The Voluntary Trade Council

Analysis of S. 443: The Antitrust CriminalInvestigative Improvements Act of 2005

(VTC Legislative Analysis 5C01)

July 14, 2005Updated November 5, 2005

By S.M. Oliva

The United States Senate recently passed legislation that would substantiallyexpand the powers of prosecutors at the Department of Justice’s Antitrust Division. S.443, the “Antitrust Criminal Investigative Improvements Act of 2005,” would for thefirst 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 andbusinesses. 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 allegedbenefits proffered by the bill’s sponsors.S. 443 would authorize the Justice Department, through the Federal Bureau ofInvestigation, to intercept “wire or oral communications * * * when such interceptionmay provide or has provided evidence of” any alleged criminal violation of SectionsOne, Two, or Three of the Sherman Act.

Section One prohibits any “restraint of trade”affecting interstate commerce. Section Two makes it a felony to “monopolize, orattempt to monopolize” any area of interstate commerce. Section Three makes theactions prohibited under Sections One and Two illegal within the District of Columbiaand 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 rangingfrom presidential assassination to bribery in sporting contests. The list originated withthe passage of the Omnibus Crime Control and Safe Streets Act of 1968. In theintervening 37 years, dozens of federal offenses have been added to the list. Most

1S.M. Oliva is president of the Voluntary Trade Council. The views expressed are his own.215 U.S.C. §§ 1-3.

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The Voluntary Trade Council – Analysis of S. 443

recently the 2001 PATRIOT Act

added a revised definition of terrorism and feloniesrelated to chemical weapons.As with other § 2516 predicate offenses, S. 443 requires prosecutors in antitrustcases to apply to a U.S. district judge for an order authorizing a wiretap. Under existingprocedures, the application must include “a full and complete statement of the facts andcircumstances relied on by [the Justice Department], to justify [its] belief that an ordershould be issued.”

The government must explain “whether or not other investigativeprocedures have been tried and failed or why they reasonably appear to be unlikely tobe successful if tried or be too dangerous.”

The judge may require additional evidenceor testimony before granting an application.

The judge may order an intercept if he concludes that “there is probable cause forbelief that an individual is committing, has committed, or is about to commit” apredicate offense listed in § 2516.

The order must identify the person, (if known) whois the subject of the intercept, the facilities to be intercepted, and a “particulardescription of the type of communication sought to be intercepted, and a statement ofthe particular offense to which it relates.”

The intercept may be “conducted in wholeor in part by Government personnel, or by an individual operating under a contractwith the Government, acting under the supervision of an investigative or lawenforcement officer.”

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

Justification and Legislative Intent of S. 443

Senator Mike DeWine (R-Ohio), chairman of the Senate Judiciary Committee'santitrust subcommittee, introduced S. 443 on February 17, 2005, and made a briefstatement on the Senate floor justifying the legislation. DeWine said that S. 443 wasnecessary to fully equip the Justice Department to enforce the Sherman Act:

3Public Law 107-56, 115 Stat. 272 (October 26, 2001).418 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

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The Voluntary Trade Council – Analysis of S. 443

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

DeWine explained that the Antitrust Division presently had two principal means ofinvestigating criminal antitrust offenses: Enlisting the cooperation of witnesses oroffering an accused antitrust violator lenient sentencing in exchange for incriminatingother defendants. The latter technique is frequently employed in corporate “price-fixing” cases as one company incriminates other firms in exchange for amnesty fromcriminal prosecution.DeWine said permitting wiretaps in criminal antitrust investigations would give the Justice Department “a much needed tool to investigate the inner workings of criminalantitrust conspiracies.”

DeWine argued wiretaps would provide better informationthan either voluntary witness statements or leniency:In criminal antitrust investigations, to prosecute a case, it is critical thatprosecutors gain access to evidence on the inner workings of theconspiracy. To meet their heavy burden of proof, prosecutors mustmarshal strong evidence showing, for example, the terms of the illegalagreement, the participants in the illegal agreement, and precisely whenthe illegal agreement was reached. This type of evidence is extremelydifficult to gain without penetrating the inner workings of theconspiracy.

11151 Cong. Rec. S1656 (daily ed. Feb. 17, 2005) (statement of Sen. DeWine).12

. at S1657.13

. at S1656.

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