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On Tuesday, 31 members of Congress in two different letters registered strong opposition to the appropriations package provision that cuts $45 million in funding to the Department of Justice’s Antitrust Division and undermines a law increasing premerger filing fees that overwhelmingly passed Congress in 2022. And the anger boiled over onto the Senate floor.
Republicans Rep. Ken Buck (R-CO) and Sen. Chuck Grassley (R-IA) joined a bipartisan, bicameral letter with Sen. Amy Klobuchar (D-MN) and Reps. Jerrold Nadler (D-NY) and Joe Neguse (D-CO), which asks appropriators to “ensure the DOJ Antitrust Division can fully access the premerger filing fees as envisioned under the Merger Filing Fee Modernization Act.”
Currently, the Antitrust Division is funded in part by filing fees from companies seeking to merge. But the appropriations package caps DOJ Antitrust’s budget at $233 million, forcing all fees above that number to go into the DOJ’s general fund, permanently reversing a process that has been in place since 1989. This could cost the division hundreds of millions of dollars over time. The division currently operates with fewer employees than they had in 1979, when the economy was about a third as large as it is today.
A second letter from Klobuchar, Nadler, and 26 other Democrats outlined the specific changes needed in the bill text for how to fix the appropriation provision before a House vote on Wednesday.
That did not happen, and the House passed the “minibus” appropriations package by a vote of 339-85. Passage in the Senate to avert a partial government shutdown is likely as well. As Sen. Klobuchar said in a floor speech on Tuesday, because this minibus deals with only half of the 12 annual spending bills, there’s a possibility that a patch to allow DOJ Antitrust to retain filing fee revenue for their own purposes of fighting monopolies could be added in the next appropriations bill. That is the focus of more than 25 civil society groups, which sent a letter to the president and congressional leadership on Wednesday.
Otherwise, as Klobuchar put it, DOJ Antitrust is receiving more work with no more funding to deal with it. “One pen and they changed it. We weren’t able to see it ahead of time … they just took the money and ran,” Klobuchar said. “When Congress acts to increase merger fees or makes a policy decision, I think the appropriations committee’s job then is to follow that policy decision.”
Klobuchar alluded to “a little group in a committee behind closed doors” responsible for this decision. That would be the appropriations subcommittee that deals with Justice Department funding, known as Commerce, Justice, and Science, or CJS. And while reporting indicates that the ostensible reason for this change was a turf war—appropriations officials were perturbed that money was given to the Antitrust Division in a law rather than through their subcommittee—there are also conflicts of interest among committee staff that should be noted, considering the benefits to large corporations from weakening the Justice Department’s enforcement posture.
THE SUBCOMMITTEE CHAIR, SEN. JEANNE SHAHEEN (D-NH), and the chair of the Senate Appropriations Committee, Sen. Patty Murray (D-WA), released a joint statement on Wednesday blaming House Republicans for the funding cuts, and saying that they emerged from those “tough bipartisan negotiations” with “increased funding” to “help further the Division’s work to level the playing field.”
This spin resembles White House talking points from press secretary Karine Jean-Pierre on Tuesday. On a nominal basis, DOJ Antitrust funding (which largely reflects the agency getting to keep the filing fees that come in) will go up slightly, from $225 million to $233 million; adjusted for inflation, this is effectively flat. But the agency was supposed to receive $278 million, based on an estimate of increased filing fees for the fiscal year.
The Senate Appropriations Committee said months ago that the Antitrust Division shouldn’t be allowed to keep the premerger filing fees, because it would make their budget too volatile. It recommended an operating reserve to smooth out funding. Of course, the current package does not allow for an operating reserve, instead taking the money from the division. Furthermore, explanatory language released by the committee suggested that the Justice Department could only fix the problem by coming to them with another appropriations request.
If DOJ Antitrust cannot use premerger filing fee revenue, the money will get folded back into the general operations fund of the department.
On Wednesday night, The Lever reported that top Shaheen donors have an interest in weakening antitrust efforts, representing companies like investment manager The Capital Group, military contractors Raytheon and BAE Systems, and several corporate defense law firms. That story also pointed out that Shaheen’s staff played a major role in cutting the deal with their colleagues in the House, who have been gunning for the Antitrust Division.
Underlying that fact is the significant revolving-door issue among committee staff. For example, three current staff members of the committee are former lobbyists for large companies.
Brian Daner, a counsel and professional staff member for Sen. Jerry Moran (R-KS) on the CJS subcommittee, spent a year as a lobbyist for the U.S. Chamber of Commerce, whose members have a vested interest in DOJ Antitrust’s budget. Jo Eckert, a staffer for the Appropriations Committee, previously lobbied for AT&T. And Viraj Mirani, a Republican clerk on a separate appropriations subcommittee, lobbied for Google for five years, and more recently for the Computer and Communications Industry Association, a trade group for a number of tech firms. His lobbying portfolio included proposed antitrust legislation.
In addition, a Prospect review found 19 former members of the Appropriations Committee staff who are now lobbyists for Amazon, Google, Microsoft, Meta, or Apple. Of those firms, Google has multiple active lawsuits before the Antitrust Division, and Apple is the subject of a pending investigation. In January, The New York Times reported that DOJ Antitrust would imminently file a case against Apple. Bloomberg has reported that the reduced funding could hamper the Apple case, among others.
One of those 19 former members is Laura Friedel, former staff director for the committee. Friedel has lobbied on Amazon’s behalf as recently as this year, but she has also lobbied on “patent and antitrust issues affecting the biopharma industry” for leading drug company AbbVie.
The Senate Appropriations Committee did not respond to a request for comment.
IF DOJ ANTITRUST CANNOT USE PREMERGER FILING FEE REVENUE, the money will get folded back into the general operations fund of the department. That puts it under the control of Deputy Attorney General Lisa Monaco, who has her own set of conflicts.
Monaco’s financial disclosure form indicates that she worked for Apple when she worked in the white-collar defense practice at law firm O’Melveny & Myers. She provided “legal services” for the tech giant. Other Monaco clients include ExxonMobil, which announced a proposed merger last October with Pioneer Natural Resources that antitrust regulators must approve, as well as Lyft, CNN, Humana, Kia Motors, Boeing, and Lockheed Martin.
The Justice Department did not respond to questions about whether any of their officials worked with the appropriations committees on the final language. In September, Attorney General Merrick Garland did say in House testimony that he supported the Antitrust Division getting more funding and retaining their filing fees. But no other division of the Justice Department saw a bigger cut to their funding; most of the divisions were either flat or lost a smaller amount.
The agency also did not answer a question about whether Monaco supported more resources to combating violations of the antitrust laws. Monaco’s own operations budget, sometimes called by critics a “slush fund,” got a slight boost in the appropriations package, from $140 million to $142 million.
The White House has defended the compromise appropriations bill, and did not even voice displeasure with the cuts to the Antitrust Division in its statement of administration policy. Olivia Dalton, a deputy press secretary and longtime Biden aide, announced she would leave for a position at Apple, though she currently still works in the White House.
There is no indication that Monaco or Dalton had anything to do with the appropriations cuts to the Antitrust Division, or the talking points selling the deal. But it would be better if the situation offered no reason to suspect that conflicts of interest played a role.
