Washington, D.C.-House Energy and Commerce Committee Republican Leader Cathy McMorris Rodgers (R-WA) and Republican Leader for Consumer Protection and Commerce Gus Bilirakis (R-FL) sent a letter to FTC Chair Lina Khan on her recent internal decisions that politicize the agency while harming businesses.
Excerpts and highlights from the letter To Chairwoman Khan:
“We write to you regarding our significant concerns about the trajectory of the Federal Trade Commission (FTC). Historically, the Commission has operated in a bipartisan manner to carry out its responsibility to protect consumers without unduly burdening legitimate business activity. Under your leadership, it appears that is no longer the case.
“There have been many partisan FTC decisions this year that followed questionable procedure. This ill-conceived practice not only leaves the FTC vulnerable to legal challenges, but it also undermines the FTC’s mission to protect consumers. As the head of the FTC, an independent agency, you are responsible for ensuring that the Commission’s decision-making process is legally sufficient. Using unprecedented and questionable procedures to advance the White House’s partisan progressive agenda will diminish the FTC and your legacy as Chairwoman."
[…]
“In addition, we are concerned by reports that former-FTC Commissioner, and current Director of the Consumer Financial Protection Bureau (CFPB), Rohit Chopra, continued to influence and participate in FTC business after he was no longer a member of the Commission. According to an article in Politico, Director Chopra’s “zombie" vote has continued to be counted in FTC decisions after he was no longer on the Commission. The article indicates that as a “former Commissioner," CFPB Director Chopra cast as many as 20 votes by email on October 8, 2021, his last day at the FTC. The article also suggests that these votes have continued well past Director Chopra’s tenure at the Commission.
“The use of these “zombie" votes is just one example of the FTC’s questionable decision-making process and invites legal challenges. It is sloppy process, and it is unnecessary. Even FTC veterans have questioned the necessity of such extreme procedures. Former Chairman William Kovacic stated, “I don’t know what you gain if [FTC nominee Alvaro] Bedoya is coming in. Why push that document out the door? Why is the end of October better than the end of December or January?"
“The latest example of questionable judgment is your decision to delete “without unduly burdening legitimate business activity" from the FTC’s draft strategy plan for fiscal years 2022 to 2026. This language has been included in FTC mission statements for decades, through both Republican and Democrat administrations. Your amendment suggests the FTC is departing from its traditional focus on protecting consumers from fraud, as well as ensuring businesses have clear rules to follow, in favor of an unorthodox interpretation of its antitrust mission to reshape the American economy.
“Given our concerns with the deficiency of FTC’s recent decision-making process, we ask that you respond to the following questions no later than Dec. 22, 2021 and provide a copy of all rules relating to the FTC voting process immediately upon receipt of this letter.
1. Did President Biden, or any other members of his senior staff - such as National Economic Council (NEC) special assistant Tim Wu, who reportedly “asked the FTC to see if [you] can craft a rule around data collection" - request, influence, or pressure you in any way to hold a vote on any matter before the Commission? If yes, please be specific about what those items are and the nature of the involvement by the White House.
2. Did CFPB Director Rohit Chopra, or any member of his staff, request, influence, or pressure you in any way to allow him to vote on a matter before the Commission after Director Chopra had departed the Commission? If yes, please be specific about what those items are and who were the individuals involved.
3. Was Director Chopra briefed on the matters considered by the Commission on Oct. 25, 2021? If yes, when did that briefing occur, and who was present at that briefing?
4. Have you received any legal guidance from your staff, other Commissioners, the White House, or outside consultants regarding this “zombie" voting practice? If so, please provide copies of such guidance to the Committee.
5. Has the Commission provided briefings to Alvaro Bedoya, President Biden’s FTC nominee, on any matters before the Commission?
6. Are there any staff, on their own or at your request, still communicating with CFPB Director Chopra regarding any matters before the Commission? If so, please provide the Committee with all records of those communications.
7. Has Director Chopra contacted you, directly or indirectly, regarding any matters before the Commission? If so, please provide the Committee with all records of those communications.
8. Would coordination with CFPB Director Chopra on a matter before the FTC or the CFPB raise any procedural concerns, including but not limited to conflicts of interest or ex parte communications?
9. With Director Chopra’s alleged “zombie" votes, please address the details of the Politico report and the discretion you have over how to use former Commissioner Chopra’s votes.
* Will you continue to use “zombie" votes?
* Do you consult with all other Commissioners before using “zombie" voting?
10. Of the alleged 20 “zombie" votes cast by CFPB Director Chopra, the only publicly available vote occurred on Oct. 25, 2021, on a high profile 3 to 2 partisan split to approve a policy statement requiring FTC approval before companies may engage in a merger:
* Did you consult with CFPB Director Chopra before his vote was used to pass the policy statement? If so, who consulted with Director Chopra, and when did the consultation occur?
* Was CFPB Director Chopra informed of the FTC business before any other Commissioners?
11. Is the use of “zombie" voting consistent with your commitment to openness and transparency at the FTC?
12. Why are you deleting “without unduly burdening legitimate business activity" from the FTC’s strategic plan?
* Which FTC Commissioners did you consult with before proposing this amendment?
** Did those Commissioners agree with your decision to delete the language?
** If you did not consult other Commissioner before proposing such drastic change, why not?
13. Will you direct Commission staff to examine any potential unintended burdens to legitimate business activity that may result from proposed FTC actions?
*
** How does the amended FTC mission statement relate to section 31502 of the Build Back Better Act on first offense penalty authority, which is pending before the Senate?
*
** What is the policy case for how section 31502 will further protect consumers from unfair or deceptive acts or practices versus current law?
*
** What will be the Federal budgetary impact of this proposal if no person, partnership, or corporation is determined to have violated the FTC Act’s prohibition of unfair or deceptive acts or practices?
*
** What additional costs might a person, partnership, or corporation face if section 31502 becomes law?
*
** Will you initiate any action, including but not limited to an enforcement action, against a person, partnership, or corporation, pursuant to section 31502, if that action will negatively impact legitimate business activity?"
