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The apparent Republican sweep of the presidential and congressional elections bodes well for business interests, but may not lead to an easing of antitrust scrutiny. Business leaders said Wednesday they expect the Congress — even with razor-thin Republican majorities — to embrace issues important to Wall Street. These include tax cuts, deregulation, free trade and education reform. The record, however, for mergers and acquisitions is far more murky. Assuming George W. Bush holds his slim lead over Democrat Al Gore Jr. and is declared the winner in the presidential race, his administration is expected to be a bit more accommodating than the Clinton administration has been toward consolidation. Yet there are severe limits on how far Bush-appointed regulators could go. The five most important congressional leaders on antitrust issues are all returning, with one getting a promotion to an even more powerful panel. As a result, the careful scrutiny of big mergers that characterized the 106th Congress is likely to continue unabated in the 107th. With Republicans safely in control of the Senate, Sen. John McCain will continue to rule the Commerce Committee, which directly oversees the Federal Trade Commission and which has held hearings in the past year on oil industry mergers, America Online Inc.’s bid for Time Warner Inc., and airline consolidation. Albert Foer, president of the American Antitrust Institute, said Bush owes McCain for being a loyal soldier and delivering Arizona, New Hampshire and other states. That means he is not going to ignore the Arizona Republican’s view on mergers, he said. “McCain is stronger than ever,” said Foer, whose group advocates enforcement of the antitrust laws. “He doesn’t hesitate to get involved in mergers.” Sen. Orrin Hatch, R-Utah, returns to chair the Senate Judiciary Committee. Hatch has been a major proponent of the Microsoft Corp. antitrust litigation and his continued presence could limit Bush’s ability to drop charges against the software giant. Also returning is the bipartisan antitrust duo of Sens. Mike DeWine, R-Ohio, and Herb Kohl, D-Wis. Both won re-election and are expected to resume their roles as the respective chairman and ranking member of the Senate Judiciary antitrust subcommittee. The two often issue joint statements on megamergers and their staffs work closely together. “This speaks of continuity,” Foer said. “The combination of them presented a pretty substantial constituency for (former Assistant Attorney General) Joel Klein and what he was doing.” On the House side, the election results are more confusing. Republicans appear to have an eight-seat majority, which means they will retain control. Party leaders will meet in January to pick the chairmen of committees and subcommittees. Conventional wisdom holds that Rep. Billy Tauzin, R-La., will take over the House Commerce Committee. Tauzin, as the telecommunications subcommittee chairman, has held hearings on the AOL-Time Warner merger, using them to question how the antitrust agencies have handled their reviews. He has vowed to reconsider merger review policy next year. House Judiciary is more complicated. Rep. Henry Hyde, R-Ill., must relinquish the seat under rules adopted by House Republicans. The next highest ranking member is Rep. F. James Sensenbrenner, R-Wis., but he chairs the House Science Committee and may not want to give that up. If he does not, Rep. George Gekas, R-Pa., could become chairman. Gekas, who has championed bankruptcy reform for the past three years, is generally considered friendly to business. Yet because Hyde has always coordinated antitrust policy, it is unclear how actively Gekas would handle the issue. National Association of Manufacturers President Jerry Jasinowski said there was no evidence that voters were concerned about consolidation. That means there will be little political pressure to address the issue. “There is no indication from the electorate that you’ll see strong criticism of mergers emerge,” he said. Much depends on whether Bush or Gore wins the election. That might not be known for days — after all absentee ballots in Florida are counted. U.S. Chamber of Commerce president Thomas J. Donohue said he would expect Bush-appointed regulators to block deals that create high market centralization. But he also expects them to see more value in consolidation than Gore appointees. “In a Gore administration, I’d worry about the people appointed to run the regulatory agencies,” Donohue said. “They might be more apt to restrict mergers.” So far it is tough to tell how a Bush or Gore administration would tackle merger policy. Foer said much will rest with who the president-elect picks as his attorney general. “This is a bigger deal for Bush,” Foer said. “There is more latitude whether he goes with continuity in antitrust or back to the Ronald Reagan, Chicago-school approach.” One person unlikely to take the antitrust reins is Timothy Muris, a George Mason University law school professor who has antitrust experience. Though he has advised Bush during the campaign, Muris is said to favor a job in the budget office rather than at Justice. Bush also would have the opportunity to elevate either Thomas Leary or Orson Swindle to FTC chairman. Foer noted that McCain and Swindle are friends from their Vietnam days, when both were prisoners of war. “If McCain pushes hard for Swindle, then you’ll get Swindle,” Foer said. “But if the antitrust community were polled, they would prefer Leary, who has far more experience and depth in this field.” While changes at the antitrust agencies may be hard to predict, some observers said they expect greater efficiency at the Federal Communications Commission, which is taking more than a year to review some mergers. “With a Republican-controlled FCC, you’d see that process move more quickly and there would be more faith in the business judgment of the companies involved,” said Paul L. Glenchur, an analyst at Schwab Washington Research Group, which held a conference call roundtable Wednesday on the election results. Genchur said he also expects a Bush-controlled FCC to expand the number of broadcast stations a company may own, to eliminate the ban on owning two television networks and to drop a restriction on owning a television station and newspaper in the same market. Changes also are likely for the Securities and Exchange Commission. While Gore would likely retain SEC Chairman Arthur Levitt, Bush is expected to replace him with a less activist official. One potential nominee is James Doty, a former SEC general counsel who is now a partner in the Baker & Botts law firm. The changes in Congress could hurt Microsoft. Sen. Slade Gordon is in a fight with Maria Cantwell that was still too close for some pollsters to call on Thursday. Gordon, R-Wash., represents the software company’s home state and earlier this year he tried to punish the antitrust agencies by cutting their funding. Copyright (c)2000 TDD, LLC. All rights reserved.

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