Washington, DC – Today, Senator Sheldon Whitehouse (D-RI) called on the Justice Department Inspector General to investigate the aborted federal antitrust investigation of four automakers’ agreement with the state of California over auto fuel emissions standards. Citing last week’s hearing in the House Judiciary Committee featuring whistleblower testimony from a former top Antitrust Division official, Whitehouse points to a range of troubling conduct by Attorney General Bill Barr’s Justice Department and yet-unanswered questions about President Trump and Trump White House involvement in the decision to begin the investigation. The incident fits into a broader pattern of weaponizing the Justice Department against Trump foes, and of continued actions by the Trump administration to cater to the interests of the fossil fuel industry, Whitehouse notes.
“[W]e have: (1) an industry willing to use every lever at its disposal to increase its profits by blocking an environmental regulation; (2) a Division with political leadership willing to disregard established policies to please the President, who himself wants to please that industry; and (3) a Department willing to countenance delayed, incomplete, and misleading answers to questions asked by a co-equal branch of government to stymie congressional oversight,” writes Whitehouse to the Inspector General. “Whether you view this as another instance of in the long and growing list of improper politicization of law enforcement across the Department or a breakdown of procedures in the Antitrust Division, these facts require your attention.”
Whitehouse has raised questions about the investigation on several occasions and received incomplete or downright misleading responses from the Trump Justice Department. In September 2019, Whitehouse pressed the head of the Antitrust Division, Makan Delrahim, for answers on the investigation during a Senate Judiciary Antitrust Subcommittee hearing. After Delrahim stonewalled Whitehouse, the Justice Department failed to provide written responses to Whitehouse’s questions for nine months, forcing Whitehouse to withhold approval of legislation sought by the Department. And even upon receiving a response, the Department failed to address key concerns, forcing Whitehouse to lodge additional questions.
The Department’s Antitrust Division formally launched its inquiry into Ford, Honda, BMW, and Volkswagen just a week after President Trump tweeted criticism of the companies for dealing with California. Antitrust Division attorney John Elias testified last week that political leadership of the Division directed staff to open the investigation the day after the president’s tweet.
In communications with Whitehouse, current Trump officials have repeatedly asserted that the president’s interest in the automakers’ agreement was not a factor in the antitrust investigation. However, Elias’s testimony last week highlighted a number of troubling departures from Antitrust Division practices that suggest otherwise. According to the whistleblower, career staff in the Division had “grave concerns” about opening the investigation, and at no point did the Division bother to contact the state of California.
The Trump administration has gone to extraordinary lengths to cater to the interests of the fossil fuel industry – an industry that has orchestrated a shadowy campaign to undermine fuel economy standards. In addition to the antitrust investigation, the Trump administration is in the process of tearing down President Obama’s fuel economy standards in favor of regulations that would allow for dramatically more carbon pollution.
Full text of Whitehouse’s request to the Inspector General is below. A PDF copy is available here.
The Honorable Michael E. Horowitz
Inspector General
U.S. Department of Justice
Office of the Inspector General
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Dear Inspector General Horowitz:
I write to you today in furtherance of our conversations about political interference at the Department of Justice. Specifically, I write to bring to your attention correspondence I have had with the Department about the Antitrust Division’s investigation of agreements four automakers made with the State of California concerning greenhouse gas emissions by cars and light trucks. The Department’s responses to my inquiries range from incomplete to misleading, and suggest an attempt to cover up misconduct from congressional oversight.
I have spent months trying to get answers from the Antitrust Division about this investigation. On September 17, 2019, Assistant Attorney General Makan Delrahim appeared for an oversight hearing before the Senate Judiciary Committee’s Antitrust Subcommittee. I asked him questions about the Division’s investigation, at that point just weeks old, and submitted written questions for the record (QFRs). I did not receive answers to those questions until May 29, 2020, nine months after they were submitted, four months after it was reported that the investigation had been closed, and only after I indicated that I would put a hold on legislation sought by the Antitrust Division. On June 9, I advised the Department that Mr. Delrahim’s responses were insufficient and that I would continue to place a hold on the legislation it sought. On June 19, Assistant Attorney General Stephen Boyd responded in the place of Mr. Delrahim with a supplemental response.
My suspicion that Mr. Delrahim’s and Mr. Boyd’s responses failed to tell the full story of this investigation was confirmed on June 24, when Antitrust Division attorney John Elias testified as a whistleblower before the House Judiciary Committee, in part about the events I raised in my questions.
The Decision to Investigate the Automakers Was Motived by Politics
When I first asked why the Antitrust Division opened its investigation, circumstantial evidence strongly suggested the decision was driven by political considerations. California and the four automakers announced the new emissions standards in July 2019. The President tweeted about it on August 21, 2019. Letters from the Antitrust Division to the automakers were dated August 28.
Mr. Elias testified that political leadership of the Antitrust Division directed staff to open the investigation on August 22, 2019, the day after the President’s tweet. At the House Judiciary Committee hearing, Rep. David Cicilline noted the investigation’s coincidental timing and asked whether the investigation was opened to “cater to the President’s political whims.” Mr. Elias responded that “the coincidence in time between the President’s tweets and the instruction the next day to open the investigation could lead to [such an] inference.”
In response to my QFR asking whether the Department considered White House preferences when launching an investigation, Mr. Delrahim claimed that Division decisions are always made without “improper political considerations or interference.” Mr. Boyd reiterated that external political concerns “never govern law enforcement efforts.” Mr. Delrahim stated that “the Division generally follows the procedures described in the Antitrust Division Manual in all matters it undertakes, including the investigation into the automaker agreement.” If Mr. Elias’s testimony is correct, Mr. Delrahim’s and Mr. Boyd’s answers to me cannot be.
The Division Did Not Follow Its Own Procedures
The significant authority vested in the Antitrust Division means that even the opening of an investigation can have economic consequences on companies and industries. The Antitrust Division Manual sets out the procedures staff should follow to conduct a preliminary investigation to assess whether a formal investigation is warranted, effectively cabining that authority for cases in which a strong basis to suspect potential anticompetitive behavior has been established.
When I asked Mr. Delrahim what facts the Division used to establish predication for the investigation it had opened several weeks earlier, Mr. Delrahim testified, “I have nothing. That’s the purpose of an investigation.” Mr. Boyd was slightly more forthcoming, pointing to a one-page term sheet of the automakers’ agreement with California that included the words “we all agree.” When Mr. Delrahim replied to my QFR asking who decided to open the investigation, Mr. Delrahim claimed that “career staff” evaluated and drafted the recommendation to investigate.
An investigation premised on “nothing” or the words “we all agree” hardly follows the Antitrust Division Manual. So it came as little surprise that Mr. Elias testified that the decision to investigate the automakers was made by “political leadership” who directed career staff to open the investigation the day after the President’s tweets. Mr. Elias continued that “the career staff who reviewed [the California automaker agreement] … had some grave concerns about opening it, especially the people who were then charged with actually conducting the investigation. They … documented their concerns with the legal underpinning … of the case.” Further, Mr. Elias testified that the Division did not bother to contact California officials, suggesting another departure from typical practice. The effect of this rash and unjustified decision was to weaponize our nation’s antitrust laws to cause economic harm to companies that took a position contrary to the President’s wishes. This is exactly what the procedures in the Antitrust Division Manual are designed to prevent.
The Division Failed to Properly Consider Automakers’ Defenses
The Division’s investigation continued for months despite the existence of clear defenses it must consider before initiating and continuing an investigation according to the Antitrust Division Manual. In response to my QFR on the consideration of defenses, Mr. Delrahim claimed that “the Division considers the strength of likely defenses at every stage” of the investigation. Mr. Boyd later suggested that two likely defenses—state action doctrine and Noerr-Pennington doctrine—did not necessarily apply to this case.
Mr. Elias testified that “normally for significant, complicated matters, people put time and attention into assessing potential defenses” and that “the career staff who examined [the California automaker agreement] saw some very obvious defenses, things called state action or Noerr-Pennington, and … you really have to twist things” to not consider these defenses conclusive. The Department’s official answers and Mr. Elias’s testimony cannot both be true.
Many Unanswered Questions about the Investigation Remain
In addition to the Department’s misrepresentations, there remain several questions that, if answered, could reveal the existence of additional improper interference in the Antitrust Division’s investigation of the automakers. For example, neither Mr. Delrahim nor Mr. Boyd answered my questions about communications the Division had with the White House (Question 34) or with the EPA or DOT (Question 31). I have documented elsewhere the influence of the oil and gas industry throughout the Trump administration, and specifically on the administration’s decision to roll back emissions standards for cars and light trucks. I strongly suspect this industry’s influence extended to this antitrust investigation, as the attack on California’s agreement with the four automakers was consistent with the Trump administration’s decision, at the behest of the oil and gas industry, to weaken nationwide greenhouse gas emission standards for cars and light trucks.
To summarize, we have: (1) an industry willing to use every lever at its disposal to increase its profits by blocking an environmental regulation; (2) a Division with political leadership willing to disregard established policies to please the President, who himself wants to please that industry; and (3) a Department willing to countenance delayed, incomplete, and misleading answers to questions asked by a co-equal branch of government to stymie congressional oversight. Whether you view this as another instance of in the long and growing list of improper politicization of law enforcement across the Department or a breakdown of procedures in the Antitrust Division, these facts require your attention.
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