Joseph Simons, formerly of Paul Weiss, testifies at his confirmation hearing to lead the FTC. Credit: Diego M. Radzinschi / NLJ

In preparation for his February confirmation hearing, Joseph Simons drafted an opening statement that included what has become something of an applause-line for political events related to the Federal Trade Commission: a nod to the agency's tradition of working by consensus.

But by the time his turn came to speak, senators had already beaten Simons, a former antitrust partner at Paul, Weiss, Rifkind, Wharton & Garrison, to the punch. When he turned to that tradition in his remarks, the Trump administration's pick to lead the agency said, “as has already been discussed, one of the great things about the FTC's mission historically is that it has been performed in a highly bipartisan way.”

Just two weeks into their tenures together, Simons and his fellow commissioners are testing that ethos. The five-member commission this week only narrowly approved the appointment of Covington & Burling partner Andrew Smith as the director of the FTC's bureau of consumer protection, with the two Democrats dissenting over concerns about the recusals that will arise from his record as a corporate defense lawyer.

In private practice, Smith represented Facebook and Equifax—companies that are now facing two of the FTC's highest-profile investigations: the social media company for its privacy practices and the credit agency for a massive data breach affecting millions of U.S. residents.

In a prepared statement, Simons said Wednesday he was “disappointed that two of my new colleagues have chosen to turn Mr. Smith's appointment into a source of unnecessary controversy.”

The early dustup has struck FTC alumni as uncharacteristically political for the agency and possibly even unprecedented. Traditionally, agency veterans said in interviews with The National Law Journal, the FTC chairman selects bureau directors and the votes on their appointments are treated as pro forma matters.

“This is really aberrational in terms of having fresh new commissioners coming in at the same time. I think it's unfortunate that there's this kerfuffle,” said Georgetown law professor David Vladeck, who served from 2009 to 2012 as the director of the FTC's bureau of consumer protection. “These votes are traditional but they're not required, as I understand it. The chair has the ability to appoint whomever he or she wants as key agency personnel, but I think it's an important tradition [to hold votes].”

Vladeck added that there is “no question” that Smith, a Covington partner since 2014, is qualified to lead the consumer protection bureau.

The divided vote on Smith's appointment reflects the arrival of four new commissioners who don't have prior experience working together, Vladeck said.

At the February confirmation hearing, Simons appeared alongside three other nominees, including two Republicans—former Delta Air Lines executive Christine Wilson and Noah Phillips, a former chief counsel to U.S. Sen. John Cornyn—and Rohit Chopra, a consumer advocate picked for a Democratic seat. All four were confirmed in late April along with a Democratic nominee, Rebecca Slaughter, who previously served as chief counsel to Senate Minority Leader Chuck Schumer. (Wilson has not yet taken her seat, which Commissioner Maureen Ohlhausen is holding onto as she awaits confirmation to a the Federal Claims Court.)

Smith, like many agency officials who take posts from a big law firm, will face recusal issues for matters he worked on or Covington handled.

FTC's Rohit Chopra, testifies before the Senate Committee on Commerce, Science, and Transportation. Credit: Diego M. Radzinschi / National Law Journal

Without naming any specific investigations, Chopra said Wednesday that he opposed Smith's appointment because he “may be unable to participate in some of the FTC's high-profile and consequential matters.”

“The director should be our quarterback on the agency's top priorities,” Chopra said in a prepared statement. “But, I fear our quarterback will be spending too much time on the sidelines.”

Chopra said Simons' selection of Smith was a “break with precedent.” He noted that past senior leadership picks drew unanimous, bipartisan support. “Our most critical personnel pick was made without a commission meeting. I don't believe this is an effective model for decision-making, particularly given our agency's long track record of reaching consensus,” Chopra said. “I'm hopeful it is one we will not repeat.”

Chopra and Slaughter supported Simons' selections for other senior posts, including his pick of Alden Abbott for general counsel and Bruce Hoffman for director of the competition bureau. Hoffman previously worked for Shearman & Sterling and Hunton & Williams. Abbott formerly was senior legal fellow and deputy director of the Heritage Foundation's Meese Center for Legal and Judicial Studies.

As the commissioners continue to work together, Vladeck said time will help them find the consensus. The “hydraulic pressure” of the FTC's bipartisan track record, he said, is strong.

“It will take a little working together before the bonds sort of form and the ethos is restored,” he said. “I have no doubt six months from now that people will not remember this episode.”

Simons, for his part, appeared willing to give consensus a shot. Appearing before a Senate appropriations panel Thursday, the chairman said he and his fellow commissioners “look forward to continuing the agency's longstanding tradition of bipartisanship, collegiality and cooperation.”

“And we are proud of our track record,” he said.

 

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