Yesterday, Assistant Attorney General for Antitrust Division, Makan Delrahim gave a talk at the ABA Antitrust Section Fall Forum. I encourage you to read Mr. Delrahim’s full remarks (here). There were a couple of items in particular that I found exciting (in an antitrust sense of “exciting”) that relate to the Antitrust Division’s commitment to: 1) investigating and prosecuting cartels that rig public procurement contracts; and 2) the supporting whistleblower (False Claims Act) cases to recover damages (in addition to a criminal fine) that reward whistleblowers for coming forward. Below are a few excerpts from Mr. Delrahim’s talk:
- As some of you may have seen, the Division announced just yesterday a set of global settlements with three South Korean companies. Those unprecedented settlements resolve criminal charges and civil claims arising from a bid-rigging conspiracy that targeted fuel supply contracts to U.S. military bases in South Korea. They are the result of tremendous hard work in parallel criminal and civil investigations by the Antitrust Division’s Washington Criminal I Section, the Transportation, Energy, and Agriculture Section, and the Fraud Section of the Civil Division. We were assisted ably by our partners at the FBI and the Defense Criminal Investigative Service.
- The three companies agreed yesterday to plead guilty to criminal charges under Section 1 of the Sherman Act, and they will pay at least $82 million in criminal fines for their involvement in the conspiracy. Importantly, the three defendants have also agreed to cooperate with the ongoing criminal investigation of the conduct.
- We did not stop there. We are committed to using all authorities Congress has granted to us to remedy antitrust injuries to the American taxpayer. Those tools include the authority conferred in Section 4A of the Clayton Act. Section 4A is an important but underused enforcement tool that allows the government to recover treble damages for antitrust violations when the government itself is the victim.
- To that end, the Division established a parallel civil enforcement team, led by Kathy O’Neill and a group of capable litigators from the Transportation, Energy, and Agriculture Section to pursue parallel civil actions for damages. We negotiated separate civil resolutions with each of the three defendants on behalf of American taxpayers. We also worked alongside our partners in the Civil Division’s Fraud Section, who pursued charges against the defendants under the False Claims Act for making false statements to the government in connection with their conspiracy.
- To resolve both the civil antitrust and the False Claims Act violations, these three defendants have agreed to pay an additional $154 million in total. They also have agreed to cooperate fully with the Division’s ongoing civil investigation and to implement effective antitrust compliance programs.
This is great stuff. Government bid rigging cases are extremely important. The harm from bid rigging is extremely focused and the recovery to the government can be substantial. Government contract bid rigging conspiracies can often last decades so ending the conduct also means a return to competitive bidding and lower prices for the government. Government contract cases can be extremely gratifying to work on and a great way for lawyers to get hands on training. When I was Chief of an office, we took great pride and satisfaction in the returning money to the taxpayers. Congratulations to the staff (from several different offices and agencies) on these results.
Thanks for reading. Bob Connolly