Cronyism? Watchdog group alleges FTC gave special treatment to former employers

A government ethics watchdog group is raising questions about preferential treatment inside the Federal Trade Commission after obtaining internal communications exposing contacts it claims  "reveal an unusually close relationship" between top officials and their former employers.

FTC Chairwoman Lina Khan worked as a policy analyst at the progressive New America think tank's Open Markets program before going on to help launch the influential Open Markets Institute (OMI), where she served as legal director from 2017-2018. Khan's former FTC chief of staff, Jen Howard, previously served as communications director at left-wing media reform advocacy group Free Press.

Government ethics watchdog Protect the Public's Trust (PPT) says that internal FTC emails it has obtained through the Freedom of Information Act (FOIA) leave "the appearance of preferential access" to the officials.

For instance, OMI emailed Khan’s office to give her a "heads up" that the group was forming a federation of organizations to join in a letter pushing the FTC to block a proposed merger of grocery store chains. The email highlighted how OMI would submit it "directly to the Chief of Staff." 

Howard, Khan's chief of staff, then promptly sent an email to nine FTC officials asking, "Did we receive this letter yet?"

An assistant director at the FTC replied that "thousands of letters" had been submitted on the proposed merger. The letter in question was located the next day, with a notation highlighting OMI as a signatory. 

Likewise, Howard's former employer Free Press had its co-CEO forward a letter to the FTC chair's office asking her to regulate the use of personal data by tech companies. That letter was forwarded by a lawyer in the office to both Khan and Howard. Free Press then requested a meeting with Khan to discuss it. When the attorney asked Howard how to respond to this special meeting request, Howard told the lawyer to thank them and say that "you will circle back soon."

PPT Director Michael Chamberlain said the exchanges smacked of giving insiders preferential treatment and raised questions about the objectivity of the FTC leadership.

"At a time when the FTC has aggressively turned its focus on industries struggling to deal with supply chain and inflation issues — issues arguably related to the government's policy agenda — one would expect an increased diligence to curate a reputation of objectivity and propriety," Chamberlain said. "These records tell a different story."

Chamberlain said the unearthed communications "raise deep concerns over the independence of the FTC's most powerful decision makers” and directly challenge the Biden White House claim to be "the most ethical [administration] in history" because they show "if you have a connection to the top, the Commission will bend over backwards to ensure your voice is heard over the thousands of others attempting to weigh in."

"Reaching out directly to senior leadership raises concerns under federal ethics regulations prohibiting officials from providing preferential treatment to any organization or creating an appearance of impropriety," PPT said in a separate statement. 

The FTC has not responded to a request for comment. 

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