In a rare party-line vote, the Federal Trade Commission appointed a corporate lawyer who has represented Uber, Equifax, Facebook, and a jailed payday lender to run its Bureau of Consumer Protection. The appointment was one of the first moves of the new five-member panel, all of whom were confirmed by the Senate last month.
“I am delighted to appoint such a stellar group of leaders to continue the FTC’s work on behalf of American consumers,” said FTC Chair Joseph Simons in a statement. The commission appointed heads for the bureaus of Competition and Economics and a General Counsel unanimously, as is typical for these positions.
Only the appointment of Andrew Smith to the Bureau of Consumer Protection was controversial, with a 3-2 vote along party lines. Democratic appointees Rohit Chopra and Becca Kelly Slaughter opposed Smith, and each laid out their concerns in written dissents.
No commission meeting was held in conjunction with the appointment; commissioners merely turned in their votes.
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As the New York Times explained last week, while Smith once worked at the FTC, he was most recently a partner with the financial services practice at Covington & Burling, a leading white-collar defense firm. His clients included dozens of financial institutions, credit-reporting agencies, and tech firms, including players in some of the most notorious corporate scandals of the past several years. For example, Smith represented convicted payday lender Scott Tucker, from whom the FTC won a $1.3 billion judgment for deceiving and exploiting consumers. Tucker faces 16 years in prison.
Three other Smith-repped companies have active investigations at the FTC: Facebook, for potentially violating a 2011 consent decree over safeguarding user privacy; and Uber and Equifax, over separate data breaches that exposed the personal information of hundreds of millions of Americans. Smith even testified on Equifax’s behalf in the Senate last year.
Smith has said he would recuse himself from any investigations or enforcement involving companies with whom he has worked. But as Chopra writes in his dissent, “The Director should be our quarterback on the agency’s top priorities. But, I fear our quarterback will be spending too much time on the sidelines.”
In addition, Chopra writes, Smith will still be able to participate in policy rule-making that would likely have an effect on the companies associated with him.