically snuffing out competition wherever they go.”

He said violations of the antitrust laws can result in prison terms of as much as three years and fines of up to $1 million.