As the government's antitrust case against International Business Machines drones on into its second decade, IBM Chairman Frank Cary is getting angrier and angrier.
In his harshest criticism of the Justice Department so far, Cary today charged government attorneys with "incompetency" and accused them of a "monumental abuse of power."
The government's case alleges that IBM monopolized the computer business and used its extensive power to stifle competition through illegal marketing practices. Since the case was filed in the final hours of Lyndon Johnson's presidency, it has generated more than 90,000 pages of transcript and 8,000 exhibits have been collected. Six U.S attorneys and four U.S. presidents have come and gone. And in the interim, the nature of the computer industry has changed dramatically.
The case is by far the longest and biggest antitrust trial in history, and Cary said today that no end was in sight.
"Like Pinocchio's nose, the trial gets longer and longer and more bizarre," he told more than 1,400 IBM shareholders gathered here for the annual meeting. He added later, "Day by day, it's becoming the lawsuit of the century-the 21st Century."
The IBM chairman spoke cooly and calmly, reviewing the prolonged history of the case, but his remarks had a sharply critical bite. He blamed the Justice Department for stretching out the case by seeking new depositions and allegedly superfluous documents from witnesses despite an agreement to end the legal discovery process by 1974.
Cary called some of the government's requests for information "ludicrous." In particular, he cited a government subpoena in February which IBM claimed would have required it to produce within two months 5 billion pages of documents housed in 2,000 separate locations throughout the world. The documents were requested in connection with a depostion the government sought from Cary.
He accused government lawyers of abusing the discovery process. He said such action runs contrary to statements by John Shenefield, head of the Justice Department's Antitrust Division, who has denounced abuses of legal processes. Cary suggested that Shenefield either "does not know what his trial team is doing or he is deliberately trying to hide what they are doing."
"Either way, the record adds up to monumental abuse of power in a major agency of the United States government," Cary added.
Cary told shareholders the company has been experiencing "unparalleled customer demand" for its products. He said IBM, which earned $3.1 billion last year on sales of $21 billion, has "a bright future not only in 1979 but as far ahead as we can see."
Claiming that the computer business is and always has been highly competitive, Cary noted that IBM has introduced 450 new products in the last 16 months. It has opened two new plants, increased employment by 20 percent, raised investment in tools and equipment by 50 percent and invested more than $1.2 billion in research and development last year alone.
Applauding IBM's recent good times and prospects for growth, shareholders today approved a 4-for-1 stock split.
They also overwhelmingly defeated a motion to stop computer sales to Communist coutries and re-elected 20 of the company's 21 directors. Grayson Kirk, president emeritus of Columbia University, resigned as a director, and Dead McKay, IBM senior vice president, was elected to the board. CAPTION: Picture, IBM Chairman Frank Cary (left) and his wife, Anne, watch Geoffrey Groves demonstrate electrocardiogram acquisition and analysis system at meeting. AP