The Deal of the Century: The Breakup of AT&T by Coll Steve

Author:Coll, Steve [Coll, Steve]
Language: eng
Format: epub
Tags: Business, History, Politics
ISBN: 9780671645922
Amazon: 0671645927
Goodreads: 199958
Publisher: Touchstone Books/Simon & Schuster
Published: 1986-01-01T08:00:00+00:00

Chapter 20

The Baldrige Proposal

When the Reagan administration’s commerce secretary, Malcolm Baldrige, interviewed Bernie Wunder early in 1981 for the job of assistant secretary of commerce in charge of telecommunications policy, one of the first questions Baldrige asked was, “What do you think about the AT&T case?”

“It ought to be settled,” Wunder told him.

“Yeah, I think so, too,” Baldrige agreed.

And so, it seemed that spring, as the trial of U.S. v. AT&T progressed, did every secretary in the Reagan cabinet. Caspar Weinberger had already taken public his view that the case should be dismissed. The new attorney general, William French Smith, was widely considered by congressional and White House insiders to support that idea, even though he was prohibited from ruling on the case because of his past affiliation with Pacific Telephone. Edwin Meese, long-time friend and counselor to President Reagan, privately told AT&T chairman Charlie Brown that he was sympathetic to the phone company’s plight and would do what he could to expedite White House intervention in the case. Even cabinet-level officials who had little to do with economic or legal policy, such as Secretary of Agriculture John Block, expressed support for settlement or outright dismissal.

The question, though, was how to accomplish that goal when the administration’s own Antitrust chief was boasting about litigating the case “to the eyeballs” and when the trial before Judge Greene was moving rapidly ahead.

From New York, Charlie Brown and his general counsel Howard Trienens were doing all they could to devise a workable strategy. When the brouhaha between Weinberger and Baxter hit the newspapers, Trienens called the White House and made an appointment to discuss the matter personally with Ed Meese. He flew to Washington and met with the President’s counselor in his office. Trienens told him, “You all really ought to get your act together—stop this public bickering and start working on a solution.” Meese agreed. But the sort of solution that Meese and Trienens wanted—dismissal of the case or favorable settlement terms forced on the Justice department by the White House—would require a direct decision by the President himself. Obviously, such a decision would have major political and policy repercussions. Meese could not simply walk into the Oval Office and ask Reagan to drop the case. A lot of groundwork would have to be laid inside the administration.

Trienens knew where to start. Malcolm Baldrige and Bernie Wunder at the Commerce department had already made it clear to AT&T that they would be willing to push a dismissal proposal to the White House. One problem was that, since February, Wunder’s confirmation as assistant secretary in charge of the National Telecommunications and Information Agency had been delayed for no apparent reason. Until Wunder was confirmed, it would be impossible for Commerce to put forward a major telecommunications policy proposal such as dismissal of U.S. v. AT&T. During his meeting with Meese, Trienens successfully pushed the counselor to move Wunder’s confirmation along quickly.

Charlie Brown, meanwhile, was spending a considerable amount of time on the telephone and in Washington talking with administration officials about why the case should be dropped.

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