How Things Work: FTC Chair to Join Procter & Gamble
The chair of the Federal Trade Commission (FTC), Deborah Platt Majoras, is leaving her job. She’s going to become vice president and general counsel for Procter & Gamble (P&G).
Should it raise eyebrows for the head of the leading U.S. consumer protection agency to leave and take a job with the largest consumer products company?
Not in Washington, D.C.
Asked about the propriety of the move, FTC spokesperson Nancy Judy explains that Majoras will need to abide by a year-long “cooling off” period. She’ll never be able to represent P&G before the Commission on matters on which she worked while at the FTC. And once she announced that she would be taking a job with P&G, she removed herself from any matters that might affect the company.
Shira Mintz, who is the assistant general counsel for ethics at the FTC, says that Majoras is “extremely conscientious” about ethical matters, and that everything she has done is above board.
OK, but is there any concern about appearances here? Or is this just how things work?
“It is how things work,” says Mintz. “The nature of the business is the revolving door.”
Wow.
“You get extremely qualified people to come into government, and then they go back into the real world,” says Mintz. “Real world” means well-paying corporate work.
Majoras came to the FTC from the Bush Justice Department. Prior to that, she worked for the corporate law firm Jones Day. Jones Day claims more than half of the Fortune 500, including P&G, as clients.
Procter & Gamble is the largest consumer goods company in the United States (not counting Altria/Philip Morris, which is breaking itself apart later this week). It makes Old Spice deodorant, Charmin toilet paper, Pampers diapers, Duracell batteries, Ivory soap, CoverGirl cosmetics, Dawn dish washing soap, Clairol hair dye, Pepto-Bismol, Tide laundry detergent, Crest toothpaste, Bounty paper towels, Gillette shaving products, Folgers coffee and Pringles potato chips, among many other products.
The FTC is an independent federal agency with authority over both consumer protection and competition policy. Given the breadth of the FTC’s jurisdiction and the breadth of P&G’s product line, what the FTC does — and does not do — is of potentially enormous importance to P&G.
Under the Bush administration, including the period since 2004, when Majoras became chair, the FTC hasn’t done much.
Consider just a few of the issues that touch on Procter & Gamble’s interests:
* P&G is the leading company involved in “buzz marketing” — employing regular people to talk up company products, often in exchange for free merchandise. P&G says it has 250,000 teens working for its Tremor division. P&G sends them stuff, and they are supposed to talk to friends about the products.
The head of the Tremor division told USA Today in 2005, “If we’ve done our work correctly, they talk to their friends about” the gifts. Tremor doesn’t tell members to say they are part of Tremor, he explained, “because you never tell a [panelist] what to say.”
An organization with which I work, Commercial Alert, petitioned the FTC in 2005 to investigate whether buzz marketing operations violate federal rules on deceptive advertising. The basic FTC rule is that paid marketers must disclose that they are paid.
The Commercial Alert petition asked the FTC to review evidence that “companies are perpetrating large-scale deception upon consumers by deploying buzz marketers who fail to disclose that they have been enlisted to promote products. This failure to disclose is fundamentally fraudulent and misleading.”
The petition specifically focused on P&G, arguing that “the Commission should carefully examine the targeting of minors by buzz marketing, because children and teenagers tend to be more impressionable and easy to deceive. The Commission should do this, at a minimum, by issuing subpoenas to executives at Proctor & Gamble’s Tremor and other buzz marketers that target children and teenagers, to determine whether their endorsers are disclosing that they are paid marketers.”
A year later, the FTC responded. The Commission agreed with the thrust of Commercial Alert’s argument: “In some word of mouth marketing contexts, it would appear that consumers may reasonably give more weight to statements that sponsored consumers make about their opinions or experience with a product based on their assumed independence from the marketer.” But then the Commission declined to undertake an investigation or rule-making, saying it would consider matters only a case-by-case basis. The P&G case — involving a quarter of a million teens who are not instructed to disclose their relationship to the company — apparently was not noteworthy enough.
Said Gary Ruskin, Commercial Alert’s executive director at the time, “Instead of acting like a watchdog, the Commission is more like a docile lapdog nestled in the lap of its corporate masters.”
* A major emerging technology for consumer products is RFID (Radio Frequency Identification) systems. These systems, involving the attachment of tiny, trackable electronic chips to products (or people, pets and cars), offer the possibility of precise inventory control and management. They also portend some major privacy concerns.
The Electronic Privacy Information Center (EPIC) warns of the possibility of “an Orwellian world where law enforcement officials and nosy retailers could read the contents of a handbag — perhaps without a person’s knowledge — simply by installing RFID readers nearby.” There are concerns about retailers and manufacturers being able to track consumers once they leave the store.
These issues are being taken seriously in Europe. There, says EPIC executive director Marc Rotenberg, “the European Commission has undertaken an extensive public consultation and has recently held several high-level events.” The European Commission is now soliciting comments on proposed privacy standards for RFID technologies.
In the United States, in 2004, the Federal Trade Commission held a workshop on RFID issues. P&G presented at the workshop, detailing the company’s privacy policies and how it would ensure that RFID technologies were not abused. EPIC also presented.
“EPIC submitted very detailed comments with clear recommendations,” says Rotenberg. “No action since.”
* Childhood obesity rates in the United States have more than tripled over the past four decades. The childhood rate of type 2 diabetes, once known as “adult-onset” diabetes, has more than doubled in the past decade. No serious person believes skyrocketing childhood obesity rates are unrelated to the onslaught of junk food marketing targeting kids. The staid Institute of Medicine finds, “food and beverage marketing practices geared to children and youth are out of balance with healthful diets and contribute to an environment that puts their health at risk.”
It has been impossible for the FTC to completely ignore this issue. But the FTC has doubly worked to protect the junk food marketers. It emphasized that many factors besides marketing are driving the obesity epidemic — which is true, but a way to divert attention from the agency’s regulatory role. And, as Majoras said in 2007, “the focus of the FTC/HHS [Department of Health and Human Services] joint initiative on childhood obesity has been on marketing and industry self-regulation.”
In recent years, facing the threat of litigation, federal legislation, state and local regulation, and citizen pressure campaigns — just about everything but serious FTC action — the junk food companies have adopted some modestly helpful marketing guidelines to curb some of their most aggressive practices. But the guidelines remain voluntary and are non-enforceable. Although it has held some interesting meetings, the FTC has been absent on the regulatory front.
These are just three among many examples. Other FTC policy issues implicating Procter & Gamble include online marketing to kids, product placement on TV, and mergers (the FTC in 2005 approved a controversial, $57 billion P&G takeover of Gillette, a decision from which Majoras recused herself.) There are many others.
There’s no reason to suspect Majoras is violating any laws in going to work for Procter & Gamble, or that she will in the future. There is no reason to believe she did favors for P&G in anticipation of a job with the company. From her new, high post, she personally may never take up a matter before the FTC.
But the deep corruption inside the beltway is not the illegal, Jack-Abramoff stuff. The real corrupting influences are the things that are legal. The things that Washington insiders view as just “how things work.”
Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor, and managing director of Commercial Alert.
(c) Robert Weissman
Is this sort of like the CEO of Halliburton infiltrating the gov’t and starting an illegal war with Iraq to reap unheard-of war profiteering treasure for his former (or present?) corporation?
300,000,000 people in the US. 5,000 to 10,000 people qualified to perform this function for P&G. The fact that she is/was former head of FTC has no bearing on their selection process,……. so.
Direct democracy by referendum can beat the corporate oligarchy.
It would be great if we had a Congress willing to pass anti-revolving door legislation. No former bureaucrat, executive official, legislator or Congressional staffer should be able to work for the private sector in an area for which that person had responsibility. If they can’t find another job in government, let them start from scratch.
heyas
it is all part of the ”plan”.. fat sick people won’t (can’t) cause trouble.. as in revolt against the MIC/Neocon take over, they are too sickly to resist
This concern is so-pre-Bush II. Read Chapter 15 of Naomi Klein’s The Shock Doctrine. Donald Rumsfeld successfully fought to hold on to his stocks in Gildead Sciences, valued at $95 million, while serving as Secretary of Defense. Dick Cheney continues to hold shares in Halliburton even as it profits from no-bid contracts and stands accused of defrauding the government of billions of dollars. As the government privatizes its functions, it brings people into service who can recommend policies in overt conflict of interest. The “Revolving Door” has been replaced by an archway.
Ah yes, the “Golden Archway” Then, when you finally leave, the “Golden Parachute.”
We who worked our lives and finally retired get a fixed “lead parachute” that gets smaller and smaller each year.
Isn’t fascism wonderful?
Let’s hope that this works out as well for P&G as it did for Boeing and their tanker planes…
It isn’t very hard to imagine situations which may corrupt civil servants as they are being poached by business.
A job offer as a bribe is still a bribe?
So far, and from what I can tell from all of the above reader posts, tbenner is the sole one to be off; FAR OFF.
Evidently hasn’t heard of ‘CONFLICT OF INTEREST’, or doesn’t adequately understand what it entails, so means; or else is just another corporatism pusher.
Or maybe it’s that tbenner doesn’t understand what this means, “head of the leading U.S. consumer protection agency”, Weissman speaking of what her role was, and what the FTC [is].
What I find peculiar and objectionable is how the FTC’s Shira Mintz in this article self-identifies her job with the FTC/ government as implicitly diminished, or even imaginary in role when she quips about former FTC regulators like Deborah Platt Majoras assuming corporate positions “…they go back into the REAL world.” The only ‘real world’ is the corporate world in other words. I’ve always hated that term. “The real world”. It’s so utterly loaded with political implications. Volunteer with the Peace Corps after college? Well…according to many such as Mintz, you’re presumably enjoying a year or two on a fling of sorts. That is, before you return to the ‘real world’ and start interviewing for a ‘real job’ with P&G, Home Depot, Best Buy, etc. I actually knew a Peace Corps volunteer who in her first interview in the USA after service in the Corps was asked this question: “well, now that you are back in the REAL world, are you ready to get serious about life and your career?” As if her volunteer work was irrelevant, or even a negative on her CV.
Why are we shocked about this or all the shortcomings of the FTC in regulating industry? Hasn’t it become perfectly clear that the government is FOR and BY the corporations? There’s nothing surprising about this at all… As far as the government is concerned, the people are just consumers to be exploited, a commodity to be abused by the corporations, nothing but dumb little lemmings to be fed to the war machine. YOU mean nothing to them. In fact, they think of you with the greatest of disdain… They think you stupid fat lazy people to be exploited. Slaves. Sub-Humans… not worth the shit on their shoes. So when they work against the best interests of the people and work on behalf of the corporations, surprised should be the one thing we’re not.
“FTC spokesperson Nancy Judy explains that Majoras will need to abide by a year-long “cooling off” period. She’ll never be able to represent P&G before the Commission on matters on which she worked while at the FTC.”
A whole year of cooling-off from the FTC, of draining her system of governmentality, the same governmentality that prepared her to work at Procter and Gamble.
Surly, a “cooling-off period” is as juvenile a treatment for her inclinations as it is an unnecessary one. Deborah Platt Majoras probably won’t even notice she’s changed employers. (It could reasonably be said that she has not a qualitatively different job, but only a different parking lot to park her car in.)
Gale Norton , 5 year Secretary of the Interior became General Counsel for Royal Dutch Shell.
Oil and drug companies are among the most profitable recently. Along with military contractors.
Move along. Nothing new.
If you want to get angry about something and your only 2 choice are either “the war” or the “revolving door” get angry at the “revolving door” because it is the root of many more problems than “the war”.
Definitely nothing new here. The revolving door has been revolving for decades now.
One tangible thing that is very effective though is: DON’T BUY P&G PRODUCTS! I haven’t bought anything made by them for years.
There is a line from the movie Trading Places that seems so apropos here, paraphrasing: “It seems to me the way to get back at rich people is to make them poor.” No sales=bankruptcy.
No Old Spice deodorant, no Charmin toilet paper, no Pampers diapers, no Duracell batteries, no Ivory soap, no CoverGirl cosmetics (they contain phthalates anyway), no Dawn dish washing soap, no Clairol hair dye, no Pepto-Bismol, no Tide laundry detergent, no Crest toothpaste, no Bounty paper towels, no Gillette shaving products, no Folgers coffee and no GD Pringles potato chips!
No, no, no. And then we can say goodbye to Proctor and Gamble, and the world will be a better place because of it.
When I was a young man, “conflict of interest” was the kiss of death. Now it is a job requirement.
We are a country of consumers. To stop buying P&G they will just put their products on sale and guess what 75% of the shopping carts in the store that day will have those products.
I feel the world will have to hit rock bottom before it changes. Gas price only for the rich, line ups for food to try to keep you and family alive. Politician changes in the USA will not make any difference. I say start growing your own food and get a back up power source ( solar wind, batteries) to keep the freezer working.
PS start saving those seeds before the Gov takes them away.
mike corbeil, let me clarify my position. After rereading my comment, I see it is not very well written mainly because I am not a very good writer. The point I was trying to make is that many people could do that function at P&G. The fact they chose who they chose and why, confirms who runs this country.
Just want to add, The last thing I would ever want to be is a corporatist pusher. I am a socialist who has seen how truly evil this country has become.
maybe majoras didn’t like the TAX PAYER SALARY she was getting…i wonder how much she will make during the cooling off period ?….
and as has been said above. The corruption of politicians being bought off by lobbyists from big companies is why the USA is in the toilet today and won’t ever get out.
QUESTION, correct me if I am wrong but was it not Regan who changed the laws to allow this to happen? If I am correct then change the laws, if we can. I don’t think BO or any of them have the nuts to do it.
tbenner: -I- got what you meant.
You were basically musing about rolling a 5 or 10 thousand sided die and rolling someone so high up in government on ‘accident’. Yeah, it’s cute how coincidence theorists can justify anything.
johnycanuck, I thought I was the ony one who saw this. Give them food that will make them sick and then they will have to take meds, which the pham. co’s will sell us. Everything is arm in arm.
A position designed to be impartial and antagonistic has now been changed to appease the regulated and thus removes the intent of impartiality.
“how things work” is a direct result of the conservative mantra that “government is the problem.”
How best to limit government than by neutering it. The attack on government agencies by denying it freedom and the attack on government power by bankrupting it through massive deficits is the conservative legacy.
If you agree with Weissman’s corruption charge then it is conservative ideology that is the cause.
Frank-squared, you are right on target. It’s the infuriating battle cry of the republican party that government is ineffective and should be limited. They use the argument to discredit the dems for “taking all your money in taxes and handing it out to people who are too lazy to earn a living for themselves”, and then when they are actually in charge of government, and they f#ck everything all up even worse, they merely say “see? we told you”. it is maddening.
It is only another case of very efficient business people doing what they do best: seeing to it that no payoffs go to the wrong recipient.
“You get extremely qualified people to come into government, and then they go back into the real world,” says Mintz.”
Wonderful to know that the government is staffed with people of such high qualification. Somewhat less happy is that the government is not “real”.
Did Mintz’s mother drop her head first onto the concrete steps?
This F#*KING country is making me sick. When I see this kind of convenient and cozy relationship amongst the lawmakers and corporations, it makes me want to vomit. What the hell is our government set up for, the corporations? Apparently so.
tbenner, I could see you were being tongue-in-cheek with your first comment.
libertas fugit, did you mean to say, “Isn’t democracy wonderful?”
Poet, you are right about the revolving door. I am still amazed at the brazenness of it all. I think these folks KNOW that most people in the country are too distracted by TV, football and what not, to care for such an abstract(!) concept such as conflict of interest.
With the western countries pushing ‘globalization’ down the throat of many countries, it’s a worldwide phenomenon now - many officials who were earlier working for the government now work for the multinational companies - as consultants, advisers, or full time. Things are even more chaotic and getting scarier due to rapid, but uneven growth in some of these countries.