The Justice Department’s announcement Wednesday that it is suing to block the proposed merger of AT&T and T-Mobile caught a lot of people by surprise.
AT&T officials said they were shocked by DOJ’s decision to file the suit at all.
“We are surprised and disappointed by today’s action, particularly since we have met repeatedly with the Department of Justice and there was no indication from the DOJ that this action was being contemplated,” Wayne Watts, AT&T senior vice president and general counsel, said in a statement.
Opponents of the merger say they weren’t surprised by the decision. But they did profess dismay at the relatively quick decision, coming less than six months after the deal was proposed. ”The only thing that might have been surprising was the speed,” said Richard Brunell, director of legal advocacy at the American Antitrust Institute, a think tank with a consumer focus.
David Balto, a senior fellow at the Center for American Progress, agreed. “I think in an investigation like this, you would expect it to take a longer period of time,” said Balto, a former DOJ antitrust attorney and former policy director of the Bureau of Competition at the Federal Trade Commission.
Justice officials said Wednesday that they were suing to block the merger of the nation’s second and fourth largest wireless telephone companies. In announcing the suit to block the $39 billion deal, DOJ officials said the merger would result in decreased competition, which, in turn would result in decreased quality and choices for customers. The suit is the most visible antitrust action by the Obama administration – and it comes, ironically, just after the departure of Obama’s Antitrust Division chief.
Last month Assistant Attorney General Christine Varney announced she would leave the department’s Antitrust Division for the law firm Cravath, Swaine & Moore LLP. Attorney General Eric Holder announced that rather than nominating a permanent replacement, Sharis Pozen, a key Varney deputy, would replace her boss in an acting capacity. Deputy Attorney General James Cole headlined the official announcement of the lawsuit to block the merger.
Varney’s departure will have little impact on the suit, Brunell and Balto said. “The litigators are in charge,” Brunell said.
President Barack Obama campaigned on a promise of reinvigorated antitrust enforcement, but many consumer groups had been waiting for strong evidence of such an effort. Under Varney’s leadership, the administration extracted restrictions on several major mergers but did not block them, including those that combined Ticketmaster and Live Nation, and Comcast and NBC, as well as a suit to block an H&R Block acquisition and action which resulted in Nasdaq and NYSE to drop a merger plan.
The suit filed Wednesday may have been the type of big move consumer groups had anticipated when Obama took office. “This announcement is something for consumers to celebrate,” Parul Desai, policy counsel for Consumers Union said, in a statement. “We have consistently warned that eliminating T-Mobile as a low-cost option will raise prices, lower choices, and turn the cellular market into a duopoly controlled by AT&T and Verizon.”
“It’s a ‘Joe Friday’ case,” said Balto, referring to the detective from the television series and movie, “Dragnet.” “Just the facts.”
The two agreed that DOJ officials have been insulated from one of the major issues surrounding the merger–jobs. The Obama administration has announced the president intends to give a speech on job creation before a joint session of Congress on Sept. 7 and jobs have become a primary focus for the administration.
AT&T and labor unions supporting the deal have argued that the merger would create jobs. And hours before Justice officials announced the lawsuit, AT&T said if the deal were approved, the company would bring back 5,000 wireless call center jobs to the U.S. that had been outsourced to other nations.
Such issues would have no impact on DOJ decisions, Brunell said. “I think they make the call straight up” based on the law, he said, adding that the jobs issue would not have come into play.
The two experts differed on how the merger battle will end up. Brunell said he believes that Justice Department officials have left themselves very little room for a deal that would result in a merger with conditions. However, Balto said the administration has been “particularly innovative in coming up with creative” ways to structure a deal.
South Carolina has hired former U.S. Solicitor General Paul Clement to parry questions from the Department of Justice over the state’s new voter identification law.
The Justice Department on Monday requested additional information from South Carolina as it weighs whether the state can legally implement a law requiring voters to show photo identification at the polls. The state has 60 days to respond to the letter, and DOJ then has 60 days in which to reply.
In a letter sent to the state attorney general’s office on Monday, Christian Herren, chief of DOJ’s voting section in the Civil Rights Division, said the department does not have enough information to determine whether the new requirements would have the effect of “denying or abridging the right to vote on account of race, color, or membership in a language minority group.”
The Justice Department request, and Clement’s involvement, mark the matter as another salvo in a long-running partisan battle over voter fraud.
Conservatives generally support strong identification requirements, arguing that showing an ID at the polls will reduce the number of voters who register ballots illegally as someone else. Liberals counter that voter ID laws are really intended to suppress voting by elderly, poor and minorities — groups that generally support Democrats and who may have a harder time obtaining ID.
Clement, who was Solicitor General during the George W. Bush administration, has emerged in recent months as the conservative movement’s new point man on hot-button legal issues.
In April, he made headlines by quitting the law firm King & Spalding over the firm’s decision to end its representation of House of Representatives, which had hired Clement to defend the constitutionality of the anti-gay marriage Defense of Marriage Act. Clement joined a new firm, Bancroft PLLC — which was founded by Bush-era DOJ official Viet Dinh, who also sits on the board of News Corp., owner of conservative powerhouse Fox News — and continued to work for the House to defend DOMA.
In August Clement argued on behalf of the state of Arizona in front of the Supreme Court, defending the state’s aggressive new anti-immigration law signed by Arizona Gov. Jan Brewer (R).
Gov. Nikki Haley (R) signed the South Carolina law in May. It requires voters to show either a driver’s license, passport, military identification card from the motor vehices department or a photo voter card that has yet to be developed. Many of the questions surround the voter identification card. Democrats and civil rights groups say the card requirement amounts to a latter day poll tax.
South Carolina’s history of voting rights violations requires federal clearance of any change in state election law.
Many of the DOJ questions revolved around a planned photo-voter registration card system. The agency approved two sections of the law not central to the photo identification requirement.
South Carolina Attorney General Alan Wilson said the state will litigate the issue ”up to the U.S. Supreme Court if necessary.” Speaking at an Orangeburg County Republican Party fundraiser Monday, Wilson added that he has “no faith that [the DOJ] will do the right thing.”
Mary Jacoby contributed to this report.
The Justice Department Wednesday filed suit to block AT&T Inc.’s proposed acquisition of T-Mobile USA Inc., saying the proposed $39 billion transaction would decrease competition for mobile wireless telecommunication services.
The decreased competition would result in worse service, higher prices and fewer choices, DOJ said, in a civil suit filed in the U.S. District Court for the District of Columbia.
Arizona U.S. Attorney Dennis K. Burke, a Democratic Party insider once considered a rising star, resigned abruptly on Tuesday in the wake of a growing political furor over a botched U.S-Mexico gun-tracking program overseen by his office.
Dennis Burke (DOJ)
Burke — who’d been a top aide to former Arizona Governor and U.S. Homeland Security Secretary Janet Napolitano — had once been considered a possible candidate for the Arizona Senate seat being vacated next year by retiring Sen. Jon Kyl (R).
But his fortunes have taken a nosedive in the controversy over Fast and Furious, a program of the Bureau of Alcohol, Tobacco, Firearms and Explosives that tracked some 2,000 guns purchased in the U.S. by straw buyers intended for Mexico. The program aimed to analyze and stop the weapons from getting into the hands of Mexican drug cartels.
Burke’s office over saw the ATF operation.
But after allowing the guns to pass over the border last year, ATF lost track of them. Two AK-47s from the program were found at the scene of a shootout between U.S. Border Patrol agent and Mexican bandits near Rio Rico, Ariz., in December. Border Patrol agent Brian A. Terry was killed in the gunfight.
The resignation came on a day of house cleaning at the Justice Department, as acting ATF Director Ken Melson was also ousted in connection with the gun-walking program, which has been the subject of an investigation and hearings in the Republican-led House of Representatives.
The Justice Department’s Office of Public Affairs issued a news release at noon today announcing that Melson had been reassigned to the department’s Office of Legal Policy, where he would be a senior adviser on forensic science. The news release said Minnesota U.S. Attorney B. Todd Jones, a confidant of Attorney General Eric Holder, would take over as acting ATF director.
Then, exactly one hour later, the Public Affairs office issued a statement from Holder praising Burke for resigning in Arizona. “I am grateful to Dennis for his dedication and service to the Department of Justice over these many years and commend his decision to place the interests of the U.S. Attorney’s office above all else,” Holder said in the statement.
Burke worked in the Clinton White House as a senior policy analyst in the mid 1990s, and later served in the Phoenix U.S. Attorney’s office as an Assistant U.S. Attorney from 1997 to 1999. He was then-Gov. Napolitano’s chief of staff from 2003 to 2008. After Barack Obama won the presidency, he served as an adviser to his transition team on homeland security.
Burke wrote to his staff in an email on Tuesday as he departed: ”The work in every corner of this office – your work – has been significant and impressive. When I first came to the office a decade ago as a line AUSA (Asst. U.S. attorney), I knew it was an excellent office and did important work.”
First Assistant Ann Scheel will assume Burke’s duties until the president makes an interim or permanent appointment, Arizona news channel KOLD reported. In Phoenix Assistant U.S. Attorney Emory Hurley, who handled Fast and Furious on a day-to-day basis, was reassigned from the criminal to civil division.
One person familiar with the office described Hurley as “not a go-getter.” The U.S. Attorney office’s failure to indict any of the straw buyers of the guns until after agent Terry had been killed in the border shootout in December was considered a major black-mark against Burke’s leadership.
Burke was interviewed by congressional investigators last week and, according to anonymous sources cited by Fox News, “got physically sick during questioning and could not finish his session.”
The shakeup Tuesday appears to be an attempt by senior DOJ and administration leaders to contain the fallout from the scandal.
Arizona Republic columnist Laurie Roberts wrote Tuesday that Rep. Paul Gosar (R-Ariz.), who sits on the House Oversight Committee investigating the matter, told her that he believes responsibility lies “at the top” with Holder or other Justice Department leaders. The columnist wrote: ”This move to dump Burke — who oversaw the operation — looks like an effort to make this mess go away.
As part of an apparent ouster of Justice Department officials involved in a controversial gun probe, Kenneth Melson, acting director of the Bureau of Alcohol, Tobacco, Firearms and Explosives, is being transferred to a new job inside the department.
B. Todd Jones, the U.S. Attorney for Minnesota, will take over in an acting capacity at ATF, while Melson will become a senior advisor on forensic science in the department’s Office of Legal Policy. Jones will remain as U.S. Attorney while serving at ATF.
In addition Dennis Burke, the Arizona U.S. Attorney who supervised the troubled gun probe– known as Operation Fast and Furious– resigned Tuesday.
The moves were the most dramatic indications that Fast and Furious has become a major thorn in the side of the department and its leader, Attorney General Eric Holder.
A career federal Justice Department employee who once ran the U.S. Attorney’s office in the Eastern District of Virginia, Melson appeared to abandon his role as loyal foot soldier this summer. During a private interview with Republican congressional investigators on July 4, Melson appeared with private counsel, and told them that higher-ups in the Justice Department knew about the operation, He appeared either to be shifting the blame or maneuvering not to become the fall guy — neither of which reflected well on his leadership or bode well, it turned out, for his future.
Melson’s attorney denied he had created any rift with the department, although the Wall Street Journal had by that time already reported that Justice Department leadership was attempting to oust him.
Operation Fast and Furious allegedly resulted in at least 2,000 firearms being sold to straw buyers, who resold them to drug cartel members in Arizona. The ATF then allegedly allowed the guns to be taken Mexico, where the bureau lost track of them. Two guns from the operation were recovered in December at the scene of a shootout between Border Patrol agents and Mexican bandits near Rio Rico, Ariz., that ended in the death of agent Brian A. Terry. Other firearms sold during the operation have been linked to scenes of violent crime in Mexico.
The GOP-led House Oversight and Government Reform Committee and Sen. Charles Grassley of Iowa, the ranking Republican on the Senate Judiciary Committee, have been conducting a probe of the operation. Initially, Republicans criticized Melson’s leadership. But following a private interview with Oversight Chairman Darrell Issa (R-Calif.) and Grassley, the GOP critics reconsidered, saying Melson had given DOJ officials early warning about the operation.
Some Republicans later expressed concern that Melson was being made the fall guy for his superiors at DOJ. Others disagreed. Sen. John Cornyn (R-Texas), who has criticized the department for the operation, said that reassigning Melson and others who may have been involved in the gun operation is not enough. “Attorney General Holder should ask for the resignations and come clean on all alleged gun-walking operations, including a detailed response to allegations of a Texas-based scheme,” Cornyn said in a statement.
In a statement Tuesday, Issa said that while changes are needed at ATF, he will continue his probe to ensure that blame isn’t “offloaded on just a few individuals for a matter that involved much higher levels of the Justice Department.”
Issa said the DOJ changes are warranted, but that DOJ officials still must answer questions about who knew that guns were being allowed to flow unchecked into Mexico. He added, “I also remain very concerned by Acting Director Melson’s statement that the Department of Justice is managing its response in a manner intended to protect its political appointees.”
Melson gave his July 4 interview to Issa and Grassley without informing DOJ officials.
Earlier this summer, Issa and Grassley sent a letter to DOJ describing their interview with Melson. Melson, they said, acknowledged the existence of a report on the operation held by the department and said the DOJ has withheld it and other documents in an effort to protect senior officials.
“It was very frustrating to all of us, and it appears thoroughly to us that the department is really trying to figure out a way to push the information away from their political appointees at the department,” Melson said on July 4, according to the letter.
The letter also suggested a rift between Melson and department officials over the handling of congressional requests for information regarding the operation.
“I think [the department] was doing more damage control than anything,” Melson said. “My view is that the whole matter of the Department’s response in this case was a disaster. That as a result it came to fruition that the [House Oversight] committee staff had to be more assertive in attempting to get information from the department, and as a result, there was more adverse publicity toward the ATF than was warranted if we had cooperated from the very beginning.”
According to passages cited by the letter, Melson told investigators that the DOJ advised him not to raise concerns with Congress about “institutional problems” within Fast and Furious or even explain the operation to ATF agents in January following the first of the public controversy.
“Earlier on, I wanted to do a broadcast that just talked about the case, because everybody was wondering what’s this case about?” Melson said. “And I was told not to do that.
Melson’s replacement — Minnesota U.S. Attorney Jones — is a friend and confidant of Holder, signaling the attorney general is now giving high-level attention to the political problem child that is ATF. The agency has been without a Senate-confirmed director for years, primarily because of objections from Republican senators who strongly support second-amendment gun rights and object to the ATF’s federal role in enforcing gun laws.
In announcing Jones’ new position, Holder said that he will provide steady leadership at ATF.
“As a seasoned prosecutor and former military judge advocate, U.S. Attorney Jones is a demonstrated leader who brings a wealth of experience to this position,” Holder said in a statement. “I have great confidence that he will be a strong and steady influence guiding ATF.”
Jones has served as U.S. Attorney for the District of Minnesota under two presidential administrations —from 1998 to 2001 during the Clinton years, and again starting in 2009, when he was nominated by President Barack Obama and confirmed by the Senate..
He is the chair of the Attorney General’s Advisory Committee (AGAC), a group that advises Holder on management and operational issues affecting U.S. Attorneys’ offices throughout the country. Jones previously served as a member, vice chair and chair of the AGAC from 1999 to 2001.
Melson was appointed acting director of ATF in 2009. He was previously director of the Executive Office for U.S. Attorneys. In his new position, Melson will focus on issues relating to policy development in forensic science.
“As he moves into this new role, I want to thank Ken for his dedication to the department over the last three decades,” Holder said in the statement.
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FOR IMMEDIATE RELEASE
TUESDAY, AUGUST 30, 2011
DEPARTMENT OF JUSTICE ANNOUNCES NEW ACTING DIRECTOR OF ATF
AND SENIOR ADVISOR IN THE OFFICE OF LEGAL POLICY
WASHINGTON – The Department of Justice today announced the appointments of U.S. Attorney for the District of Minnesota B. Todd Jones to serve as Acting Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and ATF Acting Director Kenneth Melson to become Senior Advisor on forensic science in the Office of Legal Policy (OLP).
“As a seasoned prosecutor and former military judge advocate, U.S. Attorney Jones is a demonstrated leader who brings a wealth of experience to this position,” said Attorney General Eric Holder. “I have great confidence that he will be a strong and steady influence guiding ATF in fulfilling its mission of combating violent crime by enforcing federal criminal laws and regulations in the firearms and explosives industries.”
Jones will continue to serve in the capacity of U.S. Attorney when he assumes the role of ATF acting director on Aug. 31, 2011.
A veteran of the Justice Department, Jones has served as U.S. Attorney for the District of Minnesota under two presidential administrations. He first served from 1998 to 2001. He was nominated again in 2009 by President Obama and has been in that role since being confirmed that year.
In 2009, the Attorney General appointed him to serve as chair of the Attorney General Advisory Committee (AGAC), a group of U.S. Attorneys appointed to advise the Attorney General on policy, management and operational issues affecting U.S. Attorneys’ Offices throughout the country. Jones previously served as a member, vice chair and chair of the AGAC from 1999 to 2001.
During his several years as a federal prosecutor, Jones conducted grand jury investigations and has been the lead trial lawyer in many federal prosecutions involving drug trafficking, firearms, financial fraud and violent crime.
Throughout his career, Jones has served as a partner with Robins, Kaplan, Miller & Ciresi (2001-2009); a partner with Greene Espel, PLLP (2001; 1994-1997); First Assistant U.S. Attorney for the District of Minnesota (1997-1998); and Assistant U.S. Attorney (1992-1994).
Following admission to the Minnesota bar, Jones went on active duty in the U.S. Marine Corps, where he served as both a trial defense counsel and prosecutor in a number of courts martial proceedings.
Jones received his B.A. from Macalester College in 1979 and his J.D. from the University of Minnesota Law School in 1983.
Melson will join OLP on Aug. 31, 2011, in his new role as senior advisor where he will focus on issues relating to policy development in forensic science.
“Ken brings decades of experience at the department and extensive knowledge in forensic science to his new role and I know he will be a valuable contributor on these issues,” said Attorney General Holder. “As he moves into this new role, I want to thank Ken for his dedication to the department over the last three decades.”
He is a past president and distinguished fellow of the American Academy of Forensic Sciences, and currently participates on behalf of the department on the American Society of Crime Laboratory Directors/Laboratory Accreditation Board. He has been an adjunct professor at George Washington University for almost 30 years teaching both law and forensic science courses.
Melson was appointed acting director of ATF in 2009. Prior to that, he was director of the Executive Office for U.S. Attorneys and served several years in the U.S. Attorney’s Office for the Eastern District of Virginia.
Melson received his B.A. from Denison University in 1970 and his J.D. from George Washington University in 1973.
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FOR IMMEDIATE RELEASE AG
TUESDAY, AUGUST 30, 2011
STATEMENT OF ATTORNEY GENERAL ERIC HOLDER ON THE RESIGNATION
OF U.S. ATTORNEY FOR THE DISTRICT OF ARIZONA DENNIS BURKE
WASHINGTON – Attorney General Eric Holder issued the following statement today on the resignation of U.S. Attorney for the District of Arizona Dennis Burke:
“United States Attorney Dennis Burke has demonstrated an unwavering commitment to the Department of Justice and the U.S. Attorney’s office, first as a line prosecutor over a decade ago and more recently as United States Attorney.
“Under his leadership, the office has made great progress in its pursuit of justice with the creation of special units focusing on civil rights enforcement and rule of law, as well as more robust outreach to key communities, particularly in Indian Country. The office’s quick response to the devastating shootings in January that claimed the lives of several people and critically injured Congresswoman Gabrielle Giffords was crucial in arresting and charging the alleged shooter.
“I am grateful to Dennis for his dedication and service to the Department of Justice over these many years and commend his decision to place the interests of the U.S. Attorney’s office above all else.”
With Libya’s transitional government snubbing U.S. requests to hand over the convicted planner of the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland, the Justice Department says its probe remains open.
“We remain firmly committed to bringing to justice everyone who may have been involved in the Pan Am 103 bombing,” department spokesman Dean Boyd told The Cable, a blog on Foreignpolicy.com. “The Justice Department investigation into the Pan Am 103 bombing that was initiated on December 21, 1988, remains open and active.”
The Libyan Transitional National Council said Monday it didn’t plan to extradite Abdelbaset al-Megrahi, who was convicted in Scotland in connection with the bombing that killed 270 passengers, crew and people on the ground. But Scotland released him in 2009 on the grounds he was dying of prostate cancer.
News reports at the time speculated the real reason for the release was the United Kingdom’s wish to help British oil major BP plc win more business in Libya, then run by Col. Moammar Qaddafi, who was recently ousted by a rebel movement aided by NATO military assistance.
Indeed, two years later, al-Megrahi hasn’t yet died of cancer. CNN’s Nic Robertson tracked Megrahi down in his luxury home in Tripoli on Monday, where he was lying with an oxygen mask in a hospital bed, apparently comatose. Robertson, however, also wrote in his article that he couldn’t be sure the death-bed scene hadn’t been staged.
Senators and GOP presidential candidates have been saying the new Libyan government — in power with the help of American assistance through NATO — should re-arrest al-Megrahi and extradite him to the United States.
But Mohammed al-Alagi, the justice minister in for the transitional counsel, said Monday: “We will not hand over any Libyan citizen. It was Qaddafi who handed over Libyan citizens.”
State Department spokesman Victoria Nuland said at a briefing today that it didn’t’ appear the TNC had made any final decision on the matter.
“We need to let them get their feet under themselves as a governing authority, and then they have agreed that they will look at this…and I don’t think we’re there yet,” she said, according to The Cable, adding that the Justice Department had the lead on the issue.
Kenneth Melson, whose leadership as the acting director of the Bureau of Alcohol, Tobacco, Firearms and Explosives has been marred by a controversial gun walking operation, is leaving the bureau for a job in the Office of Legal Policy.
Melson will be replaced as acting director by B. Todd Jones, the U.S. Attorney for the District of Minnesota. Jones also will continue to serve as U.S. Attorney.
A federal appeals court has thrown out sanctions against two federal prosecutors in Miami.
The 11th Circuit Court of Appeals ruled Monday, that U.S. District Judge Alan S. Gold violated the rights of prosecutors Sean Cronin and Andrea Hoffman by denying them any notice of misconduct charges and the chance to be heard on the allegations, the Associated Press reported.
The appeals court also voided a $600,000 in legal fees awarded to Dr. Ali Shaygan, who had been acquitted of 141 counts of illegally prescribing pain killers. Gold had ruled that the prosecutors and a Drug Enforcement Administration agent acted “vexatiously and in bad faith” because they had not obtained permission from their supervisors in the U.S. Attorney’s office before authorizing two witnesses to tape conversations with Shaygan’s attorney and his investigator.
The Drug Enforcement Administration had conducted a probe of Shaygan after one of his patients died from a combination of prescription and illegal drugs.
Federal officials asked two witnesses in the case to record conversations with Shaygan’s lawyer and his investigator to determine if the defense was trying to tamper with witnesses. However, the prosecutors failed to obtain the required permission from Alexander Acosta, who was then U.S. Attorney for the Southern District of Florida. They also did not disclose to the defense that the witnesses were working for the government.
No evidence of witness tampering was uncovered.
Following Gold’s ruling, Acosta acknowledged errors in the Shaygan case.
Shaygan’s attorney, David O. Markus said he planned to ask the entire 11th Circuit to review the case.
A spokeswoman with the Miami U.S. Attorney’s office declined comment because the case is still pending.
