Joe Kaestner still doesn't quite understand what happened to him.
Just six months ago, Kaestner was riding high as the assistant attorney general in charge of Virginia's new and dynamic antitrust section. He was instrumental in prosecuting the state's first public bid-rigging cases and the first cases of public bribery in Virginia in 30 years.
A native New Yorker, Kaestner had an aggressive, confident and outspoken style. Coupled with his courtroom successes, that style won him favorable press coverage but angered some of Main Street's most influential businessmen. Most importantly, however, he appeared to have the unreserved support of his boss, state Attorney General J. Marshall Coleman, himself no stranger to publicity.
Today, Joe Kaestner's reign is over and his antitrust section appears to be a demoralized wreck. In two weeks, he becomes assistant prosecutor for the City of Richmond.
Kaestner's fall from grace is, in large part, the result of a clash between two strong-willed men -- himself and Coleman. Anson Franklin, Coleman's administration director and chief adviser, calls Kaestner's resignation a "personnel matter" and says there is no significance beyond that.
But for those who saw Kaestner and the antitrust section as the state's only effective weapons against white-collar crime, his departure could signal an unfortunate return to business as usual in a state government that some observers believe prefers to deny the existence of corruption rather than fight it.
Joseph W. Kaestner, 33, came to town in 1977 after several years with New Jersey's antitrust unit. Using Virginia's new antitrust section, he quickly made a name for himself here, successfully prosecuting used car dealers in Tidewater and Richmond for illegally tampering with odometers and three-out-of-state companies for bid-rigging on traffic contracts with the state highway department and Fairfax County.
Kaestner's most noted work began last year when he took over a probe in the state's scandal-ridden division of purchases and supply. He revived the moribund investigation and assisted a special grand jury in sifting through the evidence. The result so far: Three businessmen and two state employes have been indicted for bribery, bid-rigging or other corrupt practices.
Coleman, a maverick Republican elected in 1977, has build a reputation as an activist attorney general, at least partly on the record established by Kaestner's unit. Coleman held a press conference after the release of the first grand jury report and even appeared in court to prosecute the first bribery case.
But there were problems. Coleman complained privately that Kaestner at times was uncontrollable, a poor administrator and a recalcitrant subordinate -- sometimes slow in responding to Coleman's request for help in cases Kaestner found unimportant. Coleman also complained the antitrust unit was not keeping him sufficiently informed on new investigations.
The split came in December over a trivial matter -- whether Kaestner had to submit a travel voucher in advance to Franklin, whom some office members look upon as Marshall's "hatchet man."
What followed, according to insiders, was this:
Kaestner blew up, marched over to Coleman's office for a brief shouting match and offered to resign. He then went home for a planned Christmas vacation, cooled off and changed his mind.
Coleman-Kaestner shouting matches had taken place before, but had been patched up, insiders say. This time, however, Coleman reacted differently.
Although Coleman accepted Kaestner's apology and the withdrawal of the resignation offer, Coleman docked Kaestner's annual pay $1,000 and relieved him as head of the antitrust section.
After that, relations deteroriated further. Kaestner's demotion made headlines the day before he was scheduled to try one of the major purchasing scandal cases, thereby endangering his concentration on his courtroom duties. (As it turned out, the case was postponed after a defense lawyer was hospitalized).
In late January, a special grand jury report recommended the indictment of two more persons in the purchasing scandal, but took pains to blame the scandal on a pattern of cronyism and neglect on the part of ex-governors Mills Godwin and Linwood Holton, both Republicans.
This time, Coleman held no press conferences on the report, which could prove politically embarassing as he attempts to unite party elders such as Godwin and Holton behind his bid next year for the Republicans gubernatorial nomination. Some Coleman aides privately blamed Kaestner, who helped draft the report and vigorously defended the criticism of the former governors.
Kaestner says he and Coleman have had virtually no contract since their meeting in early January when Kaestner apologized. He says he has no idea why Coleman shut him out.
"Somewhere along the line I lost the attorney general's confidence, and without that confidence, I can't do my job effectively," says Kaestner.
Coleman's critics say he used Kaestner to establish his credentials as a fighter against white-collar crime and discarded him when it became expedient.
Facing the task of raising up to $2 million for the governor's race, the critics contend Coleman decided he could no longer risk alienating potential supporters in the business community.
Coleman and Franklin vigorously deny that charge. They say the prosecution of white-collar crime will continue as before.
Kaestner himself is uncertain. He points out Coleman has begun returning $150,000 in federal funds that were earmarked for the antitrust section.
Spokesman Franklin says the money simply is not needed and notes Coleman is committed to the nonexpansion of his staff.
But Kaestner believes that without funds, "the investigation of white-collar crime will be considerably hampered."