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Los Angeles Times Interview

Joel Klein

On Anti-Trust Regulation as Consumer Advocacy

April 12, 1998|RONALD J. OSTROW | Ronald J. Ostrow has covered the Justice Department and related assignments for The Times since 1966

Even for fickle Washington, the swift turnabout in the assessment of Joel I. Klein as the nation's chief trustbuster may set a record--just like the mushrooming number of mergers confronting him.

Denounced last summer by Sen. Ernest F. Hollings (D-S.C.) as "an antitrust fellow here who rolls over and plays dead" for failing to challenge Bell Atlantic's $21-billion acquisition of Nynex Corp., the 5-foot, 6-inch. Klein is now being hailed as a would-be giant-killer for taking on Microsoft and its larger-than-life chief Bill Gates.

Partly because of his 25 years as a lawyer in Washington, Klein seems to let the brickbats and kudos roll off with equal ease.

The son of a postman, Klein, 51, grew up in New York and graduated magna cum laude from Colombia University and Harvard Law School. He clerked for circuit court of appeals Judge David L. Bazelon and Supreme Court Justice Lewis F. Powell.

Klein's ties to President Bill Clinton stretch back to Renaissance weekends in the mid-1980s. By 1988, Klein said, he had a pretty good sense that Clinton would reach the White House. When Clinton named Ruth Bader Ginsburg to the U.S. Supreme Court, Klein agreed to take leave from the Washington law firm he co-founded, where he specialized in appellate advocacy, to help with her confirmation. In the middle of that effort, Vincent W. Foster Jr. committed suicide and Klein was asked to take his job as deputy White House counsel. He stayed in that post for two years, until he moved to Justice in the antitrust division's No. 2 spot.

In addition to the challenges to Microsoft and the Lockheed Martin combination with Northrop Grumman, antitrust under Klein has made news most recently with a record setting fine of $110 million against UCAR International Inc., the nation's largest producer of graphic electrodes. The company was charged with participating in an international cartel to fix the price and allocate market shares for graphite electrodes, used in steel refining and making products essential to business and consumer items.

While Klein speaks with clarity, certainty and some passion about antitrust issues, he shows genuine fervor when he explains what he means by spending "quantity time" with his 13-year old daughter, Julia, and his wife, Patsy Davis. Klein's hours with his daughter run from working on various projects alongside her in her room to taking her to the mall for clothes. "In the process of being around them, I think that's when children do open up and are more likely to share what's going on," Klein explains.

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Question: You are running the antitrust division at an unusual time in this country's economic development: near full employment, low inflation, the stock market continuing to "outbull" itself. Yet the line between the well-off and the not well-off seems to be growing more marked. What role do you see for antitrust in this?

Answer: Antitrust really is the part of the economic team in government that focuses on consumers. Our concern is not simply what's good for business, but what's good for America's consumers. That is as true for the sort of small-time, one-time consumer . . . . We've done cases recently involving the price of school milk--you're talking only about a few cents on a carton of milk--up through some very sophisticated technologies, whether it's telephones, computers. But I think, in that respect, antitrust is probably the most focused part of the government's economic analysis in terms of consumer interests.

Q: Couldn't that have been said of antitrust over the years, and this is really just a shift of rhetoric here? Hasn't it always been to protect the consumer?

A: When it did what it was supposed to do, it's always been consumer focused. However, there were times in the history of antitrust where, I think, people worried about competitors. In other words, they were concerned about the successful company versus a weaker competitor. We worry only about competitors in the context of consumer interests. And if there is a stronger or a more efficient competitor, our job is not to hamper that competitor.

Q: With the global economy becoming more of a reality every day, is there a danger that vigorous antitrust enforcement's going to be a brake on the ability of U.S. companies to compete?

A: I think it's just the opposite. You started out by saying, look at how strong our economy is right now. I think there's no doubt the American economy is the strongest in the world. But it's also the most competitive economy in the world. If you look at what's going on in Asia and elsewhere, you see some of the problems that these countries face because of regulatory protection, of a model that says let's protect our domestic firm in the international arena. I think that hurts a country's businesses. The U.S. economy right now is a very competitive economy, and we need to make sure, through the appropriate enforcement of the antitrust laws, that that competition remains vigorous domestically.

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