Halting a Regulatory Crackdown

The move to slash the Antitrust Division’s budget comes as the Biden administration has responded to overwhelming public support to crack down on monopolies by ramping up enforcement efforts, with the support of many congressional Democrats and some Republicans.

During President Joe Biden’s term, federal regulators have sued to stop Amazon, Google, and Meta from expanding their tech monopolies, and are challenging the controversial Kroger-Albertsons supermarket merger.

Shaheen’s staff inserted the language just days before Biden announced a new “strike force” of officials from the Federal Trade Commission and the Antitrust Division “to crack down on unfair and illegal pricing.”

“This strike force will strengthen interagency efforts to root out and stop illegal corporate behavior that hikes prices on American families through anti-competitive, unfair, deceptive, or fraudulent business practices,” the White House announced on March 5.

The spending deal to slash regulators’ enforcement budget would overturn a thirty-five-year-old rule that outlines the way the Antitrust Division gets money. In 1989, Congress passed legislation allowing the Antitrust Division to keep some of the fees corporations pay when mergers take place. In 2022, Congress passed legislation that increased the fees for large mergers and brought the Antitrust Division’s budget to around $278 million for 2024, according to a Congressional Budget Office estimate.

Shaheen’s proposal would vacate the 2022 law, eliminate the Antitrust Division’s ability to collect merger fees, and slash the division’s budget to $233 million to enforce antitrust laws throughout the entire American economy. For comparison, the legal budget of a single tech giant, Apple, has reportedly been as much as $1 billion.

Shaheen’s legislation would also subject the Antitrust Division to heavily politicized funding cycles that plague other government agencies, potentially leading to less enforcement actions, said Stoller, who was first to report on the effort to cut the Antitrust Division’s budget.

The funding cut is now facing stiff opposition from a bipartisan group of lawmakers who called for the funds to be restored.

“Unfortunately, the 2024 appropriations bill does not provide the Antitrust Division with full access to the pre-merger filing fees . . . . This limitation will hamper the ability of the Antitrust Division to utilize those additional funds to enhance its enforcement activities,” wrote Sens. Amy Klobuchar (D-MN) and Chuck Grassley (R-IA), as well as Reps. Ken Buck (R-CO), Joe Neguse (D-CO), and Jerry Nadler (D-NY).

Shaheen’s office did not respond to a request for comment.

Financial Firms, Health Insurers, and Arms Dealers

Some of Shaheen’s top career contributors to her campaigns and political action committee are donors from companies with an interest in stopping antitrust efforts, according to data from the Federal Election Commission.

For instance, employees from the Capital Group, an investment management firm that manages more than $2 trillion dollars globally, are collectively Shaheen’s ninth-largest career donor, providing more than $82,000 to her campaign committees, according to data compiled by OpenSecrets.

The Capital Group spent $1.6 million lobbying Congress and federal agencies on antitrust and other issues in 2022 as regulators issued new rules cracking down on mergers, according to disclosure records reviewed by the Lever.

In a letter authored by one of Shaheen’s donors, the Capital Group urged regulators to back off a proposed rule to help the Justice Department better evaluate the effects of mergers on consumers. Additionally, company executives reportedly held a conference call with congressional staffers to criticize the proposal.

Law firms that make their money from facilitating corporate mergers also donated heavily to Shaheen.

Employees from Akin Gump Strauss Hauer & Feld, a multinational law firm specializing in corporate-finance issues including mergers and acquisitions, has delivered more than $27,000 to Shaheen’s campaign committees. That included more than $11,000 from Ed Pagano, a former Obama administration official and current lobbyist for the law firm. Pagano and other employees of the firm lobbied federal officials on behalf of AT&T and DoorDash in 2022 regarding antitrust and other issues, disclosures show.

Employees from Ropes & Gray — a law firm specializing in antitrust litigation that says it was “built around veterans of the US Department of Justice and Federal Trade Commission” and includes former antitrust prosecutors — gave $33,850 to Shaheen’s election efforts from 2014 to 2020. Robert Jones, a lawyer for Ropes & Gray and former legal counsel to Mitt Romney when he served as Massachusetts governor, gave $5,600 to Shaheen in 2019, according to Federal Election Commission data.

Joshua Levy, a former Ropes & Gray attorney who now works for the US Attorney’s Office for the District of Massachusetts, donated $1,000 to Shaheen’s campaign efforts in 2019 and 2020, federal data shows.

Defense contractors facing antitrust actions — and new Justice Department scrutiny — have also donated heavily to Shaheen.

Employees from weapons manufacturer Raytheon, including company CEO Thomas Kennedy, have donated nearly $30,000 to Shaheen’s election efforts. In January 2023, a US district judge declined to dismiss an antitrust lawsuit brought by employees at a Raytheon subsidiary who alleged the weapons manufacturer conspired to crush wages and limit employment opportunities.

It’s a similar story for UK-based arms manufacturer BAE Systems — whose donors are collectively among Shaheen’s top contributors for the current election cycle, according to OpenSecrets. When BAE Systems recently purchased Ball Aerospace for $5.5 billion, Justice Department antitrust regulators scrutinized the deal.

Shaheen received campaign donations from the president and CEO of BAE Systems and received donations from BAE Systems’ chief operating officer, multiple vice presidents, and a slew of executives, federal data shows.

BAE Systems spent $3.5 million in 2022 lobbying on a number of matters including the United States Innovation and Competition Act of 2021, which included provisions related to antitrust funding and enforcement, among other provisions.

Shaheen has also received $459,000 from donors at private equity and investment firms, $152,000 from donors in the tech industry, and nearly $300,000 from donors in the health care industry — all sectors facing new pressure from antitrust regulators.

Among those donors is UnitedHealth Group, whose political action committee has given $34,500 to Shaheen’s campaign and affiliated political action committee. UnitedHealth owns the largest insurer in the country and is reportedly facing an antitrust investigation over its industry acquisitions.

UnitedHealth’s political action committee gave an additional $26,500 to Schumer, who is integral in ensuring Shaheen’s antitrust funding cut makes it through the Senate.

“They Took the Money and Ran”

An explanatory statement included with the spending bill proposal depicted the Antitrust Division’s budget cut not as a favor for donors, but instead as a response to a political turf battle. The statement noted that before the Justice Department or Congress considers funding issues, they should work with the Senate Appropriations Committee, of which Shaheen is a member.

“The agreement recognizes the importance of predictable, sustainable funding for the Antitrust Division, and encourages the Department to work with Congressional committees of jurisdiction to address such challenges,” staffers wrote in the explanatory statement.

Normally, funding for government agencies comes out of the Appropriations Committee, but the 2022 funding increase for the Antitrust Division came out of the Competition Policy, Antitrust, and Consumer Rights subcommittee, which is under the Senate Judiciary Committee.

Stoller, with the American Economic Liberties Project, called the explanatory statement an “annoying, nerdy way” for the Appropriations Committee staffers to say they were upset.

“What [the Appropriations Committee staff] are saying is that they’re mad that the Antitrust subcommittee increased fees for the division without going through Appropriations,” Stoller said.

Stoller added that House Republicans have been extremely aggressive in trying to cut the Antitrust Division’s budget and that the budget-cutting language could have been added as a compromise. Stoller said Rep. Jim Jordan (R-OH) has been trying to gut antitrust efforts for some time.

“This wasn’t all just Shaheen,” Stoller said. “Shaheen probably didn’t care or wasn’t actively hostile to the Antitrust Division, and then Jordan just wants to get [antitrust] defunded. So [staffers] had to negotiate with the House.”

On Tuesday, Klobuchar, chair of the Senate Subcommittee on Competition Policy, Antitrust, and Consumer Rights, heavily criticized the decision to gut the Antitrust Budget, saying the move would “reverse decades of precedent” and would restructure how the Antitrust Division receives its funding.

“One pen, and [Appropriation Committee staffers] changed it,” Klobuchar said during a Senate floor speech on March 5. “We weren’t able to see it ahead of time. Unbeknownst to us, they took the money and ran. They took the money and put it in other parts of the government’s budget.”