A federal judge upheld an administration claim of executive privilege yesterday and barred Commerce Secretary Malcolm Baldrige from testifying about White House deliberations on telecommunications policy in the government's antitrust suit against American Telephone & Telegraph Co.
The decision by U.S. District Court Judge Harold Greene dealt a serious blow to the efforts of AT&T to inject the White House deliberations about telecommunications policy into the Justice Department's ongoing antitrust case against the Bell System.
AT&T claimed that Baldrige, who the company had called as a defense witness, had waived the privilege claim by testifying in public before the Senate Judiciary Committee in August on matters involving the antitrust case and then-pending telecommunications legislation.
But as Baldrige was in the courtroom waiting to take the witness stand, Greene ruled that because AT&T was seeking testimony on deliberations involving President Reagan, Baldrige's and other advisers' claims of executive privilege are valid.
"If this is not privileged, nothing is privileged," Greene said in a ruling from the bench, noting that he had read Baldrige's Senate testimony and "found no such waiver." Immediately after the ruling, an AT&T lawyer said Baldrige would not be called under those circumstances.
The action came on the 127th day of the trial, as AT&T continued to wind down its defense. The company recently has called such witnesses as Leonard Woodcock, former ambassador to the Peoples Republic of China; former Commerce secretary Philip Klutznick; and historian John Hope Franklin.
The Baldrige matter is particularly important, however, because the administration has considered ordering the Justice Department to drop the seven-year-old landmark case, and AT&T hoped to show that top government officials opposed the case. In fact, a Commerce Department task force had recommended that the case be dropped and opposed the break-up of AT&T sought by the Justice Department, arguing that a restructuring of AT&T is a legislative matter that could not pass Congress with the antitrust case pending.
Ironically, the Justice Department's trial team, whose leadership had fought Commerce Department efforts to dump the case, assisted Baldrige's legal effort to avoid testifying on the administration deliberations.
Ultimately, however, the task force agreed to endorse a Senate bill on the matter, although the assistant attorney general for antitrust, William Baxter, has said that the task force favors dropping the case only if Congress passes legislation addressing the competitive problems raised by the lawsuit.
AT&T's lead counsel, George Saunders, said after the ruling that he "wanted to prove that the government thinks the break-up of the Bell System is crazy" and "not in the national interests of this country." Saunders said AT&T still plans to call Secretary of State Alexander Haig and Defense Secretary Caspar Weinberger.
Before Greene ruled on the Baldrige matter, Harold Brown, Defense secretary in the Carter administration, testified that a break-up of AT&T would "erode" the Defense Department's communications capabilities and would rob the defense communications system of the integrated planning capacity of the telephone giant. "You need to have a unified design, development and operation authority of some kind," said Brown, now a Johns Hopkins University professor.
But Brown admitted that if the AT&T local operating companies and the long-distance firms were permitted to plan as AT&T and the independent companies do now, the problems could be minimal. He said that the planning problems would be particularly acute if AT&T and its divested units were competing against each other.
Questioned by government attorney Gerald Connell, Brown admitted that he has little antitrust expertise and said his basic knowledge of telecommunications comes from his years at the Department of Defense as a government user of AT&T services.