Cruz: Congress and the public deserve an explanation for the FTC’s record destruction
Top Republicans in Congress are pledging to take strong measures against the Federal Trade Commission (FTC) over allegations of destroying documents relevant to a congressional investigation. Senator Ted Cruz, a prominent Texas Republican and the ranking member on the Senate Commerce, Science, and Transportation Committee, expressed concerns in a letter to FTC Chair Lina Khan.
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The letter, dated Thursday and shared with Fox News Digital before its official release, states, “Through the deletion of documents, the FTC appears to have potentially violated federal law; this has also obstructed the oversight by Congress into the FTC’s unprecedented recent actions, including the proposal to prohibit non-compete clauses.” Cruz, joined by Representative Jim Jordan, an Ohio Republican and the chairman of the House Judiciary Committee, and Representative James Comer, a Kentucky Republican and the chairman of the House Committee on Oversight and Accountability, emphasized, “Both the public and Congress deserve an explanation regarding the reasoning behind the improper destruction of FTC records, the nature of records that were inappropriately eliminated, and the measures that will be implemented to prevent any recurrence.”
This action from Republican lawmakers transpires approximately eighteen months after the FTC’s internal oversight body, the Office of Inspector General (OIG), identified several deficiencies in the FTC’s record-keeping procedures.
Republicans insist the FTC has engaged in “improper deletions” of documents, which Representative Jordan specifically urged regarding the agency’s recent proposal to prohibit private sector employers from enforcing non-compete clauses on employees. These regulations restrict workers from joining competitors or starting similar businesses within a specified period.
In February, Jordan said the proposed rule could void 30 million existing non-compete agreements. He also criticized the FTC for focusing broadly on the potential benefits of the rule, while largely neglecting to quantify its associated costs.
According to Jordan, this rule goes beyond the scope of the Commission’s authorized powers. He believed it would implement a uniform policy that ignored the basic American principles of both federalism and open markets.
At the time, Jordan requested various documents related to legal risks arising from the rulemaking process, economic evaluations of the rule, and communications between the FTC and external parties regarding the rule.
In May, the FTC notified House Judiciary Committee staff that it had “removed material potentially relevant to the Committee’s inquiries.” It contains the records of an employee described by the Consumer Financial Protection Bureau who led the FTC’s efforts to draft the rule.
Republican leaders’ release of documents linked to the FTC’s congressional investigation underscores findings from the inspector general’s office in 2022. The OIG concluded that the FTC did not place sufficient emphasis on records management and did not robustly incorporate it. A core element of an agency’s organizational culture.
“Furthermore, it indicates a lack of commitment from the agency to adhere to legal regulations and raises concerns that it will continue to delete records related to ongoing investigations. Such practices are inconsistent with the principles governing the operations of a federal agency.” They expressed.
All three GOP members pointed out in their correspondence that “federal law places significant obligations on the FTC concerning recordkeeping.”
According to the Federal Records Act (FRA), the head of each federal agency is required to “create and maintain records” related to the agency’s “activities, policies, decisions, processes, and significant transactions.” Additionally, agency heads are required to establish and maintain a policy for “records scheduling.” This includes the agency identifying its records, establishing the duration of each type of record’s value, and obtaining authority to legally dispose of or transfer such records to the National Archives when such records are no longer needed by the agency.
As lawmakers highlighted, the FRA clarified that this accurate recordkeeping is necessary to “provide information necessary to protect the legal and economic rights of individuals directly affected by government and agency activities.”
“It has come to light that the FTC has faced challenges in meeting its obligations under the Act,” they said.
In a February 2022 memo, the Office of Inspector General (OIG) brought to the attention of FTC leadership two significant concerns regarding the agency’s records management: First, the agency was not adhering to records scheduling requirements established by the National Archives and Records Administration (NARA); Second, the FTC has not implemented automated procedures for efficient storage and timely disposal of records in a consistent manner across the organization.
The legislators stressed that the OIG’s findings are significant, highlighting that both the Bureau of Competition and the Bureau of Consumer Protection lacks a comprehensive case management system for their case files. Additionally, FTC management has no intention of moving files to the FTC’s cloud platform as an alternative to separate shared drive folders.
“To date, the FTC has not satisfactorily addressed concerns regarding its policy for records retention,” the Republicans said in their letter.
Lawmakers highlighted the agency’s failure to provide an explanation for the deletion of documents related to the rulemaking process, which the FTC should have identified as potentially facing legal challenges, Freedom of Information Act (FOIA) requests, and congressional oversight. Further, the FTC has not clarified how the records were removed from senior counsel at the FTC, regardless of whether these documents are subject to litigation or other holds.
As of now, the FTC has not responded to a request for comment from Fox News Digital regarding the letter.
Republicans have made a comprehensive request for communication records from the agency, seeking details about any documents the FTC has removed in connection with twelve additional congressional oversight hearings related to the agency.