The Justice Department’s decision to close four of its Antitrust Division field offices reflects “misinformed” reasoning by department leadership, said several career lawyers from offices scheduled for closure.
After the offices close, the 47 staff assistants will be offered jobs at nearby U.S. Attorney offices. The 47 displaced lawyers will be offered one year details also at nearby U.S. Attorney offices if they are willing to relocate to another Antitrust Division field office. In addition, displaced lawyers are guaranteed interviews with other Justice Department divisions; however, many prosecutors and staff are unsatisfied with this solution.
The department will save money in terms of “efficiences” through forgone rent payments and a realignment of its antitrust personnel to other vacant department positions, Attorney General Eric Holder said on Tuesday before the Senate Judiciary Committee.
“No one will lose their job,” he said.
Antitrust Division field offices in Chicago, New York, San Francisco, and Washington, D.C. will remain open while offices in Cleveland, Dallas, Atlanta and Philadelphia are scheduled to close after the 2013 budget passes through Congress. The proposed restructuring is expected to save the department $8 million.
But Sen. Herb Kohl (D-Wis.) asked last week how the department expects to save $8 million if “almost all of the money to be saved would be in the reduction of staff and yet you’re saying these people will be given [job] opportunities.”
The department is banking on career trial attorneys in these offices not accepting jobs in other regions or at other U.S. Attorney offices, said Dan Polster, a federal judge who began his professional career in the Cleveland field office.
Many of the prosecutors in regional field offices have spent their careers building contacts and familiarizing themselves with the local and regional legal landscape, in addition to raising families and settling down in these regions, he said.
Most of the people unwilling to relocate “are people that are career prosecutors where they are and have families in those locations,” said Joan Marshall, a prosecutor in the Dallas office.
Richard Hamilton has worked in the Cleveland field office for 22 years and estimated that 36 of the 47 prosecutors in the field offices slated to close will not be able or willing to relocate.
The attorneys and staff in the four field offices scheduled to close work exclusively in criminal antitrust enforcement, an “important, if not the most important part of the Antitrust Division’s mission,” Hamilton said. There are more than 200 division attorneys in the Washington, D.C. office focused on civil enforcement, such as merger review and civil litigation. Such a one-sided approach to cost savings should be rejected, reads a November 2011 letter from the Ad Hoc Committee for Continued Operation of the Department of Justice’s Philadelphia Field Office to Rep. Chaka Fattah (D-Pa.), ranking member of the Subcommittee on Commerce, Justice, science and related agencies.
But the Justice Department said the consolidation will not affect enforcement.
“We have seen that these antitrust cases become more complex and complicated and it is our view that they can best be handled by the reduced number of offices that we have with larger teams,” Holder said on Tuesday.
According to Department of Justice numbers, between fiscal year 2007 and 2011 the entire Antitrust Division collected on average $605.2 million in criminal fines each year. The Atlanta office collected on average $19.3 million each year; on average the Cleveland office collected $30.1 million each year; the Dallas office collected on average $6,600 each year; and Philadelphia collected on average $5,400 each year.
Further, department numbers indicate between fiscal year 2007 and 2011 the Antitrust Division imposed restitution in connection with criminal cases amounting to an average of $11.5 million each year. The Atlanta office imposed $3.1 million each year on average; the Cleveland office imposed $286,500 each year on average; the Dallas office imposed $27,302 each year on average; and the Philadelphia office imposed $19,200 each year on average.
Between fiscal year 2007 and 2011 the four field offices slotted for closure collected $247.1 million in criminal fines combined. In total, the Antitrust Division as a whole collected $3 billion in criminal fines during that same time period.
The numbers do not tell the whole story, these attorneys argue. Field offices occassionally work on large cases together and credit is normally given to one office. Further, field offices that focus on small-scale bid-rigging and price fixing cases will inevitably not collect as much money in criminal fines as the central offices, which routinely prosecute large-scale international cartel cases. What’s more, some cases take years to bring to prosecution, they said.
The department is looking for ways to make its Antitrust Division more “efficient” and “effective,” the Attorney General said on Tuesday.
“Consolidating the staff into larger teams will allow the team to more effectively and efficiently manage larger investigations,” said Justice Department spokeswoman Gina Talamona, echoing Holder’s testimony.
The Justice Department’s decision would allow antitrust prosecutors and litigators to focus on larger criminal cartel investigations. However, the division’s current alignment is the most effective way to combat larger international cartels, said 12 regional field office chiefs in a February letter to acting Assistant Attorney General for the Antitrust Division Sharis Pozen.
Hamilton contends that a number of major cases have utilized field offices to help with investigations and prosecutions.
“With all due respect, Attorney General Holder is incorrect,” he said. “Field offices frequently use their resources to alleviate the burden on the central office.”
Further, the Antitrust Division will have a diminished presence at the local and regional levels, which will ultimately hurt consumers and taxpayers at a time when poor economic conditions create more of an incentive to cheat the system for profit, Polster argued. The problem may be especially apparent in the South, where the department will have little influence or reach after closing its Atlanta and Dallas field offices, he added.
“What will fall through the cracks are the smaller, regional-type antitrust cases that we prosecute now in the field offices,” Marshall said.
The decision will give a “green light” to would-be conspirators in regions where antitrust enforcement inevitably tapers off. The smaller bid-rigging and price fixing cases will go unprosecuted without regional field offices, she said.
“Local price fixing cases really have a direct impact on local economy and people’s pocket books,” Polster said. “It would be one thing if there were fewer and fewer cases being brought each year, but that’s not the case.
The small-scale cases are equally as important to consumers, Marshall said.
The Justice Department, on the other hand, is confident it can maintain a strong domestic and international antitrust presence. ”Vigorous antitrust enforcement will continue both domestically and internationally,” Talamona said.
The Antitrust Division expects to save $2 million in rental costs and $6 million in the department’s projection that at least half of the 94 employees will lose their jobs because they will not be able to relocate, according to information presented to the House Appropriations Committee last year.
Lawyers in the Philadelphia field office called, in the 2011 letter, for the department to evaluate its “efficiency” standards. According to Department of Justice numbers, the operating costs for fiscal year 2010 for the Division’s Washington D.C. office was $125.5 million; for the San Francisco office, $6.7 million; for the New York City office $5.7 million; for the Chicago office $4.9 million; for the Atlanta office $4.2 million; for the Philadelphia office $4.2 million; for the Dallas office $3.5 million; and for the Cleveland office $3.2 million.
The letter suggests the antitrust division can be most efficient by maximizing operation costs in low-cost cities.
“I don’t think there’s anything sinister,” Polster said. ”The whole thing just makes no sense.”
Update: This article has been updated to clarify that attorneys from offices scheduled to close will receive one year details with nearby U.S. Attorneys offices if they are willing to relocate to other Antitrust Division field offices.