F.T.C. Chairman Mike Pertschuk Is the Bureaucrat Who Makes Some Businessmen Turn Blue
Bizarre as the Commerce Committee seems as prime-time material, he thought enough of the idea to write a few sketches and try them out on his friends Robert and Lola Redford. How did they react? Suffice to say that Mike Pertschuk is not up for an Emmy this weekend.
Yet when television executives gather for their annual awards broadcast—in fact when almost any group of American businessmen assembles these days—Pertschuk is sure to be the focus of more attention than even his generous ego requires. As chairman of the Federal Trade Commission, the regulatory agency which is charged with promoting "a fair and competitive marketplace," Pertschuk, 46, has emerged as one of Washington's permanent storm centers. "I like to speak my mind," he allows modestly, "and it sometimes gets me in trouble."
Even a less outspoken chairman would probably be in hot water—if perhaps not quite so deep. Government regulation is under widespread attack in this country as unfeeling and excessive, and the FTC is a leading target. Pertschuk seems to relish the controversy, especially that generated by the agency's campaign against "unfair and deceptive" advertising. Last year it forced singer Pat Boone, for example, to rescind his TV endorsement of an acne medicine. Other products that have had to amend their ads are STP, Geritol and Listerine. Though less noticed by the public, the FTC has looked into used cars, hearing aids, laundrycare labels, funeral homes, health insurance and real estate commissions. It also succeeded in rolling back prices on eyeglasses, raincoats and blue jeans. "Mr. President," Pertschuk announced tongue-in-cheek at a White House meeting, "pants are dropping all over the country." Jimmy Carter, a long-time devotee of the dungaree lifestyle, responded with a chuckle: "You saved me some money."
Despite Carter's admiration, Pertschuk may be anathema to more American businessmen, large and small, than any other agency chief in Washington. Some congressmen charge the FTC under Pertschuk is a flagrant example of nonelected officials overstepping their authority. A serious move is under way on Capitol Hill to curb those powers. Some complain that Pertschuk seems all too ready to link business to the forces of evil—and to paint himself as that avenging public-spirited Pimpernel from his TV sitcom. (The chairman's views on bigness are clear: He generally opposes mergers and acquisitions by major corporations that lead to "huge concentrations of power.")
No issue has visited more wrath on the FTC and its boss than their investigation of children's television commercials, especially those for highly sweetened cereals and snacks. "Many children have only a minimal understanding of what TV commercials are and what they do," he says. "Advertisers seize on the child's trust and exploit it as a weakness for their gain. It is no surprise that Charlie believes that 'Cereal A makes the monsters go away.' If he didn't see it on TV, Jane, who told him so, did."
Right or wrong, Pertschuk has some cause to rue his outspokenness. Prior to public hearings on children's TV last winter, Federal Judge Gerhard Gesell barred the FTC chairman from further involvement in the debate because of his personal bias. Nonetheless, Pertschuk's name continues to be tied to the issue. "Mike staked out kidvid as a cornerstone of FTC policy, but his statements prejudging the case have engendered real animosity on Capitol Hill," claims a top Washington lawyer. "He has painted himself as an irresponsible, intemperate regulator, and that is the kiss of death in this town."
Mike (even critics call him that) Pertschuk has none of the wild-eyed characteristics of the zealot. Professorial in manners and habits, he is engagingly relaxed—"the guy," says a colleague, "for whom the word 'rumpled' was invented."
His quarrels with lawmakers have come as a surprise, since Pertschuk often describes himself as a "creature of Congress." During 15 years on the Hill—first as an assistant to former Oregon Sen. Maurine Neuberger, later as chief counsel and staff director of the Senate Commerce Committee—he earned the not always complimentary title of the "101st senator."
"He had the technical expertise and political instincts to galvanize any issue into an important one," a friend remembers. Pertschuk first demonstrated his mastery of the legislative process by helping Senator Neuberger draw attention to the need for a national policy on smoking that finally led to the 1966 law requiring health-warning labels on cigarette packages. "Mike was my mainstay," the now retired senator recalls.
That knack for shaping workable bills and shepherding them to passage was noted by Commerce Committee Chairman Warren Magnuson, whom Pertschuk credits as his legislative guru. In turn, "Maggie" Magnuson is one of Mike's staunchest fans. "It began 'B.N.'—'Before Nader'—but we passed a list of consumer acts as long as your arm," the Washington Democrat enthuses. "The Warranty Act [of 1974] was the most trouble, but Mike was in charge and made it work."
In a sense some of Pertschuk's current problems are still rooted in making the Warranty Act work. (It requires manufacturers to live up to their promises to buyers.) Until its passage, the FTC was widely viewed as a lumbering, lackluster agency; a 1969 American Bar Association report chastised the agency for bureaucratic inertia, and Nader's Raiders derided it as "the little old lady on Pennsylvania Avenue."
The Warranty Act broadened the FTC's scope, particularly in empowering it to set rules for an industry as a whole. Armed with the new authority he helped develop, Pertschuk took over at the FTC in 1977, vowing to make it "the best public-interest law firm in the country."
In his personal life, as in his professional approach, Pertschuk admits he is occasionally unconventional. When his first marriage broke up in 1971, Mike and his wife, Carleen, marked the occasion with a party. "We actually sent out announcements of our separation and invited friends over," Mike recalls now with a grimace. Old friend Ralph Nader came ("He was all upset"), as did journalist-author Morton Mintz ("He was surprised"). "At the end of the party," Pertschuk says, "we had a seminar so people could ask questions. At the time it seemed all very rational, but, looking back, it was rather bizarre."
It was hardly the sort of thing expected of the scion of a merchant family who was born in London and reared in a "substantial household by an elegant English nanny." Mike was 5 when his father, a Russian émigré furrier, brought him to America. The boy quickly lost his British accent and gained a reputation at school, he recalls, as "a kid who could write," including some "heavy, heavy poetry." He enrolled at Yale as an English major, but somehow got lost in the buttoned-down aimlessness of the 1950s, a period of his life which he now dismisses as "all bullshit." After graduating he eloped with Carleen Dooley, a Vassar girl.
Pertschuk spent two years as an artillery officer in Oklahoma before returning to Yale Law. Later he clerked in Oregon with U.S. District Judge Gus J. Solomon, a renowned civil libertarian. "Judge Solomon has to be the single strongest force in turning me toward social and political causes," says Pertschuk. "He always sentenced more severely those who had privileges—professionals, the well-educated—because he believed they had less reason to break the law."
In 1961 Solomon recommended Pertschuk to Senator Neuberger, and the young lawyer went back East to savor Kennedy's New Frontier. He has been in the capital ever since—contentedly so, except for the breakup with his wife. "It was not a tumultuous marriage—really a question of going separate ways," he says. There are two children, Mark, 22, a senior at Oberlin College, and Amy, 19, a mechanical draftsman in California.
While vacationing in Ireland in 1973, Pertschuk met New York artist Anna Sofaer. Two years of joint housekeeping led to matrimony in 1977. They own a comfortable three-bedroom home in Washington's Cleveland Park section, but Anna, 38 (she uses her own name and never calls herself "Mrs. Pertschuk"), commutes to Manhattan often to keep in touch with the art world. Together Mike and Anna enjoy Tai Chi exercises, tennis and picnic hikes with Daniel, 10, her son by a first marriage. They manage to avoid almost all official parties, preferring to stay home alone. "Anna and I are great talkers," says Mike. She adds, "I always ask the Cassandra question. It balances the Pollyanna side of his life, his tendency to be flowery."
Pertschuk's informal style goes with him to the office, where his workday begins at 8:30 with a coffee klatsch known as a "hello, hello" staff meeting. "When I came here there was a lot of backbiting and turfiness," Pertschuk says. "I spend a lot of my time getting people to work together to produce." Says FTC Executive Director Chris White, who has seen three other chairmen leave since 1971, "Mike's not so much a manager as he is a humanist."
Pertschuk points out correctly that some of the FTC's toughest issues were kicking around before he got there. Yet he has clearly stamped his mark on the agency. Using a novel prod, for example, he told his staff that if they did not move ahead on the kidvid hearings he might feel compelled to donate his salary ($52,500) to the American Dental Association.
FTC challenges against current business practices range from trademarks (making Formica a generic term) to corporate mergers (Exxon and Reliance Electric), and they have brought howls that the agency is striking "at the heart of the free-enterprise system." Led by New Mexico Republican Harrison Schmitt in the Senate and Georgia Democrat Elliott H. Levitas in the House, debate has begun on a bill giving Congress veto power over FTC rulings. If antiregulatory sentiment continues to grow among lawmakers, Capitol Hill observers say, the Schmitt-Levitas campaign could eventually limit the mandate of every federal watchdog agency.
Pertschuk denies the FTC is playing bureaucratic big brother. "It's not our job to interfere in the marketplace and substitute our judgment for those of consumers," he insists. "We believe that the best protector of the consumer is open competition, with informed buyers acting as regulators. What we're doing is to make sure that happens."
To many consumer advocates, indeed, the hostility directed at the agency is a sign that it must be doing something right. "You can't run the FTC and not be controversial," says Senator Magnuson, "but that doesn't bother Mike—he's too tough." Tough may not be enough: Pertschuk was appointed for seven years but can be removed as chairman by this or any future President. Disavowing interest in any other appointed or elected office, Pertschuk talks of moving on to teaching and writing—after 1984. Meantime he promises, with a disarming smile, "We won't duck, we won't shrink from tough targets."
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