Says Action Necessary To Restore Faith in Agency As Effective Antitrust Enforcer

Consumer Watchdog today called on the Federal Trade Commission to release the 100-page staff report on the 19-month Google investigation as the only way to “restore a modicum of public trust in the Commission’s ability to serve as an effective antitrust enforcer.”

“I call on you to release the FTC staff report to help make clear what was behind the Commission’s otherwise unfathomable action,” wrote John M. Simpson, Consumer Watchdog’s Privacy Project director in a letter to Commission Chairman Jon Leibowitz and Commissioners Julie Brill, Edith Ramirez, Maureen Ohlhausen and Joshua Wright.

“Media reports suggest that the Commission’s tap on the Internet giant’s wrist was the result of a ‘calculated and expensive charm offensive,’ ” Simpson wrote.

Read Consumer Watchdog’s letter here.

“Put another way, by all appearances, the Internet giant played an insiders’ game and bought its way out of trouble,” Simpson wrote. “Perhaps, the Commission managed to ignore the charm offensive and decide the case on the merits. Sadly, we cannot know the true situation because we don’t have the details of the 19-month staff investigation.”

Consumer Watchdog’s letter quotes articles in Politico and The New York Times about the Internet giant’s $25 million lobbying campaign and its efforts to cozy up to the Obama Administration and other Washington insiders. “It was a multiyear campaign focused on this very moment, knowing as the company grew these issues were going to come up,” Alan Davidson, Google’s former top lobbyist, told Politico.

Read the Politico article here.

Read The New York Times article here.

The best course of action, Consumer Watchdog said, would have been to file an antitrust suit and bring the case to trial. All the evidence would have been part of the public record. In a November letter to the FTC Consumer Watchdog warned that a negotiated settlement would inevitably invite cynicism about the results.

Consumer Watchdog’s letter to the Commission today continued:

Opting to avoid a trial and filing a formal consent agreement would at least have required a complaint, spelling out the violation. Instead you have settled for promises from a company that has a demonstrated record of repeatedly breaking its word. And it’s not even clear what they did wrong.

Your only chance of re-establishing the FTC’s credibility on its handling of the Google investigation is to release the 100-page staff report about the inquiry. Releasing the report would put the Commission’s decision in context.

Moreover, the public has the right to know what the staff recommended and to understand the reasoning of the professionals who conducted the lengthy investigation and the quality of their work. It could be possible that the staff botched the investigation and you were left with no other choice. If the report contains Google trade secrets, they could be redacted.

Populist governor Hiram Johnson gave Californians the ballot initiative one hundred and one years ago to combat the stranglehold of wealthy scions over the statehouse. Today’s New York Times reports on how California’s ballot measures are dominated by a handful of billionaires, including some trying to buy more power for themselves and their companies. Call it The Billionaire Ballot.

In modern history there has been no slate of ballot measures with so much concentrated wealth behind it. But can we judge a ballot measure by the billionaire behind it? It depends what the billionaire wants.

Here’s a populist guide to the Good, Bad and Ugly of California’s Billionaire Ballot:

The U G L Y: Two insurance billionaires are the big funding behind Proposition 32 and 33. Both initiatives have been rejected before. The tens of millions being poured in by two insurance billionaires are pure power grabs to get more money and power for the backers of Proposition 32 and 33.

Proposition 33 is backed by Mercury Insurance Chairman George Joseph, who has spent $16 million, 99.5% of the funds behind the initiative, to charge drivers more for not having auto insurance previously, even if the reason is they didn’t drive. Billionaires buying the ballot to help their own profits doesn’t get much uglier than Prop 33.

Prop 32 features the heir to the Berkshire Hathway fortune, including GEICO and another insurance company, buying the ballot to gut the power of labor unions in the political process. This of course helps the super-rich and insurance companies have more power. GEICO heir Charlie Munger Jr. poured $22 million into Prop 32, and it isn’t to benefit The People, but His People. Hiram Johnson rating: U.G.L.Y!

The BAD: Molly Munger, the other heir to the Berkshire Hathaway fortune, the liberal one, is funding an altruistic ballot measure, Prop 38, which is backed by the PTA and funds education. The problem is it has little public support and is likely not only to fail, but could bring down Prop 30, Governor Brown’s budget mending ballot measure, which Munger briefly attacked directly. Rule for billionaires in ballot measures: start with 70% approval rating, not 40%. IF you don’t have the public with you at the beginning, you are not likely to win voters over. And if there’s a competing ballot measure, it’s likely to be a pox on everyone’s house.

The GOOD: At least two billionaires have the right idea. Environmentalist and hedgefund manager Tom Steyer is funding Prop 39, an enlightened idea to close the state’s loophole on taking out of state corporations, and generate $1 billion for the beleaguered state treasury. Steyer used his money to stop oil companies from gutting the state’s greenhouse gas emissions law last election, for which he earned my consumer group’s Phillip Burton Public Service Award.

Nicholas Berrgruen’s financing pushed Prop 31 on the ballot at the last minute. It’s a two year budget cycle initiative reform that has positives and negatives, but Berrgruen sponsored the idea because he believed it would benefit Californians, not line his own pockets. In the end, that’s all we can really ask of billionaires that want to play in ballot measure politics: 1) Do it for the state, not to benefit yourself or your class 2) Don’t screw anyone else who has a better idea and is more in sync with public opinion.

It takes big money to play in California’s ballot measure process today, so billionaires are plenty welcome. But if they are in it for themselves, they aren’t likely to fool the voters, who have a remarkable knack for rejecting any ballot initiative with a stink behind it. In the end, the initiative process is still the people’s. Voters decide, and their judgment over the billionaires is the final verdict.

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Originally Posted on The Huffington Post by Jamie Court, author of The Progressive’s Guide to Raising Hell and President of Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.