The Voluntary Trade Council

Analysis of S. 443: The Antitrust Criminal

Investigative Improvements Act of 2005

(VTC Legislative Analysis 5C01)

July 14, 2005

Updated November 5, 2005

By S.M. Oliva1

The United States Senate recently passed legislation that would substantially
expand the powers of prosecutors at the Department of Justice’s Antitrust Division. S.
443, the “Antitrust Criminal Investigative Improvements Act of 2005,” would for the
first time authorize the use of wiretaps in criminal antitrust investigations. If enacted,
S.443 would likely expand the scope of criminal antitrust liability for individuals and
businesses. Because there is no constitutional or policy justification for this expansion,
S. 443 should not be passed. The danger to individual liberty far outweighs the alleged
benefits proffered by the bill’s sponsors.

S. 443 would authorize the Justice Department, through the Federal Bureau of
Investigation, to intercept “wire or oral communications * * * when such interception
may provide or has provided evidence of” any alleged criminal violation of Sections
One, Two, or Three of the Sherman Act.2 Section One prohibits any “restraint of trade”
affecting interstate commerce. Section Two makes it a felony to “monopolize, or
attempt to monopolize” any area of interstate commerce. Section Three makes the
actions prohibited under Sections One and Two illegal within the District of Columbia
and U.S. territories.

S. 443 amends an existing list of predicate offenses, set forth in 18 U.S.C. § 2516(1),
that can justify wire and oral intercepts. The current list encompasses offenses ranging
from presidential assassination to bribery in sporting contests. The list originated with
the passage of the Omnibus Crime Control and Safe Streets Act of 1968. In the
intervening 37 years, dozens of federal offenses have been added to the list. Most

1 S.M. Oliva is president of the Voluntary Trade Council. The views expressed are his own.
2 15 U.S.C. §§ 1-3.

Post Office Box 100073 ● Arlington, Virginia 22210

Tel/Fax: (703) 740-8309 ● www.voluntarytrade.org ● info@voluntarytrade.org
 The Voluntary Trade Council – Analysis of S. 443

recently the 2001 PATRIOT Act3 added a revised definition of terrorism and felonies
related to chemical weapons.

As with other § 2516 predicate offenses, S. 443 requires prosecutors in antitrust

cases to apply to a U.S. district judge for an order authorizing a wiretap. Under existing
procedures, the application must include “a full and complete statement of the facts and
circumstances relied on by [the Justice Department], to justify [its] belief that an order
should be issued.”4 The government must explain “whether or not other investigative
procedures have been tried and failed or why they reasonably appear to be unlikely to
be successful if tried or be too dangerous.”5 The judge may require additional evidence
or testimony before granting an application.6

The judge may order an intercept if he concludes that “there is probable cause for
belief that an individual is committing, has committed, or is about to commit” a
predicate offense listed in § 2516.7 The order must identify the person, (if known) who
is the subject of the intercept, the facilities to be intercepted, and a “particular
description of the type of communication sought to be intercepted, and a statement of
the particular offense to which it relates.”8 The intercept may be “conducted in whole
or in part by Government personnel, or by an individual operating under a contract
with the Government, acting under the supervision of an investigative or law
enforcement officer.”9

An intercept may last no more than 30 days or “for any period longer than is
necessary to achieve the objective” of the order. An expired order may be extended up
to 30 days at the judge’s discretion.10

Justification and Legislative Intent of S. 443

Senator Mike DeWine (R-Ohio), chairman of the Senate Judiciary Committee's

antitrust subcommittee, introduced S. 443 on February 17, 2005, and made a brief
statement on the Senate floor justifying the legislation. DeWine said that S. 443 was
necessary to fully equip the Justice Department to enforce the Sherman Act:

3 Public Law 107-56, 115 Stat. 272 (October 26, 2001).

4 18 U.S.C. § 2518(1)(b).
5 § 2518(1)(c).
6 § 2518(2).
7 § 2518(3)(a).
8 § 2518(4)(a-d).
9 § 2518(5).
10 Id.

-2-
 The Voluntary Trade Council – Analysis of S. 443

Investigating and prosecuting criminal antitrust conspiracies, such as

cartels and bid-rigging, is the core mission of the Department of Justice's
Antitrust Division. Because of the harm this behavior can do to the
economy and to innocent consumers, Assistant Attorney General for the
Antitrust Division, Hewitt Pate, has said that prosecuting “cartels
remain[s] our top enforcement priority at the Antitrust Division.” As a
result, in the United States, we punish such illegal behavior harshly.
Corporations can be fined up to $100 million and individuals can be fined
up to $1 million and be incarcerated for 10 years. But, despite the high
priority the Antitrust Division places on these cases and the tough
penalties under the law, up to now, we have not given the Department of
Justice all the tools it needs to investigate and prosecute criminal antitrust
conspiracies.11

DeWine explained that the Antitrust Division presently had two principal means of
investigating criminal antitrust offenses: Enlisting the cooperation of witnesses or
offering an accused antitrust violator lenient sentencing in exchange for incriminating
other defendants. The latter technique is frequently employed in corporate “price-
fixing” cases as one company incriminates other firms in exchange for amnesty from
criminal prosecution.

DeWine said permitting wiretaps in criminal antitrust investigations would give the
Justice Department “a much needed tool to investigate the inner workings of criminal
antitrust conspiracies.”12 DeWine argued wiretaps would provide better information
than either voluntary witness statements or leniency:

In criminal antitrust investigations, to prosecute a case, it is critical that

prosecutors gain access to evidence on the inner workings of the
conspiracy. To meet their heavy burden of proof, prosecutors must
marshal strong evidence showing, for example, the terms of the illegal
agreement, the participants in the illegal agreement, and precisely when
the illegal agreement was reached. This type of evidence is extremely
difficult to gain without penetrating the inner workings of the
conspiracy.13

11 151 Cong. Rec. S1656 (daily ed. Feb. 17, 2005) (statement of Sen. DeWine).
12 Id. at S1657.
13 Id. at S1656.

-3-
 The Voluntary Trade Council – Analysis of S. 443

DeWine’s other principal justification for S. 443 was the existing widespread
authorization for communication intercepts. He said that that there were already “over
150 predicate offenses” listed in § 2516 and that “antitrust offenses are basically white-
collar, fraud offenses, and often do much more harm to innocent consumers than other
types of fraud offenses.”14 DeWine noted that the Canadian government has permitted
wiretaps in antitrust investigations since 1999.15

S. 443 had two initial co-sponsors, Sen. Patrick Leahy (D-Vermont), the ranking
Democratic member of the Judiciary Committee, and Sen. Herb Kohl (D-Wisc.), the
ranking member of the antitrust subcommittee. Leahy made a brief statement justifying
S. 443 following DeWine’s February 17 floor remarks. Leahy largely echoed DeWine’s
arguments:

Congress acted in 1890 with passage of the Sherman Antitrust Act to

prohibit abusive monopolization and anticompetitive practices. Since that
time, the Department of Justice’s enforcement efforts have benefited
consumers in terms of lower prices, greater variety, and higher quality of
products and services. Despite the value and impact of criminal antitrust
cases, however, criminal antitrust investigations do not currently qualify
for judicially approved wiretaps. While the Justice Department may
engage in court-authorized searches of business records, it may only
monitor phone calls of informants or the conversations of consenting
parties.

The Antitrust Criminal Investigative Improvements Act of 2005 will add

criminal price fixing and bid rigging to the many crimes that are already
“predicate offenses” for wiretap purposes. More than 150 “predicate
offenses” are currently included in Title III of the Omnibus Crime Control
and Safe Streets Act, including crimes of lesser impact and significance
than criminal antitrust violations. In light of the seriousness of economic
harms caused by violations of the Sherman Antitrust Act, the inability of
the Justice Department to obtain wiretaps when investigating criminal
antitrust violations makes little sense. Moreover, the evidence that can be
acquired through wiretaps is precisely the type of evidence that is
essential for the successful prosecution and prevention of serious antitrust
violations. This bill equips the Department of Justice investigators and

14 Id. at S1656-S1657.
15 See Criminal Code, R.S.C. ch. C-46, § 184.2(2-3) (Canada). The Canadian statute authorizes intercepts
for a period of 60 days, as opposed to 30 in the United States.

-4-
 The Voluntary Trade Council – Analysis of S. 443

prosecutors to enforce zealously the criminal antitrust laws of the United

States.16

On October 20, 2005, S. 443 was reported out of the Judiciary Committee without
amendment. On October 25, the Senate passed the bill by unanimous consent. (A copy
of the floor discussion on S. 443 is attached as an appendix to this analysis.) S. 443 is
now in the hands of the House of Representatives, which has until the expiration of the
109th Congress in January 2007 to pass the bill.

Analysis and Objections to S. 443

The principal justification offered by Sen. DeWine for S. 443 is that “we have not
given the Department of Justice all the tools it needs to investigate and prosecute
criminal antitrust conspiracies.” Describing wiretaps as “tools” is misleading.
Government interception of business communications that are presumed private by the
participants is a state violation of private property rights. As economist Murray
Rothbard has explained, “no one has the right . . . to wiretap someone’s phone lines.
Wiretapping is properly a crime not because of some vague and woolly ‘invasion of a
right to privacy,’ but because it is an invasion of the property right of the person being
wiretapped.”17

The Fourth Amendment states that individuals are “to be secure in their persons,
houses, papers, and effects, from unreasonable searches and seizures” except by
warrant issued for probable cause, “particularly describing the place to be searched,
and the persons or things to be seized.” Nothing in this language—or any other clause
of the Constitution—permits the federal government to trespass for the purpose of
intercepting private communications. Accordingly, any wiretap power is permissible
only if, under Article I of the Constitution, it is “necessary and proper” to carry out an
enumerated legislative power.18

It is insufficient for Congress to find—as the sponsors of S. 443 claim—that an

investigative “tool” is useful or may facilitate prosecution under an existing criminal
statute. There are any number of “tools” that might advance the Justice Department’s
prosecution of antitrust cases, such as torturing witnesses for information or conducting
warrantless searches. Such methods are unconstitutional, however, and thus
unavailable to the government regardless of any congressional authorization. The

16 151 Cong. Rec. at S1657 (statement of Sen. Leahy).

17 Murray N. Rothbard, The Ethics of Liberty 122 (New York Univ. Press 1998) (italics in original).
18 U.S. Const., art. I, § 8, cl. 18.

-5-
 The Voluntary Trade Council – Analysis of S. 443

“proper” element of Article I’s Necessary and Proper Clause requires any method of
law enforcement used by the federal government to respect individual rights and the
separation of powers.

Even if S. 443 is a “proper” exercise of congressional power, there remains the

concurrent question of whether the legislation is “necessary.” Assuming the antitrust
laws are themselves constitutional19, the sponsors of S. 443 have not offered any
empirical (or even anecdotal) evidence that demonstrates the government’s need for
wiretap powers in antitrust investigations. The bill itself contains no congressional
“finding” that explains the need for additional investigatory powers. The only
substantive arguments that the sponsors have advanced are (1) prosecutors need
wiretap authority to successfully prosecute “price-fixing cartels”; and (2) the Justice
Department already has wiretap authority when investigating other federal crimes.
Neither argument establishes the necessity of S. 443.

1. The Justice Department is successfully prosecuting corporations and individuals under

the antitrust laws despite a lack of wiretap authority.

Despite Sen. Leahy’s claim that wiretap authority is “essential for the successful
prosecution and prevention of serious antitrust violations,” the empirical evidence
strongly indicates that the Justice Department’s existing powers are more than sufficient
to maintain a successful criminal antitrust enforcement regime. For the federal
government’s fiscal years 1995 through 2004, the DOJ charged 632 individual and
corporate defendants with criminal antitrust violations. The government won 97% of
the cases decided during this ten-year period, compiling 449 victories against just 16
defeats. The total criminal fines assessed exceeded $2.3 billion, and the average jail
sentence for individual defendants was 376 days.20

Neither the sponsors of S. 443 nor the DOJ have argued that the lack of wiretap
authority contributed to the government’s failure to obtain convictions or guilty pleas in
the three percent of cases over the past decade that the Antitrust Division lost. Nor has it
been demonstrated that the lack of wiretap authority has caused a decline in the
number of investigations opened. To the contrary, the number of grand juries
convened to investigate antitrust matters during the first term of President George W.
Bush (121) represented a 17% increase from the number of antitrust grand juries
convened during President Bill Clinton’s second term (103).21
19 And it is my view that the Sherman Act and all other antitrust laws are unconstitutional.
20 U.S. Department of Justice, Antitrust Division, Workload Statistics, FY 1995-2004 <available at
http://www.usdoj.gov/atr/public/workstats.htm>.
21 Id.

-6-
 The Voluntary Trade Council – Analysis of S. 443

The DOJ has long maintained that its most effective weapon in criminal antitrust
cases is the cooperation of defendants through the Antitrust Division’s “Corporate
Leniency Program” (CLP). Under the CLP, a company receives immunity from
criminal prosecution if it approaches the Antitrust Division and assists the
government’s investigation.22 According to Scott Hammond, the Division’s head of
criminal enforcement, over 90% of the criminal antitrust fines obtained since 1997 were
“tied to investigations assisted by leniency applicants.”23 Before the Supreme Court in
2004, then-Assistant Attorney General R. Hewitt Pate said: “It’s only in the past [eight]
years that we’ve begun to see dramatic success in detecting and punishing international
cartels, and that has come about only by international cooperation with other
enforcement agencies and through the use of amnesty programs.”24 The CLP

The wiretap authority proposed by S. 443 will not enhance the effectiveness of the
CLP given that defendants who conspire with the government voluntarily provide the
foundation for most successful antitrust prosecutions. Most antitrust investigations are
only begun after a company reports a purported violation to an otherwise oblivious
Antitrust Division, and thus there is no cause to assert that wiretap authority will spur
an increase in either the number of investigations commenced or convictions obtained.

2. Wiretap authority will provide dangerous incentives for prosecutors to expand the scope
of criminal antitrust liability.

According to the Administrative Office of the United States Courts, “[v]iolations of

the drug laws and racketeering laws [are] the two most prevalent types of offenses
investigated through communication intercepts.”25 Placing antitrust violations on the
same level as drug and organized crime cases sends a dangerous signal to prosecutors.
There is already a belief among antitrust supporters—as evidenced by Sen. Kohl’s
statement regarding S. 443—that voluntary contracts are the equivalent of violent theft.
In fact, most antitrust cases do not involve the violation of anyone’s rights or economic

22 Amnesty is automatically granted if the company approaches the Division before an investigation has
commenced. Even after an investigation is underway, however, amnesty is available at the Division’s
discretion, and DOJ policy is to exercise such discretion liberally.
23 Scott D. Hammond, “Cornerstones of an Effective Leniency Program,” Presentation before the
International Competition Network Workshop on Leniency Programs (Nov. 22-23, 2004) <available at
http://www.usdoj.gov/atr/public/speeches/206611.htm>.
24 Supreme Court of the United States, Transcript of Oral Arguments in F. Hoffman LaRoche, Ltd., et al. v.
Empagran, S.A., et al. 17 (No. 03-724) (April 26, 2004) <available at
http://www.supremecourtus.gov/oral_arguments/argument_transcripts/03-724.pdf>.
25 Administrative Office of the United States Courts, Report of the Director of the Administrative Office of the
United States Courts on Applications for Orders Authorizing or Approving the Interception of Wire, Oral, or
Electronic Communications 9 (April 2005).

-7-
 The Voluntary Trade Council – Analysis of S. 443

liberties. Even the Antitrust Division’s celebrated cartel prosecutions have

accomplished little beyond removing billions of dollars in capital from the market via
criminal fines, which harms rather than helps competition by rendering firms less able
to compete and meet consumer demand. The only true beneficiaries of criminal
antitrust cases, as with drug and organized crime prosecutions, are the individual
prosecutors who leverage their inflated won-loss records to secure future employment
as highly paid antitrust counsel for private law firms and businesses.26

Adding wiretap powers to the Antitrust Division’s existing arsenal will give
prosecutors a green light to expand the scope of criminal antitrust doctrine, which in
turn will lead to more coerced guilty pleas and the removal of even greater amounts of
capital from the private sector. This expansion will not result from any changes to the
text of the antitrust laws, since S. 443 does not amend the Sherman Act itself, but rather
from a shift in the Division’s exercise of prosecutorial discretion. Wiretap power will
free the Division from its near-total reliance on the Corporate Leniency Program to
generate criminal cases. This means that the Division may in the future prosecute
companies and individuals that would have otherwise received amnesty. But more
importantly, the Division will likely use its new “tools” to transform cases that are
presently tried as civil matters into criminal prosecutions. This would be a major ex post
change in liability standards for businesses and individuals, and it would almost
certainly take place without public warning, as “prosecutorial discretion” is not subject
to any formal regulatory or rule-making process.

The American Bar Association’s Section of Antitrust Law, in their own comments
on S. 443, noted that the proposed wiretap powers would not just be available in cartel
investigations—cases generally brought under Section One of the Sherman Act—but
that they could also be used in “attempted monopolization” cases brought under
Sections Two and Three:

The difficulty is produced because every violation of Sections 1, 2 or 3 of

the Sherman Act potentially can be prosecuted criminally. The statute
does not differentiate between business conduct that is clandestine and
criminal in nature and that which would support only civil litigation or
other enforcement methods. The decision of whether a potential violation
will be addressed through criminal or civil enforcement is purely a
function of the government’s exercise of its prosecutorial discretion.

26 For example, R. Hewitt Pate recently resigned as head of the Antitrust Division to become head of the
Competition Practice Group at Hunton & Williams. Pate’s immediate predecessor, Charles A. James,
left the DOJ to become general counsel at Chevron.

-8-
 The Voluntary Trade Council – Analysis of S. 443

Currently, that would not seem to be a problem. For the last decade or so,
the Antitrust Division has exercised its discretion to prosecute only “hard
core” and “cartel” types of violations. In essence, these include horizontal
price fixing between and among competitors, bid rigging, and horizontal
conspiracies to allocate customers, territories or to limit production. If we
could be assured that the government would always exercise its authority
in this manner, the proposed legislation would not raise any issue.

The government’s enforcement discretion, however, has not always been

limited in this fashion. In the past, for example, the government has
pursued criminal cases against companies for alleged attempted
monopolization, see, United States v. Empire Gas Corp., 393 F. Supp. 903
(W.D. Mo. 1975), and even vertical resale price maintenance. See,
indictment mentioned in In re Cuisinarts Food Processors Antitrust Litigation,
1980-81 CCH Trade Cases, ¶63752. These cases are far outside the realm of
what is now considered “cartel” conduct. Unfortunately, there is no
assurance that future enforcement policy would not again turn its
attention in this direction and use this wiretap authority to investigate
conduct far beyond that contemplated by the sponsors [of S. 443].27

S. 443 brings the Sherman Act closer in scope and application to federal terrorism
and racketeering statutes, laws that create broad prosecutorial powers with minimal
judicial and legislative oversight.28 Meaningful judicial scrutiny has been notably
lacking with respect to wiretap powers. Of the more than 14,000 applications for
wiretaps made by federal prosecutors between 1994 and 2004, only four were turned
down by federal judges.29 From a practical standpoint, then, S. 443 grants the Antitrust
Division a virtually unrestricted license to spy on private businesses. Given such
license, prosecutors will be able to target a particular firm and then use wiretap
evidence to “discover” a crime that has been committed within the penumbra of the
Sherman Act.

27 American Bar Association, Comments of ABA Section of Antitrust Law on S. 443: “Antitrust Criminal
Improvements Act of 2005,” 1-2 (June 16, 2005) <available at
http://www.abanet.org/antitrust/comments/2005/06-05/com-crminal-invest-improv.pdf>.
28 For a discussion of prosecutorial abuse of the anti-racketeering laws in particular, see William L.
Anderson and Candice E. Jackson, Law as a Weapon: How RICO Subverts Liberty and the True Purpose of
Law, 9 Independent Review 85-87 (Summer 2004).
29 Administrative Office of the U.S. Courts, Report of the Director 30.

-9-
 The Voluntary Trade Council – Analysis of S. 443

For example, the Antitrust Division can open a criminal investigation whenever it
believes that prices in a particular market are “too high”—a political judgment that has
no basis in free-market economics. The mere allegation of “suspicious” industry pricing
patterns would then provide cause to authorize a wiretap, allowing the Division to spy
on companies indefinitely until some evidence of “collusion” is discovered to justify the
filing of criminal charges.

In Section Two cases the potential abuses are limitless. Consider the Antitrust
Division’s long-running prosecution of Microsoft Corporation. In that case, the
principal argument was that Microsoft attempted to monopolize the Web browser
market by leveraging its operating system “monopoly.” This was tried as a civil matter,
but with wiretap authority the Division could easily have pursued criminal charges
against Microsoft and individual executives. S. 443 would have enabled the Division to
spy on any conference call to discuss product development or sales practices, or any
other business matter, since Section Two cases often allege general conspiracies to subvert
competition that are unconnected to specific acts.

S. 443 contains no statutory mechanism to prevent prosecutorial abuse, and existing

judicial oversight is insufficient. Indeed, government misuse of wiretap authority will
likely receive less scrutiny in antitrust investigations than in terrorism or racketeering
cases. Drug cartels and terrorist organizations are by their very nature entities that
operate outside the state’s control. Their existences are always under threat of
destruction by the government (or other outlaw entities), and they often have nothing
to lose by throughly challenging the government’s conduct at trial. Corporations, on
the other hand, owe their legal existence to the state, and there are strong incentives to
waive due process rights and seek quick settlements on terms favorable to the
government. The mere threat of indictment is usually enough to secure guilty pleas
from corporations, since individual executives can avoid personal indictment (and
possible prison time) by opening up their corporate treasuries and paying multi-million
dollar fines. Hence, most criminal antitrust cases are settled without trial and without
scrutiny of the government’s conduct during the investigation.

The existing data shows that judges currently exercise no critical oversight in
approving wiretap applications. Therefore the only other chance for judicial review is
during trial via a defendant’s motion to exclude wiretap evidence. The rarity of
criminal antitrust trials, however, mean that such motions will rarely be heard and
ruled upon, preventing the development of case law that places meaningful restrictions
on the authority of prosecutors.

- 10 -
 The Voluntary Trade Council – Analysis of S. 443

Conclusions

S. 443 is unnecessary and unconstitutional. The federal government’s existing claim

to wiretap powers is suspect under the Fourth Amendment, and extending such
authority to allow unrestricted spying on every business in the United States falls well
outside the executive branch’s constitutional mandate. The Sherman Act has been well
served (too well, in my judgment) through the use of existing investigatory “tools.”
Congress should redirect its energies towards examining the Antitrust Division’s
ongoing abuses of power, and indeed the necessity of keeping the antitrust laws on the
books.

____________________________

The Voluntary Trade Council (also known as Citizens for Voluntary Trade) is a
nonprofit research and education organization that develops practical solutions to the
problems caused by violent state intervention in free markets. The VTC focuses on the
harm caused to individuals and businesses by the enforcement of antitrust and other
“competition” laws. Through publications, filings with government agencies, and the
Internet, the VTC applies the principles of free market economics and rational ethics to
contemporary antitrust policies and cases.

© 2005 The Voluntary Trade Council. All rights reserved.

- 11 -
 The Voluntary Trade Council – Analysis of S. 443

APPENDIX

Floor Discussion of S. 443

(Congressional Record, Senate, October 25, 2005, Page S11850.)

Mr. FRIST. Mr. President, I ask unanimous consent that the Senate proceed to the
immediate consideration of Calendar No. 250, S. 443.

The PRESIDING OFFICER. The clerk will report the bill by title.

The assistant legislative clerk read as follows:

A bill (S. 443) to improve the investigation of criminal antitrust offenses.

There being no objection, the Senate proceeded to consider the bill.

Mr. KOHL. Mr. President, I rise in support of the Antitrust Investigative Improvements
Act of 2005, a bill I am cosponsoring with Senators DEWINE and LEAHY. This
important measure will give the antitrust criminal enforcers at the Department of
Justice a vital tool to investigate, detect, and prevent antitrust conspiracies. It will allow
the Justice Department, upon a showing of probable cause to a Federal judge, authority
to obtain a wiretap order for a limited time period to monitor communications between
those suspected of engaging in illegal antitrust conspiracies.

The current Federal criminal code lists over 150 predicate offenses for which the Justice
Department may obtain a wiretap during the course of a criminal investigation. These
offenses include basic white collar crimes such as mail fraud, wire fraud, and bank
fraud. However, under current law, if the Government is investigating a criminal
antitrust conspiracy, such as a scheme to fix prices to consumers, the Government
cannot obtain a wiretap of the suspected conspirators. This inability to obtain wiretaps
unquestionably severely handicaps the detection and prevention of such conspiracies.
Only with the consent of a member of the conspiracy who has already agreed to
cooperate with the Government may the Government surreptitiously record the
meetings of the conspirators.

There is no logical basis to exclude criminal antitrust violations from the list of predicate
offenses for a wiretap. A criminal antitrust offense, such as price fixing, is every bit as
serious--and causes every bit as much financial loss to its victims--as other white collar

- 12 -
 The Voluntary Trade Council – Analysis of S. 443

crimes, such as mail fraud or wire fraud. A price-fixing conspiracy raises prices to
consumers, stealing hard earned dollars from citizens as surely as does a salesman
promoting a bogus investment from a ``boiler room'' or, indeed, a thief with a gun.
Moreover, by its secret nature as an agreement among competitors, such a conspiracy is
likely harder to detect than a fraudulent offering over the phone or through the mail. A
properly issued wiretap, therefore, is even more necessary to detect criminal antitrust
conspiracies than other white collar offenses.

Detecting, preventing, and punishing criminal antitrust offenses are one of the principal
missions of the Justice Department's Antitrust Division. Such offenses are punished
severely with corporations facing fines of up to $100 million and individuals subject to
jail terms of up to 10 years for each offense. Indeed, last year we passed legislation
raising criminal penalties to these new levels. Yet, despite the damage these
conspiracies do to the economy and individual consumers, our law enforcement
agencies lack the one vital tool essential to uncover these secret conspiracies--the ability
to obtain a wiretap to monitor communications between the suspected conspirators
upon a showing of probable cause. This legislation will remedy this defect by granting
to our law enforcement officials the necessary means to protect consumers and end
illegal antitrust conspiracies.

I urge my colleagues to join with me in supporting this legislation.

Mr. LEAHY. Mr. President, earlier this year I was pleased to join the chairman and
ranking member of the Judiciary Committee's Subcommittee on Antitrust, Competition
Policy and Consumer Rights, Senators DEWINE and KOHL, on the introduction of the
``Antitrust Criminal Investigative Improvements Act of 2005, ACIIA. Today, I am even
more pleased to see the Senate pass this bill. This is important legislation, and I hope
that it will receive the speedy vote in the House of Representatives that it deserves.
Once the President signs it into law, the Department of Justice will finally have another
vital tool to enforce antitrust laws--wiretap authority to investigate and prosecute
criminal antitrust violations.

America's antitrust laws play a critical role in protecting consumers and ensuring a fair
and competitive marketplace for business. Congress's first antitrust law, the Sherman
Antitrust Law, was enacted in 1890 to prohibit abusive monopolies and restraints of
trade. Since that time, enforcement of the antitrust laws has benefited consumers
through lower prices, greater variety, and higher quality products and services. But
antitrust criminal offenses have been somewhat anomalous in the law, for they have not
qualified for judicially approved wiretaps. The ACIIA will add criminal price fixing and

- 13 -
 The Voluntary Trade Council – Analysis of S. 443

bid rigging to the many crimes that are already ``predicate offenses'' for wiretap
purposes. There are over 150 offenses that currently qualify for judicial approved
wiretaps. These ``predicate offenses'' under Title III of the Omnibus Crime Control and
Safe Streets Act, include crimes of lesser impact and significance than criminal antitrust
violations. The ACIIA will ensure that the Department of Justice has the tools
commensurate with the seriousness of the violations.

Under current law, the Department of Justice must often rely on the FBI or other
investigative agencies to obtain evidence. While the Justice Department may engage in
court-authorized searches of business records, it may only monitor phone calls of
informants or the conversations of consenting parties. In light of the seriousness of
economic harms caused by violations of the Sherman Antitrust Act, the inability of the
Department of Justice to obtain wiretaps when investigating criminal antitrust
violations makes little sense. The evidence that can be acquired through wiretaps is
precisely the type of evidence that is essential for the successful prosecution and
prevention of serious antitrust violations. This bill equips the Department of Justice
investigators and prosecutors the opportunity to zealously enforce the criminal
antitrust laws of the United States.

Mr. FRIST. Mr. President, I ask unanimous consent that the bill be read a third time and
passed, the motion to reconsider be laid upon the table, and that any statements relating
to the bill be printed in the RECORD.

The PRESIDING OFFICER. Without objection, it is so ordered.

The bill (S. 443) was read the third time and passed, as follows:

S. 443

Be it enacted by the Senate and House of Representative of the United States of America
in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Antitrust Criminal Investigative Improvements Act of
2005''.

SEC. 2. AMENDMENT OF PREDICATE CRIMES FOR AUTHORIZATION FOR

INTERCEPTION OF WIRE, ORAL, AND ELECTRONIC COMMUNICATIONS.

- 14 -
 The Voluntary Trade Council – Analysis of S. 443

Section 2516(1) of title 18, United State Code, is amended--

(1) in subparagraph (q), by striking ``or'' after the semicolon;

(2) by redesignating subparagraph (r) as subparagraph (s); and

(3) by adding after subparagraph (q) the following:

``(r) any criminal violation of section 1 (relating to illegal restraints of trade or

commerce), 2 (relating to illegal monopolizing of trade or commerce), or 3 (relating to
illegal restraints of trade or commerce in territories or the District of Columbia) of the
Sherman Act (15 U.S.C. 1, 2, 3); or''.

- 15 -