February 21, 2011 The Hon. John L. Mica Chairman Committee on Transportation and Infrastructure U.S.

House of Representatives 2165 Rayburn House Office Building Washington, DC 20515 Re: H.R. 690 (FTC/NGA facility consolidation) Dear Mr. Chairman, 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 familiar with the Commission’s waste of taxpayer funds. Of particular relevance to H.R. 690 is the FTC’s conduct of administrative trials. In the Commission’s letter to you and Ranking Member Rahall, Chairman Leibowitz and his colleagues insist relocation would force the Commission to “build new courtrooms for conducting adjudications.” This is not necessarily the case. For one thing, few FTC matters proceed to trial given the Commission’s substantial legal and financial advantages over respondents, many of whom are individuals and small businesses who lack adequate counsel. I can’t recall any point in recent history where the Commission is actively “trying” more than a couple of cases. Indeed, the Commission never bothered to replace an administrative law judge who retired 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, respondents 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 inconvenience 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 administrative trials should be held in a respondents’ home state. This would promote greater efficiency in FTC trial preparation while sparing

The National Antitrust Hall of Fame S.M. Oliva, Director Tel.: (434) 253-1179 Fax: (434) 382-0688 director@antitrusthall.com www.antitrusthall.com Twitter: @antitrusthall

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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 alleged loss of courtroom space while promoting greater fairness to individuals 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 looking for businesses to prosecute without conducting any substantive “investigation” whatsoever — to say nothing of establishing fraud. If the FTC were restricted to prosecuting cases of actual fraud, the Commission’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 information 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

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