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This statement responds to the “Complaint Requesting Recusal of the Federal Trade Commission Chairman From the Pending Review of the Proposed Google-Doubleclick Merger” (“Petition”), which was filed with the Federal Trade Commission (“FTC”) by Messrs. Rotenberg and Chester on December 12, 2007. After reviewing the relevant facts and consulting with the FTC’s Designated Agency Ethics Official, Deputy General Counsel Christian S. White, the General Counsel, my fellow Commissioners, and members of my staff, I have determined not to recuse myself from this matter because the relevant laws and rules, as detailed below, neither require nor support recusal.

To fully explain why recusal is not required here, I first must correct some key factual errors contained in the Petition. The Petition states that “Petitioners learned on Monday, December 10, 2007 that Doubleclick, has retained the Washington law firm of Jones Day to represent the company before the Federal Trade Commission in the pending merger review.” (Petition, page 1 ¶ 3). Commission staff has advised me that Jones Day represents Hellman & Freidman Capital Partners V, LP ( a.k.a. DoubleClick) in the review of this transaction by the competition authorities of the European Commission (“EC”). Jones Day does not represent DoubleClick before the FTC and, indeed, in dozens of meetings and submissions, has never appeared or even been mentioned. The law firm of Simpson, Thacher & Bartlett LLP represents DoubleClick before the FTC. I understand that no one at the FTC was aware that Jones Day was involved in the EC review of this transaction until the afternoon of Tuesday, December 11, 2007, at which time staff learned and contacted me. Following my customary practice when I learn that Jones Day is or may be involved in a matter, I immediately contacted the FTC’s Ethics Official, and asked him to undertake a conflict of interest analysis.

More importantly, the Petition also incorrectly states that “The Spouse of the FTC Chairman, John M. Majoras, is currently an equity partner with the law firm Jones Day.” (Petition, page 2 ¶ 5). As of January 1, 2006, John Majoras converted from an equity to a non-equity status and became a fixed participation partner in Jones Day. I understand that as a fixed participation partner, his compensation will not be increased or affected by changes in the firm’s income. Further, all benefits my husband receives from Jones Day are the same as those earned by other similarly situated non-equity partners in the firm. Therefore, my husband does not have a financial interest in the firm’s income, and thus I do not have an imputed financial interest. Similarly, the Petition states on page 6, ¶ 30: “However, Petitioners do not accept the premise that the spouse of the Chairman should represent a client in the pending matter and profit from an outcome that is favorable to the client.” My husband does not represent any party in the Google-DoubleClick matter. He is in no way connected to the matter, nor are any of the parties to the matter otherwise currently his clients. 1

The absence of a financial interest in the matter is important because an executive branch official is prohibited by 18 U.S.C. § 208(a) from participating personally and substantially in any particular matter in which, to her knowledge, she has a financial interest, if the outcome of, or determinations made in, the particular matter will have a “direct and predictable effect” on that interest or the interest of someone whose financial interests are imputed to the employee. Because my husband is not an equity partner in Jones Day, any decisions that I may make in any case in which Jones Day represents a party cannot be said to directly and predictably affect my husband’s interest in Jones Day. Hence, I do not have a financial conflict in this matter. 2

In 2004 and 2005, when my husband was still an equity partner, I assumed that I would have a financial interest in FTC matters in which Jones Day represented a party and recused myself in such matters, as petitioners note.3 (Petition, page 3 ¶ 8-12). After my husband relinquished his equity interest in the firm’s income, I began to consider participating in FTC matters in which Jones Day represented a party, in consultation with the FTC’s Ethics Official. FTC staff and I continue to actively monitor FTC filings and public appearances, as well as any public statements that we may see, to determine whether Jones Day is involved in FTC matters. Since January 1, 2006, in each matter in which the FTC becomes aware that Jones Day is representing a party or a third party, I consult with the FTC’s Ethics Official to review the relevant factors for considering whether to participate, as described below. (Indeed, based on an incorrect rumor that I heard last summer that Jones Day was representing a third party in this transaction, I immediately consulted with the FTC’s Ethics Official, who determined that I had no conflict and recommended that I continue to participate.) Based on the advice provided on a case-by-case basis, I have participated, since January 1, 2006, in various matters in which Jones Day has represented a party or third party.

Despite the absence of a financial conflict, the “Standards of Ethical Conduct for Employees of the Executive Branch,” 5 C.F.R. § 2635, (“Standards of Conduct”) also require that an employee not participate in a particular matter involving specific parties when she knows the matter is likely to affect the financial interests of a member of her household, or when she knows that a person with whom she has a covered relationship is or represents a party, if she determines that a reasonable person with knowledge of the relevant facts would question her impartiality in the matter. 5 C.F.R. § 2635.502(a). When I learned that Jones Day might represent DoubleClick in the review of this transaction by the competition authorities of the EC in Brussels, Belgium, even though I had worked on this matter for seven months, I asked the FTC’s Designated Agency Ethics Official to consider whether this fact would implicate the impartiality subpart of the Standards of Conduct. 5 C.F.R. § 2635.502.

As it has been explained to me over the past several years, the Standards of Conduct are premised on protecting the integrity of government decision making, while also allowing government officials appropriately to carry out their duties. The FTC’s Ethics Official determined that, based on the applicable facts, including those described above, no impartiality conflict exists. Further, he determined that, even if my participation in this matter could reasonably raise an appearance issue, the Standards of Conduct did not dictate my recusal. A federal official may participate in such a matter, provided such participation is authorized in accordance with the standards in Section 502(d). Participation may be authorized if, based on the relevant circumstances, the interest of the Government in the employee’s participation outweighs the concern that a reasonable person might question the integrity of the agency’s programs and operations. Factors to be considered include, inter alia, the nature of the relationship involved, the nature and importance of the employee’s role in the matter, and the difficulty of reassigning the matter to another employee. Id. at 2635.502(d). Based on his analysis of the factors specified in Section 502(d), the FTC Ethics Official determined that any concern about my participation in the Google-DoubleClick matter would be outweighed by the agency’s interest in my participation. Critical to that analysis was the fact that the decision making authority of an FTC Commissioner cannot be transferred to any other person.

Because my participation in this matter is consistent with federal ethics laws and regulations, I intend to fulfill the duties entrusted to me when I was appointed and confirmed.

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1. Petitioners make repeated reference to the fact that my husband has responsibility for business development in the Washington, D.C. office. The FTC’s Ethics Official informed me that this responsibility, in and of itself, does not create any additional conflict.
2. I do not understand what is meant by the Petition’s statement, “The Chairman failed to notify the petitioners and the public of this arrangement.” (Petition, Page 5 ¶ 22). That is, it is unclear what petitioners believe I was supposed to have told them or publicly disclosed. The Commission was unaware of Jones Day’s representation in Europe. But even if we had been aware sooner, assuming that the conflict analysis resulted in the same recommendation to continue participating – and I have no reason to believe it would not – the fact that I had reviewed with the FTC’s Ethics Official a potential conflict and determined not to recuse myself would not have been announced. Under applicable ethics rules, there is no requirement or, as I understand it, even expectation, that Commissioners publicly reveal that they are not recusing themselves on matters; indeed, that has not been the practice.
3. As petitioners note, I formerly was a partner at Jones Day (though, for the record, not an equity partner, as the Petition incorrectly states). Accordingly, applicable conflict rules required that I recuse myself, for a period of one year, from any matter in which Jones Day represented a party. Under the applicable ethics rules, an employee has a “covered relationship” with, inter alia, “[a]ny person for whom the employee has, within the last year, served as officer, director, trustee, general partner, agent, attorney, consultant, contractor or employee[.]” 5 C.F.R. at § 2635.502(b)(1)(iv). I observed this “cooling off” period for 16 months, from August 2004, when I assumed my position, until January 1, 2006.

 

As of January 1, 2006, my wife, Kathryn Fenton, converted to a nonequity status at the law firm of Jones Day and became a fixed participation partner in that firm. As a fixed participation partner, her compensation will not be increased or affected by changes in the firm’s income. Further, all benefits received by Ms. Fenton from Jones Day are the same as those earned by other similarly situated non-equity partners in the firm. I have read the Statement by Chairman Deborah Platt Majoras responding to the Petition filed by the Electronic Privacy Information Center and the Center for Digital Democracy seeking the Chairman’s recusal from the Proposed Acquisition of Hellman & Friedman Capital Partners V, LP (DoubleClick Inc.) by Google, Inc. and agree with her analysis. Further, even though the petition does not ask for my recusal, I want my position to be clear to avoid any future questions relating to this issue. Because, like the Chairman, I do not have any current conflicts in this matter, I have determined not to recuse myself.

 

We have reviewed the letters of December 12 and 13, 2007, from Marc Rotenberg and Jeffrey Chester seeking disqualification of Chairman Majoras from participation in an investigation of the pending Google-DoubleClick transaction. We have also reviewed the responses of Chairman Majoras and Commissioner Kovacic to the arguments made in those letters.

We agree with the analyses in Chairman Majoras’s and Commissioner Kovacic’s responses, and see no legal grounds that would disqualify them from participating in the investigation of the Google-DoubleClick transaction. It is evident that these Commissioners have at all times taken affirmative steps to conduct themselves in complete conformity with the ethical standards that apply to their positions.