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Whistleblower: Probe of California, automakers over emissions deal was a sham

Antitrust investigation after Trump complaint began on legally dubious grounds, DOJ attorney says

President Donald Trump at the American Center for Mobility in Ypsilanti, Mich., with General Motors CEO Mary Barra in 2017.
President Donald Trump at the American Center for Mobility in Ypsilanti, Mich., with General Motors CEO Mary Barra in 2017. (Nicholas Kamm/AFP via Getty Images)

The Justice Department rushed to launch an antitrust investigation of automakers and California last year after President Donald Trump complained about their emissions agreement with the state, according to a whistleblower who told House members the probe “did not appear to be in good faith” and began on legally dubious grounds. 

John W. Elias, a career attorney at the department, told the House Judiciary Committee Wednesday that political appointees at DOJ directed staff to begin an antitrust investigation against the four car companies and California.

Elias tied that direction to a series of messages the president posted on Twitter Aug. 21, 2019, in which he criticized an agreement California reached in July with four auto firms — Ford, Honda, BMW and Volkswagen — to meet lower vehicle emission standards than the Trump administration sought.

In a series of statements that day, Trump said Henry Ford would be “very disappointed” in his namesake company today and that modern cars are unsafe and expensive because of California regulations.

“The day after the tweets, Antitrust Division political leadership instructed staff to initiate an investigation that day,” Elias said. “Accordingly, the investigation opening memorandum is dated August 22, and the August 22 opening date is reflected in internal tracking records.”

Under questioning from Rep. Hank Johnson, D-Ga., Elias said the inquiry “did not appear to be in good faith.”

Brianna Herlihy, spokesperson for DOJ, said the department disputes Elias’ testimony. “The Department strongly disagrees with Mr. Elias’s claim that the Antitrust Division acted inappropriately in any investigation,” she said in a statement.

“After the State of California announced that four automakers had jointly entered into an agreement with the State, the Antitrust Division opened an investigation to review whether that arrangement constituted a horizontal agreement among competitors,” Herlihy said. “Such an agreement would have given rise to a potential antitrust violation, even with the involvement of the State.”

Since taking office, Trump has established a pattern of criticizing the country’s most populous state over environmental policy, jousting with officials there over vehicle standards, wildfire prevention, human waste, air pollution, homelessness, needles, water usage, highway funds and high-speed trains.

When the EPA moved last year to revoke a legal waiver that allows California to set its own vehicle emissions regulations, an unprecedented act in agency history, Gov. Gavin Newsom, D-Calif., called the step a “threat of pure retaliation.”

Elias appeared before the panel with another department attorney and whistleblower, Aaron Zelinsky, an assistant U.S. attorney in Maryland who worked on the Mueller investigation into Russian interference in the 2016 presidential election.

He also testified that DOJ began an antitrust investigation of mergers in the marijuana industry on politically motivated grounds.

The head of the antitrust unit, Assistant Attorney General Makan Delrahim, said at a staff meeting in September that work stemmed from a dislike of cannabis from “the fifth floor,” in reference to Attorney General Willam Barr’s office.

The agreement California reached with the four automakers in July would set a fuel-efficiency standard of 51 miles per gallon, on average, for passenger vehicles by 2026, a slightly less stringent goal than the Obama administration set.

By comparison, the Trump administration is seeking to freeze fuel economy rules at about 40 miles per gallon.

‘Politically motivated’

Sens. Dianne Feinstein, D-Calif., Thomas R. Carper, D-Del., and Maria Cantwell, D-Wash., wrote Barr demanding an explanation over the antitrust probe, a decision they said “appears to be nothing more than a politically motivated act of intimidation to discourage additional automakers from joining the agreement.”

The DOJ’s antitrust division closed its probe in February.

Elias said attorneys at the department typically consider how the subjects of an antitrust investigation might respond.

“Normally for significant complicated matters, people put time and attention into assessing potential defenses,” said Elias, who filed a whistleblower complaint.

Elias told Johnson legal precedent appeared on the side of the targets of the probe, adding that he did not believe California state officials were ever contacted during the investigation.

“The career staff who examined it saw some very obvious defenses,” he said. “You really have to twist some things to get around those. So it did not appear to be in good faith.”

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