The Sheriff at the FTC
The Sheriff at the FTC
When the Federal Trade Commission (FTC) decided to purge Joe Camel from cigarette advertisements, the commissioners had an experienced hand to carry out the sentence: Joan Z. (Jodie) Bernstein, the head of the agency's Bureau of Consumer Protection.
As lead counsel for the FTC's suit against R.J. Reynolds Tobacco Co., the 71-year-old crusader built the case against Smokin' Joe to force the tobacco giant to pull the advertising logo. Following the mammoth settlement between tobacco companies and antismoking lawyers, Reynolds retired the emblem last summer.
In the new year, Bernstein's plate will be equally full. As the FTC commits significant resources to its new role as sheriff in the frontier of cyberspace, she and staff will be patrolling the Internet in hot pursuit of Web site operators who take personal information from kids without their parents' consent and high-tech hucksters who defraud consumers across borders. The FTC started to police the Internet two years ago, "before any other agency was able to get its act together," Bernstein says proudly.
Marching down the corridors of the FTC, Bernstein leaves no doubt who is in charge. Her petite frame belies the bulldozing bureaucrat underneath. Over her 30 years in government and the private sector, she's managed to change the way smokestack pollution is monitored and to clean up the soiled image of the waste disposal giant WMX Technologies Inc. From her post as consumer protection director over the past three years, she has battled large companies such as Sears, Roebuck and Co., and hacked away at bureaucratic inefficiencies. In the past two years, about 10,000 obsolete administrative orders have been taken off the FTC's books at Bernstein's initiative, and her staff has been recovering more money for consumers than ever before.
In the FTC case against Sears, Roebuck, the merchandiser was ordered to refund debtors pressured into paying delinquent charges even though they were bankrupt. In another win for consumers, the FTC brokered an agreement with Exxon Corp. to run ads correcting previous commercials that claimed high-octane gasoline reduces car maintenance costs.
One of the thorniest issues that Bernstein has tackled was fraud among funeral directors. For a decade, the FTC required that funeral homes--long hostile to FTC regulation--disclose their prices to consumers before goods or services are purchased. Only 36 per cent of funeral homes complied. Under a deal worked out by Bernstein in 1996, the FTC now allows funeral homes found violating the agency's order to make voluntary payments and go through compliance training, rather than face enforcement action. Since the new arrangement began, compliance has shot up to 90 per cent.
Despite these victories, Bernstein is not without detractors. "I don't see a whole lot of unusual or innovative cases coming out of her bureau," said Art Amolsch, editor of FTC Watch newsletter. Innovation is important, he argues, because state and local consumer protection agencies depend on the FTC to come up with cutting-edge strategies to combat fraud.
It was moderation, however, that FTC chairman Robert Pitofsky was looking for when he choose Bernstein to head consumer protection. "I wanted someone who was not exclusively free-market or protectionist," he recalled in a recent interview. Indeed, though Bernstein is the first to pursue a case with vehemence, she advocates such measures as a last resort. "I believe in the market," she says, "but sometimes the market fails, and that's where our role is: to put the consumer back in the position of having an informed choice."
A Wisconsin native, Bernstein started out as one of a handful of women who graduated from Yale Law School in the 1950s. She and former classmate, now District of Columbia Circuit Justice Patricia Wald, were the only two women in their class to sit on the Yale Law Review. But a few months before graduation, neither had received a job offer. So both set off to Wall Street to look for work. "We got the usual response--'Sorry, we hired a woman last week'--meaning their quota was full," Bernstein recalled recently. Eventually though, the trip paid off, and Bernstein landed a law firm job.
After several years in private practice in New York, she joined the FTC, then moved on to become general counsel at the Environmental Protection Agency. At the EPA, Bernstein helped simplify regulation by being one of the first to implement the "bubble theory" of clean air regulation, in which emission restrictions were averaged out among all the smokestacks at a factory. Previously, there were separate regulations and separate emission controls for each smokestack, which confused owners and factory design engineers alike.
In the mid-1980's, when corruption scandals were rocking the EPA and companies tainted by association with the agency, she accepted an executive position with the Oak Brook (Ill.)-based WMX. Her brief was to soften the company's image. "WMX executives needed someone with a white hat," Bernstein recalls. In 1987, when New York state environmental conservation commissioner Thomas Jorling called her, looking for trucks to haul trash from the Mobro, the infamous garbage barge, from Islip, N.Y., to a Brooklyn incinerator, Bernstein got her chance to score a public relations coup. She did Jorling one better and persuaded her bosses to provide the trucks for free.
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