When a new consumer regulator gets appointed in Washington, Remington Gregg, as a lawyer with the advocacy group Public Citizen, routinely submits a request under the Freedom of Information Act for the appointee’s financial disclosure statement. This can help spot any potential conflicts of interest.
Gregg told me he usually expects to find a handful of possible conflicts, especially under a business-friendly Republican administration. There might be four or five affiliations that raise questions about the appointee’s fairness or impartiality.
When he recently received the disclosure statement of Andrew Smith, the new director of the Federal Trade Commission’s Bureau of Consumer Protection, Gregg said he almost couldn’t believe what he was looking at.
It showed that Smith had provided legal or lobbying services for more than 50 companies and business groups, including some that have gained notoriety for scandalous behavior or that have actively worked to oppose consumer interests.
Wells Fargo? Yup.
Payday lenders? Say hi to the Online Lenders Alliance.
Smith has received paychecks from Bank of America, JPMorgan Chase, Capital One, Goldman Sachs, American Express, PayPal and Credit Karma.
He’s worked on behalf of Uber, Amazon, Microsoft, LinkedIn, Disney and CoreLogic.
He’s advanced the interests of Pharmaceutical Research and Manufacturers of America — the drug industry — and the Consumer Data Industry Assn., which represents the big credit bureaus.
He’s even represented Cash America International, which operates hundreds of pawn shops and check-cashing stores.
“It’s crazy,” Gregg said. “It’s a corporate lawyer’s dream client list.”
He recalled a sense of growing astonishment as his eye traveled down this who’s who of businesses that don’t always put consumers first.
“There was no one else who was a good candidate for the job?” Gregg wondered. “No one else without so many conflicts?”
I put those questions to the FTC.
Peter Kaplan, an agency spokesman, replied that “Mr. Smith is widely respected as one of our country’s best and most experienced consumer protection lawyers.”
In fact, Smith appears to have little if any experience in consumer protection. Prior to joining the FTC, he was a partner at the Washington, D.C., law firm Covington & Burling, which specializes in defending businesses in regulatory matters.
The firm earned nearly $18 million last year lobbying for its corporate clients, according to the Center for Responsive Politics.
No one is suggesting Smith’s seeming conflicts make him the administration’s most corrupt member. That title clearly belonged to Scott Pruitt, who stepped down Thursday as head of the Environmental Protection Agency amid multiple probes into legal and ethical issues.
But Smith is a leading contender for “wrong man for the wrong job” honors.
The FTC is the federal government’s premier consumer watchdog agency, tackling anti-competitive, deceptive and unfair business practices across virtually all industries. It often works in conjunction with state authorities to crack down on abusive or illegal corporate behavior.
Just as the Trump administration is now weakening the Consumer Financial Protection Bureau, it doesn’t take much imagination to figure that Smith’s appointment signals a similar downshifting of the FTC’s consumer-protection activities.
Last month, the FTC announced hearings on possible changes in the agency’s “enforcement priorities” in light of “broad-based changes in the economy” and “evolving business practices.”
Among the areas the FTC said it wants to examine is “the intersection between privacy, big data and competition.” As it happens, this is something Smith knows quite a bit about.
Last October, he testified before the U.S. Senate’s Banking, Housing and Urban Affairs Committee on behalf of the Consumer Data Industry Assn., which represents Equifax, Experian, TransUnion and dozens of other businesses that trade in the personal information of millions of people.
Smith’s appearance followed news that hackers had breached Equifax’s database, accessing the files of about 148 million people. His testimony laid out the industry’s case for why more regulatory oversight is unnecessary.
“Our credit reporting system today is the envy of the world,” Smith said. “CDIA members work to act in the best interests of consumers — by ensuring the accuracy and completeness of data in consumer reports, and by providing businesses with the information that they need to ensure consumers are treated fairly.”
Message: You can’t make an omelet without breaking a few eggs.
Despite declarations of outrage over the Equifax breach, lawmakers took no legislative action to clamp down on credit agencies. In effect, Smith got everything his client wanted, which is to say nothing.
I asked the FTC whether I could speak with Smith. They said he was unavailable.
Gregg at Public Citizen said it’s not fair “to vilify a guy for being wealthy, or for being a lawyer and a lobbyist.”
“But having so many conflicts makes it very hard for this person to do their job effectively,” he said. “It’s not just about impropriety but also the appearance of impropriety.
“When you have this many entanglements with industries you oversee, how can the public believe that, first and foremost, you’re looking out for consumers?”
There it is. Whatever Smith’s personal merits, his past as a corporate advisor and mouthpiece would, to most reasonable observers, disqualify him from running a government agency dedicated to safeguarding consumers.
Yet the Trump administration either chose to overlook these conflicts or decided it didn’t care. Or, worse, Smith’s background as a corporate shill was exactly what they were looking for in a regulator.
“All we know,” Gregg said, “is that he was apparently the best candidate they could find.”
The FTC’s Kaplan suggested Smith might recuse himself from any matter representing a conflict of interest. “The staff take on additional responsibility when a political appointee is recused on a particular matter,” he said.
If that’s the case, however, does it make any sense to have a department chief who might have to recuse himself from potentially dozens of cases involving some of the country’s most high-profile, and troublesome, businesses?
It should be obvious that Smith is the best person for the job only if the main qualification is a proven ability to please corporations, not protect consumers.
That the administration would try to portray him as “one of our country’s best and most experienced consumer protection lawyers” only makes his appointment more insulting.