Pitofsky’s move ignites speculation

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After nearly six years as activist chairman of the U.S. Federal Trade Commission, Robert Pitofsky's likely return to commissioner has sparked a guessing game about the changes George W. Bush's inauguration may bring for the agency.

Mr. Pitofsky is one of three Democrats on the commission.

President-elect Bush is expected to name one of the two Republican commissioners, Orson Swindle or Thomas Leary, as chairman. It isn't yet clear whether the chairman would serve for years or only until September, when the expiration of Mr. Pitofsky's term would give Mr. Bush his first chance to appoint his own FTC commissioner. A spokesman for the Bush transition team said he was not prepared to discuss personnel at this time.

Mr. Swindle, who was an official of the Reagan administration directing financial-assistance programs in economically distressed areas from 1981 to 1989, has been on the commission for more than three years. He also was a spokesman for Ross Perot during Mr. Perot's Reform Party campaign for the presidency, but he is a close friend of Senate Commerce Committee chairman John McCain (R, Ariz.) and worked actively in Mr. McCain's presidential campaign last year. Mr. Swindle and Mr. McCain were fellow prisoners in a North Vietnam prisoner-of-war camp. He is expected to have the inside track for the FTC post.

"I assume the president will have someone in mind," said Mr. Swindle, adding that speculating about names is "a game others are playing that I don't like to participate in."

Mr. Leary, who joined the commission in November 1999, is a veteran antitrust lawyer and former assistant general counsel of General Motors Corp.

Mr. Leary couldn't be reached for comment last week.

While the FTC under Mr. Pitofsky has seen relatively little partisanship, observers maintain there have been some noticeable differences on certain issues that could alter the FTC's direction when Republicans gain control of three FTC seats in September.

The immediate changes, however, most likely would be in the agency's staffing and the cases that get to the commissioners.

Under Mr. Pitofsky, a former law-school professor who returned to the commission in 1995 after earlier stints as director of the FTC's Bureau of Consumer Protection and an FTC commissioner, the commission pushed actively into new areas and took an activist role in some existing areas of law.

"The enforcement staff answers to the chairman, and the FTC chairman's post is one of the stronger chairs in government,'' said one lawyer familiar with the FTC. Unlike some other agencies - including the Federal Communications Commission - the FTC chairman selects top FTC staffers, though with the consent of fellow commissioners. The staffers report directly to him.

The observers say that means that while there would be no change in commission votes until September, the enforcement actions brought to the commission may shift depending on who is chairman.

With Mr. Swindle as chair, the changes could be more pronounced than if Mr. Leary is named, said Bill Kovacic, a professor of law at George Washington University, though he cautions there "will be much more continuity than change."

Advertising experts said the commission rarely splits on party lines. "If he is replaced as chairman, but Bob [Pitofsky] stays on the commission, it will not change things much, because whoever is chairman will need three votes," said American Advertising Federation President-CEO Wally Snyder. "The commission is fairly centrist. I don't think you would see a sea change."

Longer term, however, the changes could become noticeable.

In divided votes, the commission under Mr. Pitofsky decided to seek corrective advertising in a case against Novartis' Doan's pills; urged Congress to pass legislation to ensure Internet privacy for adults; went after Beck's North America for a campaign showing people operating a boat while drinking and accused McCormick & Co. of using slotting allowances to unfairly prevent competitors from competing with its spices.

In other divided votes, the commission took on Staples' attempt to buy Office Depot; accused Toys 'R' Us of using its monopoly power to keep toy prices higher; challenged H.J. Heinz Co.'s purchase of the Beech-Nut Nutrition Corp.'s baby food line; and accused Intel Corp. of trying to abuse its monopoly power.

Mr. Swindle was in dissent in most of those decisions.

Recently, Mr. Pitofsky reportedly has pushed the commission to consider some concentration issues in America Online's purchase of Time Warner that FCC commissioners have declined to consider in similar cases. He also helped shape the commission's report on violent entertainment.

Copyright December 2000, Crain Communications Inc.

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