November 27, 2018

VIDEO: Udall Presses FTC Commissioners on Acting Attorney General Whitaker’s Links to Company Accused of Scamming Consumers

FTC commits to respond to Democratic oversight requests, including whether Whitaker failed to comply with an FTC subpoena

VIDEO: [Udall’s questioning begins at 1:50:10] 

WASHINGTON – Today, in an oversight hearing of the Senate Commerce Subcommittee on Consumer Protection, Product Safety, Insurance, and Data Security, U.S. Senator Tom Udall (D-N.M.) questioned Federal Trade Commission (FTC) Chairman Joseph Simons and other FTC Commissioners about Acting Attorney General Matthew Whitaker’s role as an advisory board member of World Patent Marketing, an invention marketing firm accused of fraud by its customers and subsequently investigated by the FTC. During the hearing, Udall pressed the commissioners regarding Whitaker’s appointment to Acting Attorney General amid allegations that Whitaker personally intervened to silence criticism of the firm with threats of legal action and has avoided an FTC subpoena on the topic.

The line of questioning comes in the wake of a letter sent today from Udall, along with three other senators, seeking answers from the FTC regarding Whitaker’s involvement with the scam company and reports that the FTC issued a subpoena to Whitaker, but Whitaker reportedly failed to comply. Earlier this month, four incoming House committee chairs wrote to Chairman Simons requesting that the FTC produce documents related to its investigation into World Patent Marketing and Whitaker’s role at the company. In response to questions from Udall, Chairman Simons publicly committed that the FTC would comply with the House Democrats’ request and would share that information with the Senate Commerce Committee as well. 

Udall also noted, “It is worrisome that a person so closely involved with World Patent Marketing failed to respond to a lawful subpoena and that he has now been appointed to be the nation’s chief law enforcement officer, which many believe is unconstitutional.”  

He questioned Chairman Simons, asking “Mr. Chairman, are you aware of any previous instance when a potential party to a FTC order has served in a senior [Department of Justice] position?”

Udall concluded, “Your blankness – I will take that as you can’t think of any instances.” 

While Chairman Simons declined to confirm multiple public reports that Acting Attorney General Whitaker had received and failed to respond to a subpoena as part of the FTC’s investigation, he committed that FTC staff would provide answers to Udall and members of the committee. Commissioner Rebecca Slaughter emphasized that it is mandatory for anyone to respond to FTC subpoenas. 

Despite the unprecedented situation of an acting attorney general who has been part of an FTC fraud investigation, Chairman Simons and other FTC Commissioners assured senators they would conduct business free of any political interference, and expected full cooperation with DOJ to continue.

In May 2017, the FTC charged World Patent Marketing with “deceiving consumers and suppressing complaints about the company by using threats of criminal prosecution against dissatisfied customers.” After settling for more than $25 million, the company shut down in May 2018. According to the Washington Post, “FTC staff had sought to learn more about the role played by the company’s advisory board members, including Whitaker” during their investigation. In 2015, Whitaker allegedly called the founder of a consumer complaint website that had posted negative comments about World Patent Marketing, threatening to sue him and ruin his business if he didn’t remove the comments. Court documents also revealed that Whitaker threatened one of the company’s critics, emphasizing that he was a former U.S. attorney,” via email.