Beware of Unpaid Consultants In Federal Agencies
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The Biden Administration has test-driven a novel tactic to expand the size and reach of government without paying for it: high-level, unpaid consultants at an influential government agency that is trying to dramatically change how business is done in the United States.

At issue is the Federal Trade Commission’s (FTC’s) use of such consultants for self-described important and potentially widely influential projects. The FTC wants all hands on deck as it continues to initiate litigation against America’s leading tech companies, fight mergers across numerous industries, and tries to outlaw non-compete agreements.

For good reason, the FTC’s Office of Inspector General has raised strong concerns about the use of unpaid consultants and Congress is investigating.

Federal regulations state, “Every Federal manager and their employees have an obligation to help avoid performance by contractors of responsibilities that should be reserved for Federal employees. Although contractors provide important support to the agency, they may not be motivated by the public interest and may be beyond the management controls applicable to Federal employees.”

The FTC’s consultants had major responsibilities.

FTC documents, later provided to the U.S. Senate, said one consultant’s duties included to “act as a visionary leader on economic issues related to the FTC’s law enforcement activities, and consumer protection and antitrust missions … to report to the Chair, and work together with staff and attorneys throughout the FTC.”

Another unpaid consultant was to “leverage their expertise to advise the Chair and senior Commission leaders on legal issues required to advance the agency’s mission.” The FTC subsequently revised the work description for these and eight other consultants before they were sent to Congress.

As with many things in life, “free” at government agencies often comes with hidden costs and problems. In Washington, D.C., access and inside information can be a gold mine and there are significant barriers to guard against potential conflicts of interest.

In addition to federal laws requiring that government employees perform inherently government functions and tightly manage related functions, there are other reasons to be wary of high-level contractors.

As the FTC’s Office of Inspector General said in its critical August 2022 report, “When the FTC enters into agreements with unpaid consultants and experts, the agency introduces operational, legal, compliance, security, and reputational risks.” Its audit also found, “the FTC’s unpaid consultant and expert program lacks a comprehensive system of controls” and recommended changes.

Using unpaid contractors can be a work-around to constrained budgets. But budgets and related constraints are a decision for Congress, and an integral part of the U.S. Constitution’s checks and balances. With the FTC seeking a 37 percent increase in its budget for the year ahead, there should be clear restrictions on the use of such consultants, including appropriations language to reinforce the restrictions. 

Morale among career employees can also plummet when large numbers of unpaid consultants are given roles with power and authority. In fact, that seems to have happened at the FTC. The Office of Personnel Management found that in 2022 there was a 40 percent drop from 2020 in the number of FTC employees who believed the agency’s “senior leaders maintain high standards of honesty and integrity.”

Furthermore, if the unpaid consultant’s services are that important, they should be hired as full-time federal employees.

In September 9, 2022 response to a request from Senator Mike Lee (R-UT), the FTC reported that it had brought on ten prominent, unpaid consultants since January 2021 with the program running through early 2022.

Congress should demand a full accounting from the FTC of the scope of the program, including the reasons that may have motivated so many accomplished professionals to work at the FTC in high pressure, important, unpaid positions. And it should make sure such practices are rooted out of the FTC once and for all.


Paul Steidler is a Senior Fellow with the Lexington Institute, a public policy think tank based in Arlington, Virginia. 


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