Justice Dept. scraps antitrust plan

WASHINGTON - The Justice Department abandoned an agreement to divide antitrust enforcement with the Federal Trade Commission, citing threats from a senator to slash budgets if officials continue to operate under the plan. <br> <br> The Justice Department&#39;s top antitrust official, Assistant Attorney General Charles James, defended the agreement Monday as ``good public policy&#39;&#39; but announced the agency would no longer adhere to it. He cited threats by Sen. Ernest Hollings, D-S.C., to attack the budgets of the Justice Department and the FTC if they continued operations under it. <br> <br> The move marked a rare retreat by the Bush administration in the face of congressional opposition. <br> <br> Hollings heads the Senate Commerce Committee, which oversees the FTC, and the Senate Appropriations subcommittee for the Justice Department. James said the Justice Department abandoned the plan because of Hollings&#39; opposition ``and the prospect of budgetary consequences for the entire Justice Department.&#39;&#39; <br> <br> The agreement, announced March 5, made the Justice Department permanently responsible for reviewing mergers involving Internet, software, telecommunications and entertainment companies. The FTC would have authority over other industries, such as health care, oil, natural gas, electric power, computer hardware and biotechnology. <br> <br> Administration officials said the agreement would streamline mergers by eliminating time-consuming debates about which agency should be responsible for the review. <br> <br> The arrangement also would give Justice responsibility for cable, publishing, toys, games, television, radio, newspapers, movies, advertising and music. <br> <br> Critics have said the deal would send important media merger reviews to Justice, part of the executive branch, while the FTC comprises five commissioners, from both political parties. <br> <br> In a hearing this spring, Hollings vented his anger at the chairman of the FTC and threatened to cut the agency&#39;s finances and even employee salaries because of his displeasure with the broad antitrust reorganization. Hollings said he believes the move violated federal law because it was not approved by Congress. <br> <br> ``What we&#39;ll have to do is, by gosh, come here and cut that budget around so that we get the attention,&#39;&#39; Hollings told FTC Chairman Timothy Muris. ``Actually, I&#39;m studying to see whether or not legally we can cut the pay&#39;&#39; of FTC employees. ``Sometimes, when you cut pay, you get their full attention. This administration has run amok.&#39;&#39; <br> <br> Hollings has especially criticized the administration&#39;s decision to solicit advice about the reorganization from former federal antitrust officials, including Joe Sims, a Washington lawyer who represented America Online Inc. in its merger with Time Warner Inc. <br> <br> James, the Justice Department antitrust chief, is Sims&#39; former law partner. Critics have noted that under the reorganization, future AOL merger approvals would be decided by the Justice Department, although James is restricted under ethics rules from considering any antitrust matters involving his former law firm for two years.

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