Bill Barr hates the reefers! The Attorney General is a hep cat, but he can't get down with your filthy jazz cigarettes. No, not even if they're legal and purveyors are just trying to make an honest living and pay their taxes like everyone else. Which is why he launched the DOJ's Antitrust Division on a holy fatwa to harass legal cannabis purveyors with pointless investigations. He also directed the Division to go after car companies and the state of California for the crime of offending Donald Trump with ungodly fuel efficiency standards. Because the GOP loves local control and deregulation — right up until they don't.

Justice Department whistleblower John Elias, former chief of the Antitrust Division, will testify to the House Judiciary Committee just about right now about Bill Barr's corruption of the Justice Department to suit his anti-pot prejudices and Trump's love of gas guzzlers. Elias will appear alongside Roger Stone prosecutor Aaron Zelinsky, whose testimony is likely to get a lot more attention. We previewed it here. But while Barr's perversion of justice to help Donald Trump personally is shocking, his waste of government resources to hound small businesses is hair raising in a whole separate way. Truly, the cartoon villain squatting atop our nation's justice system doth contain multitudes!


The Pot Stuff

In the simplest terms, the Antitrust Division's job is to protect American consumers from companies that distort the market, either by colluding to fix prices or getting so big that they constitute an uncompetitive monopoly. John Elias will say in his testimony, excerpted below, that Barr used the Division to launch bullshit investigations of little cannabis companies trying to merge — not because they represented any danger of distorting the market, but simply to harass them with expensive compliance demands.

Since March 2019, the Antitrust Division has conducted ten investigations of mergers in the cannabis industry. While these were nominally antitrust investigations, and used antitrust investigative authorities, they were not bona fide antitrust investigations. Nonetheless, they accounted for 29 percent of the Antitrust Division's full-review merger investigations in Fiscal Year 2019.

Regardless of whether these companies are complying with the Controlled Substances Act, the investigations I will describe are not investigations of potential violations of federal drug law. An appropriations rider restricts the Justice Department from prosecuting medical marijuana usage in states that have legalized it.

In plain English, that second paragraph says that, because the DOJ is constrained by statute from prosecuting locally licensed medical marijuana distributors, it went after them on spurious antitrust grounds instead. And having the Justice Department up your ass is expensive and stressful, which is why the Division's policy is to "carefully assess both the need for and the scope of the request [for documents]; if a second request is necessary, staff should tailor it to the transaction and its possible anticompetitive consequences."

The DOJ isn't supposed to waste its firepower investigating little companies; it's own policies restrict the Division's purview to companies which represent "typically double-digit market shares" in their area. Except when it comes to marijuana companies, in which case, nobody was too small to merit Bill Barr's special attention.

For instance, when career staff reviewed a proposed merger between medical cannabis companies MedMen and PharmaCann, they agreed that "the transaction is unlikely to raise any significant competitive concerns." After which, they were summoned to a meeting with Barr on March 5, 2019 and ordered to launch a full-scale investigation.

Elias, whose subordinates attended the meeting, testifies that, "The rationale for doing so centered not on an antitrust analysis, but because he did not like the nature of their underlying business." Division staff opened the case "for the purported reason that it had 'not closely evaluated this industry before.' This rationale – standing alone, without reference to a competition problem not described in theMergerGuidelines as a basis for investigating a transaction."

How'd you like to be told that your company was going to have to pay tens of thousands of dollars to lawyers to comply with an antitrust investigation because the government is curious how your industry works? But the action had the intended effect: After kicking up 1.3 million documents, the MedMen/PharmaCann merger fell through.

Elias describes a pattern of harassing antitrust investigations undertaken over the objections of career employees, simply to satisfy Barr's anti-pot crusade. He dispatched them to look into companies whose market shares were routinely below the antitrust threshold (one accounted for a paltry 0.035 percent of market share post merger), some of whom didn't even compete geographically.

Sometimes the investigators didn't even get time to read the documents before the case was closed. But it didn't matter, because bleeding the cannabis companies with compliance costs was the whole point of the exercise anyway. Elias testified that the current Antitrust Division head, Assistant Attorney General Makan Delrahim, acknowledged as much to his staff.

The head of the Antitrust Division, Assistant Attorney General Delrahim, responded to internal concerns about these investigations at an all-staff meeting on September 17, 2019. There, he acknowledged that the investigations were motivated by the fact that the cannabis industry is unpopular "on the fifth floor," a reference to Attorney General Barr's offices in the DOJ headquarters building. Personal dislike of the industry is not a proper basis upon which to ground an antitrust investigation.

Will Elias's testimony reverberate in Colorado's US Senate race? It's too soon to tell. But Cory Gardner's going to get asked about Attorney General Buzzkill's jihad against legal weed on the stump, so ... good luck with that one, fella!

The Car Stuff

Because it is always 1962 in Donald Trump's broke brain, giant gas guzzlers are as American as apple pie and global warming doesn't exist. So when Trump found out that Honda, Ford, BMW, and Volkswagen had agreed to abide by California's enhanced fuel efficiency standards, he lost his shit.

By amazing coincidence, the very next day the Antitrust Division was sent noodling off to find some reason that California's fuel efficiency standards were UNLEGAL. And even though the enforcement staff were like HELLO, THERE IS NOTHING ILLEGAL HERE, "The investigation proceeded anyway, with AAG Delrahim personally writing the automakers to inform them that the Division had decided to examine the arrangement with California." Because whatever President Tantrum wants, President Tantrum gets.

After the car companies "indicated that each company had independently entered into an agreement with California; there was no group agreement" — i.e. there was no collusion, and thus no antitrust violation — Elias expected the case to be closed. But no! Instead, the staff was dispatched to investigate California's decision to purchase only low-emission vehicles for the state's fleet. Another bullshit use of government resources to harass the president's perceived enemies.

Instead, the political leadership instructed staff to examine an announcement by California that it would purchase state vehicles only from automakers that comply with the stricter fuel efficiency standards. When operating as a market participant, states have wide latitude to determine their own purchases. Moreover, California's annual purchase of fewer than 2,700 vehicles in a state of nearly 40 million people did not confer it with the market power that could lead to antitrust liability. Accordingly , in February of this year, the Division notified the automakers that its investigation was closed.

What a terrific use of taxpayer dollars!

Hey remember when the GOP spent years accusing the Obama administration of "picking winners and losers" because it loaned money to solar power company Solyndra? LOL forever!

The House investigations of this shit are going to be EPIC. Buckle up, kids, we're in for some turbulence.

[Elias Opening Statement]

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Liz Dye

Liz Dye lives in Baltimore with her wonderful husband and a houseful of teenagers. When she isn't being mad about a thing on the internet, she's hiding in plain sight in the carpool line. She's the one wearing yoga pants glaring at her phone.

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