A.G. Barr accused of 'politically motivated probes of cannabis mergers' & CA emission standards
A career employee at the Department of Justice was subpoenaed to testify by the U.S. House Committee on the Judiciary chaired by Chairman Nadler of NY today June 24, 2020.
John Elias, a career prosecutor, will testify that Attorney General William Barr ordered 10 ‘politically motivated’ investigations of ten Cannabis industry mergers. In addition, he will testify on an investigation into the State of California’s auto-emission standards.
Elias was subpoenaed by the committee because of their investigation on Donald Trump’s bestie, the traitor Roger Stone.
Elias has sought and been granted whistleblower status.
Elias in his prepared statement will accuse Barr of ordering two investigations over the objections of Anti-trust career staff. The Cannabis Industry and ‘Second, I will detail an investigation – initiated the day after tweets by President Trump – of an arrangement between the State of California and four automakers on fuel emissions.
House Judiciary Committee Chairman Jerrold Nadler (D-N.Y.) on Tuesday subpoenaed two Department of Justice officials, including a former prosecutor in the case against Roger Stone, to testify about “unprecedented politicization” at the agency under President Trump and Attorney General William Barr.
Nadler said the two Department of Justice (DOJ) officials will testify June 24 as part of the committee's investigation into improper political interference at the DOJ. The hearing will feature Aaron Zelinsky, who quit the case against Stone, and John Elias, the acting chief of staff for the DOJ's Antitrust Division.
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Democrats are presenting Zelinsky and Elias as whistleblowers.
In a statement, Nadler hit Barr for failing to testify, while commending those in government who have come forward.
“The Committee welcomes the testimony of current and former Department officials who will speak to the lasting damage the President and the Attorney General have inflicted on the Department of Justice,” Nadler said.
“The Attorney General – who cites his busy schedule as a basis for refusing to appear before the House Judiciary Committee but has made time for multiple television interviews – may have abdicated his responsibility to Congress, but the brave men and women of our civil service have not,” he said.
Former Deputy Attorney General Donald Ayer is also slated to testify.
Nadler launched the DOJ probe after Barr chose to overrule career prosecutors by requesting a lighter sentence for Stone, a longtime Trump ally.
From Marijuana Business Daily.
According to a prepared version of Elias’ opening remarks, he will testify that the 10 investigations were not “bona fide” but, rather, driven by Barr’s personal dislike of the marijuana industry.
The investigations in sum totaled 29% of the antitrust division’s “full-review merger investigations” in the 2019 fiscal year, Elias alleges.
Elias wrote in his statement that one of his superiors said in September 2019 that “the investigations were motivated by the fact that the cannabis industry is unpopular ‘on the fifth floor,’ a reference to the location of Barr’s office at DOJ headquarters.
“Personal dislike of the industry is not a proper basis upon which to ground an antitrust investigation,” Elias wrote.
John Elias opening statement to congress.
Last year, the Antitrust Division reviewed the proposed combination of MedMen and PharmaCann, two companies that supply cannabis. When career staff examined the transaction, they determined that the cannabis industry appeared to be fragmented with many market participants in the states that had legalized the product. As a result, they viewed the transactions unlikely to raise any significant competitive concerns. However, on March 5, 2019, Attorney General Barr called the Antitrust Divisionleadership to his office for a meeting entitled “Marijuana Industry Merger Review.” As a Microsoft Outlook delegate of one of the attendees, I was copied on the calendar appointment but did not attend the meeting. The Antitrust Division political leadership asked staff to prepare a short briefing memo for Attorney General Barr before the meeting. In that memo, staff emphasized in an underlined text that in its preliminary view, the transaction was unlikely to raise any significant competitive concerns that would justify the issuance of Second Requests. Rejecting the analysis of career staff, Attorney General Barr ordered the AntitrustDivision to issue Second Request subpoenas. The rationale for doing so centered not on antitrust analysis, but because he did not like the nature of their underlying business.
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After the meeting, Division political leadership turned to the career staff to implementAttorney General Barr’s directive. In assembling the paperwork to issue the Second Request, which is normally styled as the career staff’s “recommendation,” career staff declined to recommend either opening an investigation or issuing the Second Request subpoenas. Instead, the staff reiterated its view that the transaction was “unlikely to raise any significant competitive concerns” and that the industry appeared to be fragmented, with many participants. The staff went on to say that, nonetheless, “[t]he Division has decided to open an investigation and issue second Requests,” for the purported reason that it had “not closely evaluated this industry before.” This rationale – standing alone, without reference to a competition problem – is not described in the Merger Guidelines as a basis for investigating a transaction. The Division’s Front Office negotiated subpoena compliance with the companies, obtaining 1.3 million documents from the files of 40 employees.
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At one point, cannabis investigations accounted for five of the eight active merger investigations in the office that is responsible for the transportation, energy, and agriculture sectors of the American economy. The investigations were so numerous that staff from other offices were pulled in to assist, including from the telecommunications, technology, and media offices. The head of the Antitrust Division, Assistant Attorney General Delrahim, responded to internal concerns about these investigations at an all-staff meeting on September 17, 2019. There, he acknowledged that the investigations were motivated by the fact that the cannabis industry is unpopular “on the fifth floor,” a reference to Attorney General Barr’s offices in the DOJ headquarters building. Personal dislike of the industry is not a proper basis upon which to ground an antitrust investigation
John Elias’s statement on Barr’s meddling into California’s climate policies.
In July 2019, California, together with four major automakers, announced an arrangement on air quality emissions standards that would be stricter than the rules the EPA was preparing to adopt. Under well-established antitrust precedent, states have wide latitude to regulate. In addition, under a doctrine called Noerr-Pennington, which is grounded in the First Amendment, companies are free to collectively lobby the government for regulation. On August 20, 2019, the New York Times reported that President Trump was “enraged” by the deal and wanted to retaliate. The next day, August 21, the President tweeted about it. As reprinted below, he said, “Henry Ford would be very disappointed … because [Ford] execs don want to fight California regulators.”
The day after the tweets, Antitrust Division political leadership instructed staff to initiate an investigation that day. Accordingly, the investigation opening memorandum is dated August 22, and the August 22 opening date is reflected in internal tracking records. The investigation’s initiating paperwork, like the cannabis opening memorandums, does not include a staff “recommendation” but instead states that “[t]he Antitrust Division would like to open an investigation.” It was generated by the Division’s policy staff, which does not conduct enforcement investigations of this type.5 Later, in an all-staff email of September 11, AAG Delrahim explained that he had had the policy staff convert an earlier analytical piece into an investigation opening memorandum “due to our current resource constraints.
