A crucial element of this offense, over and above pure size and power, is a deliberativeness in acquiring and maintaining the monopoly power. Thus, a natural monopoly such as most local newspapers which are the only newspaper in town, do not unlawfully monopolize merely by acting as strong, dynamic competitors. Union Leader Corp. v. Newspapers of New England, Inc., 284 F.2d 582 (1st Cir. 1960). These natural monopolies are defensible because they have had monopoly thrust upon them in a market which cannot support more than one viable competitor. An unlawful monopolizer must engage in some sort of predatory, unfair practice aimed at eliminating any possible competition.

The offense of attempting to monopolize requires proof of even more specific intent to commit predatory practices than mere monopolization. Furthermore, newspapers can be charged under Section 3 of the Clayton Act if they engage in such practices as selling below cost with the intent to destroy competition. Proof in these situations, however, is very difficult particularly in the newspaper industry which operates on very marginal economic grounds. The trend is toward fewer and fewer newspapers because of the economic iimitations on the number of newspapers in a given market which can be viable. In these circumstances, practices which might in other conditions violate the antitrust laws are sometimes used and accepted as part of the struggle to survive.

Congress recognized this problem in its passage of the Newspaper Preservation Act (P. L. No 91-353 (1970)). This law immunizes existing joint newspaper operating agreements from the operation of the antitrust laws and exempts new agreements approved by the Attorney General upon finding that one of the jointly operated newspapers is in "probable danger of financial failure." The Antitrust Division also learned these harsh facts of life recently when a newspaper in Chattanooga after suit was brought by the Government folded rather than attempt to live with the restrictions proposed in the suit.

Therefore, before any action might be considered against the Los Angeles Times, there must be strong evidence of predatory practices on their part such as selling below cost, offering rebates to advertisers, or attempting to purchase smaller competitors. In discussing this general area with Bruce Wilson, Deputy Assistant Attorney General

for Antitrust, he mentioned almost all the cases concerning newspapers in which the Division was currently involved. The Los Angeles Times was not included among these, indicating that so far it has not engaged in any practices which have caused a competitor to complain.

The Select Committee met, pursuant to notice, at 10:40 a.m., in room S-143, the Capitol.

Present: Samuel Dash, chief counsel and staff director; Terry Lenzner, assistant chief counsel; Marc Lackritz, assistant counsel; Scott Armstrong, and Lee E. Sheehy, investigators; Fred Thompson, minority counsel; Dick Schultz, assistant minority counsel; Emily Sheketoff, minority investigator.

Senator INOUYE. Raise your right hand, sir. Do you swear that the testimony you are about to give, will be the truth, the whole truth, and nothing but the truth, so help you God?

Mr. LARUE. I do.

Senator INOUYE. Will you give your name and address?

Mr. LARUE. Fred C. LaRue, 1026 Hallmark Drive, Jackson, Miss. Senator INOUYE. Thank you very much.

Mr. LARUE. Thank you, Senator.

[Recess.]

Mr. ARMSTRONG. This is a continuation of the executive session begun this morning with Senator Inouye in his office.

Mr. LaRue, from January 1972, until sometime in 1973, did you serve as a special assistant to the campaign director of the Committee To Re-Elect the President?

TESTIMONY OF FRED C. LaRUE, ACCOMPANIED BY FRED VINSON,

COUNSEL

Mr. LARUE. I'm sorry, would you repeat that?

Mr. ARMSTRONG. From January 1972, until sometime in 1973, did you serve as a special assistant to the campaign director of the Committee To Re-Elect the President?

Mr. LARUE. Yes. I'm not sure about the termination date of that, but that is basically correct. Whether it was terminated in late 1972, or early 1973, I'm just not sure.

Mr. ARMSTRONG. Subsequent to the election.

Mr. LARUE. That would be correct, yes.

Mr. ARMSTRONG. And prior to that time, where were you employed? Mr. LARUE. Well, prior to that time I was self-employed, I was working on a voluntary basis as a special consultant to the President. Mr. ARMSTRONG. In the Executive Office of the President?

Mr. LARUE. That's correct.

Mr. ARMSTRONG. And did there come a time in March 1972 when you traveled to Key Biscayne, Fla., to meet with the then-campaign

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director, John Mitchell and Jeb Magruder to discuss the Presidental campaign?

Mr. LARUE. Again I would like to clarify that. I was in Key Biscayne, Fla., with Mitchell on vacation, and during that period of time I did meet with Mr. Magruder, Mr. Mitchell, and Mr. Flemming regarding the campaign.

Mr. ARMSTRONG. And was Mr. Rebozo present during any of the time you were in Key Biscayne?

Mr. LARUE. Yes.

Mr. ARMSTRONG. And do you recall on what type of occasion he was present?

Mr. LARUE. Well, it would be purely social occasions. I think Mr. Rebozo was at Mitchell's house when I arrived in Key Biscayne. I recall one instance where we went out on Mr. Rebozo's houseboat, and I, quite frankly, don't recall whether he went on the trip with us; I do know he took us down and got us situated on the boat. Whether he actually went with us or not I just don't remember.

Mr. ARMSTRONG. OK. During your visit in Key Biscayne on that occasion, did you discuss with Mr. Rebozo, campaign contributions? Mr. LARUE. No.

Mr. ARMSTRONG. And did he discuss with you any specific campaign contributors?

Mr. LARUE. No.

Mr. ARMSTRONG. Did he transmit to you any cash, or any sealed envelope purported to contain campaign contributions?

Mr. LARUE. No.

Mr. ARMSTRONG. Did he give you any materials at all?

Mr. LARUE. No.

Mr. ARMSTRONG. For any purpose whatsoever?

Mr. DASH. Can you fix the date?

Mr. ARMSTRONG. This is in March 1972. Do you recall leaving Key Biscayne on approximately April 1, 1972, just the beginning of the Easter week?

Mr. LARUE. That is correct. As I recall, it was Friday or Saturday prior to Easter.

Mr. ARMSTRONG. And can you tell us where you traveled?

Mr. LARUE. Where I traveled?

Mr. ARMSTRONG. From Key Biscayne.

Mr. LARUE. I went to my home in Jackson, Miss.

Mr. ARMSTRONG. And did you subsequently return to Miami?

Mr. LARUE. That is correct.

Mr. ARMSTRONG. Do you recall approximately when you returned? Mr. LARUE. The Monday following Easter.

Mr. ARMSTRONG. Which would be April 3?

Mr. LARUE. April 3.

Mr. ARMSTRONG. And do you recall, did you return to Key Biscayne after returning to Miami?

Mr. ARMSTRONG. OK. And whom did you meet there, and what did

you do from there?

Mr. LARUE. I met Mr. Mitchell. We picked him up and came to Washington.

Mr. ARMSTRONG. Do you recall how you returned to Washington? Mr. LARUE. Private plane.

Mr. ARMSTRONG. Was there anyone else accompanying you and Mr. Mitchell on that occasion?

Mr. LARUE. Not that I recall.

Mr. ARMSTRONG. And on April 3, did you leave the airport at any time?

Mr. LARUE. Not that I recall. As I recall we made a stop, refuel pickup, picked up Mr. Mitchell and came directly to Washington. Mr. ARMSTRONG. While you were at the airport, did you meet anyone else at the airport, besides Mr. Mitchell?

M.. LARUE. Again, as I recall, there were one or two FBI agents that brought Mr. Mitchell to the plane.

Mr. ARMSTRONG. Anyone else?

Mr. LARUE. Not that I recall.

Mr. ARMSTRONG. Did you see or talk to Mr. Rebozo on that day? Mr. LARUE. No; not that I recall.

Mr. ARMSTRONG. And do you recall after seeing Mr. Rebozo in March 1972 in Key Biscayne, when you next saw or talked with Mr. Rebozo?

Mr. VINSON. Would you read that question back?

[Question read.]

Mr. LARUE. My best recollection would be when I went to Florida to pick up this money. I want to clarify that. There is a possibility that I saw Mr. Rebozo during the period of the convention when I was down there, but I just don't recall it.

Mr. ARMSTRONG. That would be August 1972.

Mr. LARUE. Yes.

Mr. ARMSTRONG. But, did you see Mr. Rebozo, or talk to Mr. Rebozo between your trip in March 1972 to Key Biscayne, and August 1972, the convention?

Mr. LARUE. And I do not recall seeing him during the convention, but I certainly don't want to rule out-there were so many people involved and present at various functions and meetings

Mr. DASH. If you did see him during the convention it would be that you bumped into him or had seen him there; but would you have had meetings, or transactions?

Mr. LARUE. I recall no transaction or meeting, Mr. Dash. As I say, I certainly would not want to rule out

Mr. DASH. The fact that you had seen him.

Mr. LARUE. Rule out the possibility that I had seen him casually, or talked to him casually at a function, or during the course of the convention. But, I do not specifically recall any such occasion.

Mr. ARMSTRONG. Now, through the convention in August 1972, were you aware of any role Mr. Rebozo played in campaign fundraising, during the 1972 campaign, other than just contributing himself? Mr. LARUE. Through the

Mr. ARMSTRONG. During the 1972 campaign, up to the point of the convention, were you aware of any role that Mr. Rebozo played in the campaign?