WASHINGTON - Last week's deal that ended a federal investigation of the National Automobile Dealers Association failed to shed light on questions that have hung above the 16-month probe from the start: Who committed the alleged transgressions? And what exactly did they do?
The Justice Department agreed to drop its pricing investigation of NADA and former leaders. In exchange, NADA agreed to operate under a federal antitrust microscope for a decade.
The government won't give specifics, other than to say that NADA representatives violated antitrust laws by dictating pricing and advertising practices to its 19,500 members during the last six years.
NADA officials are still scratching their heads, trying to figure out what they or former leaders did to draw the attention of the Justice Department.
And if any dealers were offended by the alleged NADA strong-arming, as the Justice Department says, they haven't gone public with their complaints.
Both sides claimed victory. The government said it had stopped NADA practices that limited price competition. The NADA es-caped a costly legal battle with a small price: educating its officials on what they can and cannot say while wearing an NADA hat.
'This does not in any way change the way we do business,' said NADA Executive Vice President Frank McCarthy said. 'It will have no effect on how we represent dealers.'
The Justice Department, without citing details, said NADA officials from 1989 to 1995:
Tried to persuade car dealers to boycott or reduce purchases from automakers that offered consumer rebates.
Tried to persuade members to stop advertising retail prices based on dealer wholesale cost.
Called for members to reduce inventories, thus pressuring manufacturers to reduce subsidies to fleet buyers.
Urged members to boycott auto brokers.
'NADA stepped well over the line by trying to keep various players in the auto industry from taking steps that would reduce car prices for consumers,' said Anne Bingaman, assistant attorney general in charge of the Antitrust Division. 'Trade associations must not be allowed to become a cover for cartel-like activity.'
The NADA board voted for the settlement last Tuesday, Sept. 19.President Leon Edwards sent a letter explaining the settlement to NADA members.
'NADA strongly disagrees that its actions violated the antitrust laws,' Edwards wrote. 'Throughout this investigation, NADA has argued that addressing these issues and the many other issues confronting dealers is a proper function of a trade association.'
During the past year, the Justice Department subpoenaed records, minutes of meetings, letters, speeches and other NADA documents.
It also deposed 16 dealers, including current and former NADA presidents, McCarthy and Jake Kelderman, NADA's executive director of industry affairs.
'After more than a year of investigation by dozens of Justice Department attorneys, economists and other staff - at a cost to taxpayers of millions of dollars - NADA was faced with the unfortunate choice of litigating with the federal government at potentially crippling cost to our association, or attempting to reach a settlement,' Edwards wrote.
McCarthy said NADA agreed to formalize an antitrust compliance program and provide an annual report to the Justice Department about training it will give directors and task force members on how to follow antitrust laws.
Individual dealers are unaffected by the agreement, McCarthy said. But dealers acting on behalf of NADA may not encourage boycotts or discuss specific pricing.
'We will make it clear when they'll be speaking for themselves and not NADA,' McCarthy said. 'At a meeting of their own franchise, they can act as individuals, but when speaking for NADA they have to follow the program.'
McCarthy said, 'We made it very clear we didn't do anything wrong, and that we must aggressively represent dealers' views to manufacturers. This preserves that right.'
The Justice Department last week filed charges against NADA in U.S. District Court in Washington. That is a formality. Charges must be filed before a federal judge can approve the deal.