Under Khan’s leadership, staffers air frustrations in wake of survey

06 June 2022 00:00 by Mike Swift, Kathleen Murphy, Michael Acton, Curtis Eichelberger

Federal Trade Commission

When Lina M. Khan took the reins of the Federal Trade Commission a year ago, she inherited a regulatory force of 1,100 staffers poised to advance her progressive agenda. Soon, however, her relationship with that staff was in tatters, according to a staff survey recently made public.

FTCWatch spent the past month talking at length to about 30 FTC staffers, some still at the agency and others recently departed; some on the record and some declining to be identified by name because of concerns about career reprisals. Many of the conversations were notably emotional, as staffers admitted to a deep sadness — and some, to a kind of angry grief — over changes in an organization they said they loved.

The staffers interviewed included critics of Khan and her controversial chief of staff, Jen Howard, but also included more recent joiners who are advocates of the chair. Collectively, their comments explain the results of the latest Federal Employee Viewpoint (FEV) survey. In a single year, respondents in that survey who said they have a “high level of respect” for the FTC’s senior leadership plummeted from 83 percent in 2020 to less than half in 2021.

The agency declined to discuss specific morale issues raised by staffers, but said the survey results reflect the “considerable change” initiated by Khan.

“Chair Khan shares the passion of the FTC staff for the work they do protecting Americans from unlawful business practices, and she has enormous respect for their diligence and expertise,” said FTC Deputy Director of Public Affairs Peter Kaplan. “Last year, the period over which the FEV data was collected, was a period of considerable change at the FTC, which is always difficult. Chair Khan is committed to making sure that the FTC continues to be a great place to work and looks forward to building on the agency’s record of accomplishments.”

Current and former staffers said an agency that has traditionally allowed even rookie staff attorneys to have input into whether to bring enforcement actions has become a hierarchical, top-down organization, where even expert staffers say they feel marginalized and afraid to speak truth to power, for fear of being frozen out for not being “on board” with Khan’s mission.

One veteran staffer said the FTC’s leaders “are big supporters of McDonald’s and Amazon workers, but they treat the people within the commission probably as badly as McDonald’s … They ask people to work all hours — nights, weekends, [Khan’s] own staff more than anybody — no regard to people’s quality of life and what they are dealing with.”

The staffer professed to be on board with the direction of the agency.

“I want stronger enforcement,” the staffer said. “I think we’ve let too much stuff go in the past. But the way to fix that is not to ruin an agency; it’s to build an agency up. It’s not driving out the most experienced members of our team and browbeating everyone into submission where everybody just hides and waits.”

Khan’s managerial methods were faulted.

“My concerns with the agency are that there is a lack of managerial experience and expertise at the top. That comes out in spending too much time and resources on matters that are relatively less significant,” said one senior FTC staff attorney on the antitrust side of the house.

A senior manager likewise said Khan’s team fails to properly allocate limited resources.

“There is just a sheer lack of recognition that the FTC has a resource constraint. Everything is a priority and any pushback that this doesn’t add up — it’s like, ‘You’re not on board with us.’ That is a major, major problem,” said the manager. “People are being asked to do more and more and more and more without being properly resourced, or empowered, or motivated. There is no priority — everything is a priority. And when everything is a priority, nothing is a priority.”

Staff concerns were reflected in the late April release of an annual survey that showed unprecedented declines in trust in senior leadership and in staffers’ overall job satisfaction. In one  year, for example, the share of FTC staffers saying senior leaders generate “high levels of motivation and commitment” for staff dropped from 80 percent to 42 percent, while the share of staff who said senior leadership lacks integrity grew six-fold.

Numerous senior staffers have left the agency in recent months — often at least doubling their salaries at tech companies or large Washington, DC, law firms. Those private entities are bolstering their benches with a revolving door of government staffers who bring knowledge of the FTC’s evolving playbook.

The total number of employees leaving the FTC during Khan’s first year is smaller than in past leadership changes tied to a new administration. A list of separations obtained under the Freedom of Information Act showed 127 employees left the FTC from June 15, 2021 to May 2, 2022. There were 163 employees heading for the exits during a comparable period — May 2018 to April 2019 — when Joe Simons became FTC chair.

But the senior nature of those leaving is unusual, former and current staff told FTCWatch. Those senior departures are seen as representing a significant erosion of institutional expertise — a loss that creates a risk the FTC will make poor enforcement decisions that, in the hands of a conservative US judiciary, could lead to bad case law.

“The chair had an army of 1,000 dedicated attorneys who came to the FTC because they wanted to make a difference in the world, to make antitrust enforcement or consumer protection enforcement more visible and relevant, and they really believed in the mission of protecting competition and protecting consumers,” said a veteran FTC lawyer. “The chair didn’t come in and rally the troops around this mission they all believed in. Instead, she isolated herself and alienated herself. She’s going to have a hard time overcoming those failures.”

‘Wall of Silence’

The FTC staff is its engine of enforcement. The agency’s political leadership swings back and forth between Republicans and Democrats, but the staff provides continuity in investigating antitrust and consumer protection violations, recommending enforcement and litigating complaints.

Even under Democratic leadership, an eager staff sometimes recommends a more aggressive course, such as when the staff sought an antitrust lawsuit against Google in 2012 but was vetoed by a commission with a Democratic majority.

“The agency's productivity and effectiveness depend on an engaged career staff, and engagement grows from a culture of mutual respect, collaboration, and inclusion,” Eileen Harrington, a 27-year former FTC senior official, said at a public commission meeting on May 19. “For 40 years, this was the culture at the Federal Trade Commission, regardless of the party holding the majority. Today, it is not.”

Harrington served as the FTC’s executive director and in a string of other senior positions. Her recruiting video about the agency’s “special” and “really creative and talented” culture can still be found on the FTC website.

Starting on June 15, 2021 — Khan’s first day leading the agency housed in the Classical Revival edifice at 600 Pennsylvania Avenue — what had been a free flow of information between the chair’s office was suddenly interrupted, by what one staffer described as a “wall of silence” around the chair’s office. Staff bristled at a directive widely interpreted as a gag order forbidding them from public speaking, and some felt they were instructed to lie about being too busy as a pretext for canceling speaking engagements.

Chief of Staff Howard didn’t revoke the gag order, which also frustrated businesses and lawyers outside the agency, until the end of May this year.

Khan was also faulted for waiting two months to have her first meet-and-greet session with the most senior members of the staff, a gap confirmed by FTCWatch through a FOIA request for staff emails that noted the first meeting. The new chair drew her senior leadership team from people close to former Commissioner Rohit Chopra, an outspoken consumer protection activist.

Essential enforcement positions, such as the permanent directors for the Bureau of Economics and the Division of Privacy and Identity Protection, remain vacant, and staffers expressed concerns that Khan is insufficiently attentive to privacy enforcement and has devalued the role of economists in bringing antitrust cases.

Maxed out

Meanwhile, staffers were being asked to do much more, particularly in areas such as merger reviews. A report completed last month by the FTC Office of the Inspector General found that Bureau of Competition staff lawyers raised concerns about “the excessive workload, in quantity and pace of assignments,” as well as interference from political appointees in the front office.

“In more than one instance, attorneys noted that higher agency leadership do not allow lower management and staff attorneys to exercise a sufficient level of discretion in their handling of merger reviews — with an end result of lower efficiency and staff morale,” the May 2 OIG report found.

Jennifer Milici, a former lawyer in the Bureau of Competition, said during a webinar presented by law firm Wilmer Hale that the OIG found bureau lawyers are “maxed out” because of a failure of senior leadership to prioritize investigations. That, said Milici, may mean the overburdened agency won’t be able to bring new antitrust conduct cases.

Milici, a former chief trial counsel, led the FTC’s successful antitrust trial against Qualcomm in 2019. (Qualcomm subsequently reversed its defeat on appeal.)

“There’s really a question here about how much more litigation the FTC can really take on,” said Milici, who left the FTC in January for Wilmer Hale.

Khan’s supporters say she’s pushing for a transformational change in antitrust enforcement that will inevitably result in long-tenured and overly comfortable staffers leaving the agency as they’re prodded to work harder and pursue new legal strategies. But current and former staffers predict the rift with the staff won’t make the FTC a better consumer and competition watchdog.

Staffer after staffer said Khan’s hierarchical leadership style and lack of organizational experience is leading to a poor use of the FTC’s limited resources.

“We didn’t talk to the chair for months after she was confirmed,” one senior staffer told FTCWatch. “If the leadership really wanted to drive their mission forward, one great way to do that was to bring along career staff who believe in enforcement. That’s why they’re there, and they have the legal skills to do that. [Khan and her team] had a very good opportunity to do that, and they missed it.”

Another staffer said: “There was just this sense, I think, among career staff that this was an administration that didn’t think staff did a good job at all — which sees them as the enemy and was going to make decisions that were not well grounded in the law.”

Fear of reprisals and pressure for ideological loyalty have become so strong, multiple staffers said, that they’re afraid to follow the wrong person on Twitter or like a post on LinkedIn that criticizes Khan or her agenda. Some are infuriated that Khan hasn’t publicly addressed criticism on social media by critics such as Matt Stoller, a former colleague of Khan’s at the Open Markets Institute who has called the agency “lazy.”

In Khan’s first months in office, her team communicated with the media about the overhaul of the agency in a manner that created the impression among some staffers that the leadership was talking to the outside world more than its own people.

“They are trying very hard to control the messaging out of the FTC and there’s very much of a mentality if you’re not with us and 100 percent supportive, you’re against us,” another veteran FTC attorney told FTCWatch. “It’s very much black and white now, which is not consistent with what you had historically at the FTC as a bipartisan agency.”

Federal survey

The survey of the staff taken last fall, just six months after Khan became chair, showed an unprecedented spike in the share of FTC staffers who believe senior leadership lacks integrity. The annual survey — the Federal Employee Viewpoint Survey that is applied across the federal government — asked whether staffers agree that “I have a high level of respect for my organization's senior leaders” and “My organization's senior leaders maintain high standards of honesty and integrity.”

In 2020, just 4.1 percent of staff said the FTC’s senior leaders lacked honesty and integrity; in 2021, that figure rose to 28.8 percent. The share of staffers who said they were satisfied with their jobs at the FTC dropped from 88.6 percent in 2020 to 60.2 percent in 2021, while the percentage of staff who said they were dissatisfied quintupled, growing from 5 percent to 26.5 percent. There was no such drop in the opinion of staffers’ direct supervisors — only of senior leadership.

Khan responded on April 28 in an internal letter seen by FTCWatch. She acknowledged that the survey findings showed the “overall trends were not where we want them to be.”

“I take these results seriously and am committed to using them to inform further dialogue and identify actions that facilitate positive change,” Khan told the staff, saying she wanted them to feel “motivated, committed, included and accepted.” She said the agency was creating an electronic suggestion box for proposed improvements.

Some viewed Khan’s note as inadequate and didn’t trust her assurances of confidentiality regarding the electronic suggestion box.

Khan said it was a “true honor” to lead the FTC. She said she wanted to recruit and retain “the incredible talent that makes this agency so special.” But she did not admit to mistakes or express regret about the leadership transition.

Staffers who once looked with disdain upon the political bickering of federal agencies such as the Federal Communications Commission are starting to believe the FTC is no better.

Senior departures

While there was a significant drop in the number of enforcement actions from 2020 to 2021 on the consumer protection and antitrust sides of the agency, even Khan’s critics aren’t inclined to assert a direct cause-and-effect relationship between that and staff morale or the departure of key staff.

From 2020 to 2021, the number of new cases brought by the Bureau of Consumer Protection dropped from 79 to 31, according to research done by Daniel Kaufman, former acting director of the Bureau of Consumer Protection. New merger enforcement cases brought by the Bureau of Competition fell from 31 in 2020 to 12, according to a statement by Commissioner Christine Wilson.

The number of people leaving the FTC was lower during Khan’s first year than it was during the first year of her predecessor, Simons, a Republican, according to data obtained through a FOIA request.

FTCWatch has documented at least 40 staffers, including multiple senior leaders such as FTC bureau or division chiefs, economists, and staff attorneys, who have left the agency since October.

Among the notable departures:
*Maneesha Mithal, the former chief of the Division of Privacy and Identity Protection, who left in October after more than 22 years.
*Dominic Vote, who left in January after 11 years in the Bureau of Competition.
*Frank Gorman, former acting deputy director of the Bureau of Consumer Protection, who left late last year after 24 years.
*Heather Johnson, former acting deputy director of the Bureau of Competition, who left in February after 10 years.
*Linda Holleran Kopp, a long-time privacy enforcement lawyer who was central to the FTC's $5 billion privacy settlement with Facebook in 2019, who left in March after 16 years.
*Marta Wosinska, the FTC’s top economist and the director of the Bureau of Economics, who resigned in February.
*Devin Willis, a privacy counsel who left the FTC in March after 15 years.
*Ryan Quillian, the deputy assistant director of the competition bureau’s Technology Enforcement Division, who left in April after 8 years.

Virtually all the senior people who have left the agency in recent months have landed quality jobs in the private sector at companies, including Apple, Amazon, Adobe, Google, Ford, NBC’s streaming service Peacock, T-Mobile and Zoom Video Communications, and at prominent law firms such as Wilmer Hale, Covington & Burling and Wilson Sonsini.

Kaufman, the former acting director of the BCP, left the FTC in November after 24 years for a job at the law firm Baker Hostetler.

“What is really atypical here is you generally don’t see people who have worked long and hard during their careers to become a senior career official leaving in such high numbers. That’s what’s really different,” Kaufman told FTCWatch. “It’s the senior people leaving that are atypical. We’re not talking about political people leaving; we’re talking about career staff.”

Yet even Kaufman, who has blogged about the decline in the number of enforcement cases, said low staff morale and the departure of key leaders aren’t necessarily driving the reduction.

“I don’t know if they are linked. It’s hard for me to say that positively,” Kaufman said. “What really struck me was it was such a dramatic change from the years before.” Kaufman said consumer protection cases had typically been about 65 to 70 a year.

Kaufman, who remains in close touch with current employees and people who have left, said staffers are afraid of career damage if they’re seen as critical of Khan and her senior leaders, even indirectly. “I had one [current staffer] reach out to me, and they said they really liked what I was writing [in blog posts], but they were not comfortable to either follow me or like my LinkedIn post,” Kaufman said, echoing worries about social media blowback that other staffers shared with FTCWatch.

Khan and her senior team also have defenders on the staff, and some drew a distinction between Khan and the controversial Chief of Staff Howard on the one hand, or more defensible senior leaders such as Consumer Protection chief Sam Levine on the other hand.

Many said Levine has been more supportive and is a good leader. “He genuinely cares about having staff’s back on things,” one former staffer said.

Merger theories

Part of the reason so many on the staff are upset, said one recently hired staffer who supports Khan and her change of direction, is that on merger reviews they are being asked to pursue unfamiliar legal theories.

Khan is asking staff to pursue legal theories that even FTC veterans have rarely pursued and often don't have recent legal precedent, the staffer told FTCWatch. That leads to a lot of stress, especially when combined with how strapped the agency is for cash and the insane amount of merger filings there are right now, the person added.

But Howard’s blunt personality has caused conflict with the staff, the person acknowledged.

Howard is very direct, and leadership is trying to get staff to do things a different way, the staffer said. Howard's blunt style probably rubs people the wrong way, they said.

Another Khan supporter who joined the FTC said some turbulence is caused by people who are opposed to change generally.

“To me, it's an exciting challenge to think of new questions and different ways of doing things; it's a departure from what came before,” the staffer said.

Managerial experience

Prior to becoming chair of the FTC, Khan was an associate professor at Columbia Law School, served as counsel to the House Judiciary Committee’s Subcommittee on Antitrust, Commercial, and Administrative Law, was a legal adviser to Chopra, and worked as the legal director at the Open Markets Institute.

Khan has been faulted for a relative lack of courtroom or managerial experience, but she has become a breakout media star in a way that no FTC chair has in decades. The 33-year-old leader has been cast as a smart young agent of change with the courage to confront the unchecked market power of Big Tech. Even critics within the agency concede Khan may be all of those things.

But if Khan is a brilliant antitrust theorist, her critics say, that doesn’t mean she has the organizational or litigation sense to deploy a force to navigate the US court system against stoutly defended foes such as Meta Platforms, which the FTC sued under Simons, or Amazon, which the FTC is reportedly investigating. Khan is seen by many within the agency as more of a “big ideas” academic than someone who has the legal and managerial savvy to run an organization like the FTC.

“She has her small cadre of people that she listens to, and she doesn’t listen to anyone else,” one staffer said.

Nevertheless, Khan has been presented publicly as a transformational figure. She received more than 45 minutes on cable television in a joint New York Times/CNBC interview with Kara Swisher and Andrew Ross Sorkin. In the pages of New York Magazine, dressed in a dark-blue blazer and overlooking the statue “Man Controlling Trade” outside FTC headquarters, Khan acknowledged that she is upsetting the status quo.

“I think it’s fair to say that my tenure here represents change in a whole host of dimensions. And I think change can be hard,” she said.

The FTC’s media strategy has been shaped by Howard, who informed the staff just a week after Khan’s arrival that there would be a “moratorium on public events and press outreach.” Howard, like Khan, Levine, and Bureau of Competition chief Holly Vedova, are former staffers of Chopra.

Howard in particular was described by some as unprofessional and disrespectful.

An image of Howard in a Politico profile included her silver necklace emblazoned with one word in a delicate, cursive script: “Fuck.” In casual conversations, Howard peppers her remarks about antitrust policy and Big Tech companies with F-bombs.

Given the Covid pandemic, much of the FTC’s business has lately been done over Zoom calls, and Howard’s language isn’t perceived as a problem so much as the perceived hostility behind it.

On Zoom calls with Howard, “I got very good at hiding my facial expressions,” one former staffer said.

“I think they think of us as the enemy, and I don’t do this work to be the enemy,” said a current staffer. “It’s like there’s this hostility just emanating from them toward the staff.”

Howard “is certainly dismissive of staff. These were mostly video chats,” said one senior staffer, describing Zoom calls with Howard. “She would roll her eyes and be instant messaging and appear to be laughing at staff. It’s difficult because we’re professionals, and we’re doing the best we can under extreme time and resource constraints.”

Staff who disagreed with the views of Howard or Khan have found themselves marginalized, another staffer said. Howard “very tightly controls access to the chair, and when someone says something she doesn’t like, that person will often no longer be invited to meetings where decisions are being made on matters they oversee.”

Another staffer expressed concerns that progressives’ novel legal theories, when presented to older, conservative federal judges, will lead to unfavorable court decisions.

“There is a view inside the agency that there is a willingness to just kind of ignore the law and the facts sometimes if it’s going to further the ideological mission,” said a staffer. “There are a lot of great opportunities [in the private sector] for people right now. Is it worth the headache of being put on litigation that is a loser?”

It was Howard who informed the staff about the hugely unpopular “gag order” in June last year, and who rescinded the policy in a recent email to staff. In the FTC’s Bureau of Economics, the gag order was viewed as not only hurting the careers of staff economists who need to publish research and attend conferences in their field, but also as damaging to the FTC’s mission. Without a strong record of publishing research, economists are seen as less effective expert witnesses.

Lisa Sotto chairs the global privacy and cybersecurity practice for the law firm Hunton Andrews Kurth. She helps organize an annual privacy conference in New York at which FTC staffers traditionally speak, but the agency’s scheduled staff speaker canceled on her this year.

“For years and years, there was a very strong, cooperative relationship between the private sector and the FTC. The FTC spoke at conferences and was very active in educating the public,” said Sotto, who spoke to FTCWatch before the gag order was rescinded. “And now the FTC is forbidden to speak, which I find kind of antithetical to their educational mission and not helpful, because both the public and the private sector would benefit from understanding what the FTC is looking for. We’re handicapped.”

Emotion

FTCWatch’s conversations with current and former FTC staffers were often emotional. One person had trouble catching their breath as they talked about what several staffers described as the “toxic environment” at the agency. Others expressed their sadness.

None of those who departed the agency told FTCWatch that Khan’s leadership was the sole reason they chose to leave, but all, without exception, said the situation within the agency was a factor.

“I no longer felt excited about the work I was doing because it felt like it was in service of this leadership. While I supported the mission, I didn’t really believe in them as leaders,” one person said. “I probably would not have left the FTC but for that fact. When recruiters called me over the past five years, I always would say, 'No, no, no, I’m not leaving.' And then it changed.”

“I have never seen staff morale like this in my [more than a dozen] years at the agency. It’s exponentially worse,” said another staffer who remembers becoming emotional at their departure. “I love the agency. It is like long-time family there.”

Another person who quit the FTC to take a job in the private sector said Howard’s demeanor and Khan’s apparent indifference to the staff were not the only reasons to resign. The desire for change and better pay in the private sector were factors, too.

“I probably would have stayed longer but for what is going on at the agency. I took it very personally, at least the way our division was treated and the people I was working with closely. I think I would have stayed longer had it not been for that,” the former staffer said. “I’d like to go back; it has been the best job of my career.”

If Khan and her allies are to take the FTC in a new direction, the loss of senior staff is a huge obstacle, departing staffers believe.

“A lot of institutional knowledge has left very quickly,” one departing veteran told FTCWatch. “It’s a terrible approach to running the agency to just believe ‘Sweep out the old and in with the new.’ There’s not that many people left that know the FTC cold.”

Claude Marx contributed to this story.

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