Sen. Fritz Hollings (D-S.C.) is threatening to cut political jobs and salaries at the Federal Trade Commission unless the agency retreats from a media merger agreement with the Department of Justice.
Hollings contends the FTC and the DOJ did not have the legal authority to decide merger review policies without the consent of Congress.
"Actually, I am studying to see whether or not legally we can cut the pay. Sometimes when we cut pay, we get their final attention," Hollings said last Tuesday at a hearing on the FTC's proposed fiscal 2003 budget of $176.5 million — based on 1,074 full-time employees.
Hollings chairs the Senate Appropriations Subcommittee on Commerce, Justice, State and Judiciary, a panel that has a large say in FTC funding and staff levels.
He warned that the merger agreement also put the FTC's budget and political jobs at risk.
The commission's chairman Timothy Muris testified that the agreement allowing the Justice Department's antitrust division to review all media mergers would eliminate time-consuming disputes over which agency would review a specific media deal.
"I have watched the deterioration of the clearance process to where when I arrived we had a matter that had been going on for over a year," said Muris, who became chairman last year. "I think it's better if we don't fight."
Hollings didn't accept that explanation, claiming he was unaware that any problem existed between the FTC and DOJ regarding the allocation of mergers.
Muris formed the agreement with Charles James, chief of the DOJ's antitrust division, on March 5 to expedite review of all mergers.
Under current law, only one agency can review a merger and if the agencies disagree, a merger cannot be processed, Muris said.
Muris denied that the agencies acted contrary to law. He said the agreement codified the reality that the Justice Deparment had been handling more media mergers than the FTC in recent years.
The FTC handled the American Online Inc. merger with Time Warner Inc., but the DOJ took other big cable and phone company mergers, he said.
The Justice Department got the $72-billion cable merger of Comcast Corp. and AT&T Broadband and the $25.8-billion direct-broadcast satellite merger of EchoStar Communications Corp. and DirecTV Inc. parent Hughes Electronics Corp.
No major media merger is pending at the FTC.
The FTC decision to cede media mergers to the DOJ created turmoil within the FTC and angered consumer groups, which argue that the Justice Department is an appendage of the White House while the FTC is a bipartisan organization run by five commissioners from both major political parties.