For the nation's top trustbuster, the government's antitrust case against International Business Machines Corp. will not go away.
Even though assistant attorney general William F. Baxter officially dropped the 13-year-old suit last January saying it had no merit, the case still lingers, ghost-like, as new disclosures about Baxter's prior connections with IBM come to light.
The latest: During IBM's attempts to settle the landmark suit, the computer giant frequently suggested that the Justice Department appoint a blue-ribbon panel to review the case and presumably seek a settlement. Baxter, then a Stanford University law professor, was one of at least eight antitrust experts and economists proposed by IBM for the panel.
According to a former Justice Department official involved in these settlement talks, Baxter's name was discussed several times by IBM lawyers--and even mentioned in an IBM memorandum to Justice.
"Some other names came up but I was constantly struck by the fact that they nominated Baxter" because he had not been a witness in the suit or a former government official, as several other IBM nominees were, the official said.
IBM's critics are now using this and other disclosures to argue publicly and privately that Baxter should have disqualified himself from handling the IBM and should never have dismissed it.
Baxter, however, has repeatedly denied any conflict of interest and always maintained that his dismissal of the case was due only to the fact that it lacked any merit.
"A lot of people who have an interest in IBM are trying to unsettle this, and I guess they are going around town trying to peddle these charges the best they can. . . . I just think it's a pain," he said.
Baxter says it came as news to him that IBM had suggested him for the blue-ribbon panel. "I had no notion they were proposing such a vehicle, let alone that they were proposing my name," and that he learned it only recently, when he checked into the report, Baxter said in an interview.
IBM, in confirming that it had suggested Baxter for a blue-ribbon panel, issued a statement saying Baxter and all other proposed candidates never knew they had been suggested.
"Because these suggestions never matured into serious discussions concerning the appointment of someone to review the case, no one representing IBM ever discussed with any of the persons whose names had been suggested the possiblity that they might be available for such an assignment," an IBM spokesman said.
According to the spokesman, the blue-ribbon panel was suggested at least four times since 1974 as a way for the antitrust division to evaluate the case.
Even before the case was filed in 1969, the spokesman said, "counsel for IBM had repeatedly sought to enage the Department of Justice in a discussion about the merits of the case. As the case progressed, IBM was told by successive assistant attorneys general in charge of the antitrust division and their immediate subordinates that they did not have sufficient knowledge to enter into any meaningful negotiations and that they did not have sufficient resources to set up a group separate from the trial staff to evalute the merits."
Although Justice rejected the initial proposal in 1974, IBM counsel repeated the suggestion as the antitrust chiefs changed in succeeding administrations.
Among the candidates were Phillip Areeda, professor of law at Harvard Law School, Thomas Kauper, a former assistant attorney general in charge of the antitrust division, and George P. Schultz, a former Treasury Secretary, now the president of Bechtel International Corp.
Yet, given Baxter's role in dismissing the longest antitrust case in U.S. history, his name has now emerged as the most significant, making this disclosure one of several certain to be discussed in a mid-May court hearing in Manhattan. The hearing was called by the federal judge who was trying the IBM case when Baxter dismissed it and has now expressed concern that Baxter acted illegally because of his earlier relationships with IBM. The Justice Department is also conducting an inquiry into Baxter's IBM ties.
The ties include:
* In 1976, Baxter helped a West Coast law firm that was defending IBM in a private antitrust suit by finding an expert witness to testify on behalf of the computer giant. Baxter has characterized this relationship as "trivial" and minor because he did not get involved in the merits of the case.
* During his tenure at Stanford, Baxter took a year off to study economics and write a paper on how more computers could be sold to lawyers, under a grant from IBM.
* Shortly after he dismissed the IBM case, Baxter met with officials from the European Economic Community to persuade them to drop a similar antitrust suit against IBM.
"So far as I am concerned, I dismissed the case," Baxter said in a recent interview, maintaining his relationships were so trivial that they posed no conflict of interest.