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Just a day after sinking the merger clearance accord, Sen. Ernest Hollings offered Tuesday to help the antitrust agencies devise a new pact that would achieve the efficiencies of the abandoned agreement while preserving Federal Trade Commission authority over a broad array of transactions. “We are willing to work with them,” Hollings spokesman Andy Davis said. “We are willing to address their concerns with the clearance process.” Assistant Attorney General Charles James said it was unfortunate the agencies had to undo the accord because it was providing real public benefits. “This agreement had been amazingly effective in expediting clearance so investigations could start sooner,” he said. “That was the whole point.” Since the agencies adopted the accord, clearances have gone from taking weeks to an average of 1.5 days. Hollings succeeded Monday night in overturning the original clearance accord, which the FTC and Department of Justice antitrust division adopted in March. The deal was intended to eliminate disputes over which agency should review specific mergers. James said he voided the agreement after it appeared the South Carolina Democrat would successfully include in a supplemental appropriations bill a provision preventing the entire Department of Justice from reallocating funding without congressional approval. Such a restriction could have severely hampered the Justice Department’s ability to marshal financial resources to respond to a crisis, such as another terrorist attack. FTC Chairman Timothy Muris declined comment. Any new clearance agreement must ensure that the FTC has authority to review a broad array of deals, Davis said. “You don’t simply say: You operate in these industries, and you in these, and you don’t ever cross,” he said. “Concurrent jurisdiction is the heart of it. You just don’t eliminate it.” The agencies should examine deals on a case-by-case basis to determine which should conduct the review, Davis said. In some cases, one agency could conduct its review and the other could do a separate analysis, he said. Albert Foer, president of the American Antitrust Institute, said Hollings may not gain much by returning to the old clearance system. “This now reverts to the old style, which means that DOJ gets 99 percent of media deals,” Foer said. Antitrust lawyers blasted Hollings, saying he put his parochial interest in retaining oversight of some media mergers above the public interest in an efficient system to review deals. “It is a shame,” said A. Douglas Melamed, a partner at Wilmer, Cutler & Pickering in Washington, D.C., and a former acting assistant attorney general for antitrust. “All he cared about was his turf over media mergers.” Joe Sims, a partner at Jones, Day, Reavis & Pogue in Washington, D.C., who helped draft the initial accord, said Hollings’ actions represent the worst political interference with the antitrust process since the Nixon administration. “This was a total dunk shot,” he said. “To see it thrown out because one interest group could convince one senator of a problem that doesn’t exist is really very sad.” Sims also accused Hollings of exploiting the war on terrorism to get his way. The antitrust agencies “were bludgeoned into compliance,” he said. “Hollings was threatening to screw up the entire Justice Department budget.” Foer said he was concerned that Hollings used the relatively secretive budget process to change policy. “If you are going to legislate, do it through the oversight committees that are created for this purpose,” he said. But consumer advocates were elated with the accord’s collapse. “Sen. Hollings deserves praise for protecting consumers,” said Jeff Chester, executive director of the Center for Digital Democracy. “Hollings neutralized a wrong-headed policy on antitrust.” Copyright (c)2002 TDD, LLC. All rights reserved.

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