Federal Trade Commission Chair Lina Khan, an audacious and polarizing progressive pushing many of the Biden administration’s most aggressive anti-business actions, has been lionized by the press, including “60 Minutes.” In this context, a recent report from the FTC’s inspector general on news leaks are especially troubling and worthy of further investigation.
As a law enforcement agency, the FTC is privy to many trade secrets and other confidential information that businesses must disclose to it. Yet rather than zealously protect that information, as it is legally required to do, the FTC has apparently been widely leaking it to select media outlets.
This is a troubling, central finding of the inspector general’s annual report issued on Sept. 30, “FTC’s Top Management and Performance Challenges.” The report examines the top managerial deficiencies and challenges that must be addressed.
The internal watchdog agency is respectful but clear in its assertions. “The volume of unauthorized disclosures of FTC leaks to the media has been steadily increasing,” it says. “Although it is possible that some of the leaks could have originated from outside sources, it appears that the media may be obtaining significant amounts of nonpublic information from sources within the FTC.”
Such unauthorized disclosures are punishable by termination, up to a year in prison, and civil lawsuits. The disclosures also threaten the FTC’s public service mission, as the report warns.
“The trust of businesses, consumers, and other affected parties that the FTC will not improperly disclose nonpublic information is vital to the FTC’s ability to execute on its law enforcement mission,” the inspector general writes. “The mere perception that the FTC is leaking such information erodes that trust.”
While the report does not name the names of those who are leaking, it points to a troubling culture at the FTC and a cavalier attitude toward protecting this confidential data.
It says, “Despite recent training sessions on handling nonpublic information and written guidance from agency leadership — even warnings — to staff prohibiting leaks, the problem persists.” In plain English, FTC employees either do not fear the consequences of leaking this information or agency leadership is doing it.
Indeed, there has been much buzz about FTC leaks of confidential information since the start of 2024. In July, during a hearing of the U.S. House of Representatives Energy and Commerce Subcommittee on Innovation, Data, and Commerce, Congresswoman Debbie Lesko (R-Ariz.) asked Chair Lina Khan, “Lesko: Have you instructed Commission staff concerning these continued leaks? Have you talked to the staff about it?”
Khan replied, “As a general matter, I believe our general counsel has reminded everybody of the importance of maintaining the security and integrity of law enforcement.”
Chair Khan’s less-than-rigorous response merits follow-up. Key questions that need to be asked include:
- Have you taken any subsequent steps since July 9 to ensure that all FTC employees respect nonpublic, confidential data? If so, what are they?
- Why do you believe this problem is occurring now?
- Do you believe your frequent, high-profile media interviews lead to a perception that it is OK to provide such confidential information to the media?
- How can the FTC expect to be respected when it demands companies protect people’s private data, but the agency is not doing so?
The FTC must stop its cascade of leaks. Otherwise, its risks doing irreparable harm to its mission and standing, as its watchdog has wisely said, and the companies it is investigating.
Paul Steidler is a senior fellow with the Lexington Institute, a public policy think tank based in Arlington, Va.