Federal Trade Commission chair Lina Khan’s latest conflict of interest

Op-ed views and opinions expressed are solely those of the author.

For a judge, the idea of a conflict of interest arises from personal bias or prejudice concerning a
party being judged. Conflicts of interest, even if merely perceived because of circumstances, are
impermissible and usually result in the person with the conflict being recused – or not allowed to
participate in any investigation – or judge a case.

Lina Khan, the controversial Chair of the Federal Trade Commission (FTC) has for years been
making derogatory comments in her writings and speeches about those she is charged with
regulating and judging. She clearly has a built-in conflict of interest. One would think, given her
history of pre-judging those she is currently investigating, Khan might lay low to create at least a
pretense of objectivity now that she is a top antitrust regulator for the Biden Administration.
To the contrary though, Khan is continuing to build on the biases she already has that would
otherwise cause any lawyer or judge to recuse themselves in similar circumstances.

Just recently, Chair Khan spoke at the September 2022 Annual Convention for the National
Community Pharmacists Association (NCPA), a group whose very complaints helped lead to an
FTC investigation of their marketplace competitors. In June, the Commission Kham led the
Commission is opening a so-called 6(b) study of the practices of pharmacy benefit managers
(PBMs). The investigation includes the issues of fees charged to pharmacies and allegations of
patient steering made by NCPA.

Attending NCPA’s annual meeting and commenting on issues around an ongoing FTC
investigation of PBMs is the sort of behavior any responsible regulator would assiduously avoid.
Why? Because the appearance creates an unquestionable perception of a conflict of interest. It
also raises legitimate concerns about whether the due process rights of the party under
investigation are being respected.

The individual who led the questioning of Chair Khan was the CEO of the NCPA, B. Douglas
Hoey, who felt comfortable sporting a tee shirt at the convention that called PBMs
“bloodsuckers.” That shows a real level of bias on the part of the questioner of the head of the

But there was Khan, whose appearance at NCPA’s annual gathering was advertised by the group
to the press and its own members as “landing a big fish.” During the weekend-long meeting,
attendees were passed out buttons with a middle finger emoji aimed at the terms “PBMs”. The
same NCPA CEO who interviewed Khan in a ‘fireside chat” at the conference walked around
during the weekend with a “PBMs bloodsuckers” t-shirt on, mocked to look like a horror movie.
The NCPA pushed the FTC to start an investigation and praised her as a strong “consumer
advocate” who “has been receptive to hearing the concerns of independent pharmacists.” In the

legal realm, this would be called an “ex parte” discussion. In other words, only one side is with
the regulator, lobbying her, and has the opportunity make their case at a private industry meeting
behind closed doors. This is a clear conflict of interest and one that would make for a great case
study in legal ethics classes.

At a minimum, the perception that she is engaging in showing favoritism to critics of PMBs is
unethical and should lead to her being recused from the 6(b) study. Even the perception of Chair
Khan taking a side by attending and speaking at the event violates legal ethics. Think about it
this way. If a judge had dinner with attorneys in a case before the judge the next day, there would
be an outcry from the attorneys not present because that is a clear opportunity for one side to
make their case behind closed doors. It is unethical, because it violates the principle that lawyers
need to avoid even the perceived conflict of interest.

If Republicans take over the House and Senate, it would be wise to use their oversight power to
ask Khan if she is going to recuse herself from the PBM investigation because of her comments
at the NCPA meeting or because it was wrong to even attend. The NCPA bragged on their
website that they had “asked that the agency swiftly review the effects of consolidation and
vertical integration of health insurance plans and pharmacy benefit managers, and the resulting
impact on independent pharmacies and patients.” There is no way the PBMs can get a fair
proceeding under current circumstances.

The evidence is mounting that Chair Khan thinks she is above the ethical rules that apply to
everybody else. Her recent actions concerning PMBs, as well as her years of comments about
Amazon, show that she has no boundaries and has tossed aside any cloak of fairness. It is time
for Congress to step in and force Khan to recuse herself from the PMB case while providing
close oversight over her actions towards Amazon because of her prior activism in the space.
Congressional oversight over the Chair of the Federal Trade Commission may be the only way to
restore fairness to the process and protect the due process rights of those Khan has grudges

Judson Phillips is the Associate Director for TheTeaParty.net. He is also the founder of Tea Party Nation, one of the largest Tea Party Groups in the country. Judson became active in Republican politics after the 1980 presidential election. “Ronald Reagan inspired me,” he says. Judson has served in various capacities on committees for two different county parties, as well as running for local office as a Republican in 2002.


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