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the shipping industry or in any other industry when we believe prosecution is appropriate.

Mr. MOCLOSKEY. Can you list for me the successful prosecutions by the Justice Department against foreign shipping companies or shippers for violation of the antitrust law?

Mr. SIMS. I don't believe we have had any such prosecutions.

Mr. MCCLOSKEY. So, this current grand jury investigation is the first?

Mr. SIMS. I can't say whether this grand jury investigation is the first investigation. I'm not aware of a previous prosecution in the shipping industry.

Mr. MCCLOSKEY. Doesn't that qualify your former testimony then? Mr. SIMS. I don't believe so at all, no. For example, we have recently concluded a prosecution involving two U.S. airlines and Luftansa, the German national airline, for activities outside of the regulatory scheme in the international aviation industry. We had no difficulty at all with that prosecution and we concluded it successfully. We have no reason to believe we would have any more difficulty in the shipping industry than we did in the aviation industry.

Mr. MCCLOSKEY. You also got a grand jury investigation going into the uranium cartel, do you not?

Mr. SIMS. That's right.

Mr. MCCLOSKEY. That is also a criminal investigation?

Mr. SIMS. It is.

Mr. MCCLOSKEY. Have you offered immunity in either of these cases to foreign witnesses in order to get evidence against U.S. companies?

Mr. SIMS. I really don't think it would be appropriate for me to respond to that question.

Mr. MCCLOSKEY. Don't hesitate to raise that point, but it is my understanding that immunity has been offered. I point that out for the record because it poses us with a problem. If we are trying to protect the U.S. industry, at the same time the Justice Department, in enforcing domestic law

Mr. SIMS. Let me interrupt you because I think I may know what you are referring to, or if you don't-if it's not

Mr. MCCLOSKEY. Most of this I don't know. I am merely talking hearsay, but go ahead.

Mr. SIMS. There was a situation which was reported in the press and which I think I can comment on, involving the only indirectly, but involving the uranium grand jury investigation. As you may know, there have been a considerable amount of private litigation involving the Westinghouse Co. and others in the uranium field. During the process of that private litigation Westinghouse sought to obtain information from certain executives of uranium producers located in England. There is a process, a treaty process involving what are called "letters rogatory" by which American courts can obtain evidence in American trials from persons located located in England.

Westinghouse sought to invoke that process. The persons that they sought to obtain the information from in England invoked the fifth amendment of the U.S. Constitution as a reason for not responding to Westinghouse's request for information, asserting that the exist

ence of our grand jury, the uranium grand jury, meant that they were potentially subject to criminal prosecution and thus, they invoked their fifth amendment right, although they were not U.S. *citizens.

We were approached by Westinghouse asking us to take steps to remove that impediment to their obtaining information from these 'people by granting immunity from potential American criminal prosecution to those English citizens. After a considerable amount of discussion and analysis on our part, and based in large part on our belief that we would be unlikely to obtain whatever evidence they would be able to provide, in our grand jury as they were unlikely to voluntarily submit themselves to the jurisdiction of that grand jury, we decided to go ahead and make the decision to grant immunity from potential prosecution in the United States. But that is a very unusual situation, relying on a clearly unusual factual situation and I don't think you can draw any general observations from that at all for our grand jury or for Department of Justice activities generally. Mr. MCCLOSKEY. This committee and the Congress have historically passed laws trying to promote the U.S. shipping industry. Presently a number of our 13 major liner companies are in financial difficulties. Three of them have admitted illegal rebating. Six of the remaining 10 are under investigation for illegal rebating. That makes 9 U.S. companies in addition to 18 foreign carriers under investigation.

At the same time, the Justice Department is proceeding with a grand jury investigation, criminal in nature, which may include 1 or all of those 27 companies. The Federal Maritime Commission, in its investigation, is trying to obtain the cooperation of all of those companies. In fact, Congress has enacted into law a requirement effective at least until next August that as a condition of subsidy, the presidents of those companies must certify they are cooperating with the Federal Maritime Commission.

Aside from the criminal grand jury proceedings we find our companies handicapped because their foreign competitors are not subject to the same requirements. The State Department has testified that it would be a Draconian measure to deny these foreign carriers the right to participate in U.S. trades if they don't cooperate. We have the Justice Department granting immunity to a foreign witness in order to get testimony.

Mr. SIMS. As I indicated, it was a grant of immunity to a person who because of his particular situation was not likely to be successfully prosecuted in any event.

Mr. MCCLOSKEY. I have a real problem. The FMC has said that they are absolutely unable to prosecute these foreign carriers under the existing state of the law. The State Department has come in and said out of the 12 foreign countries involved they have had minor success with 1 on getting around blocking statutes being invoked by those countries to prohibit their companies from compliance.

Mr. SIMS. But I'm asserting to you whether or not we are successfully able to obtain information from individual companies, such information which might be located abroad and protected by blocking statutes or whatever, that we do not believe we face any insurmountable barriers in prosecuting, where appropriate, foreign companies involved in U.S. commerce.

Mr. MCCLOSKEY. Have you ever addressed the question whether or not it is beneficial to the U.S. foreign policy, or proper under section 101 of the 1936 act, to criminally threaten prosecution against people in the shipping industry in view of the current state of the law which requires the Government to promote the prosperity of the U.S. merchant marine?

Mr. SIMS. I don't believe there is any conceivable argument that that provision, promotion provisions of the Merchant Marine Act, create any confusion as to whether or not price fixing outside of the regulatory scheme and outside of the congressionally established procedure for obtaining immunity is a violation of the antitrust laws.

Mr. MCCLOSKEY. I don't think there is any question. What I asked you is have you ever given any consideration about whether or not the antitrust laws should not be applied in these circumstances because of the foreign policy issues and the merchant marine interests of this country. Has the question ever been addressed?

Mr. SIMS. Certainly the question has been addressed.

Mr. MCCLOSKEY. Are there any written documents summarizing the arguments on both sides and the conclusions ultimately reached? Mr. SIMS. The Antitrust Division in the exercise of its prosecutorial discretion must make decisions all the time as to whether or not, given all the circumstances then known to us, criminal prosecutions or investigations with criminal processes are appropriate We've addressed that question over and over again in this particular area because of the continual efforts by those potentially involved in the investigation and by foreign governments who have concerns over the scope and goals of the investigation, to raise those concerns with us. And as they have been raised with us, we have reconsidered and reconsidered whether or not it was appropriate for us to proceed in the way that we're proceeding-which I should state, just to make clear, is a grand jury investigation, and does not represent a decision by us that criminal prosecution is appropriate with respect to either American or foreign firms at this stage of the process.

Mr. MCCLOSKEY. I appreciate what you are saying. I don't quarrel at all with the Antitrust Division's perception of what the law is and what its responsibilities under the law are. What I am concerned about is whether or not the Antitrust Division has ever gotten together with the FMC, the State Departmen, and he Maritime Administration to discuss among the four of you which of the interests are paramount as to whether or not these criminal prosecutions should go forward.

In past administrations when there was a dispute between agencies of the magnitude that we have had in front of this committee in the last few days, the White House has taken a hand, called the departments together and made a policy decision about which interest was paramount or which interest could be pursued without inhibiting the others. But, in this case, we have had testimony in front of this committee that three other Government agencies are inhibited by what you have just properly said is the policy of the Antitrust Division.

I am asking just this question: Has the Antitrust Division ever gotten together with all three of these other agencies I have enumerated to decide what is in the best interests of the United States?

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Mr. SIMS. I'm not aware of a time when those four agencies have sat down in a room and discussed that question; no. As you may know, the Department, approximately a year ago, produced some 600-odd pages of analysis

Mr. MCCLOSKEY. I read every page of it. I heard Mr. Shanefield the other evening say that the Department welcomed comment and discussion. What I am asking is have you ever had that comment and discussion with the other agencies?

Mr. SIMS. No; we have not.

Mr. MCCLOSKEY. But you would welcome it I take?

Mr. SIMS. We, in fact, have asked for it on a number of occasions, at least informally.

Mr. MCCLOSKEY. They have declined?

Mr. SIMS. We have not had somebody call us up and say, let's sit down and talk about these issues. We had the Federal Maritime Commission produce a critique, so described, of the report, which its own Chairman has described as nitpicking, and that's the essence of the dialog which has been created by our report So, in that sense I would say we haven't been successful.

Mr. MCCLOSKEY. I think the report is a first-class piece of work. I don't know that I disagree with the facts it relates although I am not sure I would agree with the conclusions as far as its impact on what is in the best interests of national policy. However, I don't know any way to resolve that until the four agencies get together and come to us with a unified view.

Let me get off that question. I would like to ask one final question of both of you gentlemen. We are considering, in effect, granting amnesty to shipping companies, foreign and domestic, who may have violated the law.

The purpose of this is not because to grant amnesty to people who have violated the law. Instead, we are considering whether or not the FMC and the State Department are frustrated in their efforts by the enforcement of this particular law, particularly section 371 of the criminal code.

If we enact this statute with the limited bar to prosecution under section 371, in your judgment will this provide any stimulus to companies under investigation to come forward with a full disclosure to the FMC? The reason I ask that question is this: Wouldn't those companies, by making a full disclosure, as we are trying to stimulate by this legislation, then face liability from stockholder suits, suits by individuals, or a company who may have been discriminated against by not receiving illegal rebates, income tax violations, and foreign currency violations; and could the information disclosed to the FMC be used to establish antitrust violations? Could you comment on that? Mr. SIMS. At least from my relatively ignorant perspective in this context, those are all possibilities. I don't think I'm prepared to try to speculate on what their perception of their liabilities might be, but, certainly, those are all issues which I assume they would analyze and face.

Mr. MCCLOSKEY. Then let's use the antitrust basis. With a vigorous antitrust policy which you and your superiors in the Department have stated there is, wouldn't any of these 27 companies, although they were removed from the conspiracy to defraud the U.S. Govern

ment through a rebating scheme, still face substantial antitrust liability by revealing schemes of rebating similar to those that have thus far been revealed by the Sealand Corp.?

Mr. SIMS. No; I don't think that's necessarily true. The investigation which we currently have underway does not involve rebating or rebating practices.

Mr. MCCLOSKEY. No; but if you found, as Mr. Keeney has described, an aggravated situation which the Justice Department would like to prosecute for conspiracy to defraud the Government, wouldn't that also be a conspiracy to commit a violation of the antitrust law?

Mr. SIMS. I'm just not sure what the answer to that question is. If the facts that you had were an agreement to set a level of rebates, several carriers together agreeing with each other to set a level of rebates at which they would not go below-in other words, to set their ultimate price-that could well be and probably would be an antitrust violation. I don't know that those are the facts that we are dealing with in the current circumstances.

If you're talking just about an agreement between a shipper and a carrier on a particular rebate level, that probably would not be a violation of the antitrust law.

Mr. MCCLOSKEY. What about an agreement between a steamship company and 200 shippers?

Mr. SIMS. Unless there are some other facts that would lead us to a different conclusion, I think we would view that simply as a steamship company setting its price, giving that price to the various shippers who were using that company and that would not be an antitrust violation.

Mr. MCCLOSKEY. You would require at least two steamship companies then to be in on the agreement before—

Mr. SIMS. Certainly, the basic focus of section 1 is horizontal. That's not its total focus, but its basic focus is on horizontal agreements, agreements between competitors. And, ordinarily, a price, however set, and really without regard to whether or not it's an illegal rebate under some other statute, a price set by an individual firm and charged to the people who use its services would ordinarily not be a violation of the antitrust law.

Mr. MCCLOSKEY. While I hesitate to ask a question if it involves your obligation to retain things in confidence, am I correct that the pending criminal grand jury investigation could include all or a substantial number of the 27 companies presently under investigation by the FMC?

Mr. SIMS. I don't know the answer to that, as a matter of fact. I just simply don't know

Mr. MCCLOSKEY. Could you give me a ball park idea of the number of companies involved, foreign and domestic?"

Mr. SIMS. I can't give you that either, but I can tell you that the investigation, at this stage at least, is not limited to particular companies involved in the North Atlantic trades and so, potentially, all of the companies involved in the North Atlantic trades are involved, and I use that word advisedly, in the investigation. This does not mean they are targets of the investigation. That does not mean they are potential defendants, but we are investigating conduct which takes place in the North Atlantic trade.

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