February 21, 2011

The Hon. John L. Mica

Chairman
Committee on Transportation and Infrastructure
U.S. House of Representatives
The National Antitrust 2165 Rayburn House Office Building
Hall of Fame Washington, DC 20515
S.M. Oliva, Director

Tel.: (434) 253-1179 Re: H.R. 690 (FTC/NGA facility consolidation)

Fax: (434) 382-0688
director@antitrusthall.com
Dear Mr. Chairman,
www.antitrusthall.com
Twitter: @antitrusthall
I was interested to learn of the Committee’s efforts to relocate the Federal
Trade Commission in an effort to save taxpayer funds. I commend you for
taking an interest in FTC matters, and I write today to offer additional
support for your efforts to pass H.R. 690.

Having studied FTC operations for nearly a decade, I am intimately fa-

miliar with the Commission’s waste of taxpayer funds. Of particular rele-
vance to H.R. 690 is the FTC’s conduct of administrative trials. In the
Commission’s letter to you and Ranking Member Rahall, Chairman Lei-
bowitz and his colleagues insist relocation would force the Commission to
“build new courtrooms for conducting adjudications.” This is not necessar-
ily the case. For one thing, few FTC matters proceed to trial given the
Commission’s substantial legal and financial advantages over respon-
dents, many of whom are individuals and small businesses who lack ade-
quate counsel. I can’t recall any point in recent history where the Com-
mission is actively “trying” more than a couple of cases. Indeed, the Com-
mission never bothered to replace an administrative law judge who re-
tired several years ago, leaving the agency with a single ALJ.

More to the point, there is, I believe, no need for the FTC to have any
dedicated courtroom facility in Washington, DC whatsoever. Few FTC
cases deal with matters arising from events in the District of Columbia.
Most involve individuals and businesses in other parts of the country. For
example, the FTC is preparing to try two cases right now that involve
parties in California and North Carolina, respectively. In both cases, re-
spondents asked the Commission to relocate trials to their home states
— primarily to save the majority of witnesses the time and expense of
traveling to Washington. The Commission denied both motions, citing in-
convenience to the Commission itself. As is often the case, the FTC places
its own comfort ahead of taxpayers and even basic norms of due process.

There is no reason FTC rules could not be amended to provide that ad-
ministrative trials should be held in a respondents’ home state. This
would promote greater efficiency in FTC trial preparation while sparing

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witnesses (and taxpayers) unnecessary travel costs. Such an amendment

would eliminate the Commission’s objection to H.R. 690 based on the al-
leged loss of courtroom space while promoting greater fairness to indi-
viduals and small businesses subject to FTC litigation.

Additionally, I would encourage the Committee to review the FTC’s use of

space for “tracking, investigating, and fighting online and offline fraud.”
Much of the FTC’s recent enforcement activity has little, if anything, to do
with actual fraud against consumers. Rather, the FTC has been using the
fear of “online fraud” as a pretext for a massive harassment campaign
against mom-and-pop businesses that lack the resources to oppose FTC
litigation. In many cases, FTC investigators simply troll the Internet look-
ing for businesses to prosecute without conducting any substantive “in-
vestigation” whatsoever — to say nothing of establishing fraud. If the
FTC were restricted to prosecuting cases of actual fraud, the Commis-
sion’s space and infrastructure needs would be greatly reduced, saving the
taxpayers additional funding and promoting the growth of small, locally
owned businesses.

I would be happy to provide you and your staff with additional informa-
tion about any of the matters I’ve described above. Thank you again for
your work on H.R. 690. I hope it leads to greater scrutiny of FTC practices
and activities.

Sincerely yours,

Skip Oliva