Progressives thought they had the dream choice to head the Federal Trade Commission last year when President Biden nominated Lina Khan – but her leadership style leads to dissatisfaction among employees and risks derailing her ambitions, The Post has learned.
Khan, who made a name for herself as a bizarre legal scholar and critic of Amazon before her Elizabeth Warren-backed confirmation as FTC leader in June 2021, has vowed to aggressively fight monopolies in the technology field and elsewhere.
Nevertheless, sources close to the agency, which has a mandate to enforce antitrust laws and protect consumers, say that academic brilliance does not necessarily translate into leadership ability ̵[ads1]1; and that the 33-year-old manager’s inexperience has many 1,100 employees. agency on the way to the exits.
For example, Office of International Affairs Director Randy Tritell is expected to leave later this month after 24 years with the agency, said two sources close to the FTC. Tritell had taken a problem with Khan’s management style and had seen several members of his team reallocated to work on mergers and acquisitions, the sources said.
FTC spokesman Peter Kaplan declined to comment on Tritell’s resignation, but said the agency has “had to identify creative ways to redistribute internal resources to help with this intense workload.” Tritell declined to comment.
Insiders worry that internal conflict and brain drain could hamper Khan’s ability to carry out her agenda at a time when the FTC is already juggling several high-profile projects, including an antitrust lawsuit trying to force Meta to sell Instagram and WhatsApp and an Amazon investigation which includes an investigation into the recent acquisition of the MGM film studio that could lead to a possible lawsuit.
“They have put her in this position of running an important federal agency when she has no experience with this kind of thing,” Eileen Harrington, a former FTC chief executive who spent 27 years at the agency, told The Post. “She is a rising star who has been thrown out of the deep end.”
“People were crushed”
Employees complain that Khan meets staff far less often than former FTC executives – and is perceived as favoring like-minded law professors over experienced litigants and employees who understand the fine details of running a federal agency.
Harrington, a self-proclaimed Democrat, said she began receiving annoying phone calls from friends at the agency shortly after Khan took the reins last year. Khan spent much more time introducing himself to employees than previous board chairmen and had a dismissive attitude towards career employees, said sources close to the agency.
“People were devastated that all they got from the chair’s office was criticism, refusing to get involved,” Harrington said, adding that some called Khan “insulting” and a “tyrant.”
“They started quitting,” she said.
Kaplan, the FTC spokesperson, countered that Khan met with leaders of each FTC team during her first two months. Khan has also met “the entire staff at almost every office in the agency” and given employees opportunities to ask questions and share suggestions, according to Kaplan.
In addition to Tritell’s previously unreported plan to leave this month, other high-profile individuals who have left the FTC since Khan joined include former agency chief economist Marta Wosinska, former head of privacy and identity protection Maneesha Mithal and former representative of the Bureau of Consumer Protection director Daniel Kaufman.
“People with 15, 25 years of seniority are leaving,” Kaufman, who resigned in October after 23 years in the agency, told The Post. “It’s pretty unique in the kind of numbers I see.”
In a series of media interviews published Thursday, Khan promised to pursue several “major lawsuits” that “focus on what we see as some of the biggest problems.”
Kaufman claims that Khan will have a tough time reaching his goals without many years of staff on her side.
“The senior career staff are the people who really understand the firm inside and out and understand how to get things done,” said Kaufman, who has since joined the law firm BakerHostelter. “It’s a big loss for the agency.”
Since October, at least 40 FTC employees have left the agency for new jobs, including roles in Big Tech companies including Amazon, Apple and Google, MLex reported earlier in June.
“Chairman Khan’s aggressive enforcement approach has led to FTC attorneys being in demand, especially by technology companies with a history of breaches of FTC orders,” Kaplan said in response to staff layoffs, arguing that the staff decline rate has been on par with staff. first 12 months of the agency’s two former managers.
Khan’s allies claim that her overhaul is necessary to revive a stagnant FTC, even if it shakes some feathers.
“The FTC has been dying and ineffective for years, and the result has been out of control corporate concentration,” said Dan Geldon, a consultant and former senior adviser to Elizabeth Warren. “Lina acts quickly and boldly to turn the tide, and she should continue to do so regardless of whether it provokes any insider attacks.”
Dissatisfaction is not limited to leaders. An internal survey showed that the percentage of employees across the agency who have a “high degree of respect” for the agency’s senior executives rose from 83% in 2020 to 49% in 2021, as first reported by The Information in April.
Following the release of the poll, Khan rolled back a ban on public speaking that had angered employees – and her chief of staff apologized for making “people feel they do not have our trust and respect”, according to the newspaper. Employees lamented that mea culpa came just before the Office of Personal Management began sending out the 2022 edition of the Morality Survey.
Asked about the 2021 survey results, Kaplan said that Khan has taken “a number of concrete steps to address employee feedback” and that she “shares the passion of FTC employees for the work they do” and “has tremendous respect for their diligence and expertise. . ”
In May, Khan called on Congress to increase the agency’s budget from $ 377 million to $ 490 million so that it could hire more staff and cope with its “ever-increasing workload,” citing a wave of mergers and acquisitions.
Even Khan’s harshest critics admit that the FTC deserves more funding, but they are also concerned that the agency is not using its current resources efficiently.
For example, some FTC employees in their careers wondered about a New Yorker profile of Khan published in November that described Khan as saying “she intends to run the agency to select side cases, with less emphasis on results.”
While Khan supporters praise this attitude as proof of her transformative vision, some critics have interpreted it as evidence that the chairman of the board plans to send employees on wild goose that will result in headlines but not material legal victories.
Harrington went even further: “If the idea is, ‘We’ll sue you even if we think we can not win because this is what we think the law should be’ – honestly, I think this is an abuse of power.”
In response to Harrington’s criticism, Kaplan said: “As Chairman Khan has stated, her concern is that not taking action against illegal agreements and practices sends a signal to the market that violations are acceptable. Given the agency’s limited resources, she is focused on targeting the biggest players who inflict the most damage and the root causes of damage to prevent it from recurring. ”
The FTC has already claimed several victories under Khan’s leadership.
In December last year, the agency sued to block US chip maker Nvidia’s $ 40 billion acquisition of British chip designer Arm, arguing that the deal would stifle competition in the computer field. Two months later, the companies terminated the agreement. The American arms manufacturer Lockheed Martin also dropped plans to buy the rocket engine manufacturer Aerodyne for 4.4 billion dollars in February after FTC opposition.
But critics also point to the number of new cases brought by the FTC’s Bureau of Consumer Protection, which fell more than half from 79 in 2020 to 31 in 2021, according to Kaufman.
He said the agency is on track to surpass last year’s figures this year, but that it is a remarkably low bar.
“The 2021 numbers were so low that if they did not beat that number it would be really shocking,” he said.
Additional reporting by Lydia Moynihan