Officials this month announced plans to close four regional offices of the department’s antitrust division, in Atlanta, Cleveland, Dallas and Philadelphia, and to move 94 attorneys and support staff members to offices in Chicago, New York, San Francisco and division headquarters in Washington. The plans would allow the department to consolidate operations and focus on larger criminal investigations, and department officials said they would pay to relocate the attorneys and support staffers willing to move.
But career antitrust lawyers affected by the plans said they were caught off guard, and they think the plans will result in de facto layoffs as colleagues decide to quit because they are unable or unwilling to move to another city.
“There aren’t a lot of people who’ve been with the division a long time who can pick up and move,” said an antitrust attorney based in the Philadelphia office. “Many people have families and spouses with jobs where they’re already located. And there’s no assurances that in two years there won’t be further cuts, and then we’ll lose a job we picked up and moved for.”
Veteran antitrust attorneys from all four targeted offices contacted The Federal Eye and asked not to be identified for fear of retribution.
In announcing the plans, Attorney General Eric H. Holder Jr. said that consolidating office space “complies with President Obama’s order to dispose of unneeded federal real estate, which saves American taxpayer dollars.”
Obama last year ordered agencies to cut $8 billion worth of building costs by the end of the 2012 fiscal year. Shuttering the four offices would save Justice $8 million annually as part of Holder’s broader plans to cut $130 million in operational costs, the department said. In anticipation of deeper cuts, Justice has implemented a hiring freeze and spending cuts for department-sponsored conferences.
Other agencies anticipating budget cuts also are consolidating office space, canceling programs and trimming staff. In recent weeks, congressional appropriators have warned that some of the nation’s financial regulatory agencies, including the Internal Revenue Service and the Consumer Product Safety Commission, may have to furlough employees to fulfill budget cuts.
At least 23 agencies — including the departments of Agriculture, Education, Commerce, Interior and Labor; the Smithsonian Institution; and the Government Printing Office — are offering buyouts or laying off workers. Other agencies are scrapping long-planned projects and programs. At the Social Security Administration, officials plan to stop mailing benefits estimates to save money, while the General Services Administration is abandoning a multimillion-dollar renovation of its downtown Washington headquarters in order to complete similar construction projects for the Food and Drug Administration and the Department of Homeland Security.
Attorneys with the four regional offices affected by the DOJ’s decision have spent decades prosecuting companies that violate the Sherman Antitrust Act, including dairy distributors that overcharged school districts, paving companies that bilked states out of millions of dollars in highway construction funds and cases involving gasoline price-fixing.
The Dallas regional office scored a $500 million fine in an international vitamins case and handled the only cases prosecuted as part of fraud and bribery investigations of Hurricane Katrina reconstruction projects. Attorneys in the Philadelphia office said they obtained a $134 million after-trial fine, one of the division’s largest.
In Atlanta, one prosecutor said his office collects about $20 million in fines each year on an annual budget of just $2 million.
“If we cost $20 million a year and collected $2 million a year, you’d have a good case for closing our office,” the Atlanta attorney said. “But if IBM had an office that cost it $2 million a year and it collected $20 million a year, I dare say IBM wouldn’t close that office.”
Gina Talamona, a DOJ spokeswoman, said the consolidation would save the department money and add staffers to larger international investigations.
But attorneys in Atlanta and Dallas disputed the plans, saying that domestic fraud cases more directly affect American consumers.
“Individual consumers have unquestionably suffered more direct financial harm from local conspiracies that raised the price of gas, increased the price of bread and milk, and raised the price of propane than they ever suffered from the air cargo, marine hose, or municipal bond investigations,” a Dallas-based attorney said in an e-mail.
Most insulting, some said, is that the division is hiring new recruits for its New York office and paying hefty relocation costs despite the department-wide hiring freeze.
But antitrust lawyers based in the New York office “are not going to go down to Alabama, and San Francisco isn’t going to go down to Texas to work on a case,” an Atlanta-based attorney said. “And someone from New York can’t go down to a grand jury in Dallas and prevail. They just don’t know the people and know how to do the cases.”
Talamona disagreed, vowing that “enforcement will continue everywhere.”
By law, the DOJ must notify Congress of the proposed changes. Aides for the House and Senate appropriations committees said they are reviewing Justice’s proposed cuts but could not yet comment on the details.
Is your federal office preparing for similar budget cuts? E-mail The Federal Eye with your story.
Follow Ed O’Keefe on Twitter: @edatpost