Monday, December 17, 2007

FTC Chair Denies Conflict In Google's Bid For DoubleClick

Information Week reports that the head of the Federal Trade Commission, Deborah Platt Majoras, will not recuse herself from reviewing Google's DoubleClick acquisition bid.

Chairwoman Majoras issued a statement last Friday in response to petitions alleging that she should remove herself from reviewing Google's proposed acquisition of Hellman & Friedman Capital Partners (DoubleClick). She said that the law and rules do not require her to bow out of the proceedings. She also said the petition for her removal from proceedings contained several factual errors.

Earlier in the week the Electronic Privacy Information Center and the Center for Digital Democracy filed a petition for Platt Majoras' recusal. It stated that she should not review the acquisition because her husband, John M. Majoras, is an equity partner with the law firm Jones Day, which has done work for DoubleClick.

Platt Majoras denied having any conflict in the matter.

She said another law firm represents DoubleClick in the FTC proceedings and that no one on the FTC realized that Jones Day represented DoubleClick before a European commission until earlier this week.

She also said her husband changed his status to non-equity, fixed participation partner in January 2006 and that her husband is not affected by the firm's income.

"Thus, I do not have an imputed financial interest," she said.

"In 2004 and 2005, when my husband was still an equity partner, I assumed that I would have a financial interest in FTC matters in which Jones Day represented a party and recused myself in such matters, as petitioners note," she explained. "After my husband relinquished his equity interest in the firm's income, I began to consider participating in FTC matters in which Jones Day represented a party, in consultation with the FTC's Ethics Official."

Platt Majoras said she has continued to consult with FTC lawyers and other staff members to decide whether to participate in reviews that involve DoubleClick.

She pointed out that U.S. Code 18, section 208, prohibits officials from participating personally and substantially in matters they know will affect their finances in a "direct" and "predictable" way.

A code of ethical conduct for executive branch employees also warns against participation in matters likely to affect the finances of a member of her household, or when she knows that a person with whom she has a covered relationship is or represents a party, if she determines that a reasonable person with knowledge of the relevant facts would question her impartiality in the matter.

Platt Majoras said that when she heard Jones Day might represent DoubleClick in the E.U. review, she sought guidance from FTC's Designated Agency Ethics Official on whether that would affect her impartiality, or appearance of it. She said the official ruled out a conflict over impartiality and added that even if it threatened the appearance of impartiality, Platt Majoras' contribution in reviewing the acquisition outweighs likely concerns about the agency's integrity.

"Because my participation in this matter is consistent with federal ethics laws and regulations, I intend to fulfill the duties entrusted to me when I was appointed and confirmed," she said.

Commissioner William E. Kovacic also filed a statement disclosing that his wife, Kathryn Fenton, had also become a non-equity and fixed participation partner at Jones Day.

"Even though the petition does not ask for my recusal, I want my position to be clear to avoid any future questions relating to this issue," he said. "Because, like the Chairman, I do not have any current conflicts in this matter, I have determined not to recuse myself."

Commissioners Pamela Jones Harbour, Jon Leibowitz, and J. Thomas Rosch also submitted a statement supporting their colleagues' participation. They said they "see no legal grounds" for disqualifying Platt Majoras or Kovacic from investigating the transaction.

"It is evident that these Commissioners have at all times taken affirmative steps to conduct themselves in complete conformity with the ethical standards that apply to their positions," they said.

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