75% of FTC Officials Worked for Corporations It’s Supposed to Be Regulating

A new report says most FTC officials over the past 20 years worked for corporations before or after their tenure, and more than half had direct financial conflicts of interest.

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May 23 2019, 8:40pm

A new report reveals that two-thirds of Federal Trade Commission officials, tasked with everything from bleach labeling to enforcing net neutrality, either worked for corporations before entering the agency or soon after the end of their term over the past two decades.

The US government frequently fails to hold giant corporations accountable for bad behavior, in no small part thanks to the “revolving door” between posh positions as corporate lobbyists or lawyers, and key government jobs that present conflicts of interest.

For example, former FTC chief Jon Leibowitz now helps telecom giants like AT&T and Comcast lobby against meaningful consumer protections. Former FTC boss Edith Ramirez now helps Google and Youtube battle allegations of child-centric privacy violations. The phenomenon persists outside the FTC; former Federal Communications Commission boss Michael Powell now heads the cable industry’s top lobbying organization.

A new report by Public Citizen examines the depth of the problem at the FTC. Over the last two decades, the study found that more than 75 percent of FTC officials (31 out of 41) had either served corporate interests before coming to the agency, or quickly moved on to doing so at the end of their term.

Moreover, the study found that more than 60 percent of these officials had direct financial conflicts of interests with their roles overseeing either their previous or subsequent employers. More than half (13) of the FTC chairs and commissioners the study examined had specific tech sector conflicts of interest, and numerous others had represented companies facing FTC investigations, including Amway, Herbalife, or Proctor and Gamble.

Once officials leave government and enter the private sector, regulators can often be found penning editorials or giving speeches supporting the positions of their corporate clients without disclosing their newfound financial conflicts of interest. They’re often useful as media props to support policies (like killing net neutrality) that are decidedly not in the public interest.

“FTC employees follow all government post-employment restrictions and comply with all ethics rules,” the FTC said when contacted by Motherboard for comment. “We are pleased that historically, FTC leaders bring their high level of expertise and experience in their fields to the agency when serving the public.”

The dysfunction is bipartisan. The study found that six of the ten Democratic FTC commissioners who served during the past two decades have corporate revolving door conflicts, compared to ten of the fourteen Republican commissioners.

The problem was particularly notable in the technology sector. The study found that all nine FTC directors of the Bureau of Competition since the late 1990s had revolving door conflicts of interest with tech companies, and six of the seven officials in the Bureau of Consumer Protection had conflicts of interest during that same period.

“The FTC is famously timid in cracking down on corporate wrongdoing, and it has given tech companies in particular the kid-glove treatment,” Public Citizen President Robert Weissman said in a statement. “It’s awfully hard for top FTC officials to be tough on tech company wrongdoing if they previously worked for tech companies or are likely to seek employment with tech companies once they leave the agency.”

The FTC’s timidity has been criticized for decades. The agency is often quick to approve problematic megamergers but slow to enforce deal conditions. It’s routinely under fire for failing to police everything from online advertising fraud to the endless array of privacy scandals that have plagued Silicon Valley and the tech sector for years.

Public Citizen Research Director Rick Claypool told Motherboard in an email that the FTC’s issues are emblematic of a much bigger problem. The same conflicts of interest routinely plague the FDA, the SEC, the FCC, and most government departments, he said.

But Claypool noted the FTC’s issues are particularly problematic given its starring role in protecting consumer privacy. The FTC has been so unreliable on privacy protections for consumers, he said, a new organization should be created to do the work the FTC refuses to.

“The FTC is a particularly problematic agency, and so if we want strong new data protections, it would be best if we joined other countries that have an independent data protection agency,” Claypool told me. “But if we want to get serious about ending the revolving door throughout government, Elizabeth Warren’s proposed Anti-Corruption and Public Integrity Act would go far toward ending this corruption.”

Warren’s proposed Act would impose a lifetime ban on lobbying by former presidents, vice presidents, members of Congress, federal judges, and Cabinet secretaries. Federal employees would also face a two-year ban on working for companies they’ve regulated, and a six-year ban on working specifically as a lobbyist for those companies.

It’s difficult to fix corruption in government when that very corruption undermines efforts at reform. Still, identifying and understanding the scope of the problem is the first step toward recovery, Claypool said.

“For Big Tech corporations that want to ignore consumer protections and anti-monopoly laws, the FTC’s revolving door conflicts are a feature, not a bug,” he said.

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