FOR IMMEDIATE RELEASE:  May 5, 1988
                FTC COMMISSIONER CALVANI PROPOSES
                    REORGANIZATION OF AGENCY
     Federal Trade Commissioner Terry Calvani said that the FTC
faces the triple problems of constitutionality, perceptions of
partiality, and accountability.  All three of these could be
solved by a major reorganization of the agency, which would take
the law enforcement decision-making power out of the hands of the
Commissioners, he said.
     In a speech to be delivered tomorrow before the American Law
Institute - American Bar Association in San Francisco, Calvani
suggested that this power be placed in the agency's General
Counsel, who would be appointed by the President and confirmed by
Senate, and would serve at the President's pleasure.  The General
Counsel would be the one to decide whether or not to initiate an
investigation, issue a complaint, challenge a merger, and so
on.  The Commissioners "would thereafter simply hear cases that
were brought on appeal."
     This reorganization would resolve the three problems the
agency faces, Calvani said.  The first of these is the FTC's
alleged unconstitutionality.  This argument holds that since the
Commissioners do not serve at the pleasure of the President -- he
can only remove them for cause -- they are not members of the
executive branch of the government and therefore cannot
constitutionally enforce the laws of the United States.  This
problem would be "minimized" by the new General Counsel,
according to Calvani.  "The obligation to enforce the law would
be vested in an individual who is appointed by and serves at the
pleasure of the President."
     A second problem is a potential perception of partiality.
The Commissioners vote to issue an administrative complaint, and
then subsequently review the decision of the administrative law
judge who has heard the case.  "In some sense the Commission sits
as the prosecuting attorney in making the decision of whether or
not to sue and then later sits as the appellate court in the same
matter," according to Calvani.  He said that although the
Commissioners "are scrupulously fair," there is "at least the
perception of unfairness about the process."
     Under the proposed reorganization, this problem would be
eliminated entirely, since the Commission would have no voice in
issuing the complaint and would only hear appeals from
administrative law judges' decisions.
     A third potential problem is accountability.  The Chairman
is charged with administration of the agency, and appoints its
senior management officials.   This senior staff makes law-
enforcement recommendations, based on the Chairman's particular
philosophical leanings.  Thus it is virtually impossible for the
majority of the Commission to "impose any enforcement agenda on
the agency except with the active consent of the Chairman."  The
majority may disagree with the Chairman's philosophy, but has no
means of bringing cases except through the Chairman-appointed
senior staff.  "All of this would be fine if it were not for the
fact that sitting Commissioners are held by many accountable for
the actions (or, inaction) of the agency,"  Calvani said.
                             (More)
     The reorganization would also cure this problem, according
to Calvani.  "Cases would be brought or not brought at the
instance of one person" and "The Congress, public and the bar
could then look to one person to assess the quantity and quality
of the agency's law enforcement agenda."
     Copies of the speech are available from the FTC's Public
Reference Branch, Room 130, 6th St. and Pennsylvania Ave. N.W.,
Washington, D.C. 20580; 202-326-2222; TTY 202-326-2502.
                              # # #
MEDIA CONTACT:     Susan Ticknor, Office of Public Affairs,
                   202-326-2181
(TC-SF)