In an exclusive report by Fox News, leading Republicans on Capitol Hill have pledged to take action against the Federal Trade Commission (FTC) over allegations of document destruction linked to a congressional investigation.
Senator Ted Cruz, a Republican from Texas and the ranking member on the Senate Commerce, Science, and Transportation Committee, penned a letter to FTC Chair Lina Khan, accusing the FTC of likely violating federal law by erasing documents. "The FTC's recent, unprecedented actions, including its proposed rule banning non-compete clauses, have been hindered by this deletion, impeding Congressional oversight," Cruz wrote in the letter, dated for Thursday and previewed to Fox News Digital.
Cruz, along with Rep. Jim Jordan, an Ohio Republican and chairman of the House Judiciary Committee, and Rep. James Comer, a Kentucky Republican and the chairman of the House Committee on Oversight and Accountability, demanded an explanation from the FTC. "Congress and the public deserve an explanation of why the FTC improperly destroyed records, what records it improperly destroyed, and what steps will be taken to ensure it never happens again," they wrote.
This letter from the Republican legislators comes approximately 18 months after the FTC's internal watchdog, the Office of Inspector General (OIG), discovered numerous failures in the FTC's record-keeping process.
The Republicans claim that the FTC "improperly deleted" documents that Jordan had requested concerning the agencys new rule. This rule would prohibit private-sector employers from obligating employees to sign noncompete clauses, which restrict them from working for competitors or starting new businesses offering similar services for a certain period.
In February, Jordan argued that the rule would eliminate approximately 30 million existing noncompete agreements. He criticized the FTC for highlighting the estimated benefits of the rule while making little effort to quantify the costs. Jordan stated that the rule "exceeds [the commissions] delegated authority and imposes a top-down, one-size-fits-all approach that violates basic American principles of federalism and free markets."
In May, the FTC informed the House Judiciary Committee staff that it had "deleted material likely responsive to the Committees requests," including records of the employee from the Consumer Financial Protection Bureau who led the FTCs rulemaking.
The Republicans expressed their concern in the letter, stating that the FTC's deletion of documents "underscores the OIGs conclusion in 2022 that the FTC has not prioritized records management nor embedded it as a value in the agencys culture." They added, "Moreover, it suggests that the agency is not committed to complying with the law, and that it may continue to delete records that are relevant to ongoing investigations. This is not how a federal agency should be run."
The Republicans pointed out in their letter that "Federal law imposes important recordkeeping requirements on the FTC." The Federal Records Act (FRA) mandates every federal agency to "make and preserve records" about the agencys "functions, policies, decisions, procedures, and essential transactions." It also requires agency heads to "establish and maintain" a "records scheduling" process, which involves identifying the records it has, determining how long each type of record is deemed valuable, and when there is no longer a need for them at the agency, request authority to either legally destroy the records or transfer them to the National Archives.
The lawmakers noted that the FRA emphasizes that such recordkeeping is necessary to "furnish the information necessary to protect the legal and financial rights of the Government and of persons directly affected by the agencys activities."
However, they wrote, "It turns out the FTC has struggled to comply with the law." In a February 2022 memo, the OIG alerted FTC leadership to two key issues with the FTCs records management processes: the agency was not adhering to the National Archives and Records Administration ("NARA") records scheduling requirements and had not set up "automated practices for properly storing and timely disposing of records in a manner across the agency."
The Republicans concluded their letter by stating, "To date, the FTC has not adequately addressed concerns about its record retention policy." They added, "The agency has not explained how documents were deleted related to a rulemaking that the FTC should have known would face litigation, FOIA requests, and Congressional oversight. In addition, the FTC has not explained how federal records from senior advisors at the FTC could be deleted, regardless of whether there were litigation or other holds placed on the documents."
The Republicans requested a comprehensive list of communications from the agency, including what documents the FTC may have deleted in relation to 12 additional congressional oversight probes into the agency.
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