Antitrust Chief Nominee Likely to Curb Office’s Enforcement Role

WASHINGTON — During the Clinton administration, the Justice Department’s antitrust division became a pox to many in the business world, a launch pad for government attacks on such corporate giants as Microsoft, MCI and American Airlines.

Now comes Charles A. James, a corporate antitrust lawyer who was nominated by President Bush on Thursday to head the division. And experts are asking whether the 46-year-old James, who holds a decidedly restrained view of government’s role in policing business, might back away from antitrust enforcement.

For pro-consumer groups that think Republicans traditionally have given Big Business a free ride in antitrust matters, James could spell trouble. But for those who think former Atty. Gen. Janet Reno’s Justice Department overstepped its authority in going after Microsoft and other companies, he could prove cause for celebration.

James “will give antitrust enforcement a mid-course correction, moving it away from the type of zealous antitrust prosecution you see in the Microsoft case,” predicted Ernest Gellhorn, a Washington antitrust lawyer who was once James’ law partner.

James’ first big test will be the government’s lawsuit against Microsoft in its landmark effort to break up the company. A federal judge last year ordered Microsoft to be split in two.

In past statements, James has indicated that he believes breaking up the company is too severe a remedy. But the consensus among antitrust observers Thursday was that even if James wanted to pursue a less extreme solution, that would be tough to do.

First, the Senate probably will not even consider his confirmation before oral arguments in the case are heard by an appeals court at the end of this month. He is coming into the case so late that his actions could largely be dictated by the findings of the appellate court, experts said.

“If he had been [antitrust chief] when the original decisions were made on whether to challenge Microsoft, he might have made very different choices,” said Larry Fullerton, an antitrust lawyer who worked at the Justice Department until 1998. “But I would expect him to be quite cautious about intervening this late in the game.”

James, a Washington-based partner and head of antitrust at the Cleveland-based law firm of Jones, Day, Reavis & Pogue, was one of a handful of conservative lawyers considered for the job of assistant attorney general for antitrust, officials said.

Atty. Gen. John Ashcroft said James’ extensive experience in the private sector, combined with his past service at the Justice Department, makes him “the perfect choice to guide the division in today’s global economy.”

A graduate of Wesleyan University in Connecticut, James worked at the Justice Department from 1991 to 1993, serving briefly as acting head of the antitrust division. He probably would have gotten the job permanently if former President George Bush had been reelected in 1992.

Instead, it was left to Bush’s son to submit his nomination. If confirmed by the Senate--as seems extremely probable--he would be the first black person in that position.

Democrats on the Senate Judiciary Committee want to question James closely at his confirmation hearing about his views on not only the Microsoft case but also issues including “predatory pricing” in the airline industry and mergers among entertainment and communications companies, according to a senior Democratic aide.

“What do we hear in the halls about this guy?” the Democratic aide said. “He’ll probably be fine. The people who know him think very highly of him, think he’s a good administrator and think he’ll be fair.”

This much is all but certain: He will differ greatly in both philosophy and style from his predecessor, Joel I. Klein.

Under Reno, Klein built a powerful and aggressive base for scrutinizing and in some cases scuttling proposed mergers and for collecting hundreds of millions of dollars in fines from international and domestic antitrust violators.

James is said to be a smart and strong-willed administrator who is more low-key and pragmatic than Klein. James, acquaintances say, often follows his own counsel. But even skeptics say they are heartened by reports that he listens to others and is willing to get tough when he believes companies have violated the law.

One prominent antitrust lawyer who asked not to be identified because of pending cases said he believes James will bring a balanced perspective that had been lacking.

“What he brings to the table is a healthy respect for the marketplace,” the lawyer said. “He’s not a business basher. He’s spent a lot of time representing companies, trying to put deals together, trying to persuade the government there’s not a problem and defending conduct that has a good, sound rationale.”

Even skeptics predict that James won’t slam the door on antitrust enforcement completely.

“There’s definitely some concern with this administration’s general approach of being less inclined to intervene in markets. There’s a rhetoric of restraint that’s troublesome,” said Gene Kimmelman, a co-director of Consumers Union, which publishes Consumer Reports.

“But there’s nothing about Mr. James’ record that leads me to believe there’s going to be an enormous pullback on enforcement,” he said. “I’m hopeful.”

Former Justice lawyer Fullerton noted that James wrote an impressive set of antitrust guidelines in 1992 that survived eight years of Democratic leadership even as other Republican-era policies were scrapped. The guidelines prescribe ways of assessing “horizontal” mergers of similar companies from the same industry.

“Overall, I’m heartened and encouraged,” said Connecticut Atty. Gen. Richard Blumenthal, one of three state attorneys general spearheading the Microsoft case along with the federal government. “He’s someone who has basic respect for the core mission of antitrust enforcement. We may disagree with him, but I think he’ll hear us out.”