More antitrust violators should go to jail, rather than be allowed to perform community service or only pay a fine, the Reagan administration's new antitrust chief said yesterday.
"Community service is not a substitute for jail," Assistant Attorney General Douglas H. Ginsburg said in his first news conference since taking office earlier this month. "What the community needs from these people is not service, but absence."
Ginsburg said antitrust penalties and remedies are among his top concerns and will be among the legal issues addressed as a White House working group begins its review of federal antitrust laws, which prohibit collusion and other forms of conspiracy to hurt competition in the marketplace.
Government procurement fraud, the government's sale of Conrail and the breakup of American Telephone & Telegraph Co. are among other priorities for the Justice Department's antitrust division, Ginsburg said.
Ginsburg's desire to crack down on antitrust violators matches recent statements by Attorney General Edwin Meese III defending the administration's record on prosecuting white-collar crime. Meese said the Justice Department has "vigorously prosecuted all economic crime," despite criticism of the department for dropping charges or failing to seek prison terms for individuals in cases involving E. F. Hutton & Co., Eli Lilly & Co., and SmithKline Beckman Corp.
Ginsburg expressed frustration with the federal courts for opting against prison terms for antitrust violators. The Justice Department's antitrust division has recommended jail sentences for 39 of the 52 individuals convicted of violating antitrust laws over the last year. Federal courts, however, sentenced only 10 to prison terms, opting for fines, community service and other forms of probation in the other cases.
"I'm very concerned about the federal courts' approach," Ginsburg said. He cited the case of a man convicted of rigging bids for an electrical contract: The Justice department recommended prison, but the man was sentenced to community service, which included organizing a charity golf tournament. Ginsburg called that sentence "the penal equivalent of a boondoggle," and said such action "makes a mockery of our enforcement efforts." One of the tasks of the White House panel will be to determine "how to best formulate penalties and remedies to deter theft while not having an undue chilling effect on innovation and competitiveness."
The White House working group, representing both the economic and domestic policy councils, will examine and consider proposals to change "the full range of antitrust laws," including Commerce Secretary Malcolm Baldrige's controversial call for repeal of Section 7 of the 1914 Clayton Act, Ginsburg said.
Baldrige has charged that the section may hurt U.S. competitiveness by inhibiting mergers, but his proposal was opposed by Ginsburg's predecessors J. Paul McGrath and William F. Baxter. Ginsburg, one of the cochairmen of the working group, said he will study the proposal with "an open mind."
The working group held its first meeting this week, and hopes to make recommendations to the Cabinet-level policy councils by the end of the year, he said.
On other topics, Ginsburg said:
*He recently sent the Department of Transportation "a list of concerns and questions" about the proposed remedies to the antitrust problems posed by Norfolk Southern Corp.'s bid to buy Conrail.
The list was sent prior to Norfolk Southern's announcement Wednesday that it had offered to rent major trackage rights to Guilford Transportation Industries Inc., and Ginsburg said he has not seen a copy of the new proposal. However, he added that reports of the offer indicate it would not solve all the antitrust problems outstanding.
*One of the department's top enforcement priorities will be government procurement fraud, particularly within the Department of Defense.
*Another priority will be enforcing the consent order covering AT&T's divestiture of its local operating units prior to Jan. 1, 1987.