I’m going on blogging hiatus for a bit, but before I go, there’s an amusing story I’ll pass along: The House Transportation and Infrastructure Committee approved a proposal today that purports to save taxpayers upwards of $540 million. This will be done by transferring a government office building on Pennsylvania Avenue in Washington, DC, to the National Gallery of Art, which claims to need the additional space. As part of the Smithsonian, the Gallery can raise the private funds necessary to renovate and maintain this government building.
The problem is the building’s current occupants don’t want to leave. They would be the Federal Trade Commission.
The FTC’s 258,000 square feet headquarters at 600 Pennsylvania Avenue is somehow insufficient to accomodate the agency’s growing bureaucracy. Only 450 people work at this building according to the House Transportation Committee’s report. An additional 650 welfare recipients (er, “employees”) work out of a 217,000 square feet building on New Jersey Avenue that is leased by the General Services Administration. The GSA claims the FTC will need an additional 210,000 square feet of leased space somewhere in DC for future needs. Over the next 20 years, that adds up to $420 million in rent — plus another $100 million to renovate the Pennsylvania Avenue building.
Meanwhile, the taxpayers also shell out $3 million in year for the National Gallery of Art to rent space in addition to its building. Under the House proposal, the FTC’s Pennsylvania Avenue building would become the NGA’s new north wing, and the FTC would move to a single, government-owned building somewhere else in DC. This would end the leasing of all this additional space — at $49 per square foot — and put FTC and NGA completely in government-owned buildings.
The FTC, of course, is livid at this thought. They don’t want to give up their prime Pennsylvania Avenue real estate for some nondescript building in Foggy Bottom. The five commissioners penned a grumpy note to House Transportation Committee Chairman John Mica, arguing his plan would somehow cost taxpayers more money:
[A] forced move of the FTC could impose additional costs on the American taxpayer from the need to replicate important functions of the FTC Building in a new building. As major examples, the FTC would have to build new courtrooms for conducting adjudications as well as replace its extensive information technology infrastructure, including infrastructure for tracking, investigating, and fighting online and offline fraud.
The “new courtrooms” argument is a real hoot. The FTC has only one courtroom that I’m aware of. Thanks to the Commission’s ability to bludgeon “consent orders” from 95% of its targets, there are very few adjudicated cases — no more than a half-dozen in a given year.
Furthermore, there’s an easy way to get around the lack of a permanent courtroom: Move trials to defendants’ home venues. In two cases now pending before the FTC, the Commission rejected motions to move trials to the cities where the alleged antitrust violations took place. For one thing, most of the FTC’s witnesses live in those cities, not Washington. The FTC claimed it would be too much of an inconvenience — for them. But every major city has a courtroom you can borrow for a couple weeks. There’s no demonstrable need for the FTC to even maintain a permanent adjudication facility.
As for “information technology structure,” the FTC will make the taxpayers pay for that one way or the other. The Pennsylvania Avenue building is old and outdated — that’s why the GSA says it needs to pour another $100 million into the place. Mica’s proposal would make that the responsibility of private donors to the NGA.
The FTC’s letter offered no specific numbers to disprove those provided by Mica and his staff. Facts are never the FTC’s strong suit, and it’s particularly obvious the FTC simply doesn’t want to move — even though it’s probably in the FTC’s interests to do so. As Chairman Mica told Bloomberg’s Jeff Bliss, the commissioners probably don’t want to lose their nice view of the Capitol.
The commissioners also emphasized the “historic” nature of their current headquarters and invoked the ghost of FDR, who dedicated the building in 1937 as the Commission’s “permanent home.” If ever one needed a concrete example of the FTC’s static view of markets and competition, there it is. The commissioners would rather squander taxpayer money on an outdated facility then allow a more efficient actor to raise the private capital necessary to maximize the building’s potential.