When the Justice Department acknowledged it was investigating the insurance industry's campaign against the Retirement CD, you might have expected bankers to turn cartwheels.

After all, this is the insurance industry we're talking about. The guys who swagger about Capitol Hill like bullies looking for a fight. The folks who bring lawsuits and launch amendments every time bankers venture an inch into their territory.

At the least, you might have expected a bit of chortling, some heartfelt expressions of hope that the feds were ready to take the insurance lobby down a few pegs.

But you would have been wrong. The industry's response was tepid to the point of indifference. Whatever Justice does is fine by us, said Edward L. Yingling, chief lobbyist for the American Bankers Association. And that was one of the strongest opinions from the industry's trade groups.

So what's going on?

It's possible the industry is worried about the fabled two-edged sword. Today, Justice slashes away at the insurance industry; tomorrow, banking.

And in fact, there's some justification for such a concern.

David Roderer, a partner at Winston & Strawn, said the Justice Department action potentially strikes at the legal justification for industrywide lobbying efforts.

There is an exemption in existing antitrust law that allows competing companies to band together for lobbying purposes, he said. That makes it possible for trade groups to represent business sectors such as banking and insurance.

The Justice Department inquiry threatens that exemption, he said and, with it, "the entire existence" of trade groups. As a result, the inquiry "creates anxiety for everyone."

Robert Rusbuldt, a lobbyist for the Independent Insurance Agents of America said bankers should be wary of Justice's proferred help.

"If for some reason, Justice deems that you are not allowed to present your case or go as a united industry and exert pressure on regulators or legislators, that will have repercussions for everyone," he said. Mr. Rusbuldt isn't exactly a disinterested party, of course. But his trade group isn't the subject of the Justice Department inquiry, and he isn't alone in his view.

Another possibility is that the Justice Department investigation is nothing of the kind. In fact, many industry observers are wondering whether Justice is simply doing the kind of preliminary work that it would do on any complaint that came in its door.

If that's the case, the celebrated insurance industry investigation could melt away with the winter snows.

What inclines some people in this town to that view is the curious subject matter of the Justice Department inquiry. In a sense, the insurance industry stands accused of nothing more than lobbying - and of being good at it.

The insurance industry - in this case, the American Council of Life Insurance - argues that banks should not be permitted to offer the Retirement CD, a kind of insured annuity developed by American Deposit Corp., Pine, Colo.

Regulators in at least three states have agreed, and issued orders or brought suits to bar the sale of the CD by banks, though the product was yet not being offered within their jurisdictions.

Well, all right. But that's what trade groups in this town have always done. "There are First Amendment rights and the right to lobby one's government," said Ronald Glancz, a partner at Venable, Beatje, Howard and Civiletti.

"You clearly can't use boycotts, and you can't use predatory pricing," said Thomas J. Vartanian, a partner at Fried, Frank, Harris, Shriver & Jacobsen. "But the law is extraordinarily clear that you have the right to lobby your government."

In point of fact, lots of people here are scratching their heads and wondering just what the Justice Department is up to these days. Justice isn't talking, and neither is its presumed target, the American Council of Life Insurance.

But unless the antitrust prosecutors have a lot more up their sleeves than anyone has thus far let on, it's not unreasonable to believe that this inquiry will never mature into a full-blown investigation.

And many lobbyists on both sides of the annuities battle think that could just be best for all concerned.

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