International Business Machines Corp. yesterday denied a Washington Post report that it had urged the Justice Department in 1978 to appoint Assistant Attorney General William F. Baxter to a three-member blue-ribbon panel to settle the government's antitrust suit against IBM.
The report is "absolutely false in its key elements," an IBM spokesman said yesterday. "IBM did not send the Justice Department a proposal, written or oral, for a 'blue-ribbon panel' composed of Messrs. Baxter, former antitrust chief Thomas Kauper, and economist Hendrik Houthakker to recommend a binding settlment of the U.S. v. IBM antitrust case."
The comment was in response to a Washington Post story in which sources close to the IBM-Justice negotiations were quoted as saying that Baxter--who at the time was a law professor--was part of a three-member panel proposed by IBM to settle the case.
A principal source yesterday reaffirmed his belief that IBM had made a concrete proposal for a group of people, including Baxter, to review the case for the Justice Department. However, this source could not confirm that a memo describing the group had been written by IBM, or that IBM proposed that the outside experts' recommendations be binding. The Post has no evidence of an IBM memo on the subject. Another source said Baxter was suggested several times by IBM as a candidate for a group that would review the case. No one has said that Baxter knew IBM had suggested his name as an outside expert. IBM's lead counsel in the case, Thomas Barr, said yesterday that IBM never suggested a panel for settling the case. Instead, he said, IBM recommended that Justice hire a group of outside experts to help high-ranking Justice officials decide whether the case should be continued.
One former high-ranking Justice Department official said that during discussions with IBM lawyers in the late 1970s on ending the long trial, one of the concepts that was raised by IBM "was a panel of some kind," which sounded to Justice like "arbitration, mediation" of the suit, he said. Justice also discussed with IBM the concept of each side's engaging outside experts to take a fresh look at the case, he said. Other Justice Department sources said they could not recall that IBM suggested that recommendations by the group were to be officially binding, contrary to Wednesday's report in The Post. They said they assumed that recommendations would be binding, saying that was one reason why a group of experts was not named.
Some of IBM's opponents in government and private industry have questioned whether Baxter should have stepped aside from the IBM case when he was appointed head of the antitrust division at Justice last year, asserting that Baxter had had previous ties to IBM, a claim disputed by IBM and Baxter. On Jan. 8, Baxter dismissed the 12-year-old IBM case.