Source: http://www.justice.gov/atr/exhibit-10-comments-relpromax-antitrust-inc
Timestamp: 2015-11-27 16:06:00
Document Index: 677198501

Matched Legal Cases: ['§1602', '§1603', '§1603', '§1604', '§16', '§16', '§16', '§16', '§16', '§ 16', '§16', '§16', '§16', '§16', '§16', '§16', '§1603', '§ 16', '§16', '§16', '§16', '§16', '§16', '§16', '§16', '§16', '§16', '§16', '§ 16', '§16', '§16', '§16', '§16', '§16', '§16', '§1604', '§16', '§16', '§ 16', '§16', '§16', '§16', '§16', '§1602', '§1603', '§1604', '§16']

Exhibit 10 To The Comments Of Relpromax Antitrust Inc. | ATR | Department of Justice
Exhibit 10 To The Comments Of Relpromax Antitrust Inc.
This document is available in two formats: this web page (for browsing content), and PDF (comparable to original document formatting). To view the PDF you will need Acrobat Reader, which may be downloaded from the Adobe site. For an official copy, please contact the Antitrust Documents Group. EXHIBIT 10 TO THE COMMENTS OF RELPROMAX ANTITRUST INC. IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
Defendant. STATE OF NEW YORK ex rel. Attorney General ELIOT SPITZER, et al., Plaintiffs, v. MICROSOFT CORPORATION,
Defendant. | | | | | | | | | | | | | | | | | | | | | | | | | Civil Action No. 98-1232 (CKK) Filed: January 24, 2002 Civil Action No. 98-1233 (CKK) Next Court Deadline: March 4, 2002 Pre-hearing Conference MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF THE MOTION OF RELPROMAX ANTITRUST INC. FOR LIMITED PARTICIPATION AS AN AMICUS CURIAE AND FOR AN EXTENSION OF TIME
TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF CASES AND AUTHORITIES INTRODUCTION
THE TUNNEY ACT REQUIRES FULL DISCLOSURE BY MICROSOFT 7
Mr. Rule's Undisclosed Conversations Prior To November 15, 2001 Are Not Exempted From Disclosure
Mr. Rule Was Not Counsel Of Record For Microsoft Prior To November 15, 2001
Mr. Rule Was Not Counsel Of Record For Microsoft Even After November 15, 2001
The Undisclosed Conversations Of Microsoft's Other Lobbyists With Executive Or Legislative Branch Officials Are Not Exempted From Disclosure
Additional Undisclosed Conversations May Have Caused A Predawn Telephone Call From A Senior Aide To The Attorney General To A Lobbyist
THE TUNNEY ACT WAS INTENDED TO PREVENT AN ABUSE OF POWER IN THE CURRENT SITUATION
The Lawful $200,000 ITT Pledge Related To One Of The Impeachable Abuses Of Power In The Early 1970's Was Equivalent To About $650,000 In 2001 Dollars Which Amount Is Vastly Exceeded By Over $23 Million Microsoft Has Lawfully Spent On Federal Campaign Contributions And Lobbying Since 1997
The ITT Litigation and the Kleindienst Nomination
Since 1997 Microsoft Has Spent Over $23 Million On Federal Lobbying And Campaign Contributions
The Tunney Act Was Intended To Protect The Consuming Public From The Type Of Forces At Work Today In Connection With The RPFJ
ON THE PRESENT RECORD THE UNITED STATES WILL NOT BE ABLE TO COMPLY WITH THE COURT ORDER OF NOVEMBER 8, 2001, REQUIRING CERTIFICATION BY THE UNITED STATES OF COMPLIANCE WITH TUNNEY ACT PROCEDURES
THE COURT SHOULD AGAIN ODER FULL DISCLOSURE, ALLOW FULL DISCOVERY OF HE NECESSARY FACTS, AND EXTEND THE TIME FOR COMMENTS OR TERMINATE CONSIDERATION OF THE RPFJ
IF THE COURT DOES NOT ORDER FULL DISCLOSURE NOW, ENTRY OF THE RPFJ COULD BE REVERSED ON APPEAL FOR THAT REASON ALONE; HOWEVER, IF THE COURT ORDERS ADDITIONAL DISCLOSURE AND THEN ENTERS THE RPFJ, THERE WOULD BE A LOWER POSSIBILITY OF REVERSAL DUE TO DEFENDANT'S FAILURE TO COMPLY WITH THE DISCLOSURE PROVISIONS OF THE TUNNEY ACT
RELPROMAX AS THE ONLY PARTY OR PROPOSED AMICUS CURIAE WITH AN EXPRESSED INTEREST IN OBTAINING FULL DISCLOSURE FROM MICROSOFT SHOULD BE GRANTED THE RIGHT TO LIMITED PARTICIPATION AS AN AMICUS CURIAE IN THE TUNNEY ACT PROCEEDINGS
REQUEST FOR ORAL HEARING EXHIBIT LIST TABLE OF CASES AND AUTHORITIES
CASES U.S. v. Microsoft, 84 F.Supp.2d 9 (D.D.C. 1999) U.S. v. Microsoft, 87 F.Supp.2d 30 (D.D.C. 2000) U.S. v. Microsoft, 97 F.Supp.2d 59 (D.D.C. 2000) STATUTES 2 U.S.C. §1602(9) 2 U.S.C. §1603 (Section 4 of the Lobbying Disclosure Act of 1995) 2 U.S.C. §1603(a)(2) 2 U.S.C. §1604 (Section 5 of the Lobbying Disclosure Act of 1995) 15 U.S.C. §16(b)-(h) (Antitrust Procedures and Penalties Act (Tunney Act)) 15 U.S.C. §16(b) 15 U.S.C. §16(d) 15 U.S.C. §16(e) * 15 U.S.C. §16(f)(3) 15 U.S.C. § 16(f)(5) * 15 U.S.C. §16(g) RULES Federal Rule of Civil Procedure 5 Federal Rule of Civil Procedure 7(a) * Local Civil Rule 83.6(a) OTHER AUTHORITIES Cong. Rec., Senate, July 18, 1973, pp. 24597-8 Cong. Rec., Senate, July 18, 1973, p. 24599 Cong. Rec., Senate, December 9, 1974, p. 38585 Statement Of Information, Hearings Before The Committee On The Judiciary House Of Representatives, Ninety-Third Congress, Second Session, Pursuant To H.Res. 803, Book V, Part I, Department Of Justice ITT Litigation - Richard Kleindienst Nomination Hearings House Report 93-1305, August 20, 1974, pp. 139-183 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
Defendant. | | | | | | | | | | | | | | | | | | | | | | | | | Civil Action No. 98-1232 (CKK) Filed: January 24, 2002 Civil Action No. 98-1233 (CKK) Next Court Deadline: March 4, 2002 Pre-hearing Conference MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF THE MOTION OF RELPROMAX ANTITRUST INC. FOR LIMITED PARTICIPATION AS AN AMICUS CURIAE AND FOR AN EXTENSION OF TIME INTRODUCTION
The Antitrust Procedures and Penalties Act (Tunney Act) was signed on December 21, 1974, to remedy one of the many abuses of power which led to the adoption of the second of three Articles of Impeachment of the President by the Committee on the Judiciary of the United States House of Representatives on July 27, 1974, and to the only Presidential resignation in the history of our nation on August 9, 1974. The Tunney Act is not merely some procedural nicety. The Tunney Act is discussed in greater detail below (see section III.B., pp. 18-22, "The Tunney Act Was Intended To Prevent An Abuse Of Power In The Current Situation"). Defendant Microsoft Corporation ("Microsoft") has not complied with the disclosure requirements of the Tunney Act, specifically 15 U.S.C. §16(g), or this Court's Order dated November 8,2001. Pursuant to 15 U.S.C. §16(b) and (g), anyone has the statutory right to comment on the Revised Proposed Final Judgment ("RPFJ") in captioned Civil Action 98-1232 for fifty (50) days after Microsoft complies with 15 U.S.C. §16(g). Relpromax Antitrust Inc. ("Relpromax") hereby asserts its statutory right, which is also the statutory right of all Americans, to consider for fifty (50) days a true and complete disclosure by Microsoft pursuant to 15 U.S.C. §16(g) and then to file with the United States such written comments as it deems appropriate with respect to the RPFJ in light of the information disclosed pursuant to 15 U.S.C. §16(g). Accordingly, Relpromax seeks an order: 1) granting Relpromax status as an amicus curiae with the right of limited participation in proceedings so it can assist, if necessary, in obtaining, inter alia, the statutorily required (and Court ordered) disclosure; 2) compelling Microsoft to comply with the statute and the November 8, 2001, order; and, 3) extending the time for comments to provide Relpromax and all interested parties with their statutory rights. FACTUAL AND PROCEDURAL BACKGROUND
From 1993 through 1996, Microsoft contributed a total of about $366,000 to federal parties and candidates.1 Declaration of Brian Dautch ("Dautch Dec."), ¶¶ 2- 3 and Attachments 1 and 2. (A copy of the Dautch Declaration is attached hereto as Exhibit A.) On May 18, 1998, these civil actions were filed. From 1997 through July 31, 2001, Microsoft contributed a total of over $6.8 million to federal parties and candidates. Dautch Dec., ¶ 2, and Attachment 1. From 1997 through June 30, 2001, in addition to about $6.8 million in contributions Microsoft spent an additional $17.6 million on lobbyists who contacted many federal agencies and Members of the House and Senate seeking support for Microsoft's antitrust policies. Dautch Dec., ¶¶2, and 8-42 and Attachments 1, and 9-43. Given that Microsoft contributed to the campaigns of 38 U.S. Senators and 124 U.S. Representatives in 2001 alone (a non-election year), it is even possible that some of the federal legislators contacted by Microsoft about its antitrust problems had received, and/or may have been seeking, Microsoft campaign contributions. Dautch Dec., ¶ 2 and Attachment 1. On July 6, 1998, Charles F. Rule, Esq., became a registered lobbyist for Microsoft. From approximately 1986 to 1989, Mr. Rule was the Assistant Attorney General in charge of the Antitrust Division of the United States Department of Justice. Dautch Dec., ¶4, and Attachment 7. In 1998, Mr. Rule was a partner with the lobbying firm2 of Covington & Burling of Washington, D.C. On July 6, 1998, Covington &Burling filed a Lobbying Registration, pursuant to 2 U.S.C. §1603(a)(2), indicating that Mr. Rule was among the firm's "employees" who had acted or expected to act as lobbyists for Microsoft Corporation.3 On page 2 of the Lobbying Registration, Covington &Burling reported that the lobbyists expected to lobby on issues including "[c]ompetition matters affecting computer industry software." On August 12, 1999, Covington & Burling filed a mid-year 1999 Lobbying Report (Form LD-2) indicating that for the period from January 1, 1999, through June 30, 1999, the firm received $40,000 from Microsoft for lobbying.4 On page 6 of the form, Covington & Burling reported that Charles F. Rule lobbied the U.S. House of Representatives and the U.S. Senate for Microsoft on "[c]ompetition issues affecting computer software industry." On September 28, 2001, this Court docketed an order requiring the parties to engage in intensive settlement negotiations until November 2,2001. A copy of the order is attached hereto as Exhibit B. From on or about October 1, 2001, to November 6, 2001, according to written unsworn testimony by lobbyist Rule, he was one of the principal representatives for Microsoft in the negotiations with respect to the RPFJ. Dautch Dec., ¶4 and Attachment 3. On November 6, 2001, the United States and Microsoft filed a Stipulation and attached form of Revised Proposed Final Judgment. The Stipulation was signed on behalf of the United States by Charles A. James, Assistant Attorney General in charge of the Antitrust Division of the United States Department of Justice.5 (A copy of the Stipulation is attached hereto as Exhibit C.) In the Stipulation, Microsoft agreed to make the disclosure required by 15 U.S.C. § 16(g). Stipulation, ¶ 3. On November 8, 2001, this Court ordered Microsoft to make the disclosure required by 15 U.S.C. §16(g) "within ten days of the publication of the proposed Final Judgment in the Federal Register." (A copy of the Court's Order dated November 8, 2001, is attached hereto as Exhibit D.) On November 15,2001, lobbyist Charles F. Rule, Esq., apparently attempted to become a counsel of record for Microsoft in Civil Action No. 98-1232 pending before this Court. On November 15,2001, a document titled "Notice Of Entry Of Appearance" for Charles F. Rule was filed with this Court and is recorded as electronic docket entry number 29 in Civil Action No. 98- 1232. (A copy of the Notice Of Entry Of Appearance is attached hereto as Exhibit E.) According to the court docket for Civil Action No. 98-1232, the Notice Of Entry Of Appearance for Mr. Rule was signed and filed by Bradley Smith and not by Mr. Rule. According to the official docket, no document filed on behalf of Microsoft in this civil action (or Civil Action No. 98-1233) from November 15, 2001, through January 18, 2002, has been signed by Mr. Rule on behalf of Microsoft.6 On November 16, 2001, an item appeared on the front page of The Wall Street Journal which item stated in full: "LEGAL LOOPHOLE: Microsoft tries to shield its top Washington lawyer, Charles F. Rule, from having to reveal some contacts with the administration before he negotiated the company's controversial antitrust settlement. He was formally named a counsel of record yesterday, exempting him from disclosures otherwise demanded under a 1974 law requiring court review of antitrust deals."
(A copy of the item from The Wall Street Journal, November 16, 2001, page 1, is Attachment 5 to the Dautch Dec.)
On November 28, 2001, the RPFJ was published in the Federal Register along with a copy of a document titled "Competitive Impact Statement" which was filed with this Court on November 15, 2001. On December 10, 2001, Microsoft filed Defendant Microsoft Corporation's Description Of Written Or Oral Communications Concerning The Revised Proposed Final Judgment And Certification Of Compliance Under 15 U.S.C. §16(g) ("Microsoft's Description"). (A copy of Microsoft's Description is attached hereto as Exhibit F.) The Description purported to reveal "'any and all written or oral communications by or on behalf of" Microsoft 'with any officer or employee of the United States concerning or relevant to'" the RPFJ with the exception only of "communications made by counsel of record alone with the Attorney General or the employees of the Department of Justice alone [emphasis added]." Microsoft Description, pp. 1-2. Microsoft's Description reveals only: 1) that unnamed "counsel for Microsoft" (n.b. as opposed to "counsel of record for Microsoft") met with plaintiffs' representatives and mediators from September 27, 2001, through November 6, 2001, and that a Mr. William Poole of Microsoft participated in some of the meetings from October 29, 2001, through November 2, 2001; and, 2) that at an October 5,2001, meeting, technical questions were discussed by Ms. Linda Averett, and Messrs. Michael Wallent, Robert Short, and Chad Knowlton (all of Microsoft) with plaintiffs' representatives and plaintiffs' technical expert Professor Edward Felten. Microsoft certified that with the submission of the Microsoft Description, Microsoft "has complied with the requirements of 15 U.S.C. §16(g) and that this submission is a true and complete description of such communications known to Microsoft." Microsoft's Description was electronically signed by John Warden, Esq., of the law firm of Sullivan & Cromwell. The name of Charles F. Rule appears on the document apparently as Counsel for Microsoft. There is no signature line on the document for Mr. Rule's signature. Other than the appearance of Mr. Rule's name well below and to the left of Mr. Warden's name, there is no mention of Mr. Rule by name in the Microsoft Description or of any communications Mr. Rule had on behalf of Microsoft with any officer of employee of the United States concerning or relevant to the RPFJ (for example, oral or written communications or promises during the course of the intensive month-long negotiations which led to the RPFJ or drafts of proposed language for the RPFJ). On December 12,2001, Mr. Rule appeared (along with Assistant Attorney General Charles A. James and others) and submitted written testimony (not under oath) on behalf of Microsoft concerning the RPFJ before the Committee on the Judiciary of the United States Senate. Dautch Dec., ¶4, Attachment 3. In this testimony concerning the captioned civil actions, Mr. Rule (referring to the RPFJ as "PFJ") stated (p. 1, sentences 3-4): "As this committee is aware, I am counsel to Microsoft in the case [n.b. Civil Action Nos. 98-1232 and 98-1233] and was one of the principal representatives for the company in the negotiations that led to the proposed consent decree. The PFJ was signed on November 6th after more than a month of intense, around-the-clock negotiations with the Department and representatives of all the plaintiff states."
THE TUNNEY ACT REQUIRES FULL DISCLOSURE BY MICROSOFT
The relevant portions of the Tunney Act are now codified as Title 15 U.S.C. §16(b)-(h). The Tunney Act applies to the current proposal for a consent judgment (RPFJ) by the United States in captioned Civil Action No. 98-1232 which was brought by the United States under the antitrust laws. 15 U.S.C. §16(b). To cast sunlight on any potential abuse of power, to provide the public with information necessary both to understanding the full context of the RPFJ and to providing as insightful comments as possible (as allowed by 15 U.S.C. §16(d)), and to provide the Court with information the Court must have prior to determining whether entry of the RPFJ is in the public interest (as required by 15 U.S.C. §16(e)), Microsoft must make the disclosures required by 15 U.S.C. §16(g) which provides in full that [emphasis added below]: "Not later than 10 days following the date of any proposal for a consent judgment under subsection (b) of this section, each defendant shall file with the district court a description of any and all written or oral communications by or on behalf of such defendant, including any and all written or oral communications on behalf of such defendant, or other person, with any officer or employee of the United States concerning or relevant to such proposal, except that any such communications made by counsel of record alone with the Attorney General or the employees of the Department of Justice alone shall be excluded from the requirements of this subsection. Prior to the entry of any consent judgment pursuant to the antitrust laws, each defendant shall certify to the district court that the requirements of this subsection have been complied with and that such filing is a true and complete description of such communications known to the defendant or which the defendant reasonably should have known."
Both the Tunney Act and this Court's November 8, 2001, Order setting forth the schedule to be followed to comply with the Tunney Act in this case clearly grant the public fifty (50) days to prepare and file comments on the RPFJ after defendant's true and complete disclosure of all communications specified by 15 U.S.C. §16(g). As is shown below, the Microsoft Description of December 10, 2001, did not meet the requirements of 15 U.S.C. §16(g). There are at least five broad categories of communications which should have been disclosed: 1) oral or written communications by or on behalf of Mr. Rule acting in any capacity for Microsoft; 2) oral or written communications in Mr. Rule's presence (these communications were not made by counsel of record alone); 3) oral or written communications which may have induced the Deputy Chief of Staff to the Attorney General of the United States (David Israelite, who recused himself from any involvement with Microsoft matters due to a conflict of interest) to place a predawn telephone call on October 9, 2001, to a lobbyist for a Microsoft competitor complaining about the competitor's support for the retention of independent private counsel by the States suing Microsoft in Civil Action No. 98-1233; 4) oral or written communications or promises by Microsoft lobbyists (other than Mr. Rule) or Microsoft personnel to officers or employees of the United States; and, 5) communications made at Microsoft's request or suggestion to officers or employees of the United States (e.g., communications by Members or employees of either House of Congress to officers or employees of the Executive Branch). Mr. Rule's Undisclosed Conversations Prior to November 15, 2001 Are Not Exempted from Disclosure
The statute, 15 U.S.C. § 16(g), exempts from disclosure only two types of oral or written communications with any officer or employee of the United States. First, the statute exempts communications between counsel of record and the Attorney General alone (i.e., outside the presence of Microsoft personnel and other Justice Department officers or employees). Second, the statute exempts communications between counsel of record and employees of the Department of Justice alone (i.e., outside the presence of Microsoft personnel and non-employees of the Justice Department). The statute does not provide for a lobbyist (or other person who is not counsel of record) to conduct negotiations with the Attorney General and/or Justice Department employees and then, after reaching agreement on a consent judgment, convert from a lobbyist into a counsel of record in order to shield from disclosure communications and negotiations conducted when he was not counsel of record. At a minimum, the term "officer or employee" in 15 U.S.C. §16(g) should include any officer or employee of the Executive Branch. It is clear that offices and employees of the Executive Branch are within the scope of the statute because the two classes of exclusions are of officers or employees of the Executive Branch (i.e., the Attorney General and employees of the Department of Justice). Arguably, the term "officer or employee" in 15 U.S.C. §16(g) could also include any "officer or employee" of the Legislative Branch. The precise scope of the term "officers and employees" within the meaning of 15 U.S.C. §16(g) appears to be a matter of first impression in this Court. Given the control of the Justice Department budget by the Congress, the importance of disclosing communications by Microsoft with Members of Congress or their staff concerning or relating to the RPFJ is manifest. In any event, the statute makes clear that any communication concerning or relating to the RPFJ made on behalf of Microsoft (whether by Microsoft, a Senator, or anyone else) to an Executive Branch officer or employee must be disclosed under 15 U.S.C. §16(g). Mr. Rule was not a counsel of record prior to November 15,2001. Accordingly, any oral or written communications made by him, or on his behalf, concerning or relevant to the RPFJ to any officer or employee of the United States must be disclosed. Clearly, communications made in the negotiations which resulted in the RPFJ both concern the RPFJ and are relevant to the RPFJ. Mr. Rule was the Assistant Attorney General in charge of the Antitrust Division long after the Tunney Act became the law. While the disclosure requirements of 15 U.S.C. §16(g) would apply to Mr. Rule's client even if Mr. Rule were totally unfamiliar with antitrust law, the disclosure requirements should be applied strictly given that Mr. Rule was the principal law enforcement officer of the United States charged with enforcing this precise statute for about three (3) years. If Mr. Rule's testimony to the effect that he was a principal negotiator on behalf of Microsoft of the RPFJ is accurate, then there are clearly undisclosed communications made by Mr. Rule or in his presence. Typically, a principal representative in negotiations would have made oral comments to the negotiators for the United States. Further, the principal negotiator would have submitted written drafts of language (whether in electronic, magnetic, or paper form) to be used in the RPFJ. Also, there is the matter of Lobbyist Rule's contacts with the Administration which contacts were reported by The Wall Street Journal. What precisely does Microsoft want to conceal? Why does Microsoft want to conceal these communications? Discovery (or a true and complete disclosure under 15 U.S.C. §16(g)) is needed to provide the American people and this Court with the answer to these questions. Mr. Rule Was Not Counsel Of Record For Microsoft Even After November 15, 2001
If Microsoft's position is that Mr. Rule's communications prior to and during settlement negotiations did not have to be disclosed because on the date the Microsoft Description was filed Mr. Rule was a counsel of record, that position is both untenable and, as discussed above, contrary to the plain language of the statute. Local Civil Rule 83.6(a) governs the process by which an attorney becomes a counsel of record and provides in full that: "An attorney eligible to appear may enter an appearance in a civil action by signing any pleading described in Rule 7(a), Federal Rules of Civil Procedure, or by filing a written notice of the entry of an appearance listing the attorney's correct address, telephone number and bar identification number."
As mentioned above, as of the date of this Memorandum, Mr. Rule has not in connection with the captioned civil actions signed any pleading described in Rule 7(a) of the Federal Rules of Civil Procedure (i.e., basically, various types of complaints and answers).
The typical written notice of entry of an appearance is signed by the attorney entering the appearance. For example, when appearances were entered by Douglas Davis, Esq., Steven Kuney, Esq., and Brendan Sullivan, Esq., each of these attorneys signed and flied a written notice of appearance containing the necessary information. (Copies of the notices of appearance for Messrs. Douglas, Kuney, and Sullivan are attached hereto as Exhibits G, H, and I, respectively.) Mr. Rule did not sign or file what purports to be his written notice of entry of appearance. The written notice attempting to enter an appearance for Mr. Rule was signed and filed by Bradley Smith, Esq., of Sullivan & Cromwell. As noted above, Mr. Rule has not, in connection with the captioned Civil Actions, signed any pleading described in Federal Rule of Civil Procedure 7(a). Thus, arguably Mr. Rule was not a counsel of record even when the Microsoft Description was filed on December 10, 2001. Accordingly, any oral or written communications Mr. Rule had with officers or employees of the United States concerning or relating to the RPFJ must be disclosed. The Undisclosed Conversations of Microsoft's other Lobbyists With Executive Or Legislative Branch Officials Or Employees Are Not Exempted From Disclosure
Even if Mr. Rule's testimony to the effect that he was a principal negotiator on behalf of Microsoft of the RPFJ were inaccurate and even if Mr. Rule had absolutely no oral or written communications at any time of any type, kind, or description with any officer or employee of the United States (whether in the Executive or Legislative Branch), it is still likely that there were other undisclosed oral or written communications made by or on behalf of Microsoft concerning or relevant to the RPFJ. In addition to Mr. Rule, Microsoft has a substantial number of other inside and outside federal lobbyists who were paid on the order of $17,645,000 from 1997 through June 30, 2001. A partial list of some known lobbying expenditures and contacts includes the following: 1. From January 1, 1999, through June 30,2001, according to the official reports required by Section 5 of the Lobbying Disclosure Act of 1995, 2 U.S.C. {} §1604, the lobbying firm of Barbour Griffith & Rogers, Washington, D.C., reported receiving $1,380,000 from Microsoft for lobbying the House and Senate concerning issues including "the Justice Department's Antitrust inquiry." Dautch Dec., ¶¶8-12 and Attachments 9-13. 2. The official reports show that from July 1, 1997 to June 30, 2001, the lobbying firm of Clark & Weinstock, New York, New York, received $1,480,000 from Microsoft for lobbying the House and Senate concerning issues including Microsoft's position on the Department of Justice antitrust suit against Microsoft. Dautch Dec., ¶¶13-19 and Attachments 14- 20. 3. The official reports show that from January I, 1998 to June 30, 1999, the lobbying firm of Covington & Burling received $140,000 from Microsoft for lobbying the House and Senate concerning, inter alia, competition issues affecting the computer software industry. Dautch Dec., ¶¶20-22 and Attachments 21-23. 4. The official reports show that from July 1, 1997, to June 30, 2001, the lobbying firm of Downey Chandler, Inc. (at times known as Downey McGrath Group), received $560,000 from Microsoft for lobbying the Office of the Vice President, the Departments of Justice, State, and Commerce, and the House and Senate concerning issues including the Department of Justice's antitrust suit against Microsoft. Dautch Dec., ¶¶ 23-30 and Attachments 24-31. 5. From July 1, 1999 to June 30, 2001, the official reports show that McSlarrow & Associates, at times known as McSlarrow Consulting, L.L.C., received $200,000 from Microsoft for lobbying the House and Senate concerning issues including competition in the software industry. Dautch Dec., ¶¶32-35 and Attachments 33-36. 6. From January 1, 2000 to June 30, 2000, the official report shows that Microsoft itself spent $3,340,000 on lobbying the National Security Agency, Federal Bureau of Investigation, Senate, House, the Departments of Justice, Commerce, and Defense concerning issues including competition in the software industry.7 Dautch Dec., ¶36 and Attachment 37. 7. From July 1, 1997 to June 30, 2001, the official reports show that Preston Gates Ellis & Rouvelas Meeds received $1,380,000 from Microsoft for lobbying the White House, the Vice President, the National Security Agency, the Central Intelligence Agency, the National Security Council, the Office of Science and Technology Policy, the Federal Bureau of Investigation, the U.S. Trade Representative, the National Economic Council, the Office of Management and Budget, the Departments of Justice arid Commerce, and the House and Senate concerning issues including competition in the software market. Dautch Dec., ¶¶37-42 and Attachments 38-43. The massive amount of money spent on lobbying raises a number of issues relevant to the Tunney Act disclosure Microsoft should have made including, but not limited to, those mentioned below. First, given that Microsoft was ably represented by accomplished in-house counsel and the distinguished law firm of Sullivan & Cromwell upon whom all opposing parties were required to serve all documents pursuant to Federal Rule of Civil Procedure 5, why was it necessary to spend over $1.3 million for Barbour Griffith & Rogers to monitor the same civil action? Where did the money really go? What did the money really buy? Did Barbour Griffith & Rogers discuss the Microsoft antitrust litigation with any officer or employee of the United States while the RPFJ was being negotiated? Second, as of June 30, 2001, Microsoft, its employees, and its outside lobbyists had spent upwards of $20,000,000 over several years lobbying, and where possible making campaign contributions, to many officers and employees of the United States. It is difficult to believe that when negotiations intensified and were conducted around-the-clock8 in October, 2001 not one of the legions of Microsoft lobbyists in whom the company invested millions made a single call to any officer or employee of the United States concerning or relevant to the RPFJ. In particular, it is difficult to imagine that no United States Representative and no United States Senator was asked to contact the Executive Branch in support of Microsoft. Additional Undisclosed Conversations May Have Caused A PredawnTelephone Call From A Senior Aide To The Attorney General To A Lobbyist
The New York Times of November 2, 2001, reported ("States Biding for Time to Study Microsoft Settlement Plan" by Stephen Labaton, pp. C1 and C4) that: "Some of Microsoft's largest competitors voiced bitter disappointment about the terms of the proposed deal and asserted that the company had used its political influence with a Republican administration to try to quickly put an end to the case."
"The rivals said that during court hearings that will be required on the proposed settlement, they intended to provide evidence of what they say was an improper discussion between a senior aide to Attorney General John Ashcroft who had been a top official in the Republican Party and a Republican lobbyist for AOL- Time Warner that demonstrated Microsoft's political muscle. In a statement issued today, Representative John Conyers Jr., Democrat of Michigan, also indicated that he would be examining that incident, word of which has been circulating widely in recent days among lawyers, lobbyists and executives following the case?' "The aide to Mr. Ashcroft, David Israelite, had been the political director of the Republican National Committee, which received hundreds of thousands of dollars from Microsoft during the 2000 presidential campaign. Mr. Israelite, now Mr. Ashcroft's deputy chief of staff, has recused himself from any involvement in the Microsoft antitrust case because he owns 100 shares of Microsoft stock." "The lobbyist involved in the discussion was said to be Wayne Berman, who is also a top Republican fundraiser." "According to the notes of a person briefed about the conversation on Oct. 9, the day it is said to have occurred, Mr. Israelite called Mr. Berman." "'Are you guys behind this business of the states hiring their own lawyers in the Microsoft case?' Mr. Israelite asked Mr. Berman in the predawn conversation, according to the notes. 'Tell your clients we wouldn't be too happy about that.'" "...According to people who were later briefed on the conversation by an AOL executive, Mr. Israelite then complained that AOL, a leading Microsoft rival, had been trying to 'radicalize' the states to oppose a settlement." (A copy of the article from The New York Times of November 2, 2001, is Attachment 8 to the Dautch Declaration.)9
Given the impact of the RPFJ on an important sector of the economy and the over-riding importance of maintaining public confidence in the integrity of both public officials and the judicial process, it would be reasonable to inquire of both Messrs. Israelite and Berman either at a hearing before the Court or at a deposition whether any conversation such as that set forth in the article published on November 2, 2001, by The New York Times ever occurred. The conversation, if it occurred, was not privileged. Because Mr. Israelite is recused from taking official action with respect to Microsoft, the inquiry would also not require any intrusion into the reasons for any of his authorized official actions. If the conversation occurred at the request of Microsoft, this Court and the public have a statutory right to know that fact. THE TUNNEY ACT WAS INTENDED TO PREVENT AN ABUSE OF POWER IN THE CURRENT SITUATION
In 1969, the United States filed three civil antitrust actions against the International Telephone and Telegraph Corporation ("ITT") challenging the acquisition by ITT of three corporations (Canteen Corporation, Hartford Fire Insurance Company, and Grinnell Corporation). Statement Of Information, Hearings Before The Committee On The Judiciary House Of Representatives, Ninety-Third Congress, Second Session, Pursuant To H. Res. 803, Book V, Part I, Department Of Justice ITT Litigation - Richard Kleindienst Nomination Hearings ("Statement Of Information" or "SOI"), pages 3-4. (A copy of the basic statement of facts in the Statement Of Information is attached as Attachment 45 to the Dautch Declaration.) Attorney General John Mitchell was recused because his former law firm had represented an ITT subsidiary; Deputy Attorney General Richard Kleindienst acted as Attorney General in connection with the litigation and sought and received approval from Counsel to the President John Ehrlichman before filing the first civil action. SOI, p. 3. On December 31, 1970, ITT won a judgment in the Grinnell case after a trial. SOI, p. 13. From April to June, 1971, a substantial amount of political pressure was applied by the President and his assistants to Deputy Attorney General Kleindienst and Assistant Attorney General in charge of the Antitrust Division Richard McLaren to convince them to forego an appeal and settle the ITT cases. SOI, pp. 17-31. On July 21, 1971, ITT-Sheraton pledged up to $200,000 to bring the 1972 Republican National Convention to San Diego, California. SOI, p. 32. There is no suggestion that this contribution by itself was illegal. On July 31, 1971, a settlement of the ITT litigation was announced. SOI, p. 34. On February 15, 1972, the President nominated Richard Kleindienst to be Attorney General. SOI, p. 36. On February 29, March 1 and March 3, 1972, three columns by columnist Jack Anderson were published alleging a connection between the ITT-Sheraton pledge and the ITT antitrust settlement and alleging the involvement of Messrs. Mitchell and Kleindienst. SOI, p. 39. (Copies of the Anderson columns and a memorandum allegedly written by an ITT lobbyist, Ms. Dita Beard, all of which were included in the evidentiary material supporting the Statement Of Information are attached as Attachment 46 to the Dautch Declaration.) As a result of publication of the first two Anderson columns, Mr. Kleindienst asked that his confirmation hearings be re-opened. SOI, p. 39. At the hearings in 1972 on his nomination to be Attorney General, Mr. Kleindienst denied talking to all the President's men other than casually about the ITT matter and also denied receiving any suggestions from them about the action the Justice Department should take in the ITT cases. SOI, p. 42. On June 12, 1972, Richard Kleindienst became Attorney General. SOI, p. 61. On May 16, 1974, Richard Kleindienst pleaded guilty to one count of refusing or failing fully to respond to questions propounded to him by the Senate Committee on the Judiciary during the hearings in 1972 on his nomination to be Attorney General. SOI, p. 66. On August 9, 1974, the President resigned. The Impeachment Resolution
The second Article of Impeachment (adopted by a vote of 28-10 in the House Judiciary Committee on July 27, 1974) charged the President with using the powers of his office in violation of his constitutional oath, disregarding his constitutional duty to take care that the laws be faithfully executed, and repeatedly engaging in five (5) types of conduct violating the constitutional rights of citizens, impairing the due and proper administration of justice and the conduct of lawful inquiries, or contravening the laws governing agencies of the executive branch and the purpose of those agencies. The specification of the fourth type of allegedly improper conduct stated in full with respect to the President that (emphasis added): "He has failed to take care that the laws were faithfully executed by failing to act when he knew or had reason to know that his close subordinates endeavoured to impede and frustrate lawful inquiries by duly constituted executive, judicial and legislative entities concerning the unlawful entry into the headquarters of the Democratic National Committee, and the cover-up thereof, and concerning other unlawful activities including those relating to the confirmation of Richard Kleindienst as Attorney General of the United States, the electronic surveillance of private citizens, the break-in into the offices of Dr. Lewis Fielding, and the campaign financing practices of the Committee to Re-elect the President."
House Report 93-1305, August 20, 1974, pp. 139-183.
During the Senate debate preceding adoption of the Antitrust Procedures and Penalties Act (the Tunney Act), Senator Tunney said: "The genesis of this legislation came during the hearings held by the Senate Judiciary Committee on the nomination of Richard Kleindienst, the hearings which quickly became known as the ITT hearings, because the major issue involved allegations that a massive behind-closed-doors campaign resulted in halting the Justice Department's prosecution of the ITT case and its hasty settlement favorable to the company. During these hearings, I became concerned with the apparent weaknesses of the consent decree process, which could allow this kind of corporate pressures to be exercised." Cong. Rec. Senate, December 9, 1974, page 38585.
As mentioned above, since 1997, Microsoft has spent in excess of $23,000,000 on federal campaign contributions and lobbying with substantial effort devoted to lobbying concerning the captioned civil actions. The ITT pledge of $200,000 in 1971 is the equivalent of about $650,000 in 2001 dollars. Dautch Dec., ¶43. There is no suggestion that any of Microsoft's expenditures by themselves are illegal. In the instant matter, the Justice Department won at trial and on appeal. The Department has agreed to what some have characterized as a "sweetheart" settlement negotiated behind closed doors by a lobbyist for Microsoft which, so far, has not revealed information the Tunney Act (and this Court's order) require it to reveal. The Tunney Act Was Intended To Protect The Consuming Public From The Type Of Forces At Work Today In Connection With The RPFJ
The point is not that an unfortunate chapter in our nation's history has repeated itself or might repeat itself precisely but rather that the same type of economic forces at work in connection with the ITT litigation are at work today. In the United States, the presence of strong economic forces tends to bring about the involvement of political forces. In 2001 dollars, the amount ITT pledged to buy influence and access in 1971 is greatly exceeded by the amount spent by Microsoft in the last few years on lobbying and campaign contributions. The impact ITT had on the 1971 economy while substantial pales in comparison to the impact Microsoft and its products have on the 2002 economy. The forces at work today may be stronger than those in play thirty years ago. The problem was aptly summarized in the following quotations (by Senator Tunney during Senate debate) from testimony before the Senate Judiciary Committee by United States Circuit Judge J. Skelly Wright, Chief Judge of the United States Court of Appeals for the District of Columbia Circuit: "By definition, antitrust violators wield great influence and economic power. They often bring significant pressure to bear on government, and even on the courts, in connection with the handling of consent decrees. The public is properly concerned whether such pressure results in settlements which might shortchange the public interest .... Because of the powerful influence of antitrust defendants and the complexity and importance of antitrust litigation, the public reasonably asks in many instances whether in reaching a settlement, the government gave up more than it need have or should have. Some response to this public concern is desirable, in my opinion, not only to ensure that the compromise struck by the Justice Department is fair from the public's point of view, but also to alleviate fears which, even if unfounded, are unhealthy in and of themselves."
Cong. Rec. Senate, July 18, 1973, pp. 24597-24598.
On November 8, 2001, this Court ordered the United States to file, when appropriate, a certification of compliance with the Antitrust Procedures and Penalties Act (Tunney Act). Given the apparent failure of Microsoft to comply with the Tunney Act and the United States' knowledge of this apparent compliance failure, it would appear to be difficult, if not impossible, for the United States to provide the required certification in good faith. This difficulty provides another reason for the Court to order compliance by Microsoft with the terms of 15 U.S.C. §16(g). THE COURT SHOULD AGAIN ORDER FULL DISCLOSURE, ALLOW FULL DISCOVERY OF THE NECESSARY FACTS, AND EXTEND THE TIME FOR COMMENTS OR TERMINATE CONSIDERATION OF THE RPFJ
Even if Microsoft chooses to amend the Microsoft Description in an attempt to comply with a second court order (after defying the first court order) with respect to 15 U.S.C. §16(g), the Court should consider allowing limited discovery by Relpromax Antitrust Inc., as an amicus curiae, into the communications revealed and into the issue of whether all communications were in fact revealed in order to avoid the prospect that Microsoft's initial reticence infects a disclosure which purports to be in accord with the terms of a second disclosure order. Alternatively, in the interests of judicial economy, the Court may terminate all consideration of the RPFJ at this time and deny entry of the RPFJ on the grounds that the Court has not been provided with the information the statute requires the defendant to provide as a condition precedent to approval of a consent judgment in these circumstances. IF THE COURT DOES NOT ORDER FULL DISCLOSURE NOW, ENTRY OF THE RPFJ COULD BE REVERSED ON APPEAL FOR THAT REASON ALONE; HOWEVER, IF THE COURT ORDERS ADDITIONAL DISCLOSURE AND THEN ENTERS THE RPFJ, THERE WOULD BE A LOWER POSSIBILITY OF REVERSAL DUE TO DEFENDANT'S FAILURE TO COMPLY WITH THE DISCLOSURE PROVISIONS OF THE TUNNEY ACT
Given the procedural history of this case (i.e., Judges Sporkin and Jackson were removed from this case or its predecessors by the Court of Appeals), it would indeed be unfortunate if the Court were to allow Microsoft to withhold information to which the public has a statutory right, determine that entry of the RPFJ is in the public interest, and then be reversed on appeal due to the failure of Microsoft to comply with 15 U.S.C. § 16(g) (necessitating re-commencement of the Tunney Act procedures with respect to the current RPFJ several years from now). Alternatively, if the Court were to order full compliance with the Tunney Act now, the delay would be minimal (on the order of sixty (60) days) and (assuming Microsoft made a true and complete disclosure) any decision to enter the RPFJ could not be reversed due to Microsoft's failure to comply with its disclosure obligations under the Tunney Act. RELPROMAX AS THE ONLY PARTY OR PROPOSED AMICUS CURIAE WITH AN EXPRESSED INTEREST IN OBTAINING A FULL DISCLOSURE FROM MICROSOFT SHOULD BE GRANTED THE RIGHT TO LIMITED PARTICIPATION AS AN AMICUS CURIAE IN THE TUNNEY ACT PROCEEDINGS
Clearly, Microsoft, the United States, and the Settling States have little or no interest in inquiring into the communications Microsoft should have disclosed pursuant to 15 U.S.C. §16(g) or into the adequacy of the Microsoft Description. Their only interest (explicitly expressed so far) is in obtaining Court approval of the RPFJ as fast as possible. In particular, the United States Department of Justice presumably already has knowledge, at a minimum, of certain undisclosed communications made to the Justice Department by Microsoft lobbyist Charles F. Rule from on or before October 1,2001, through November 6, 2001.
The Litigating States10 (the governments which did not settle in Civil Action No. 98-1233) are not parties to Civil Action No. 98-1232. While they and their citizens of course have Tunney Act rights, the Litigating States have, so far, expressed little interest on the record of Civil Action No. 98-1232 in obtaining for their citizens' consideration during the comment period the information from Microsoft to which the public is entitled under the Tunney Act. Given his responsibility for the Antitrust Division and his signature on the Stipulation filed with the RPFJ on November 6, 2001, the Assistant Attorney General in charge of the Antitrust Division knew, or in the exercise of reasonable care should have known, that lobbyist Rule was one of Microsoft's principal representatives during the negotiations which led to the RPFJ and was not, at the time, counsel of record for Microsoft. As far as can be determined from the public court record of this case, the United States has not exerted itself in any way to obtain a proper disclosure from Microsoft or to encourage Microsoft to amend the Microsoft Description. The attitude of the Justice Department has changed under the leadership of Attorney General John Ashcroft.11 The Department's attitude toward this civil action was perhaps best expressed by Assistant Attorney General James at the December 12,2001, Senate Judiciary Committee hearing. Due to a roll call vote, Mr. James was given just a few moments for his opening remarks of the day. The first point he chose to make was "some argue that the case never should have been filed."12 Another reason for the statutory requirement of fifty (50) days to consider the defendant's communications is that the significance of any individual communication in light of the RPFJ may only be apparent to one person or a few persons. The consideration time allows interested persons either to consult with others or experts or to conduct additional informal or (with the Court's approval) formal inquiries into the facts in order to be able to advise both the United States and the Court of the full implications of the disclosures in light of the RPFJ. Given the carefully crafted statutory arrangement, the Congress realized that the Court on its own can not be expected either to uncover or understand all the implications of Microsoft's communications for the RPFJ without the assistance of persons at least interested enough in the RPFJ, the nule of law, and/or the avoidance of another impeachment inquiry due to, inter alia, an abuse of the antitrust settlement power to devote their time to the public interest in this matter. Given that Relpromax is an interested person and, in particular, interested in obtaining the information to which it has a statutory right pursuant to 15 U.S.C. §16(g), it would be appropriate and in the public interest for the Court to enter an order, pursuant to 15 U.S.C. §16(f)(3), in the form submitted herewith authorizing limited participation by Relpromax in proceedings before the court. The Court has extended itself to make all of Microsoft's communications available to the entire nation by instituting electronic filing for the captioned civil actions. This means that anyone anywhere with Internet access and a PACER ("Public Access to Court Electronic Records") account is able to read Microsoft's Description of its communications concerning and relevant to the RPFJ without having to travel all the way from one end of the country to the courthouse. It is now time for Microsoft to comply with the statute. In Senate debate which preceded adoption of the Tunney Act, Sen. John Tunney quoted the words of Supreme Court Justice Louis Brandeis to sum up the meaning and purpose of the Act: "Sunlight is the best disinfectant."13 REQUEST FOR ORAL HEARING
The Court may order an oral hearing on this motion pursuant to 15 U.S.C. §16(0(5) which provides in full that: "In making its determination under subsection (e) of this section, the court may - .. (5) take such other action in the public interest as the court may deem appropriate."
It is in the public interest that the proper statutorily required disclosure be made. It is further in the public interest that the public be allowed their statutory right to consider the full ramifications of the RPFJ for fifty (50) days after a true and complete disclosure by Microsoft of all non-exempt communications with officers or employees of the United States concerning or relevant to the RPFJ. Accordingly, pursuant to 15 USC sec. 16(f)(5), movant requests an oral hearing on this motion at the Court's earliest convenience. Respectfully submitted
Peter Peckarsky (D.C. Bar No. 266171) 1615 L Street, N.W., Suite 850 Washington, D.C. 20036 Telephone: (202) 785-0100 Telecopier: (202) 408-5200
Attorney for Relpromax Antitrust Inc. FOOTNOTES 1 The total includes contributions directly to candidates or political action committees reported as made by individuals who listed Microsoft as an employer. 2 See 2 U.S.C. §1602(9). 3 The Lobbying Registration (dated June 29, 1998) is known as Form LD-1 which is required to be filed by 2 U.S.C. §1603 (Section 4 of the Lobbying Disclosure Act of 1995). The Lobbying Registration was filed with the Office of the Clerk of the U.S. House of Representatives. A copy of this Lobbying Registration is Attachment 4 to the Dautch Dec. 4 The Lobbying Report (dated August 10, 1999) is on a form known as Form LD-2 which form is required to be filed by 2 U.S.C. §1604 (Section 5 of the Lobbying Disclosure Act of 1995). The Lobbying Report was filed with the Secretary of the United States Senate. The Lobbying Report is Attachment 23 to the Dautch Dec. 5 The Stipulation was also signed on behalf of certain plaintiffs in the companion Civil Action No. 98-1233 (i.e., the States of Illinois, Kentucky, Louisiana, Maryland, Michigan, New York, ,North Carolina, Ohio, and Wisconsin) (hereinafter referred to as "Settling States"). 6 There is no indication in the electronic docket, which is the only docket available for this stage of Civil Action No. 98-1232, that Mr. Rule has signed any pleading described in Rule 7(a), F.R.Civ.P., in ink and then caused the document to be filed electronically by someone else with the Court. 7 On November 5, 1999, this Court entered Findings of Fact adverse to Microsoft. U.S. v. Microsoft, 84 F.Supp.2d 9 (D.D.C. 1999). On April 3, 2000, this Court entered Conclusions of Law holding Microsoft to be in violation of the antitrust laws. U.S. v. Microsoft, 87 F.Supp.2d 30 (D.D.C. 2000). On June 7, 2000, this Court entered an order requiring Microsoft to devise a plan to split itself into an operating systems business and an applications business. U.S. v. Microsoft, 97 F.Supp.2d 59 (D.D.C. 2000). 8 Statement of Charles F. Rule to the Committee on the Judiciary, US. Senate, December 12, 2001 (Dautch Dec., Attachment 3, ¶2). 9 In addition to the Microsoft stonewall, the Justice Department is apparently stonewalling the ranking minority member of the House Judiciary Committee, Rep. John Conyers, Jr., concerning the reported Israelite-Berman predawn conversation. On Nov. 6, 2001, Rep. Conyers wrote a letter to the Attorney General inquiring about the alleged conversation. (A copy of a press release containing the text of the letter from Rep. Conyers is Attachment 44 to the Dautch Dec.) As far as can be determined, no response had been received by Rep. Conyers from the Attorney General as of January 22, 2002. 10 The Litigating States are the District of Columbia, California, Connecticut, Florida, Iowa, Kansas, Massachusetts, Minnesota, Utah, and West Virginia. 11 David Israelite, Mr. Ashcroft's Deputy Chief of Staff, reportedly owns 100 shares of sMicrosoft stock worth about $6,610 at the close of trading on January 18, 2002. Dautch Dec., ¶ 44 and Attachment 8. David Israelite recused himself from any involvement in the antitrust suit against Microsoft. The President's campaign, his Inaugural fund, Attorney General Ashcroft, and his various campaign committees received about $180,000 in contributions from Microsoft and its employees in 1999 and 2000. Dautch Dec., ¶2 and Attachment 1. Mr. Ashcroft has not recused himself from any involvement in the antitrust suit against Microsoft. 12 The full preliminary transcript is attached as Attachment 49 to the Dautch Dec. The remarks referred to appear on page 10. 13 Cong. Rec. Senate, July 18, 1973, p. 24599. EXHIBIT LIST
Declaration of Brian Dautch dated January 23, 2002
Order docketed September 28, 2001
Stipulation dated November 6, 2001
Order dated November 8, 2001
Notice Of Entry Of Appearance for Charles F. Rule dated November 15, 2001
Defendant Microsoft Corporation's Description Of Written Or Oral Communications Concerning The Revised Proposed Final Judgment And Certification Of Compliance Under 15 U.S.C. §16(g) dated December 10, 2001
Appearance of Douglas Lee Davis dated December 12, 2001
Appearance of Steven R. Kuney dated November 1, 2001
Appearance of Brendan V. Sullivan, Jr. dated November 1, 2001
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA UNITED STATES OF AMERICA,
Plaintiff, v. MICROSOFT CORPORATION, Defendant. | | | | | | | | | | | | CIVIL ACTION NO. 98-1232 (CKK) STATE OF NEW YORK ex rel. Attorney General ELIOT SPITZER, et al., Plaintiffs, v. MICROSOFT CORPORATION, Defendant. | | | | | | | | | | | | CIVIL ACTION NO. 98-1233 (CKK)
Next Court Deadline: March 4, 2002 Pre-hearing Conference DECLARATION OF BRIAN DAUTCH My name is Brian Dautch. I am a law clerk for Peter Peckarsky, Esq. I have personal knowledge of the facts testified to below and if called as a witness could testify to those facts. Attached hereto as Attachment 1 is a copy of an article dated September 6, 2001 and titled "Microsoft Antitrust Case: An Update on the Company's Lobbying and Campaign Contributions" and related information which was downloaded from the website (ww.opensecrets.org) of The Center For Responsive Politics ("CRP"). The chart on page 2 of Attachment 1 shows that Microsoft an its employees contributed about $6.8 million to national political parties and federal candidates from 1997 through July 31,2001. The chart on page 3 of Attachment 1 shows that Microsoft spent about $17.1 million on federal lobbying from 1997 through December 31, 2000. The CRP reported it had found $161,250 in contributions from Microsoft or its employees to the Bush campaign or the Bush-Cheney Inaugural Fund. The CRP also reported it had found $19,250 in contributions in 1999 and 2000 to the campaign of Attorney General Ashcroft and to the Ashcroft Victory Committee. The listings and dates for $19,000 of these contributions are shown in Attachment 1 hereto. Attached hereto as Attachment 2 is a copy of a copy of the mission statement of the Center For Responsive Politics which was downloaded from the website (www.opensecrets.org) of The Center For Responsive Politics. Attached hereto as Attachment 3 is a copy of the unsworn Statement of Charles F. (Rick) Rule, presented on December 12,2001, to the Senate Judiciary Committee. Attached hereto as Attachment 4 is a copy of a Lobbying Registration for registrant Covington & Burling dated June 29, 1998. Attached hereto as Attachment 7 is a copy of Charles F. "Rick" Rule's resume, which I obtained from the website of Fried, Frank, Harris, Shriver, and Jacobson (www.friedfrank.com). Attached hereto as Attachment 5 is a copy of an item from the front page of the A section of The Wall Street Journal, dated November 16, 2001. Attached hereto as Attachment 6 is a copy of the preliminary transcript of the December 12,2001 Senate Judiciary Committee hearing concerning the proposed settlement of the Microsoft antitrust case. Attached hereto as Attachment 8 is a copy of an article titled "States Biding for Time to Study Microsoft Settlement Plan" by Stephen Labaton which appeared in The New York Times, November 2, 2001, on pages C1 and C4. Attached hereto as Attachment 9 is a copy of Form LD-2 dated August 5, 1999, in which Barbour, Griffith, and Rogers ("BGR") reported that during the first half of 1999, it received $300,000 from Microsoft for lobbying. Attached hereto as Attachment 10 is a copy of Form LD-2 dated February 13, 2000, in which BGR reported that during the last half of 1999, it received $320,000 from Microsoft for lobbying. Attached hereto as Attachment 11 is a copy of Form LD-2 dated August 12, 2000, in which BGR reported that during the first half of 2000, it received $300,000 from Microsoft for lobbying. Attached hereto as Attachment 12 is a copy of Form LD-2 dated February 14, 200 I, in which BGR reported that during the last half of 2000, it received $240,000 from Microsoft for lobbying. Attached hereto as Attachment 13 is a copy of Form LD-2 dated August 14, 2001, in which BGR reported that during the first half of 2001, it received $220,000 from Microsoft for lobbying. Attached hereto as Attachment 14 is a copy of Form LD-2 dated February 6, 1998, in which Clark and Weinstock ("CW") reported that during the last half of 1997, it received $80,000 from Microsoft for lobbying. 14. Attached hereto as Attachment 15 is a copy of Form LD-2 dated August 4, 1998, in which CW reported that during the first half of 1998, it received $160,000 from Microsoft for lobbying. Attached hereto as Attachment 16 is a copy of Form LD-2 dated February 11, 1999, in which CW reported that during the last half of 1998, it received $220,000 from Microsoft for lobbying. Attached hereto as Attachment 17 is a copy of Form LD-2 dated August 9, 1999, in which CW reported that during the first half of 1999, it received $220,000 from Microsoft for lobbying. Attached hereto as Attachment 18 is a copy of Form LD-2 dated August 11, 2000, in which CW reported that during the first half of 2000, it received $280,000 from Microsoft for lobbying. Attached hereto as Attachment 19 is a copy of Form LD-2 dated February 9, 2001, in which CW reported that during the last half of 2000, it received $280,000 from Microsoft for lobbying. Attached hereto as Attachment 20 is a copy of Form LD-2 dated August 9, 2001, in which CW reported that during the first half of 2001, it received $240,000 from Microsoft for lobbying. Attached hereto as Attachment 21 is a copy of Form LD-2 dated August 4, 1998, in which Covington & Burling ("CB") reported that during the first half of 1998, it received $40,000 from Microsoft for lobbying. Attached hereto as Attachment 22 is a copy of Form LD-2 dated February 4, 1999, in which CB reported that during the last half of 1998, it received $60,000 from Microsoft for lobbying. Attached hereto as Attachment 23 is a copy of Form LD-2 dated August 10, 1999, in which CB reported that during the first half of 1999, it received $40,000 from Microsoft for lobbying. Attached hereto as Attachment 24 is a copy of Form LD-2 dated February 13, 1998, in which Downey Chandler, Inc. ("DCI") reported that during the last half of 1997, it received $60,000 from Microsoft for lobbying. Attached hereto as Attachment 25 is a copy of Form LD-2 dated August 7, 1998, in which DCI reported that during the first half Of 1998, it received $80,000 from Microsoft for lobbying. Attached hereto as Attachment 26 is a copy of Form LD-2 dated February 16, 1999, in which DCI reported that during the last half of 1998, it received $60,000 from Microsoft for lobbying. Attached hereto as Attachment 27 is a copy of Form LD-2 dated July 30, 1999, in which DCI reported that during the first half of 1999, it received $80,000 from Microsoft for lobbying. Attached hereto as Attachment 28 is a copy of Form LD-2 dated February 14, 2000, in which DCI (now called Downey McGrath Group, Inc., or "DMG"), reported that during the last half of 1999, it received $100,000 from Microsoft for lobbying.' Attached hereto as Attachment 29 is a copy of Form LD-2 dated August 11, 2000, in which DMG reported that during the first half of 2000, it received $80,000 from Microsoft for lobbying. Attached hereto as Attachment 30 is a copy of Form LD-2 dated February 14, 2001, in which DMG reported that during the last half of 2000, it received $40,000 from Microsoft for lobbying. Attached hereto as Attachment 31 is a copy of Form LD-2 dated August 14, 2001, in which DMG reported that during the first half of 2001, it received $60,000 from Microsoft for lobbying. Attached hereto as Attachment 32 is a copy of Form LD-2 dated August 14, 2000, in which Lackman & Associates, L.L.C., ("L&A") reported that up to June 30, 2000, it received $17,500 from Microsoft for lobbying. Attached hereto as Attachment 33 is a copy of Form LD-2 dated January 21, 2000, in which McSlarrow & Associates, L.L.C. ("MA") reported that during the last half of 1999, it received $40,000 from Microsoft for lobbying. Attached hereto as Attachment 34 is a copy of Form LD-2 dated August 10, 2000, in which MA (now known as McSlarrow Consulting, L.L.C., or "MC") reported that during the first half of 2000, it received $40,000 from Microsoft for lobbying. Attached hereto as Attachment 35 is a copy of Form LD-2 dated February 2, 2001, in which MC reported that during the last half of 2000, it received $60,000 from Microsoft for lobbying. Attached hereto as Attachment 36 is a copy of Form LD-2 dated August 12, 2001, in which MC reported that during the first half of 2001, it received $60,000 from Microsoft for lobbying. Attached hereto as Attachment 37 is a copy of Form LD-2 dated August 11, 2000, in which Microsoft reported that during the first half of 2000, it spent $3,340,000 for lobbying. Attached hereto as Attachment 38 is a copy of Form LD-2 dated February 17, 1998, in which Preston, Gates, Ellis, & Rouvelas Meeds, L.L.P. ("PGERM") reported that during the last half of 1997, it received $220,000 from Microsoft for lobbying. Attached hereto as Attachment 39 is a copy of Form LD-2 dated August 14, 1998, in which PGERM reported that during the first half of 1998, it received $360,000 from Microsoft for lobbying. Attached hereto as Attachment 40 is a copy of Form LD-2 dated February 14, 2000, in which PGERM reported that during the last half of 1999, it received $200,000 from Microsoft for lobbying. Attached hereto as Attachment 41 is a copy of Form LD-2 dated August 14, 2000 in which PGERM reported that during the first half of 2000, it received $220,000 from Microsoft for lobbying. Attached hereto as Attachment 42 is a copy of Form LD-2 dated February 14,2001, in which PGERM reported that during the last half of 2000, it received $260,000 from Microsoft for lobbying. Attached hereto as Attachment 43 is a copy of Form LD-2 dated August 14, 2001, in which PGERM reported that during the first half of 2001, it received $120,000 from Microsoft for lobbying. On January 14, 2001, I called the Bureau of Labor Statistics to inquire about changes in the Consumer Price Index. The BLS advised me that a Consumer Price Index of 100 on January 1, 1972 would equate to a CPI of 326 on January 1, 2001. According to the Wall Street Journal of January 21,2002, p. C8, the closing price of Microsoft common stock on January 18, 2002 was $66.10 per share. Attached hereto as Attachment 44 is a copy of a press release dated November 6, 2001, from Congressman John Conyers, Jr., which appears to contain the text of a letter dated November 6, 2001, from Rep. Conyers to The Honorable John Ashcroft, Attorney General of the United States. Attached hereto as Attachment 45 is a copy of the basic statement of facts in the Statement Of Information, Hearings Before The Committee On The Judiciary House Of Representatives, Ninety-Third Congress, Second Session, Pursuant To H. Res. 803, Book V, Part I, Department Of Justice ITT Litigation - Richard Kleindienst Nomination Hearings. Attached hereto as Attachment 46 are copies of pages 614-615, 634-636 from the Supporting Evidence in Statement Of Information, Hearings Before The Committee On The Judiciary House Of Representatives, Ninety-Third Congress, Second Session, Pursuant To H. Res. 803, Book V, Part II, Department Of Justice ITT Litigation - Richard Kleindienst Nomination Hearings. A two (2) page memorandum dated June 25, 1971, from D. D. Beard to W. R. Merriam is on pages 614-615. Columns by Jack Anderson dated February 29, 1972, March 1, 1972, and March 3, 1972, appear on pages 634-636, respectively. I declare under' penalty of perjury that the foregoing is true and correct, executed in Washington, D.C., on January 23, 2002. ____________/s/_____________ Brian Dautch
Microsoft Antitrust Case: An Update on the Company's Lobbying and Campaign Contributions After more than three years of investigations, litigation and intensive lobbying, the Justice Department today announced it would no longer seek a break-up of the computer giant Microsoft, ending one aspect of a landmark case that sent the company's campaign contributions soaring and formally introduced the computer industry to Washington politics. The decision by the Bush administration to vacate the lawsuit that was first initiated in 1998 by the Clinton Justice Department is considered a major victory for Microsoft, which nearly tripled its campaign contributions and more than doubled its lobbying expenditures during its fight against the antitrust case. During the 1999-2000 election cycle, Microsoft contributed more than $4.7 million in soft money, PAC and individual contributions to federal candidates and parties--almost three times what the company contributed during the previous three election cycles combined. More than half that money went to Republicans. The Bush campaign reported $61,250 in contributions from Microsoft employees during 1999-2000. Attorney General John Ashcroft, a former U.S. Senator from Missouri, reported just $9,250 in contributions from Microsoft during the last elections, though the company did contribute $10,000 to the Ashcroft Victory Committee, a soft money account run jointly by the Ashcroft campaign and the National Republican Senatorial Committee. But that's not all the money that Microsoft has thrown around Washington in recent years. During the calendar year 2000 alone, Microsoft spent almost $6.4 million to lobby Congress and the Clinton administration, according to reports filed with the U.S. Senate. That's a significant increase over the $4.9 million in lobbying expenditures the company reported in 1999. And Microsoft also was a major contributor to the Bush- Cheney Inaugural Fund, donating $100,000 to the gala last January. Just months into the 2001-02 election cycle, Microsoft already ranks as a significant contributor, giving just over $700,000 to federal parties and candidates, split almost evenly between the two major parties. (This includes contributions reported to the FEC through the end of July.) However, the lawsuit's most significant impact on campaign finance extends beyond Microsoft itself. The antitrust lawsuit proved to be a major turning point in the tech industry's involvement in Washington politics. Shortly after the Justice Department launched its lawsuit, Microsoft became one of the first computer companies to open lobbying offices in Washington and was one of the first to contribute major soft money dollars to the political parties. By the year 2000, computers and Internet companies ranked No. 7 on the list of the biggest industry givers on the federal level, contributing more than $39.7 million. Since 1997, Microsoft has been the industry's biggest contributor. Microsoft Soft Money, PAC & Individual Contributions to Federal Parties and Candidates, 1993-2001*
$903,118
$4,701,631
$2,153,064
$2,488,943
*Based on FEC data downloaded 9/1/01. The totals for the 2002 election cycle 'including fund-raising numbers reported to the FEC through July 31,2001. THE CENTER FOR RESPONSIVE POLITICS Money in Politics Alert Microsoft Antitrust Case Microsoft Lobbying Expenditures, 1997-00*
*Based on filings with the US Senate. THE CENTER FOR RESPONSIVE POLITICS Microsoft PAC & Individual Contributions to the Senate, 2001* Name
Pete V. Doreen c (R-NM)
Richard J. Durbin (D-Ill)
Michael B. Enzi (R-Wyo)
Chuck Hagel (R-Neb)
Tim Hutchinson (R-Ark)
Blanche Lambert Lincoln (D-Ark)
Jack Reed (D-Rl)
John D. Rockefeller IV (D-WVa)
*Based on FEC data downloaded 9/1/01. THE CENTER FOR RESPONSIVE POLITICS Microsoft PAC & Individual Contributions to the Senate, 1995-00* Name
PAC & IndivTotal
Joseph I. Lieberman (D-Corm)
Mike OeWine (R-Ohio)
Max Baucus (O-Mont)
George Alien (R-Va)
Christopher J. Dodd (D-Conn)
James M. Jeffords (R-Vt)
Robert F . Bennett (R-Utah)
Robert C, Byrd (D-WVa)
Thomas R. Carper (D-Del)
John B. Breaux (D-La)
Bob Graham (D-Fla)
Larry E, Craig (R-Idaho)
Craig Thomas (R-Wyo)
Ben Nighthorse Campbell (R-Colo)
*Based on FEC data downloaded 9/1/01. THE CENTER FOR RESPONSIVE POLITICS Microsoft PAC & Individual Contributions to the House, 2001* Name
Michael Bilirakis (R-FIB)
Mary Bono (R-Calif)
Kevin Brady )R-Texas)
Randy "Duke" Cunningham (R-Calif)
Jim Davis (D-FIB)
Peter Deutsch (D-FIB)
Cal Dooley (D-Calif)
Robert L. Ehrlich Jr (R-Md)
Anna G. Eshoo (D-Calif)
Mark Foley (R-FIB)
Harold E. Ford Jr (D-Tenn)
George W. Gekas (R-Pa)
Jim Gibbons (R-Nev)
Mark Green (R-Wis)
David L. Hobson (R-Ohio)
Arno Houghton (R-NY)
John H. Isakson (R-Ga)
Nancy L. Johnson (R-Conn)
Ric Keller (R-Fla)
Mark Kennedy (R-Minn)
William P. "Bill" Luther (D-Minn)
Robert T. Matsui (D-Calif)
Scott McInnis (R-Colo)
George Nethercutt (R-Wash)
Jim Nussle (R-Iowa)
Douglas A. Ose (R-Calif)
C. L. 'Butch' Otter (R-Idaho)
Charles W. "Chip" Pickering Jr (R-Miss)
Earl Pomeroy (D-NO)
Jim Ramstad (R-Minn)
J. C. Watts Jr (R-Okla)
*Based on FEC data downloaded 9/1/01. THE CENTER FOR RESPONSIVE POLITICS Microsoft PAC & Individual Contributions to the House, 1999-00* Name
Richard "Doc" Hastings (R-Wash)
John T. Doolittle (R-Calif)
Ed Bryant (R-Term)
Thomas M. Davis Ill (R-Va)
Henry J. Hyde (R-Ill)
Tim Roamer (D-Ind)
Charies W, "Chip" Pickering Jr (R-Miss)
Christopher R. Cannon (R-Utah)
Ed Schrock (R-VB)
Nancy L. Johnson (R-Corm)
Martin T. Meehan (D-Mass)
Bud Cramer (D-Ala)
Philip M. Crane (R-Ill)
E. Clay Shaw Jr (R-Fla)
Jim Davis (D-Fla)
Porter J. Goss (R-Fla)
Constance A, Morella (R-Md)
Robert Adernolt (R-Ala)
Thomas Gerard Tancredo (R-Colo)
Felix J. Grucci Jr (R-NY)
Darlene Hooley (D-Ore)
Mark Foley (R-Fla)
Gary G. Miller (R-Calif)
Dan Miller (R-Fla)
Richard W. P0mbo (R-Calif)
Michael Bilirakis (R-Fla)
David E. Bonior (D-Mich)
H. James Saxton (R-NJ)
Bob Clement (D-Tenn)
Steve Largent (R-Okla)
Christopher Cox (R-Calif)
Vernon J. Ehlers (R-Mich)
Jim Ryun (R-Kan)
William 'Lacy' Clay (D-Mo)
Iledna Ros-Lehtinen (R-Fla)
Brad Carson (D-Okla)
Thomas M. Barrett (D-Wis)
Jack Quinn (R-NY)
James A. Barcia (D-Mich)
Marion Berry (D-Ark)
Bill Jenkins (R-Term)
Vic Snyder (D-Ark)
Baron P. Hill (D-Ind)
John M. Spratt Jr (D-SC)
Gary A. Condit (D-Calif)
Lincoin Diaz-Balart (R-Fla)
Lane Evans (D-Ill)
Peter Deutsch (D-Fla)
David R. Obey (D-Wis)
Brian D. Kerns (R-Ind)
Nathan Deal (R-GB)
John L. Mica (R-FIB)
Robert Wexler (D-FIB)
David Wu (D-Ore)
* Based on FEC data downloaded 9/1/01. THE CENTER FOR RESPONSIVE POLITICS Results: Presidential Donors Search 75 records found in .09 seconds. SEARCH CRITERIA:
Donor name: (all contributors) Donor zip code: (any zip) Donor employer/occupation: Microsoft Election cycle(s): 2000
Sort by NameSort by DateSort by Amount Records I - 49: Contributor
EISLER, CRAIGREDMOND, WA 98053
MATHEWS, MICHELLE JBELLEVUE, WA 98004
PETERS, G CHRISTOPHERMEDINA, WA 98039
FERNANDEZ, ROLAND L MRWOODINVILLE, WA 98072
MICROSOFT CORPORATION/ENGINEER
BRESEMANN, JOHN K MRREDMOND, WA 98053
MICROSOFT/SOFTWARE ENGINEER
NIELSEN, TOD MRREDMOND, WA 98053
MICROSOFT/VICE PRESIDENT
SIMONYI, CHARLES DRBELLEVUE, WA 98009
SHAW, GREGORY MBELLEVUE, WA 98004
SAMPLE, WILLIAM JREDMOND, WA 98053
MCCAULEY, DAVIDSEATTLE, WA 98112
KOSS, MICHAEL CBOTHELL, WA 98052
EMANUELS, BRIAN DMERCER ISLAND, WA 98040
BRUNTON, DEBORAHKIRKLAND, WA 98033
HURLBUT, CLARK KRENO, NV 89511
FLAAT, CHRISTOPHER ABELLEVUE, WA 98007
SPENCER, WILLIAM A MRREDMOND, WA 98052
MICROSOFT/MARKETING MANAGER
WILLMAN, BRYANKIRKLAND, WA 98034
MICROSOFT/PROGRAMMER
WOODRUFF, BRYAN A MRREDMOND, WA 98053
MICROSOFT/SOFTWARE DESIGN ENGINEER
WORLEY, TERENCE MRPLEASANTON, CA 94566
BARON, WERNER MRREDMOND, WA 98052
MICROSOFT CORPORATION/MARKETING
MASTERS, JERRY RWOODINVILLE, WA 98072
JORGENSEN, ERIK MSEATTLE, WA 98101
HERBOLD, ROBERT JBELLEVUE, WA 98015
BERENSON, HAROLD MRWOODINVILLE, WA 98072
MICROSOFT CORP./ENGINEER
HERBOLD, ROBERT J MR BELLEVUE, WA 98015
MICROSOFT CORP./EXECUTIVE VP & CO0
SHAUGHNESSY, WILLIAM T MRREDMOND, WA 98052
MICROSOFT CORP./PRODUCT & BUSINESS
KESTER, CHARLES G MRLAKE FOREST PARK, WA 98155
MICROSOFT CORP./TEAM MANAGER
MCEACHRON, BRIAN LREDWOOD, WA 98052