The Federal Trade Commission is currently embroiled in a controversy over whether to let former chairman Miles W. Kirkpatrick participate in a rule-making proceeding in behalf of a client - a rule-making proceeding he's been participating in for two years.

Kirkpatrick, who left the FTC in February 1973 and returned to the law firm of Morgan, Lewis and Bockius, wrote the FTC in February 1975 that he had been asked to represent the Mobile Home Manufacturers Association in a rule-making proceeding the commission had initiated in December 1974.

At that time, the agency announced that four large makers of mobile homes had signed consent orders agreeing to establish programs to deal with warranty-related claims from mobile home buyers. The FTC also proposed an industry-wide rule which would extend warrantly performance standards similar to those contained in the consent orders to the entire industry.

In his letter to the commission, Kirkpatrick said the rule-making proceeding had been initiated after he left the commission and that he had no part in developing it.

After analyzing the agency's rules, he said he believed his participation in the proceeding on behalf of a client posed no problems and did not require formal clearance. He said he was notifying the agency to give it an opportunity to review the situation and advise him and two other former commission employees who were planning to participate.

The commission's rules generally prohibit the participation of former members of employees in any proceeding or investigation which was pending in any manner in the commission while they were there. But the rules also outline a procedure and standards for the agency to follow if former members and staff want to seek clearance to participate in matters which were pending while they were there but in which they had had no involvement.

Kirkpatrick was contacted by a member of the FTC's staff to ask about his vote on a commission resolution in September 1972 which gave the staff the authority to issue subpoenas in connection with an investigation of the mobile home industry.

Kirkpatrick had not remembered the investigatory resolution, though he assumed he had voted for it. His associates in the firm did not recall seeing any memos on the probe. An FTC source said last week the resolutions are most often of a general nature and don't include detailed staff allegations.

The FTC staff reviewing the letter gave Kirkpatrick informal indications that they saw no problems with Kirkpatrick's representation of the mobile home group during the proceeding, the commission expressed the view that no clearance was necessary.

No letter disagreeing with his position ever came from the FTC. Kirkpatrick and his associates began to take part in the FTC proceeding shortly thereafter.

But a Freedom of Information Act request last month for any agency decisions regarding Kirkpatrick's participation from the Center for Auto Safety prompted a new staff look at the situation. The original staff memo, FTC sources confirmed, was lost.

The matter came to the commission's attention at its March 9 meeting, but could not decide what to do about it. The issue is now pending and will be a matter for the new chairman, Michael Pertschuk, to review.

Several sources saidlast week the commission was in an unnecessary flap."There is no more honest man in the world than Miles Kirkpatrick," one said. "What was he supposed to do? He told the commission what he was doing and they didn't object."

Not only has Kirkpatrick been participating in the proceeding - which, unlike adjudicative matters, is totally on the public record - everyone at the commission knew he was involved in it, an FTC staff member said.

"I certainly knew, as did everybody else involved in the mobile home proceeding, that he was participating," said J. Thomas Rosch, former director of the FTC's Bureau of Consumer Protection.

"It never crossed my mind that there was any impropriety involved in that.

"There is absolutely no question but that the participation was completely above board, everyone on the staff knew about it, and even some of the commissioners knew about it."

Sources last week confirmed that Kirkpatrick, in his capacity as counsel for the association, had met individually with three of the commissioners as an advocate of the association's position over the last two years.