March 2, 2021

DealBook: Justice Dept.’s Key Officials in Pursuing the AT&T Lawsuit

Christine A. VarneyCarolyn Kaster/Associated PressChristine A. Varney and James M. Cole, below, presided over the government’s decision to block the planned merger of ATT and T-Mobile.James M. ColeChip Somodevilla/Getty Images

The names of 25 government lawyers are listed on the last page of the Justice Department’s lawsuit seeking to block the proposed $39 billion merger between ATT and T-Mobile USA.

But two senior lawyers who played crucial roles in bringing the lawsuit are nowhere to be found on the complaint.

Christine A. Varney, the government’s former top antitrust lawyer, oversaw the investigation into the planned merger until July, when she said she was leaving the Justice Department to join the law firm of Cravath, Swaine Moore. When she departed, the investigation was in its final stages but the government had not yet decided to bring a lawsuit.

And James M. Cole, the No. 2 official in the Justice Department, made the ultimate decision to bring what is the Obama administration’s most significant antitrust enforcement action to date. He announced the lawsuit at a news conference Wednesday, one of his more prominent public appearances since he assumed the post in January.

“The leadership transition has been seamless, and the right decision was reached in this case,” Mr. Cole said before he introduced Sharis A. Pozen, the acting head of the antitrust unit. “We are seeking to block this deal in order to maintain a vibrant and competitive marketplace.”

When Ms. Varney announced her departure, some lawmakers and consumer advocates had expressed disappointment that the Obama administration had not been tougher in antitrust. Instead of bringing legal actions, the division approved a number of large mergers, including Comcast and NBC Universal, as long as the companies made certain concessions.

And the Federal Trade Commission, which also has antitrust oversight, stole some of the Justice Department’s thunder in starting an investigation into whether Google had engaged in anticompetitive practices.

The legal action against ATT appeared to ease the concerns of antitrust enforcement advocates.

Ms. Varney had been skeptical of the T-Mobile acquisition since it was announced in March, said two people familiar with her thinking who requested anonymity because they were not authorized to discuss the case.

“Christine Varney set the table for this decision,” said Bert Foer, the president of the American Antitrust Institute. “We are delighted that the administration is committed to the vigorous use of antitrust even at a time of economic difficulties.”

President Obama’s appointment of Ms. Varney in January 2009 was seen as a step toward fulfilling his vow to “reinvigorate antitrust enforcement.” He had also criticized what he said was the Bush administration’s weak record in challenging mergers and failing to bring monopolization cases.

Ms. Varney was a Clinton administration antitrust veteran, having served as a former commissioner at the F.T.C. She joined the Obama White House from the Washington law firm of Hogan Hartson, where she focused on antitrust work.

One of Ms. Varney’s first moves was to name as her deputy Ms. Pozen, a fellow antitrust lawyer at Hogan Hartson and former colleague at the F.T.C. When Ms. Varney left the Justice Department, Eric H. Holder Jr., the attorney general, named Ms. Pozen as her temporary replacement. Ms. Pozen and another government lawyer, Joseph F. Wayland, led the decision to sue ATT.

Ms. Pozen then took the case up the Justice Department’s chain of command. Mr. Holder had recused himself from the investigation for unspecified reasons, so the final decision fell to Mr. Cole.

Mr. Cole, who wears a mustache like his boss, joined the Justice Department last December from the law firm Bryan Cave, where he was a white-collar defense lawyer.

Jumping between government service and private practice throughout his career, Mr. Cole, 59, is a longtime friend of Mr. Holder. The two worked together in the Justice Department earlier in their careers.

His confirmation as deputy attorney general was a bumpy one. It was delayed in the Senate in part because lawmakers expressed concern over his role as the independent monitor for the American International Group in the years leading up to the $182 billion bailout of the insurance giant. Mr. Cole’s work did not involve many of the issues at the center of A.I.G.’s collapse, including credit-default swaps.

As for Ms. Varney, she has moved to New York, where she starts her job at Cravath on Tuesday. She will advise the law firm’s clients on antitrust issues related to mergers.

Under government ethics rules, Ms. Varney is banned for two years from appearing in any matter before the Justice Department. And she is permanently prohibited from working on anything related to the ATT and T-Mobile deal, though at the moment Cravath is not involved in the case.

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