Pulling the Plug on Competition

Dennis Kucinich, former mayor of Cleveland, must feel vindicated. During his controversial tenure, which ended in 1979, he frequently charged that the powerful private electric utility, Cleveland Electrical Illuminating Co. (CEI), was trying to drive Muny Light, a city-owned retail competitor, out of business. The city’s attorneys filed a massive antitrust suit against CEI a few years ago, demanding an injunction and hundreds of millions of dollars in damages.

CEI, represented by the corporate law firm of Squire, Sanders and Dempsey, kept delaying the trial. Federal Judge Robert Krupansky helped CEI with a series of rulings that reflected a deep hostility to Muny Light which continues to affect his demeanor on the bench.

The Muny Light case against CEI became the center of the struggle between Kucinich and Cleveland’s corporate elite, which was interlocked through boards of directors of banks, industrial firms and CEI. The corporate forces ousted Kucinich in a hotly-contested election last year and resumed their hegemony over the city’s political government.

Now, with the trial under way, the truth spilled out. On the first day, CEI attorney John Lansdale in effect admitted that his client engaged in predatory, anti­competitive action for years in order to cripple Muny Light. He did not use incriminating adjectives or adverbs, but he did declare that CEI refused to wheel power to Muny Light, refused to interconnect, and systematically designed a strategy against the city utility, whose principal sin was achieving a greater efficiency to serve its customers.

CEI internal documents showed ‘the company retained a lawyer, whose fees were laundered through another law firm, to bring lawsuits against Muny Light for harassment. One of these suits demanded an injunction against the construction and installation of a temporary emergency Muny Light interconnect with CEI, even though CEI officially had agreed to such an interconnect.

CEI’s lawyer made these admissions. and disclosures to head off about 1,000 city exhibits that Muny Light’s lawyers want to introduce into public evidence. By conceding limited culpability, attorney Lansdale hopes to save CEI executives from testifying before a jury. The tracks in this conspiracy could open a Pandora’s box of executive complicity by other Cleveland corporations. CEI hopes that its friendly judge, Krupansky, will help head off this calamity.

Back as far as 1959, CEI was plotting Muny Light’s collapse. A company memo says, “Our course of action should…recognize the fact that in taking action to hasten the municipal plant’s decline, we run the risk of alerting the plant’s management and friends to the system’s weakening economic position. But, the ad­vantage to be gained from our action far outweighs such a penalty.”

During Cleveland’s credit crises of 1978, Kucinich charged that the leading banker offered to roll over the city’s notes if Muny Light was sold to CEI. The banker denied the charge; but, he, too, must want to see this trial ended without the intricate story being laid before the jury.

Roldo, Bartimole, the longtime conscience of the Cleveland press, wrote in his fortnightly newsletter, Point of View, that “this historic trial” has been receiving little media coverage. The first trial day with its stunning disclosures did not even make the front pages of the two newspapers. Not one of the three television stations had a reporter covering the case.

That’s the way it is for corporate crime coverage in Cleveland. But, unless Judge Krupansky utterly abuses his judicial discretion, the trial record should be replete with material that would have made the early 20th century urban muckraker, Lincoln Steffens, run for his typewriter.