Lina Khan’s tenure as Chair of the Federal Trade Commission (FTC) has been a string of disasters. Every time a new report comes out about Khan’s blatant disregard for agency procedures, it becomes even more difficult to believe that Khan’s FTC could be any worse. Yet, an FTC Inspector General Report from this week proved doubters wrong.
The report demonstrated the FTC’s negligent hiring of unpaid consultants and experts in an undefined, broad capacity. While the hiring of these third parties has occurred prior, Khan has employed significantly more of these consultants/experts than her predecessors. These actions may violate policies for federal agencies that stipulate that such hires are not allowed to play an “inherently governmental function” in the course of their work for the agency. However, the Inspector General report found that “many, if not all of the relationships with unpaid consultants and experts encompass a good deal of flexibility with respect to their potential use.” It proceeded to quote the agency’s justifications for the hiring of the consultants/experts with saying that they would “play an integral role in the Commission’s strategic direction” and be granted a “wide latitude of responsibility.”
The FTC’s policy for seeking out these consultants/experts also lacked “a consistent policy or clear set of procedures guiding the identification of needed expertise, the search and selection process….and the scope of work that they will participate in while at the agency.” Khan has established no safeguards to prevent underqualified consultants from guiding crucial policy decisions. The Inspector General confirmed this issue by asserting that “the agency cannot determine whether its decisions on recruiting and selecting unpaid consultants and experts are informed with the best available information.”
Conferring these duties to the unpaid consultants/experts appears to directly task them with agency policymaking. The Inspector General noted that doing so “introduces operational, legal, compliance security, and reputational risk” for the FTC. The report notes that FTC “decisions made by such employees could potentially be invalidated due to their positions.” The January 2007 Report of the Acquisition Advisory Panel details the sort of issues caused by hiring temporary employees to complete tasks normally reserved for federal employees. In particular, it discusses questions regarding whether these type of employees “should be required to comply with some or all of the ethics rules that apply to federal employees.”
Khan opened the door for wildly inappropriate conflicts of interest with these consultants/experts by allowing them to play a major role in shaping FTC policy. Bloomberg notes that, “of the 17 individuals discussed in the report, 14 had been assigned to the Office of Policy Planning, a division that helps develop antitrust and consumer protection policy through research, workshops and filing statements with fellow agencies.” Therefore, the primary impact of these egregious behaviors are impacting the development of the FTC’s antitrust policy, which has resulted in quite radical changes and unpredictable lawsuits as of late. These conflicts of interest might be partially responsible for the FTC’s odd decision making as of late, such as their pursuit of a likely impossible to win lawsuit against Meta. If Khan is listening to conflicted consultants that are not accountable to federal ethics requirements, that would explain why she feels free to ignore the advice of the federal full-time experts within her own agency that have warned her not to pursue the lawsuit. Regardless, Khan’s reliance on temporary experts/consultants over her full-time slap is yet another slap in the face to her employees who have expressed grave concerns about her treatment of them which has caused FTC workplace ratings to tank under her leadership.
Congress needs to address the multitude of controversies plaguing Lina Khan’s FTC. Her abusive treatment of employees and reckless outsourcing of policy-related tasks display the actions of an under-qualified agency chair who needs to be held accountable. Without Khan facing accountability for her abysmal leadership, the FTC risks losing its credibility, creating reputational damage that could take years to repair.
Photo Credit: Lina Khan 2, Competition and Regulation in Disrupted Times, Brussels, Belgium, CC BY-SA 2.0 https://www.flickr.com/photos/doctorow/51974878624/in/photolist-gvkQT4-7Hkggg-2kS3v1E-2kUd5qE-gvkR6D-2nbPLJg-2nbQQCY-2nbPLKi-K1Jz1h-K1JzjU-K1JyJA-gvms6X-gvms6g-2nctW8x-2ncsxA9-2nctWbd-2nctVZX-2ncrs6c-2ncr7mL-2nctWaw-2nctW6U-2ncr7hH-2ncr7gF-2ncr7j1-2nctW6d-2ncrsg2, via Flickr