Attorney General Griffin B. Bell has sent an angry letter to Sen. Edward M. Kennedy (D-Mass.) responding sharply to charges by Kennedy that Bell overruled his entire antitrust division and approved a controversial merger in the steel industry.
Kennedy, who is slated to become the head of the Senate Judiciary Committee in the new Congress, last week wrote a stinging letter to Federal Trade Commission Chairman Michael Pertschuk, urging him to intervene in the Justice Department-approved merger of LTV Corp. and Lykes Corp.
"I am informed that every antitrust division staff member involved in the decision was of the opinion that for at least 12 different product areas, the merger would result in concentration significantly above that allowed in the department's own merger guidelines," Kennedy wrote.
Kennedy said he had also been told that the assistant attorney general in charge of antitrust, the director of the Economic Policy Office, the director of operations, two outside economic experts, and the entire trial staff assigned to the case were of the opinion that Lykes was not a failing company. The attorney general's June 21 statement, however, indicated that . . . Lykes faced a grave probability of a business failure.'"
If a business is failing, it is qualified for antitrust exemptives allowing certain mergers that would not otherwise be allowed.
Kennedy went into considerable detail in his letter in an effort to make his argument that Bell had misread the situation.
Bell then fired off an angry letter to Kennedy. Details of that letter have not been revealed. One source who read the letter described it as "unbelievable . . . the strongest letter I've ever seen from Bell. He was angry."
Despite the fact that his staff said he would release the letter if Kennedy gave his permission, Bell spokesman Terry Adamson said last night that Bell had changed his mind, and decided to withhold the letter. Bell made his decision after Kennedy gave his permission to make the letter public.
Bell had dinner with Kennedy Monday night, after the letter had been sent, and the two men discussed its contents as well as other areas relating to Kennedy's upcoming position as chairman of the Judiciary Committee.
Kennedy's staff said they would not release the letter without Bell's permission.
"We'll all been sworn to silence about the letter," said a Kennedy staffer. But another source said Bell now feels the letter was a "big mistake."
The proposed merger would combine the nation's seventh and eight largest steel makers into a new firm that would rank third in the industry.
The Wall Street Journal has reported that several Justice Department antitrust people were convinced that Bell had made up his mind not to oppose the merger long before he had heard his staff's opinion.
The newspaper reported last June that Bell had "socialized occasionally with Lykes officials, who indicated to him the problems with Lyke's Youngstown steel facilities."
Neither Bell nor Kennedy could be reached for comment.