Assistant Attorney General William F. Baxter was one of three antitrust experts who International Business Machines Corp. urged the Justice Department to nominate to a blue-ribbon panel in 1978 to settle the government's antitrust suit against IBM.
The proposal to nominate Baxter--then a law professor--was more than just an informal recommendation of eight antitrust experts as IBM suggested earlier this week, sources familiar with the IBM-Justice Department negotiations said yesterday.
The sources indicated that, in 1978, IBM sent the Justice Department a written proposal for a blue-ribbon panel comprised of Baxter, former assistant attorney general Thomas Kauper, and economist Hendrik Houthakker, who had advised the government on the IBM case from 1971 to 1977.
The panel was to review the case and come up with a recommendation for a settlement that would end the antitrust suit filed in 1969. Under IBM's proposal, the panel's decision would be binding.
"It was the assumption of the people at Justice that Baxter was clearly IBM's choice" for the panel, since the other two had connections with the department, one source said. Both IBM and Baxter said earlier this week that Baxter never knew about the proposal because it never was taken seriously by the Justice Department.
Even though Baxter said he did not know he was being nominated by IBM, the company's decision to select him for a settlement panel is seen by some IBM opponents as further indication of a relationship between IBM and Baxter during the 1970s that should have caused Baxter to step aside from the IBM case once he joined the Justice Department, the critics say.
In January, Baxter dismissed the IBM suit, which was about to enter its 13th year, saying it was without merit.