FTC Chairwoman Lina Khan by Tom Williams is licensed under Getty
The House Judiciary Committee has released a new report titled Abuse of Power, Waste of Resources, and Fear: What Internal Documents and Testimony from Career Employees Show About the FTC Under Chair Lina Khan, which you can read here.
The report, based on internal FTC communications and transcribed interviews with FTC staff, paint a picture of a government agency completely off the rails.
Americans for Tax Reform commends House Judiciary Chairman Jim Jordan (R-Ohio) and his excellent staff for this well-sourced report. This report builds on Judiciary’s impressive record of FTC oversight and should be taken into consideration when lawmakers consider any bill that would expand FTC authority.
Here are five key takeaways from the House Judiciary report:
1. Khan Moved Immediately to Consolidate Her Power
After Khan’s bait-and-switch confirmation, her first move was to consolidate power in the Chair’s office through the use of “omnibus resolutions.” This ensured Khan had ultimate control over FTC investigations, subpoena power, and merger reviews.
While Khan claimed that these resolutions were enacted to increase efficiency, the report notes that career staff disagreed. One manager said “I don’t understand what they’re for or how we are supposed to use them, to be honest, other than getting around the need for a Commission majority.” (pg. 10).
2. Khan Micromanaged Investigations and Kept Staff In The Dark On Her Agenda
Khan used her newfound, unprecedented power to micromanage investigations and impose her ivory tower economic theories on cases. Instead of going after truly anticompetitive conduct, Khan seemed to choose cases based on her progressive policy goals.
Often, Khan came in at late stages of investigations and demanded staff litigate a particular theory or issue a late subpoena. This needlessly complicated investigations and confused staff, who were concerned about walking into court unprepared to litigate Khan’s half-baked ideas. When staff sought direction from Khan or senior leadership, they got the impression that the higher-ups did not know the facts of the cases they were instructing staff to pursue.
At the same time, staff were kept in the dark on Khan’s vision for other core FTC functions like consumer protection. One staffer raised concerns that “protecting Americans from fraud did not fit in the Chair’s agenda.” (pg. 26).
One important note: FTC staff discontent is not ideologically motivated. It is not like there is some secret right-wing conspiracy in the agency working to undermine Khan’s priorities. Khan is alienating staffers who want to pursue more aggressive antitrust enforcement. Staff lamented that they were unable to achieve Khan’s vision because they were “not allowed to do anything until [staff] know[s] what [the Chair] want[s], and there [is] a catastrophic communication breakdown about what [the Chair] want[s].” (p. 27).
3. Khan Would Rather Win Headlines Than Court Cases
Despite issuing an agency-wide gag order barring staff from talking to the media or making public appearances, multiple FTC staff noted that Khan seemed more concerned with garnering positive press coverage than winning court cases.
Khan’s comfort with losing has been evident for years – she has publicly stated that she does not measure success as having a 100 percent win-rate in court. Khan’s ultimate goal is to use these losses to prod Congress into passing new antitrust laws that expand FTC power over the economy.
The report reveals how Khan’s headline-chasing cases eroded staff morale. As one manager wrote: “I also continue to get a sense that outside influences…have an undue impact on our priorities, investigation management, and enforcement decisions…we should never make an enforcement-related decision for the sake of PR.” (pg. 29).
Another manager questioned the wisdom of pursuing cases for PR wins: “I have heard a lot of discussion about the need to be more ‘aggressive’ as an agency…but ‘aggressiveness is often characterized as bringing cases too quickly on incomplete information…That’s not aggressive – that’s reckless.” (pg. 30).
4. Khan Created A Culture of Fear Where Staff Felt Disrespected, Afraid to Interact With Leadership
A common thread that runs through the report is FTC staff feeling disrespected and alienated by Khan and her leadership team. When staff attempted to raise concerns about their treatment to their immediate superiors, they were basically told to kick rocks. One manager said: “Staff are overworked and don’t feel like some in leadership trust them, listen to them, or value them.” (pg. 38).
The report also shows how FTC staff, including some on Khan’s leadership team, feared interacting with her. This chilled debate and collaboration at the agency. One manager wrote to Khan (emphasis ours):
I keep hearing that we can’t say things or recommend outcomes because it will upset you. It adds to an impression I’ve heard too often that you’re being kept in a bubble and don’t know what’s going on at the agency. That impression benefits no one. Neither does the increasing impression that the people who communicate with you most are afraid to tell you anything you don’t want to hear. If we can’t talk about things we disagree about we cannot have the debate that is essential to thorough investigation and prosecuting creative, groundbreaking cases. (pg. 45).
5. Khan “Villainized” Staff for Agency Failures, Exacerbating Morale Issues
In public, Khan pretended to take accountability for the staff morale issues plaguing the FTC. In private, Khan scapegoated her staff. One manager pointed out: “Scapegoating the career staff for ‘underenforcement’ of the antitrust laws is not just counterproductive, it’s factually incorrect…The FEVS survey results almost certainly reflect staff’s view that we’re continuing to be blamed for the agency’s past shortcomings.” (pg. 36).
The report hints that Khan is coordinating with left-wing outside groups to paint a narrative that staff is the problem. One manager’s message for Khan: “Stop contributing to an external narrative that denigrates staff.” (pg. 36).
The report also dismantles the notion that Khan has made any meaningful progress addressing the staff morale issue. Khan continues to claim that the 2022 FEVS that showed plummeting staff morale was conducted too early to accurately reflect her stewardship of the agency. The report notes that morale numbers are still way down compared to the Trump administration.
Several managers characterized Khan as causing more damage than her attempts to improve morale could overcome. Khan’s own Director of the Bureau of Competition could not state any concrete steps made by Khan to improve morale, writing “I think there have been a few things that have been improved, though they aren’t coming to mind at the moment!” (pg. 41).
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The takeaways listed here only scratch the surface of the report, which you can read here.