Khan Defends Ethics Record Before House Judiciary
FTC Chair Lina Khan defended her record against attacks from House Judiciary Committee Republicans questioning her ethics standards Thursday. The majority repeatedly questioned Khan’s refusal to recuse herself from proceedings on Meta’s purchase of Within Unlimited (see 2210190038), despite an FTC ethics official’s recommendation that she do so (see 2306300076).
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The agency’s legal framework established that employees themselves can determine whether they should recuse themselves from a proceeding, said Khan. Because she holds no financial interest in the company, there would be no ethics violation if she participated, said Khan.
Republicans are trying to hold Khan to an unrealistic standard, said House Judiciary Committee ranking member Jerry Nadler, D-N.Y. If committee staffers were held to the same standard, they would have to be recused from all committee work, he said. He noted the FTC general counsel informed Khan there would be no conflict of interest if she were to participate and recusal would be a personal decision. Rep. Pramila Jayapal, D-Wash., noted Designated Agency Ethics Official Lorielle Pankey, who owned stock in Meta at the time, recommended Khan’s recusal. A federal judge also ruled Khan’s participation wasn't a conflict of interest, said Jayapal.
The Computer & Communications Industry Association said Thursday it’s “troubling to see regulators ignore ethics advice and proceed with weak legal cases against companies they advocated against prior to taking office.” Congress is “right to investigate ideological attacks on a few U.S. companies that could significantly impact the U.S. economy,” said CCIA President Matt Schruers.
Rep. Harriet Hageman, R-Wyo., questioned Khan’s status with New York's state bar. During the line of questioning, Khan told Hageman every FTC attorney who’s actively practicing law should be in good standing with their respective bar. Hageman provided records from Thursday morning showing Khan isn’t in good standing with the New York bar. Khan’s license is listed as “delinquent,” said Hageman, meaning Khan failed to file biennial registrations, hasn't paid dues or failed to fulfill her legal education requirements. This is a “stunning” reflection on your ethics standards, said Hageman, who ended her questioning without allowing Khan to respond.
Rep. Steve Cohen, D-Tenn., said he was surprised by the questions about the bar. “You don’t talk about rope and a house where a man’s been hung,” said Cohen. “You don’t ask about membership in the bar association on the Judiciary Committee, where there are members who never passed the bar” and aren’t members of the bar, yet they’re in good standing with their respective bar associations. Members need to “get beyond the hypocrisy and realize where we are and don’t raise such subjects,” he said.
Republicans raised concerns about the FTC’s merger litigation record under Khan. Rep. Kevin Kiley, R-Calif., noted Khan’s FTC is 0-4 in merger trials and asked the chair if she’s “losing on purpose.” The FTC is “absolutely not” bringing cases it expects to lose, said Khan, noting companies walked away from potential deals because of FTC enforcement action. The FTC only brings cases when the facts lead the agency to believe there's a legal violation, she said. Despite the latest loss in Microsoft-Activision, the judge in the case noted agency attorneys went “toe-to-toe” with the opposition, said Khan. Blocking Microsoft-Activision would have weakened American competition against Japanese company Sony, said Rep. Darrell Issa, R-Calif. Issa said his problem with Khan is that “you are a bully" who has a cynical view of mergers.
Chairman Jim Jordan, R-Ohio, accused Khan of “harassing” Twitter after Elon Musk’s purchase of the company (see 2306090031). He cited court records from an Ernst and Young employee responsible for completing an independent assessment of privacy practices at the company. The independent assessor claimed the FTC’s conduct made him feel as if the agency were trying to influence the outcome of the engagement before it began, said Jordan: This included suggested outcomes and suggested findings for the assessor. Khan said she’s not familiar with those court records, but the agency just wants to make sure the auditor is doing its job. The FTC is holding Twitter accountable due to its long history of “lax” data privacy practices that predate Musk, she said.