University of Virginia Library

No Pressure Applied

During yesterday's hearing Mr.
Kleindienst stated that neither he nor Mr.
Mitchell had applied pressure to the
Justice Department to gain an
out-of-court settlement with ITT. Mr.
McLaren, now a federal judge in Chicago,
also stated that neither Mr. Mitchell nor
Mr. Kleindienst had tried to influence
him concerning the case.

However, according to information
revealed by Mr. Sussman after the hearing
yesterday, claims to the contrary - that
the anti-trust division operated free from
political pressure - may prove false. Mr.
Sussman charged that the settlement
decision was prompted by the
recommendation of Richard J. Ramsden
of Brokaw, Schaenan, Clancy & Co., a
New York Brokerage firm, who was
called in to study the case at the
suggestion of President Nixon's special
assistant Peter Flanigan.

Photo By Bob Humphrey

Kenneth Elzinga

Former Justice Department Official

Under the final settlement reached
between the government and ITT, the
company was allowed to retain control of
Hartford Fire Insurance Co. and part of a
second firm Grinnell Inc., which made
the merger the largest in history.
However, ITT agreed to divest its stock
control of a number of companies
including the Canteen Corp. and Avis
Rent-a-Car.

Mr. Elzinga said that the settlement
was favorable to ITT since the
government had failed to achieve its goal
of stopping the Hartford Fire and
Grinnell mergers. He added that he was
disappointed when the settlement was
announced, some three weeks after he
left the Justice Department, because the
case was to have been taken before the
Supreme Court and would have been a
test case on Section seven of the
anti-trust law.

Mr. Elzinga said he thought it highly
unusual that the Justice Department
should consult a financier rather than an
economist in the case. He explained that
a broker would normally base his
recommendation on the corporate
financial effects of a negative court
decision, and not the economic or legal
implications the merger.