Bugs in the boardroom

Wiretaps on mobsters are one thing. But the US Justice Department's antitrust division will be extending them into boardrooms under the Antitrust Investigative Improvements Act of 2005 introduced by Senators Mike DeWine (R-OH) and herb Kohl (D-WI).

"There is no logical basis to exclude criminal antitrust violations from the list of predicate offenses for a wiretap. A criminal antitrust offense such as price fixing is every bit as serious — and causes every bit as much financial loss to its victims — as other white collar crimes such as mail fraud or wire fraud. A price fixing conspiracy raises prices to consumers, stealing hard earned dollars from citizens as surely as does as a salesman promoting a bogus investment from a "boiler room" or, indeed, a thief with a gun. Moreover, by its secret nature as an agreement among competitors, such a conspiracy is likely harder to detect than a fraudulent offering over the phone or through the mail. A properly issued wiretap, therefore, is even more necessary to detect criminal antitrust conspiracies than other white collar offenses," said Kohl.

But this legislation is unsettling. It raises the kind of serious concerns detailed in Law.Com.

For a start, installing wire taps increases the likelihood of confidential strategic information, somehow connected but not a critical part of the antitrust investigation, being picked up by the Government. Are there sufficient guarantees that it would not be disclosed? What are the implications for client-attorney privilege? And what safeguards are there that other parties will not be swept up in the investigations.

The Rutherford Institute blog, Operation Eroding Freedom, has picked up on these points and sees the legislation in the context of the continuing attacks on civil liberties.


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