THE CONSUMER'S IMPOTENT FRIEND IN WASHINGTON

WHILE every special interest has a lobby in Washington, the U.S. consumer does not. Yet he is supposed to have one: the Federal Trade Commission. The FTC was created in 1914, partly to enforce antitrust laws and partly to stop misleading advertising, false labeling and deceptive sales practices--precisely the abuses that are most infuriating consumers now. By all expert accounts, the FTC has failed in its task. Last week a special commission of 16 lawyers, professors and economists appointed by the American Bar Association explained the reasons for that failure. The agency, charged the commission, is a model of bureaucratic inertia, timidity and internal dissension, and it cries out for top-to-bottom reform.

Seeking a New Chief. That is scarcely a new thought. The A.B.A. commission report, as its authors caustically point out, repeats some criticisms that were voiced officially as early as 1924, restated by the Hoover Commission in 1949 and updated in scathing language last spring by "Nader's Raiders," the team of young lawyers and students assembled by Consumer Crusader Ralph Nader. The latest report may well have more effect than earlier ones, because it comes at a crucial time. President Nixon asked for it, obviously to help guide him in appointing an FTC chairman to succeed Paul Rand Dixon, a Democrat who has held the job since 1961. Dixon has offered to move down and serve until 1974 as one of the five commissioners. Nixon could name the new man as early as this week, when the seven-year term of Commissioner James Nicholson expires.

The new head will have a herculean task in turning the agency around, says the A.B.A. report. Among the FTC failings that it spotlights:

PARKINSON'S LAW. The FTC has been doing steadily less work with more people. In fiscal 1962, the commission opened 1,795 formal investigations of suspected business abuses. Last year it opened only 611. "We are perplexed by the magnitude of the reduction," said the A.B.A. study. The FTC staff increased from 1,126 to 1,230 between 1962 and 1968.

PREOCCUPATION WITH TRIVIA. The FTC devotes an astonishing proportion of its energy to attacking allegedly misleading textile-and fur-labeling practices. It has questioned a fur label on which "South West Africa" was abbreviated to "S.W. Africa" and a "90% wool" label on a blanket that was 89.9% wool. On the other hand, the commission does not even screen local TV and radio commercials or scan newspaper ads to detect the fraudulent practices--fictitious pricing, home-improvement gyps, "bait-and-switch"schemes--that the FTC's own studies indicate are widely practiced in ghetto areas. The main reason for this failing is that the commissioners have given their staff little guidance as to what kind of cases to concentrate on. The staff has been reacting to whatever complaints happen to come in the mail, mostly from businessmen against competitors, rather than doing legwork. The FTC has an Office of Program Review that is supposed to set priorities but, the A.B.A. report notes, its director "died almost a year ago and has not been replaced."

LACK OF ENFORCEMENT. During Paul Rand Dixon's chairmanship, the FTC has shifted away from issuing cease-and-desist orders,* which are enforceable in federal courts, against business misdeeds. Instead it relies largely on securing written, or often merely verbal promises from businessmen that they will stop practices that the agency deems deceptive. The A.B.A. authors voiced fear that this trend would cause even more businessmen to stop taking the FTC seriously, particularly since the agency rarely checks to make sure that businessmen live up to their written promises of reform. It also "makes no effort whatever" to enforce compliance with oral promises.

STAFF WEAKNESSES. The A.B.A. team found considerable "incompetence" on the FTC staff and hinted that some of that might result from deliberate policy. For example, the report cited one "senior staff member" who hires lawyers but rarely chooses recent graduates from the top brackets of law schools. Said the report: "He told us he preferred to hire older men who had been out in the world for ten years or so and had come to appreciate that they were not going to make much of a mark --because they tended to be loyal and remain with the FTC."

Chicago Law Professor Richard A. Posner, an A.B.A. commission member, saw so little hope of the FTC's ever becoming effective that he proposed gradually phasing it out of existence. The other 15 members suggested sweeping reforms, beginning with the establishment of clear FTC priorities. They urged that the FTC create task forces in urban areas to stop frauds perpetrated on the poor, the uneducated and the elderly. The critics also suggested that Nixon name a chairman from outside the FTC. A new chief presumably could count on support for an activist line from Commissioners Philip Elman and Mary Gardiner Jones, who lately have been publicly castigating the FTC.

Popular Issue. If Nixon follows the report's advice, he would both help consumers and protect himself politically from Democrats who scent a popular issue. Senator Edward Kennedy last week tried to begin his political comeback from Chappaquiddick by opening subcommittee hearings on the FTC; he urged that A.B.A. recommendations be put into effect. The President reportedly has offered the FTC chairmanship to Caspar Weinberger, who would fit the A.B.A.'s new-broom recommendation. Now California's finance director, Weinberger is a veteran lawyer and moderate Republican politician. He is also hesitant about taking the job. It would be hardly surprising if the A.B.A. report on the magnitude of the FTC's deficiencies frightened away any new head whom Nixon might want.

*Last week the National Federation of Independent Business, an association of 270,000 small businessmen, denounced the FTC for merely promulgating guidelines to regulate gas-station games rather than forbidding the games outright. The ruling, charged the federation, "is one of those decisions that the FTC seems prone to make when big oil is involved."

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