Cleaning up after Pasquale's hit job

Geoffrey Manne —  18 December 2007

Recently, Frank Pasquale at Concurring Opinions wrote a blog post did a drive-by hit on FTC Chairman Majoras supporting her recusal from considering the Google/DoubleClick merger now pending before the FTC.  You really have to read the post to get the full effect of the innuendo and intimation–it’s masterfully subtle.  At the time I commented on his blog:

Ah, muckraking. A time-worn tradition. So, let me see if I get this straight. Majoras is incapable of acting scrupulously in assessing gouging claims because she has, in the past, advised oil companies (among hundreds of other companies). Nevermind the airtight arguments against price gouging by oil companies and the broad and vast company saying the same things as Majoras. And this tenuous, utterly-unsupported (and oh-so-carefully implicit) claim of bias thus supports calls for Majoras to recuse herself from involvement in a wholly-unrelated case, in a different industry entirely, because, something like, “she’s done it before; she’ll do it again!” I see. Yes, very compelling.

Now comes news, not reported by Frank, that the claims in the recusal motion are pretty far from the mark.  Majoras’ statement (and Kovacic’s statement in response to a similar motion) and the statement of the remaining members of the FTC supporting her are here.  The salient parts:

To fully explain why recusal is not required here, I first must correct some key factual errors contained in the Petition. The Petition states that “Petitioners learned on Monday, December 10, 2007 that Doubleclick, has retained the Washington law firm of Jones Day to represent the company before the Federal Trade Commission in the pending merger review.” (Petition, page 1 ¶ 3). . . . Jones Day does not represent DoubleClick before the FTC and, indeed, in dozens of meetings and submissions, has never appeared or even been mentioned.

More importantly, the Petition also incorrectly states that “The Spouse of the FTC Chairman, John M. Majoras, is currently an equity partner with the law firm Jones Day.” (Petition, page 2 ¶ 5). As of January 1, 2006, John Majoras converted from an equity to a non-equity status and became a fixed participation partner in Jones Day. I understand that as a fixed participation partner, his compensation will not be increased or affected by changes in the firm’s income. Further, all benefits my husband receives from Jones Day are the same as those earned by other similarly situated non-equity partners in the firm. Therefore, my husband does not have a financial interest in the firm’s income, and thus I do not have an imputed financial interest.

In 2004 and 2005, when my husband was still an equity partner, I assumed that I would have a financial interest in FTC matters in which Jones Day represented a party and recused myself in such matters, as petitioners note. (Petition, page 3 ¶ 8-12). After my husband relinquished his equity interest in the firm’s income, I began to consider participating in FTC matters in which Jones Day represented a party, in consultation with the FTC’s Ethics Official. FTC staff and I continue to actively monitor FTC filings and public appearances, as well as any public statements that we may see, to determine whether Jones Day is involved in FTC matters.

The final point helps to explain the petitioner’s oh-so-sinister assertion, duly quoted by Frank, that Majoras had recused herself from cases involving Jones Day before, but not this time . . . .

At any rate, I just thought I might keep the record straight for the blawgosphere.

Geoffrey Manne


President & Founder, International Center for Law & Economics

2 responses to Cleaning up after Pasquale's hit job


    Where to begin?

    1. You’re concerned with informal bias, not the formal kind that, you know, actually might require recusal from a case. Some of us call these silly formalistic distinctions “facts” or, in some cases, “laws.” Nevertheless, you in fact write in your post about . . . recusal from a case. Like it or not, recusal requires that certain conditions be met. You imply in your post that those conditions are more than met. The reality is that those conditions were not even barely met. Intimation to the contrary, even in the service of stamping out your supposed “informalistic” bias, sure seems like a petty hit job to me.

    2. The “Kirkpatrick Antitrust Conference” you refer to was one of the most laughable and transparently-biased efforts at self-justification I have ever seen. The entire conference was a series of post-Chicago and/or lefty academics and commentators–oh, no, I’m sorry. Richard Schmalensee was included for balance against the other 15-odd participants–asking answer-begging questions (“Is It Valid to Assume that Vertical Arrangements (Merger and Distribution) Can Very Rarely Injure Consumer Welfare?” Gosh, I wonder what their answer will be? . . .) to put forth their own pet theories along with some finger wagging at evil “conservatives” whose only justification for their misguided theories to the contrary must be bias because, who could disagree with little old me?

    3. Where, exactly, in your post to you discuss this much-vaunted biased antitrust policy? It is kind of you to point to the substantive criticisms made in the Georgetown conference, but I’m just not sure your analysis quite rises to that level (“1. Majoras has worked for a law firm. 2. There she represented oil companies. 3. She is not fit to hold public office. QED.”). I’m sure you are concerned with the conservative economic influence on US antitrust policy. But your post employs knee-jerk claims of guilt by association and not a substantive assessment of antitrust economics. So you’ll have to excuse my having missed that as “evident in your post.”


    Hit job? Simply reporting what was up on an NYT blog and some connections made on Sourcewatch?

    Geoff, I highly commend to you a listen to the “Kirkpatrick Antitrust Conference: Conservative Economic Influence on U.S. Antitrust Policy,” available on iTunes or the Georgetown law school website. That’s the type of bias I’m interested in–not formalistic distinctions between whether someone is an equity partner or not. And that concern should have been evident in the post.