Corporate Amnesty

In three actions over the past month, the U.S. government has made it increasingly clear that giant companies have no reason to fear prosecution for possible criminal activity.

On September 10, the Justice Department dropped criminal charges against four McDonnell Douglas Corporation executives involved in alleged bribery payments in Pakistan (See MM, April, 1981). In return, McDonnell Douglas pleaded guilty to criminal charges of wire fraud, mail fraud, and falsifying statements; the company was fined $55,000.

Associate Attorney General Rudolph W. Giuliani approved this deal over the objections of every criminal prosecutor who was involved in the trial, according to a number of people familiar with the case.

The Federal Trade Commission (FTC) on September 16 officially dropped its giant antitrust suit against eight major U.S. oil companies (see MM, August, 1981), without ruling on the merits of the case. "Further proceedings" are "not in the public interest," the four commissioners decided, citing "the limited progress of the litigation" in this eight-year suit.

The defendants in the case were: Exxon, Mobil, Gulf, Texaco, Standard Oil of California, Shell, Atlantic Richfield, and Standard Oil of Indiana.

FTC Commissioner Michael Pertschuk in a separate statement drew attention to "the resources and zeal of teams of lawyers" for the companies as one of the factors which impeded progress in the case. Though a number of companies would not comment on the amount spent on legal fees, Shell said it paid $8 million, Gulf $5.3 million, and SOCAL between $15 and $20 million. The government spent $9.7 million on the case.

On September 1, an administrative law judge at the Federal Trade Commission rejected the FTC's "shared monopoly" price-fixing case against three major, cereal companies: Kellogg, General Mills, and General Foods (see MM, August, 1981). Judge Alvin L. Berman, who presided in the case, ruled that charges should be dropped.

FTC prosecutors are not giving up, but they aren't particularly hopeful. "We expect to proceed with an appeal," said Tony Joseph, the FTC's lead counsel in the case, though he added, "We are not predicting what will happen" when President Reagan's newly appointed chairperson of the commission, James C. Miller, reviews the case.

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