Cleaning up after Pasquale's hit job

Cite this Article
Geoffrey A. Manne, Cleaning up after Pasquale's hit job, Truth on the Market (December 18, 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.