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The chairman of an independent federal agency wears two hats. On the one hand, as chairman, he has unique management authority over how the agency carries out its responsibilities. On the other hand, when the agency makes major policy decisions, he is just one of several commissioners with a vote. For structural and political reasons, the chairman and the majority tend to march in the same direction. But when they don’t, a troubling conflict of interest can arise. Even when the chairman dissents from the decision of the majority, he remains the agency’s voice to defend that decision before a court. Might the chairman — and his legal alter ego, the agency’s general counsel — be tempted to compromise the strength of the defense to further his own passionately held policy agenda? And in that event, should the conflict be remedied by recusing the chairman and general counsel, by erecting a Chinese wall between civil servants and political appointees, or by hiring outside counsel for the agency majority? Although not a staple of everyday administrative law, this conflict question is not purely academic. Consider the pending proceeding in the U.S. Court of Appeals for the D.C. Circuit attacking the Aug. 21, 2003, order of the Federal Communications Commission on network unbundling obligations of local telephone companies under the Telecommunications Act of 1996. AS THE CHAIRMAN SAID The FCC’s so-called Triennial Review order, which passed by a 3-2 vote of the commissioners, generally maintained the existing regulatory regime of unbundling obligations, with an exception for new fiber construction. The decision was so contentious that while the vote was taken in February, final release of the order was delayed until August. Chairman Michael Powell hotly dissented from key elements of the 576-page order. Now industry opponents of the order have enlisted that dissent to buttress their legal challenge. In petitioning the D.C. Circuit for a writ of mandamus to enforce the mandate of the court in an earlier related case, the United States Telecom Association (USTA), Qwest, BellSouth, and SBC Communications repeatedly echo Powell’s dissenting statement from February: • “As Chairman Powell explained, the majority’s decision is a transparent evasion of this Court’s mandate in order to preserve ‘a policy of maximum unbundling.’ “ • “As Chairman Powell cogently explained, this delegation [of policy to the states] is a dodge — the ‘states right debate’ was just ‘a stalking horse for a policy of maximum unbundling.’ “ • “[F]or the third time in seven years,” the FCC has “substitut[ed] its preference for a heavily permissive unbundling scheme for Congress’s judgment that no element should be provided unless the Commission can affirmatively conclude that a competitor is impaired without it” (quoting from Powell’s dissent). • “As Chairman Powell explained, the failure to ensure consistent market definition ‘is not granularity, it is gerrymandering,’ and states are accordingly ‘likely to reach wildly different results’ because of the FCC’s failure.” And on, and on, and on. JUST SAY NO Not that the industry petition quoted the entirety of Powell’s dissent. The chairman’s statement at points is even more dismissive of the FCC majority. Consider the following language, and then contemplate the strength of Powell’s enthusiasm for defending the legality of the unbundling order: “The legal errors of today’s decision are many to my mind, but I emphasize a few of the most egregious. First, the majority places switching on the list without making an affirmative finding of impairment based on a thorough analysis of sufficiently granular criteria. . . . Remarkably, however, the national rule requires the switching element on little more than a presumptive intuition and even fails to really apply the Commission’s own impairment standard. I believe this to be reversible error. . . . “This Order is legally suspect if for no other reason than it is nearly identical at its core to the ill-fated [Unbundled Network Element] Remand Order of 1999. In substance and spirit it endeavors again to reverse the presumptions of the statute by treating unbundled switching as an unqualified good.” In sum, Powell is on record as a major detractor of the legality of the FCC’s Aug. 21 order. During the months that have elapsed since his dissent, he has not publicly retreated an inch from his view that the order’s critical unbundling provisions are illegal. It is only human nature in such circumstances for the chairman to be inclined toward a suboptimal legal defense of the order. Ditto for General Counsel John Rogovin. Under the FCC’s management charter, the general counsel answers to the chairman for his tenure, his actions, and his compensation. Accordingly, the general counsel would be expected to follow the chairman’s lead in the pending litigation over the Aug. 21 order. Already, there is evidence of some wavering. In an Oct. 8, 2002, order, the FCC took the view that the D.C. Circuit had not vacated part of an earlier unbundling order in USTA v. FCC (2002). Yet in a Dec. 4, 2002, filing, then-Acting General Counsel Rogovin staked out the contrary legal position. SPEAKING FOR BOTH SIDES Powell is caught in a bind here. As an FCC commissioner, he had to vote as he felt was best on the Aug. 21 order. And there is nothing necessarily inappropriate in his explaining that vote. But now that the decision is made, Powell as FCC chairman speaks for the entire commission. And his high-voltage denunciation of the order is proving adverse to the interests of the FCC as a whole in defending the order before the D.C. Circuit. Without insinuating any nefariousness or scheming on their part, the situation of Powell and Rogovin vis-à-vis the FCC majority might be likened to the adversity between President Richard Nixon and special prosecutor Leon Jaworski in litigating access to presidential tapes in United States v. Nixon (1974), or to the dilemma facing an in-house lawyer when the Securities and Exchange Commission launches an investigation into fraud at the corporation. In the former case, Jaworski represented the United States and its interest in faithful execution of the laws. Nixon, although constitutionally entrusted with the same duty, represented himself because his interests conflicted with an unimpaired prosecution of the Watergate cover-up. In the latter case, disciplinary rules customarily prohibit representation of multiple clients with adverse interests, such as a corporation and its misbehaving corporate officers, when such conflicts arise. Fortunately, there seem to be at least two workable solutions to the awkwardness created when an agency chairman with management authority over litigation dissents from an agency decision being challenged in such litigation. The chairman and general counsel might recuse themselves in favor of staff lawyers who are not political appointees (and thus are protected by civil service rules) and who would then report to the agency majority. Alternately, the chairman might authorize the agency majority to retain outside counsel to defend the order. Perhaps Congress should also consider regularizing these solutions through appropriate legislation. As the Supreme Court lectured in Offutt v. United States (1954), justice requires the appearance of justice. But when a chairman is entrusted with defending an agency order he so publicly deplores — like tasking foxes to guard the chicken coop — the appearance of justice is undermined. And public confidence in the outcome must necessarily be shaken. Bruce Fein is a former general counsel of the Federal Communications Commission, a contributing editor of the Web site Tech Central Station, and founding partner of D.C.’s Fein & Fein (www.feinandfein.com).

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