Staffing at antitrust regulator declines under Donald Trump

Staffing in the antitrust division of the US Department of Justice has fallen since Donald Trump took office despite a boom in big corporate mergers, according to phone directories for the division.

The directories showed a 13 per cent drop across the division since February 2017, shortly after Mr Trump’s inauguration, with more severe attrition in units responsible for civil and criminal enforcement of competition laws.

Across the six units that review mergers, the directories showed 18 per cent fewer trial attorneys, paralegals, and other support staff. In two Washington-based units that investigate criminal price-fixing conspiracies, the decline was 27 per cent.

David Cicilline, Democratic chair of the House antitrust subcommittee, called the staffing decline “alarming” and said the subcommittee would look into it.

“We need to both modernise our existing antitrust laws and make sure that they’re working in the current economy, and also ensure that antitrust agencies have the resources and personnel to do their work effectively,” he said in a statement.

It’s likely not going to impact a larger investigation. What I think it affects is the number of cases you can handle at any one time

The figures highlighted how the enforcement capabilities of some parts of the US government have eroded under Mr Trump, who has restricted hiring as part of an effort to reduce costs among federal agencies.

The division appeared to have shrunk even as Democrats, and some Republicans, have raised concerns about corporate power and questioned whether competition authorities should do more to restrain big companies.

The phone directories may not precisely reflect staffing in the division, as employees may have left or joined without the directory being immediately updated.

However, the decline in phone directory listings corresponded with comments from several former attorneys in the division and antitrust lawyers who regularly represent clients before the justice department.

One said staffing in parts of the division appeared “markedly lower” than when Mr Trump took office, while another said staff numbers in certain units seemed “down substantially”.

A senior justice department official said the antitrust division had “not shrunk at all, I don’t think”. Later, a department spokesperson said: “We question whether your numbers are accurate because they include both attorneys and certain support staff.”

The justice department declined to provide its own figures for the number of attorneys and other staff employed in the antitrust division currently and at the beginning of the Trump administration.

Just days after Mr Trump was inaugurated in January 2017, he issued a hiring freeze across the executive branch, including the Department of Justice. Though the freeze was officially lifted in April 2017, the justice department has continued to operate under constraints.

“We have a number of new hires coming in the next several months,” said the justice department spokesperson. Some are from the department’s honours programme for law school graduates, according to the spokesperson, while in other cases the division has been “granted exceptions to the hiring freeze”.

Since September 2017, the justice department’s antitrust chief has been Makan Delrahim, a former intellectual property lawyer and lobbyist who previously served in the antitrust division in the early 2000s.

He has been best known for his controversial attempt to block AT&T’s $80bn takeover of Time Warner, which owned CNN, the target of frequent criticism by Mr Trump. Mr Delrahim has denied any political motive in his decision. In June, a judge in Washington allowed the deal to go ahead and an appeal is pending.

Mr Delrahim heads a division with about 610 administrative staff, paralegals, economists and trial attorneys, according to the phone directory currently available on the department’s website. The directory has been updated as recently as the past month.

The division’s budget request for fiscal year 2019 sought funding for almost 700 full-time equivalent positions, the same number as the previous year. Mr Delrahim also requested a 0.5 per cent rise in overall funding.

In fiscal year 2014, the number of full-time equivalent positions in the division dropped to just under 600, before rising in subsequent years.

The AT&T case remains the only one Mr Delrahim has thus far taken to court, a costly and resource-intensive process for the antitrust division. He has resolved almost a dozen more cases through settlements, a rate not dissimilar to previous administrations. 

The vast majority of mergers filed with the justice department and the Federal Trade Commission, which shares responsibility for civil antitrust enforcement, have historically been allowed to go ahead without any action.

“You can’t count numbers to determine the effectiveness of an enforcement agency,” said James Rill, who headed the antitrust division in the George HW Bush administration. In 2017, Mr Delrahim announced a justice department fellowship in Mr Rill’s name.

Mr Rill said he had noticed the declining staff numbers in the agency but was sceptical that “the drop at this stage” had affected the division’s enforcement activity.

On the criminal side, where the antitrust division prosecutes companies and individuals who conspire to rig prices, there has been a dramatic slowdown in new cases and in fines during the Trump administration. 

In the last fiscal year, cartel fines dropped for the second year running to “a mere $96m” from only two cases, according to figures compiled by Simpson Thacher, the law firm. In the last year of the Obama administration, the figure was almost $400m.

At the same time, the number of new cases brought by the division fell to its lowest level since the 1970s last year, with fewer than 20 new prosecutions brought, the Financial Times reported in November.

The decline in new criminal cases has reflected the end of long-running investigations into the auto parts industry and financial markets. It has also come as the antitrust division has seen significant turnover in its criminal enforcement units.

Five justice department units across the US — one each in San Francisco, Chicago and New York, and two in Washington — prosecute cartels. Staffing is down 15 per cent across the offices, according to the department phone directories.

Under the Obama administration, the antitrust division closed field offices in Atlanta, Dallas, Cleveland and Philadelphia, moving much of the staff to the remaining offices.

The drop in staffing has been most keenly felt in the two Washington-based units, where there are 27 per cent fewer employees than in February 2017, according to the directories.

“It’s likely not going to impact a larger investigation. What I think it affects is the number of cases you can handle at any one time,” said John Terzaken, a partner at Simpson Thacher who was director of criminal enforcement in the antitrust division until 2012.

There has been turnover across the leadership, also, with all but one of the five criminal unit chiefs leaving the department last year.

One took retirement after Mr Delrahim instituted an early retirement programme for long-serving career attorneys, two joined law firms, and another left to  join Facebook.

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