Senators grill DOJ official over Calif. deal probe

Source: By Timothy Cama, E&E News reporter • Posted: Wednesday, September 18, 2019

The Trump administration’s top official for antitrust matters at the Department of Justice denied allegations yesterday that the investigation into a fuel efficiency agreement four automakers struck with California regulators is politically motivated or improper.

“I’m not doing this for political reasons,” Makan Delrahim, assistant attorney general for antitrust, said at a hearing of the Senate Judiciary subcommittee on antitrust, in response to harsh questioning by Sen. Sheldon Whitehouse (D-R.I.).

“We have not concluded there’s a violation,” Delrahim, a Trump appointee, said of the probe. “All I have done so far is asked them to come and explain to us if there was communication between them, the context of which and why they need to do that collusively.”

He later said, “I have a duty to do, and I’m not going to shirk that for political heat.”

Delrahim’s office recently sent letters to Ford Motor Co., Honda Motor Co., BMW AG and Volkswagen AG scrutinizing a deal they made in July with California regulators.

In that agreement, the companies pledged to follow emissions standards more strict than what the Trump administration is proposing on the federal level. That could be anti-competitive, DOJ said, even if the companies’ goals were laudable.

Democrats have been harshly critical of the DOJ investigation and said it is likely meant as retribution for not supporting EPA and the Department of Transportation’s ongoing work to roll back efficiency standards — work that California opposes.

Many automakers want some relaxation of the standards, but not to the degree the Trump administration has proposed.

Whitehouse, whose state follows California’s emissions rules, did not hold back when he told Delrahim what he thought of his actions.

“You’re doing this for political reasons. … You’re doing this because the administration is fed up and cross that they got their scheme to bust up the CAFE [corporate average fuel economy] standards interrupted by California,” Whitehouse said.

He further argued that DOJ is turning a blind eye to anti-competitive lobbying by the fossil fuel industry.

“It’s just bizarre that of all the different political schemes that are going on right now to harm competition, the one that you pick out, the one that you pick out, is the one in which the White House has gotten itself enraged, because its scheme on behalf of the oil industry to bust up the CAFE standards got disrupted by the auto industry going to a different government and agreeing to a different rule,” Whitehouse said.

The Ocean State senator argued that federal precedent generally exempts companies’ negotiations with a government entity, such as California, from antitrust enforcement.

Sen. Amy Klobuchar of Minnesota, the panel’s top Democrat and a 2020 presidential candidate, joined Whitehouse in his criticisms, as did Sen. Richard Blumenthal (D-Conn.).

“The automakers’ reported conduct seems to be little more than an effort by regulated companies to petition a state regulator for more favorable rules, something that happens all the time between state and federal regulators,” Klobuchar said.

“Quite frankly, the antitrust investigation into these automakers appears to have less to do with protecting competition than with intimidating parties that don’t fall into line with the Trump administration’s plan to relax emissions standards,” she continued.

Delrahim sought to defend not just the administration but himself against what he perceived as the Democrats’ criticisms.

“I’m somebody who’s owned two Priuses and one of the first owners of a Tesla,” Delrahim told Whitehouse. “I’m not out there — and I live in California — believe me, I’m not out there to try to increase pollution into the air.”