House, Senate Republicans team up to crack down on FTC for destroying documents related to congressional probe

FIRST ON FOX — Top Republicans on Capitol Hill are vowing a crackdown on the Federal Trade Commission (FTC) for allegedly destroying documents related to a congressional probe.

“By deleting documents, the FTC likely violated federal law. It also impeded Congressional oversight of the FTC’s recent, unprecedented actions, including its proposed rule banning non-compete clauses,” Sen. Ted Cruz, a Texas Republican and ranking member on the Senate Commerce, Science, and Transportation Committee, wrote in a letter to FTC Chair Lina Khan, which was dated for Thursday and shown to Fox Digital ahead of its release.

“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,” Cruz wrote, joined by 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.

The letter by Republican legislators comes about a year and a half after the FTC’s in-house watchdog, the Office of Inspector General (OIG), found multiple failure’s in the FTC’s record-keeping process. 

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Federal Trade Commission Chair Lina Khan testifies before the House Judiciary Committee, July 13, 2023, in Washington, D.C. (Chip Somodevilla/Getty Images)

The Republicans allege that the FTC “improperly deleted” documents that Jordan had requested in relation to the agency’s new rule that would ban private-sector employers from requiring workers to sign noncompete clauses that restrict them from working for competitors or starting new businesses that offer similar services for a period of time.

Jordan in February said the rule would wipe out roughly 30 million existing noncompete agreements, and while the FTC highlights estimated benefits of the rule, it made little effort to quantify the costs, according to Jordan.

Jordan said the rule “exceeds [the commission’s] delegated authority and imposes a top-down, one-size-fits-all approach that violates basic American principles of federalism and free markets.”

Jordan sought at the time, among other things, documents related to the litigation risks due to the rulemaking, economic analysis related to the rulemaking, and communications between the FTC and third parties about the rulemaking.

In May, the FTC informed House Judiciary Committee staff that it had “deleted material likely responsive to the Committee’s requests,” including records of the employee on detail from the Consumer Financial Protection Bureau who led the FTC’s rulemaking.

“The FTC’s deletion of documents responsive to a Congressional inquiry underscores the OIG’s conclusion in 2022 that ‘the FTC has not prioritized records management nor embedded it as a value in the agency’s culture,’” the top Republicans wrote.

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Rep. Jim Jordan, R-Ohio (Caroline Brehman/CQ-Roll Call Inc. via Getty Images/File)

“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,” they wrote.

The GOP trio notes in their letter that “Federal law imposes important recordkeeping requirements on the FTC.”

The Federal Records Act (FRA) requires the head of every federal agency to “make and preserve records” about the agency’s “functions, policies, decisions, procedures, and essential transactions.” It further requires agency heads to “establish and maintain” a “records scheduling” process, pursuant to which the agency must identify the records it has, determine 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 FRA explains 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 agency’s activities,” the lawmakers note.

“It turns out the FTC has struggled to comply with the law,” they write.

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Jordan said the rule “exceeds [the commission’s] delegated authority and imposes a top-down, one-size-fits-all approach that violates basic American principles of federalism and free markets.” (Al Drago/Bloomberg via Getty Images/File)

In a February 2022 memo, the OIG “alert[ed] FTC leadership” to two key issues with the FTC’s records management processes: the agency (1) was not adhering to the National Archives and Records Administration (“NARA”) records scheduling requirements and (2) had not set up “automated practices for properly storing and timely disposing of records in a manner across the agency.”

The lawmakers note that the OIG found it “[p]articularly noteworthy” that “the Bureau of Competition and the Bureau of Consumer Protection do not use a comprehensive case management system for their case files” and that FTC management had “no plans” to store files on the FTC’s cloud platform rather than various shared drive folders.

“To date, the FTC has not adequately addressed concerns about its record retention policy,” the Republicans say in the letter.

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“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 (sic) at the FTC could be deleted, regardless of whether there were litigation or other holds placed on the documents.”

The FTC did not immediately return Fox News Digital’s request for comment on the letter.

The Republicans requested an exhaustive 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.