U.S. Antitrust Chief Calls for Wider Wiretap Authority

Times Staff Writer

The nation’s chief antitrust enforcer, saying every price fixer and bid rigger ought to worry that the FBI may be listening when they plot their crimes, called Thursday for sweeping wiretap authority in antitrust investigations.

Assistant Atty. Gen. Charles F. Rule, in a speech to be delivered today that is likely to draw sharp reaction from the business community, made the proposal in outlining what the next Administration should do in antitrust policy.

“The next Administration should seek legislation enabling courts to authorize wiretaps to assist in antitrust investigations,” Rule says in the address, to be delivered at the New England Antitrust Conference at the Harvard Law School. A Justice Department spokesman said the text was released Thursday to attract wider attention to Rule’s comments.

Under current law, antitrust prosecutors can seek court authority for wiretapping when the alleged conduct under investigation would violate mail or wire fraud laws. While Rule said that covers most, if not all, current investigations, department sources noted that many prosecutors have not gone to court seeking wiretaps under current law.


Limited Charges

This is because wiretaps sought under mail or wire fraud statutes would have to produce evidence leading to charges that prosecutors believe would result in convictions limited to those statutes, the sources added. Prosecutors have avoided seeking these wiretaps because evidence produced by such surveillance cannot be used to prosecute other antitrust violations.

“Changing the law would eliminate any uncertainty,” Rule said. “Antitrust investigations would, as a result, be more effective. In addition, I think every price fixer and bid rigger ought to have some question when they are planning their crime that maybe the FBI is listening in.”

Rule’s remarks were reminiscent of a February, 1983, statement by President Reagan’s first antitrust chief, William F. Baxter, who said that top business executives should be required to tape-record conversations with each other to guard against discussions of price fixing or other illegal actions.


“I don’t want them even calling each other up to discuss their golf scores,” Baxter said in remarks that outraged business leaders across the country. Within hours after those comments were published, a spokesman for then-Atty. Gen. William French Smith said: “Baxter’s views are most definitely not shared by the attorney general or any other policy-level officials of the Department of Justice.”

A Justice Department spokesman said Thursday that Atty. Gen. Dick Thornburgh and his staff were aware of Rule’s proposal but that it does not necessarily represent official Administration policy.

In his speech, Rule also predicted that, regardless of who wins the presidential election, antitrust policy will not change dramatically.

“Because the most significant changes in antitrust policy in general and enforcement policy in particular have been wrought--or at least blessed--by the courts, those changes will endure,” Rule said.

“Unlike the Supreme Court split on constitutional issues, the current antitrust trend appears to maintain the support of justices ranging from (Antonin) Scalia and (William H.) Rehnquist on the right to (William J.) Brennan and (Thurgood) Marshall on the left,” Rule said.

The antitrust chief said his division is conducting 163 grand jury investigations, a record total, which compares to 50 that were under way when Reagan came to office in 1981.

Government Procurement

The total includes 46 looking into federal government procurement, 13 into price fixing by soft-drink bottlers, 12 into price fixing and customer allocations by garbage haulers and 11 into criminal pooling among bidders at auctions.


Rule also cited “a major grand jury” probe of the dairy products industry in Florida, another in Texas looking at price-fixing and bid-rigging by the steel and alloy pipe and tube industry, another looking into aluminum can price fixing and three scrutinizing price fixing on chain-link fencing.