Whistleblower: Barr directed faulty antitrust reviews of marijuana mergers
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A career Justice Department official named John Elias today will testify that Attorney General William Barr directed improper antitrust reviews of marijuana industry mergers, because of his personal animus toward cannabis.
Why it matters: This isn't the first time that President Trump's DOJ has been accused of letting bias drive antitrust decisions. But it's the first time that a DOJ attorney is the one making the allegations, and it could have consequences for antitrust investigations into other industries.
Resumé: John Elias joined DOJ in 2006 under President Bush, and served as the Antitrust Division's chief of staff between January 2017 and October 2018. He currently is an Antitrust Division prosecutor.
- He is one of three federal prosecutors testifying today in front of the House Judiciary Committee as whistleblowers, alleging abuses of power (among other things).
What Elias claims, per his opening statement:
"At the direction of Attorney General Barr, the Antitrust Division launched ten full-scale reviews of merger activity taking place in the marijuana, or cannabis, industry. These mergers involve companies with low market shares in a fragmented industry; they do not meet established criteria for antitrust investigations. ... The rationale for doing so centered not on an antitrust analysis, but because [Barr] did not like the nature of their underlying business."
Details: Elias says that marijuana-related investigations accounted for 29% of full-review merger investigations in fiscal 2019.
- Among the mergers reviewed was one between MedMen and PharmaCann.
- In one instance, the merging companies would have a combined market share of 0.35%.
- In another, the merging companies operated in different geographies and didn't compete at all.
- Elias also will allege political interference related to an automaker agreement on carbon emissions.
The bottom line: House hearings often devolve into partisan speechifying, rather than sincere searches for the truth. But what gets said today will be filed away by companies and their attorneys, particularly in Big Tech, if and when their future mergers get challenged by Trump's DOJ.
