Federal Trade Commission Chairman Michael Pertschuk, fighting congressional attempts to limit the powers of his agency, yesterday admitted to the Senate Commerce consumer subcommittee that some FTC staffers had carried on a "vendetta" against certain industries.
But, Pertschuk added, those staffers "are no longer at the agency," and he said the investigations they were working on -- particularly those involving funeral homes, hearing aides and vocational scools -- were ultimately not influenced by their alleged bias.
He did not say which staffers were involved, and the subcommittee did not ask.
Joined by his fellow commissioners and top staff members, Pertschuk gave a spirited defense of the actions of the FTC under his leadership.
"The record demonstrates that the commission is carrying out the intent of Congress with judiciousness and restraint," he told the oversight subcommitttee.
"Yes, our procedures have been criticized and in some cases justly," Pertschuk said, "and the judgment of our junior staff in some of the proceedings has been questioned."
Pertschuk claimed that the outcry against the agency, which he said was filled with "myths and half-truths," was "in large part a reflection of the effectiveness of rulemaking."
"The rules are beginning to bite," he said.
Perschuk said that while Congress has heard testimony about the cost burden the FTC placed on the industries it regulates, it has not yet heard of the impact on consumers.
"Out of the pages of these rulemaking proceedings come the voices and the pain of real people who feel they have been victimized in the marketplace." he said.
He cited three examples:
A woman in Connecticut "who sought an inexpensive cremation for her husband and ended up paying $600 for a casket because the funeral director dishonestly told her that the law required a casket for cremation and that the $600 model was the least expensive available."
A woman in California "who agreed to pay $3,000 for a used car essential to her work -- on the dealer's promise that he would repair free any defect -- lost her job when the car broke down shortly after she bought it, and the dealer denied his responsibility."
A 79-year-old Grand Rapids, Mich., woman "who was sold a hearing aid for $485 which did not work, and in fact could not work because her ear was clinically dead, yet the dealer refused to refund her money."
"These examples illustrate the flesh-and-blood concerns we are addressing in our rulemaking proceedings," Pertschuk said.
But subcommittee chairman Sen. Wendell H. Ford (D-Ky.) echoed the allegations from trade associations and industry groups -- many of whose representatives attended yesterday's hearing -- that the FTC has been unfair in its regulatory proceedings and biased against industry.