Few Federal Trade Commission proceedings in the past few years have produced quite so much paperwork and public debate as the pending departure of Commissioner Michael Pertschuk.
With a flurry of charges and countercharges, reports and rebuttals, Pertschuk is exiting the FTC with guns blazing, making more public than ever before his sharp differences with the Reagan-appointed majority on the commission and, more specifically, with its chairman, James C. Miller III.
The bitter Pertschuk-Miller feud turns on philosophy. Pertschuk, the liberal consumer advocate, against Miller, a conservative economist who believes the marketplace will take care of bad practices without the need for much government regulation.
The dispute has bubbled along at the politically charged FTC for the past 3 1/2 years, since Miller replaced Pertschuk as chairman. Pertschuk has become increasingly frustrated with what he sees as the Reagan FTC appointees' anti-regulatory attitude, while they have been irked by his carping. With Pertschuk departing Oct. 15 at the end of his seven-year term, the feud has burst into the open with a furious exchange of position papers.
The documents include a 370-page report by Pertschuk on the problems he perceives with the FTC, that was requested by Rep. John D. Dingell (D-Mich.), chairman of the House subcommittee on oversight and investigations. Miller came back with a 189-page response charging Pertschuk with a multitude of factual and analytical errors while defending his own tenure as chairman. Pertschuk then wrote a 26-page response to the response, titled "A Reader's Guide to Claims About the Wonders of Reagan's FTC" (Subtitle: "Or Fun With Numbers"). All the while other FTC members where chorusing their own responses to the dramatic exchanges between the agency's two stars.
The exchanges are often leavened with Pertschuk's sardonic humor and humorous anecdotes: He described the report to Dingell as a chronicle of "the misadventures of a gang that couldn't rule straight."
Retorted Miller: "Mike is a terrific writer, especially when it comes to fiction."
Pertschuk and Miller have both summoned the press to complain about one another, and FTC public relations staffers have pestered reporters to get Miller's side into any farewell profiles of Pertschuk. But Pertschuk got in what may be the parting shot yesterday with what amounted to a valedictory speech at the National Press Club in which he laid out his frustrations with the current FTC.
"Part wittingly, part unwittingly, they have crippled the FTC," Pertschuk said. "They have suppressed its energy, neglected its tasks, wasted its resources, while wallowing in intellectual self-indulgence . . . While they have fiddled, consumers have been burned."
Miller, for his final licks, charged that Pertschuk's speech contained numerous innaccuracies. But in a breakfast meeting with reporters earlier this month, the chairman got off what may have been his harshest on-the-record evaluation of his nettlesome colleague.
"I don't know what the man wants. He's a whiner," said Miller, who compared Pertschuk to Saturday Night Live's Whiner family of chronic complainers, and then found another parallel: "He's sort of like Chicken Little -- 'The sky is falling! The sky is falling!' And then the sky doesn't fall and he raises his arms or wings and says, 'The sky isn't falling! That's because I'm holding it up.' "
"See if the sky falls if Mike leaves," Miller said yesterday. "We'll see if Mike was really holding up the sky."
To hear Pertschuk tell it, what he was upholding at the FTC was the last vestige of the spirit of consumer protection that characterized the FTC during the 1970s.
Pertschuk came to the commission from the Senate Commerce Committee, where as chief counsel during the early 1970s he was instrumental in changing cigarette advertising practices and in pushing other legislation, including the Magnuson-Moss Warranty Act, which liberalized the commission's rulemaking authority.
Appointed chairman of the FTC in 1977 by President Carter, Pertschuk set out to exploit that new authority. Under Pertschuk, the FTC was a strong consumer advocate, attempting to cure industry-wide deceptions in such fields as used-car sales and funerals. A former staff member says Pertschuk mobilized the staff against wrongdoing against consumers. "People felt he cared about consumers, and they were going to do anything they could to help consumers."
But critics said Pertschuk's FTC sometimes went too far. Perhaps the most flagrant example was its campaign against what Pertschuk saw as unfair advertising on children's television programs. Pertschuk himself now admits that the crusade was a mistake -- not in principle, mind you, but in choice of forum. He now believes reform of children's TV advertising is too big an issue for the FTC and should instead be taken up by Congress.
Pertschuk's aggressive administration of the FTC made the commission a prime target of the anti-regulation forces of the Reagan administration, and shortly after Reagan took office, Pertschuk was replaced as chairman by Miller.
According to Pertschuk, it's been downhill for the commission ever since. In his report to Dingell, Pertschuk charges the Reagan appointees who now dominate the FTC with the "dismantlement of a great agency. . . . Today the agency is crippled; tomorrow, under the same choking reins, it will be moribund."
Under Miller, Pertschuk charges, the FTC has become dominated by "economic theologians" bent on stripping the commission of its power. Under economist Miller, he claims, the commission has become caught up in assessing the impact of its actions on markets and industries, and in the end it has been satisfied to let the marketplace be largely self-regulating.
As a result, Pertschuk complains, the FTC has condoned huge mergers of competitors in the oil industry, failed to prosecute price-fixing, and let the largest corporate offenders against consumers go scot-free while chasing down inconsequential rip-off artists. "This commission has sued more firms in bankruptcy than in the Fortune 500," Pertschuk said yesterday.
Miller, not surprisingly, defends his record, saying that the FTC is moving against larger companies, is pursuing investigations into unfair practices in many industries and has blocked some mergers. Still, he admits that the commission is going about its work somewhat differently.
"I don't make any bones about it -- there's been a change of emphasis and philosophy at the Federal Trade Commission," he said. Under the Reagan mandate of reducing regulatory burdens, he said, the commission, in contrast to its attitude under Pertschuk, is no longer out to test the boundaries of its authority. "We're not going to engage in social engineering," Miller said.
Miller says most of Pertschuk's complaints are unfounded, and he lists what he says are many inaccurate statements and inconsistencies in Pertschuk's report, speech and record in general. He says Pertschuk, frustrated, is merely looking for attention. "He desperately wants to be listened to, heard and paid attention to," Miller said. "You know the old saying. If you don't have the facts, argue the law. If you don't have the law, argue the facts. If you don't have either, bang on the table."
Pertschuk plans to do some lecturing and teaching, and hopes to form a Public Policy Institute to educate activists. Some say he would like to head up a new super consumer-protection agency in a Mondale administration. It's unlikely he'll stop complaining about the way Miller is running the FTC.