President Trump returned to the Oval Office thanks to massive support from working-class and low-income Americans. During the transition, Trump telegraphed an intent to honor this realignment by nominating a number of officials who rejected the old GOP’s (big) business-as-usual dogmas in favor of pro-worker, pro-consumer policies. Chief among these was Gail Slater, a feisty Irish-born lawyer tapped as assistant attorney general for antitrust enforcement.
A GOP that “has more of a care for American citizens,” Slater told UnHerd earlier this year, must protect the market system from monopoly. Yet today, powerful figures within and outside the administration are bearing down on Slater and her team — simply because she insists on a transparent, rigorous process for approving mergers that would hinder market competition.
“We’re willing to do settlements,” a former official familiar with the turmoil inside told me, “but they need to be real settlements. They can’t be weak, fake settlements, which is what HPE-Juniper was, frankly.” That’s in reference to a $14 billion deal that saw tech firm Hewlett-Packard Enterprises acquire Juniper Networks, one of its biggest competitors in the enterprise-networking market (think wireless systems and other connectivity solutions for large institutions and workplaces).
The Biden administration began scrutinizing the proposed merger. But it was Omeed Assefi, the acting attorney general for antitrust in the early Trump II administration, who challenged it in court before Slater was confirmed by the Senate and took up her position. Settlement negotiations began soon after the government filed suit. Yet the final settlement, and the way it came about, did not meet with Slater’s approval, according to The Wall Street Journal. Chad Mizelle, Attorney General Pam Bondi’s chief of staff, “pushed it through” anyway.
Slater has been under intense pressure ever since, and two of her senior lawyers, Roger Alford and William Rinner, were terminated on Monday. The formal justification was reportedly “insubordination.” Yet the real nub was that they and their boss, Slater, objected to unusual shenanigans in the process, including boozy backroom meetings between company lawyers and lobbyists, on one hand, and officials from elsewhere in the Department of Justice, on the other. Slater and her team also took issue with the outsized influence of lobbyists “who weren’t antitrust specialists, but were brought in for their connections to administration officials,” per the Journal — a characterization echoed by the former official.
“Boozy backroom deal” here isn’t a figure of speech, by the way. It captures what literally took place, according to the former official, who described a meeting between government officials and lobbyists that took place at one of Washington’s “private city clubs” over cocktails.
That’s a red flag. As Matt Stoller, a historian of the anti-monopoly movement, told me, “when Richard Nixon engaged in a corrupt settlement over the ITT merger, Congress was so outraged that they passed the Tunney Act to stop these kinds of misdeeds.” Under the act, firms that are settling antitrust issues with the government must disclose any communications, written or oral, between their executives and US officials related to the settlement.
Yet not all of the HPE lobbyists were listed on the Tunney Act disclosures, according to the former DOJ official. One unlisted figure is Arthur Schwartz, described by Punchbowl News as “a longtime behind-the-scenes operator who has extremely close relationships with corporations looking for advice in Trump’s DC.” A source close to Schwartz insisted that while he represented HPE, he wasn’t involved in settlement discussions, thus obviating the need for disclosure.
Tunney disclosures aside, a private gathering of executives and government officials circumventing regulators on the front lines — Slater’s office — is disturbing. The DOJ did not return a request for comment.
All this led Rinner and Alford, the two fired officials, to speak up, in frustration and warning, while they were still in their roles. In a June speech at George Washington University, Rinner declared: “We do not plan to hash out merger settlements over martinis.” Likewise, at a hearing of the Senate subcommittee on antitrust and consumer welfare, Alford railed against the “massive ecosystem of consultants and lobbyists who push regulatory agencies toward imposing durable rules and regulations that stifle the free market.”
In reality, said the former official, “we had intense pressure from lobbyists,” prompting Slater’s team to urge the firms to “call off their dogs against us.” According to multiple sources familiar with the deal, the “dogs” in question were Schwartz and Mike Davis, a Republican legal operative and president of the Article III Project that describes itself as “an advocacy organization fighting to rein in Big Tech” (Davis, unlike Schwartz, is listed on HPE’s Tunney Act disclosure; he didn’t reply to my request for comment by deadline; Schwartz would not speak on the record).
The settlement’s defenders insist that the merger is essential for national security, creating a large American rival to China’s Huawei for networking solutions used by foreign governments and militaries. HPE, the thinking goes, shouldn’t be confused with Hewlett-Packard’s consumer-products line: dorm-room printers and the like. Since enterprise networking isn’t a consumer-facing product, it shouldn’t raise typical antitrust concerns around price and consumer welfare.
That’s simply not true. As the DOJ noted in its original complaint challenging the merger, “HPE and Juniper are the second- and third- largest providers, respectively, of enterprise-grade WLAN solutions in the United States.” If one of the three largest provides is taken over, it would very likely lead to higher prices and less dynamic innovation for “for scores of American businesses and institutions” — not just foreign governments and militaries.
As it is, numerous domestic entities rely on MIST, Juniper’s flagship networking system, including Dartmouth College, the University of Massachusetts, Amherst, and George Washington University. Ditto for numerous state and local agencies, sports stadiums, and the like. Once MIST is eliminated or subsumed under HPE’s leading networking product, known as Aruba, then all of these American institutions would face higher IT costs, which they would no doubt pass down to customers. Indeed, in its original complaint, the DOJ submitted comments by an HPE executive noting the competitive threat posed by MIST to Aruba in the higher-education market — perfectly unrelated to networking for foreign militaries.
Then, too, HPE didn’t raise national-security concerns in any of its legal filings related to the antitrust dispute (though it did bring them up in news releases). Moreover, the antitrust division has a process for checking whether challenging a merger might trigger national-security concerns. That process was followed by Assefi, the Trump DOJ’s acting antitrust czar, when he first challenged the HPE-Juniper merger. He met with no issues from the Intelligence Community or other national-security agencies.
It is telling, too, that HPE’s Tunney Act filings don’t mention any meetings with national-security officials, whether from the Central Intelligence Agency, the Pentagon, the National Security Agency, or the National Security Council. The filing only lists communications with officials in the DOJ. As the former official said, “under the statute, they would have to have disclosed that they spoke with nat-sec—they have to disclose whom within the government they spoke with. How is the government supposed to make that judgment” — that the deal isn’t security-sensitive — “if the nat-sec agencies haven’t been apprised?”
It is possible that the judge overseeing the settlement will review it for compliance with the Tunney Act, as four Democratic senators demanded in a letter on Tuesday. Either way, the episode opens a dismaying window into a second Trump administration in which the wealthy and well-connected are free to run roughshod over populist reformers.
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Author: Sohrab Ahmari
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