Column: This top FTC official is so conflicted, he has to leave the room if Facebook gets mentioned
It’s almost pointless to say that conflicts of interest abound as the country’s first billionaire president continues populating his administration with captains of industry. Just last week, President Trump nominated the former general counsel of Verizon Communications to serve as attorney general.
Yet every so often we’re reminded that no other administration in modern history has so brazenly blurred ethical lines and placed into positions of authority as many individuals who are so seemingly unsuited for public service.
Ladies and gentlemen, please welcome Andrew Smith, director of the Federal Trade Commission’s Bureau of Consumer Protection.
We’ve met Smith before. In July, I wrote about his financial disclosure statement showing he had provided legal or lobbying services for more than 50 companies and business groups — an extraordinary array of potential conflicts for a man tasked with safeguarding consumers from unfair or illegal business practices.
Now, thanks to a public-records request from the advocacy group Public Citizen, we learn that Smith’s conflicts run much, much deeper.
The new documents, which the Trump administration only reluctantly shared, show that companies compromising Smith’s regulatory abilities actually number 120.
One hundred twenty.
We’re talking some of the biggest names in banking and financial services, as well as tech and telecom giants such as Amazon, Facebook, Microsoft, Uber and Verizon.
Virtually any major company you could think of that might manhandle consumers, it’s likely Smith is unable to do anything about it.
Again, he’s the FTC’s head of consumer protection.
Heck, even Wells Fargo is on his conflict list, and those guys represent a full-time job for any consumer watchdog.
“It’s insane — I have never seen a list this extreme,” said Remington Gregg, the Public Citizen lawyer who pried a full disclosure of Smith’s corporate ties from the White House.
“Andrew Smith is literally not able to do his job,” Gregg told me. “By law, he would have to leave the room if any of these companies were brought up by investigators.”
That’s indeed the case, as Smith himself confirmed when he and I spoke the other day.
However, he stressed that he has a pair of deputy directors who can oversee any investigation he has to recuse himself from. Moreover, he said there are plenty of other companies that he has no financial ties to.
“The work of this agency is not affected by this,” Smith insisted. “There’s still a ton of work for me to do.”
Most of our conversation was off the record, so I can’t get into certain details. But I can say that Smith comes off as a bright, decent guy who isn’t trying to pull a fast one on consumers.
That said, it’s not much of a defense to say that even though he can’t have anything to do with some of the biggest and most important companies in the world, there are lots of smaller, less-influential businesses for him to keep tabs on.
The FTC is charged with defending consumers from fraudulent business practices, among other things. How can consumers trust the agency to be a reliable ally when its head of consumer protection can’t even be in the room when Equifax or American Airlines or even Disney are discussed?
I don’t fault Smith for wanting to apply his corporate legal smarts to public service — that’s a laudable goal.
But I have to question why his bosses at the FTC would believe even for a second that a man whose potential conflicts run to 120 leading companies is the best person to serve as chief consumer advocate.
The FTC’s Republican chairman, Joseph Simons, is a Trump nominee, as are the two other Republican and two Democratic commissioners. By law, no more than three commissioners can be from the same party.
Smith’s questionable background goes beyond Trump’s fondness for appointees who are totally unqualified for their jobs (hi, Ben Carson; hi, Betsy DeVos).
The latest such spectacle came last week as Senate Republicans confirmed Kathy Kraninger as the new head of the Consumer Financial Protection Bureau, despite her total lack of experience in consumer affairs, financial services, financial regulation or running a government agency.
In the down-is-up world of this administration, Mick Mulvaney, the White House budget chief who has been serving as interim CFPB director, said the agency will benefit from Kraninger’s “expertise.”
Public Citizen’s Gregg asked the FTC in May for access to all relevant disclosures regarding Smith’s ties to corporate entities.
The agency came up with nearly 500 pages of documents but decided that some were “exempt in full or in part from disclosure” under the Freedom of Information Act.
Gregg repeatedly challenged that decision, and finally, on Nov. 30, he received the list of 120 possible conflicts — nearly half a year after his original, perfectly reasonable request for public information.
Heather Hippsley, the FTC’s deputy general counsel, acknowledged in a letter to Gregg that the agency “improperly withheld portions of certain documents.”
I asked Smith about that. He said he didn’t know why it took so long for the FTC to give a full accounting of his corporate ties.
Gregg offered this explanation: “They knew full well from the very beginning that this would be unseemly in the eyes of the public.”
I asked Smith whether anyone at the White House has reached out to him regarding his potential conflicts.
“Nobody has said anything to me about it,” he replied.
No, I guess not. A president who attends to affairs of state while also owning a worldwide chain of hotels, condos and golf courses probably isn’t the sort of person who worries about such things.
Consumers, however, have a right to expect more from those entrusted with defending their rights.
Smith seems like a nice guy.
It’s too bad he couldn’t scratch his itch for public service with a job more befitting his extensive private-sector background.