On May 15, 2015 both Bill Baer, Assistant Attorney General, Antitrust Division and Edith Ramirez, Chair of the Federal Trade Commission, testified before the House subcommittee that overseas the competition agencies. This post is a brief summary of Bill Baer’s testimony as it relates to cartel enforcement. His statement to the committee is available here.
- Funding—The President requested that the Antitrust Division receive an appropriation of $165 million, a 1.7% inflationary increase over 2015. The Antitrust Division’s budget is offset almost 50% by Hart-Scott-Rodino (HSR) premerger filing fees paid by companies planning to merge. Moreover, the Division routinely obtains criminal fines more than 10 times the annual budget. [The money does not go to the Division’s budget, a bit of a conflict of interest if that were to happen, but does support the Crime Victims Fund.
- Some Statistics–Since 2009, the Division has obtained 122 convictions and more than $2 billion in fines and penalties from financial crimes prosecutions of collusion and fraud affecting municipal bond investment instruments, benchmark interest rates, and real estate and tax lien auctions. The Division recently secured a guilty plea in a case involving two companies using complex algorithms to fix prices for poster art online. The auto parts investigation is the largest criminal investigation in the Antitrust Division’s history and to date has resulted in charges against 35 companies and 52 individuals. Thus far, 30 executives and 35 corporations have pleaded guilty or agreed to do so and to pay more than $2.5 billion in criminal fines. Over 100 individual in four states, Alabama, California, Georgia, and North Carolina, for conspiring at local real estate foreclosure auctions.
- Incarceration–Individual defendants are going to jail, and for increasing periods of incarceration. Between 2010 and 2014, the average number of individuals sentenced to prison increased 38 percent and the average sentence increased from 20 months to 25 months when compared with the previous five-year period.
- Extradition–The Division will continue to seek opportunities for extradition of foreign nationals. Last year an Italian national was extradited from Germany for participating in a price-fixing/bid rigging conspiracy. The Division also extradited a Canadian national charged with conspiracy to defraud the Environmental Protection Agency’s cleanup of certain Superfund sites in New Jersey.
Two other recent items of note:
- The Division recently lost a trial when Thomas Farmer was acquitted by a jury on charges that he had participated in a conspiracy to fix prices/rates for ocean shipping of cargo between the Untied States and Puerto Rico (here).
- On May 18th, Phillip D. Murphy, the former managing director of Bank of America’s municipal derivatives group from 1998 to 2002, was sentenced to serve 26 months in prison for his role in a conspiracy to defraud related to bidding for contracts for the investment of municipal contracts (here). This is, I believe, the last of the munibond prosecutions–though some defendants still have appeals pending.
Thanks for reading.