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Derivatives are not suitable for all investors and involve the risk of losing more than the amount originally deposited and any profits you might have made. This is not a recommendation to offer to buy, sell, or retain any specific investment or service. Back in March, Alvaro Bedoya was at an after-school event for his daughter when he received some life-changing news. It was a Tuesday, and I had just left work, and I had arrived at my daughter's gymnastics class.
And, you know, a lot of the parents at these classes sit there and they take care of email or take a call. But my daughter actually gets really annoyed when I do that. And so I was very deliberately not looking at my phone. And then I got a call from Commissioner Slaughter, Rebecca Slaughter. Bedoya and Rebecca Kelly Slaughter were colleagues, serving as members of the Federal Trade Commission, which enforces U.S. antitrust and consumer protection laws.
They were the only two Democrats serving on the commission at the time. She said, well, there is an email from the White House in my email saying that they are firing me, effective immediately. So I checked my email and sure enough, there it was. The email was from someone in U.S. President Donald Trump's administration. It said Bedoya's continued service in the FTC was no longer consistent with the president's priorities. I think what was really notable about it
is that it seemed to be written very deliberately to say very simply, the president believes he has the power to fire you for any reason. And so today he's firing you. Here's the thing. Bedoya says that according to Supreme Court precedent, the president doesn't actually have the authority to just fire someone without proof of poor behavior, like inefficiency or neglect or malfeasance.
And so Bedoya and Slaughter have since filed a lawsuit against President Trump and some of their colleagues at the FTC.
And Bedoya says that their situation has implications for both American businesses and regulators, even those at the very top. I think that a world where the president can fire FTC commissioners for no reason or any time is also a world where the president can fire, you know, Fed Chair Jerome Powell. And it's the same legal precedent that protects us, protects Mr. Powell.
I'm Michaela Tendera from the Financial Times. Today on Behind the Money, we're speaking with Alvaro Bedoya, a former member of the Federal Trade Commission. He, along with Rebecca Kelly Slaughter, were fired from their positions at the agency and wrote about this recently in the FT. I'm talking with Bedoya about why he's challenging his dismissal and about why he thinks businesses, not just consumers, should be worried about this. Alvaro, hi. Welcome to the show.
Hey, thank you for having me. Glad to have you here. I'd like to start by just asking you for anyone who might not know, what is the Federal Trade Commission and what does it do? We are a 111-year-old institution that is built to stop fraudsters and monopolists.
We were founded in 1914 to stop unfair methods of competition. As of about 20 years after that, we got the power to stop unfair and deceptive trade practices.
And that would be an instance where, for example, a corporate landlord, you know, packs your rent bill with a bunch of charges that you did not expect or were led to believe wouldn't be there. But on the competition side, you know, we review mergers that are going to substantially decrease competition. And we also do conduct investigations where companies are engaged in what we allege is anti-competitive conduct. And as a commissioner for the FTC, what really did your job entail?
Commissioners wear a couple of different hats. So we wear a prosecutor hat. So we vote out cases if the staff has presented us with facts and law that give us reason to believe that there's been a violation of one of those statutes. We also have an adjudicative. We have a judge's hat, so to speak. And so right now, the FTC is alleging that
These pharmacy middlemen known as PBMs, pharmacy benefit managers, are competing not to drive down the cost of insulin, but to drive it up.
And so this lawsuit was voted out. And I, as well as Commissioner Slaughter, the other commissioner that was purported to be fired by the president that day, were sitting as effectively appellate judges above what's called an administrative law judge in that matter. Lastly, Congress gave us various rulemaking authorities. And so, for example, we are trying to ban junk fees. So some of your listeners might have had the
unpleasant experience of arriving at a hotel and being charged a resort fee, even though they were just there for a conference and they had no plans on going to the spa or the sauna, but they still got that $50 or $75 resort fee tacked on that was completely opaque to them. So we're trying to ban that. Those are the three main hats that commissioners wear, prosecutor, a judge, rule maker, regulator, but also across all of these fronts, you naturally develop expertise for
And so you were kind of continuing on with that work, as you say, focused on food, health and workers. So why do you think you were fired? I do not know. I don't know.
Why I was fired? Look, I mean, what I can say is both Commissioner Slaughter and I try to do our jobs without fear of favor and have been very concerned about conduct by a lot of the most powerful market actors. And these include companies and CEOs of these companies that have
spent a lot of money, either at the inauguration or in political donations or other flows of money into the president. And so I had been very critical recently of working conditions on Amazon warehouse floors. And so one of the last things I did was call attention to this very publicly. And so I personally wondered if some of the things and political donations that had been steered toward the president had somehow played a role in my firing. But obviously, there's no way for me to figure that out, at least at any point soon.
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Impact. Do more with less by Joe Owen. Available now at blackwells.co.uk. Let's get some legal stuff out of the way. Mainly, the basis for why Alvaro thinks he was fired illegally. It has to do with a Supreme Court case called Humphrey's Executor, which originated way back in the 1930s. Back then, President Franklin D. Roosevelt fired a head of the FTC named William Humphrey because he opposed New Deal policies.
Unfortunately, Humphrey died before he was able to get his job back. But the Supreme Court still weighed in and said, hey, nope, you can't do that. You can't just fire someone without quote unquote cause, which is a term that's widely interpreted to cover illegal activities or gross incompetence. Now, in the email the White House sent to Alvaro and his colleague Rebecca Kelly Slaughter back in March, they said,
It's said that the FTC's functions have changed since Humphrey's executor, and therefore the protections of that case don't apply. But Alvaro tells me he believes that the precedents set by the Supreme Court in Humphrey's still does apply and plays a role in the FTC's independence. Now that is something I wanted to ask Alvaro about.
Just to talk about the FTC's status as an independent agency, could you just explain, Alvaro, what does it mean to say that it is an independent agency and, you know, independent from what or whom? Absolutely. Now, some of it has grown up as norms around what the law says. But if you read the statute, if you read what the Supreme Court says, it's
Most of this, almost all of this, comes from the fact that Congress, when they created the Federal Trade Commission, said that we can only be removed by the president for inefficiency, neglect, and malfeasance.
And what's often not discussed is the reason for this is they were copy pasting something from the Interstate Commerce Commission passed in the late 1800s in the roaring days of the Gilded Age, where John Rockefeller and others were not just capturing business by combining and not competing, they're also capturing government. And so by creating this institution with those protections, they wanted to protect us from
the influence of money in politics and money infecting law enforcement and regulatory and market study decisions. And so when the Supreme Court looked at these for-cause removal protections, they pointed out that there was a value in an agency built of a bipartisan group of experts,
that were there long enough to develop expertise, long enough to be able to develop a body of law that addressed the specific needs of these industries.
And so when you hear the word independence, you know, the president can't just remove us because he doesn't like our decisions. It's about us having that protection and us also having the ability to develop expertise, bipartisan consensus, and also, I think, provide a lot of stability to the market actors and markets that we enforce and regulate.
Yeah, say more about that, because I think it's probably pretty clear to listeners how the FTC can serve consumers, but maybe less so how it serves businesses. I think so much of the FTC's work provides stability and a level playing field for business. And at the end of the day, I think that's what everyone wants. Everyone wants the best products to win, the best services to win. We want a competitive economy, and that means that
The incumbents don't just get richer and fatter because they're incumbents, but instead we have the best products and services coming out on top. I think everyone wins when market valuations reflect the actual value of the underlying company and aren't distorted by the monopoly effects that often come with incumbency.
OK, sure. So I'm curious then what your thoughts are on just why maybe Wall Street and people that are invested in the stock market should care about all this. I mean, so Humphrey's executor, the precedent, this 90 year old Supreme Court case that is a bedrock of American jurisprudence.
protects not just me, Alvaro Bedoya, not just Commissioner Slaughter, but also the Fed Chair Jerome Powell. And so this isn't just about FTC doing its job. It's also about your 401k. It's also about your checking and savings account and the stability that stable leadership provides within those institutions. So that's something that's really important about
our independence vis-a-vis the rest of the market. And so a world where there is a facial challenge to the statute that Humphrey's executor upheld. And if that bedrock principle of American law is turned on its head, that means that Fed Chair Jerome Powell can be fired for no reason at any time. That's in all likelihood what that means.
And so a world where the lawsuit that Commissioner Slaughter and I have filed to make clear that we remain commissioners, a world where we lose, is a world where the president can say anything to anyone about how long he wants to keep Mr. Powell in office, but can wake up tomorrow morning with a twinkle in his eye and make all of that go away. And so, you know, I think what we're seeing right now is...
a lot of market losses due to profound uncertainty about the regulatory and enforcement atmosphere in this country. And I would respectfully submit that a world where Mr. Powell can go away, you know, from today to tomorrow for no reason whatsoever is not going to help that climate of uncertainty and stability. Okay, so digging more into this idea of independence and independent agencies, I wonder if I can question that a bit.
Just in the sense of, you know, you were appointed as a Democrat in the FTC. And I think most Americans, if they think about this at all...
would assume that executive branch appointees are serving as a proxy for whoever appoints them from whichever party. Isn't that the case? I mean, help explain to me why we shouldn't think of commissioners in that way. Sure. So first of all, I'm just not. I'm just not doing what the Democrats want me to do. But much more importantly, let me say two things to this. So
So first of all, I didn't make up these rules, right? Congress in 1914 created this commission in statute and said the president shall appoint up to three members of his party and two members of the other party. And these individuals can only be removed for these three reasons, right? So to whatever degree you like or don't like this theory of the unitary executive, this is what the statute says.
And it is a statute that the Supreme Court has upheld. And so it is, at the most basic level, not up to me, right? Congress can go in, by the way, and change that law. Congress has not done so over the pendency of the 111-year existence of our agency. So number one, that's not what the rules are, period. Here's the other thing. Let's flip the scales a little bit. Let's say President Biden was still in office and President Biden said, hey, you know what? I'm having a lot of trouble meeting my climate goals.
I want every merger to be reviewed, not just on the basis of whether it's going to substantially injure competition, which is what the statute says. I also want there to be an environmental checklist that accompanies every single merger. But let's say the world existed where President Biden could have fired Chair Kahn, could have fired me and Commissioner Slaughter, had we said, Mr. President, I'm sorry, that's not in the statute. So, you know, go pound sand or thank you for that advice. We will not take it.
I don't think that is an environment, so to speak, that is fair to business. And so I think this world where the president can remove us for any reason at any time is a ticket to, frankly, lawlessness. And lawlessness is not something anyone in any market I'm aware of wants.
So Alvaro, you were dismissed in March. Shortly thereafter, you and Rebecca Slaughter filed a lawsuit against President Trump, the chair of the FTC, Andrew Ferguson, and a couple of other members of the commission. What's the status of this at the moment? So we have a hearing before Judge Ali Khan on May 20th.
Most observers expect us to go to the Supreme Court. I do as well. And so I suspect we're in for a long fight until this is finally resolved. As a Democrat working in the FTC, you were supporting former chair Lena Kahn's agenda. Do you see that agenda being carried forward into the coming months and years if you're not on the commission?
Look, before my firing, I would say absolutely yes. And there's been a couple of strands to this. So one obviously is big tech. Chairman Ferguson, for example, has to his credit said he wants to continue to conduct vigorous law enforcement against big tech. And the other tranche of bipartisan agreement is around labor. You know, Assistant Attorney General Gail Slater, who I happen to have a very high opinion of,
One of the very first public meetings she had was with Organized Labor, and I think she just recently gave a speech about her desire to protect not just product markets but consumer markets. And so I think the individual law enforcers that we have in the AAG slot and in the slot of chairman of the FTC will continue aspects of what Chair Kahn and Commissioner Slaughter and I, the work we did. But, of course, this decision to try to remove us for no reason casts a pall on that.
What has it been like to be at the center of this, you know, just speaking on a personal level, you know, to know or at least feel that how regulation happens in the U.S. going forward is potentially hinging on you and what happens with your role at the FTC? Look, I am very worried about
the markets and the consumers and the small businesses that the FTC works to protect. And I am maybe even more worried about the run-of-the-mill grocery store merger
The last time we were faced with a merger, Kroger Albertsons, we faced a bevy of political interest. But we were able to set all that aside, look at the facts, look at the law, and make the decision that this was going to raise grocery prices. And a federal judge agreed with FTC and blocked the merger. I am really worried that the next grocery store merger, it's not going to come down to the facts and the law and the impact on prices or workers or small businesses, what have you. It's just going to come down to this question of donations. That is a really bad outcome.
Look at the Consumer Confidence Index. Look at what's happening. All these market indicators about emergency withdrawals from retirement accounts. Now is not the time to politicize merger enforcement. Now is not the time to politicize consumer protection. This is when you want fair, neutral law enforcement regulation adjudication to occur. And I think we're headed to the opposite of that world with this attempt to remove us.
Do you think Republican appointees will aim to use antitrust in a political way? Let me be really clear. I am not accusing Chairman Ferguson, Assistant Attorney General Slater of doing X or Y or Z that is illegal or even bad. That's not what I'm saying. What I'm saying is I am worried about a scenario where the president is
can order them to do something and they will be faced with a choice. Do what the president says or be kicked out and be replaced by someone who will say yes no matter what. And that is something that I am deeply worried about. And
I urge you to speak to other law enforcers, Republican and Democrat. And if they are candid enough with you, they will eventually all tell you that even if they don't get that email, they are all thinking about this. Right. What's going to happen if I do this? What's going to happen if I say that? Am I the next one to get that email? And that alone affects the work they do. And that, I think, is a very bad thing. Yeah, certainly lots to watch for.
Well, Alvaro, thanks for coming on the show. Appreciate it. Thank you. Thank you very much. I really appreciate it, Michaela. Before we wrap up, we reached out to the White House for comment multiple times, but did not receive a reply.
And after Alvaro Bedoya and Rebecca Kelly Slaughter were fired back in March, FTC Chair Andrew Ferguson put out a statement. In it, he said that he had, quote, no doubts about Trump's, quote, constitutional authority to remove commissioners, which is necessary to ensure democratic accountability for our government, end quote.
Behind the Money is hosted by me, Michaela Tendera. It's produced by me, Safiya Ahmed, and Katya Kamkova. Special thanks to Gavin Coleman, Brooke Masters, and Stefania Palma. Sound design and mixing by Sam Giovinko. Original music is by Hannes Brown. Topher Forges and Flo Phillips are our executive producers. Cheryl Brumley is the global head of audio. Thanks for listening. See you next week.
Thank you.
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