The FTC had “attempted to co-opt EY’s independent assessment in order to generate evidence of ‘deficiencies in Twitter’s privacy and information security program.’”
It has been revealed that the Federal Trade Commission under President Joe Biden attempted to get consulting multinational giant Ernst & Young (EY) to produce a negative report on Twitter shortly after it was acquired by billionaire Elon Musk in the fall of 2022.
Documents obtained by the House Judiciary Committee show that the FTC was "adamant" about getting its way, to the point where EY consultants feared that if they failed to comply, the Biden administration would come after them.
The revelations came via a Motion for Protective Order filed on Thursday by X Corp in the ongoing legal battle between Twitter and the United States government.
"This motion asks the Court to rein in an investigation that has spiraled out of control and become tainted by bias," the preliminary statement begins, arguing that the FTC "engaged in conduct so irregular and improper that [EY]—the independent assessor designated under a consent order between Twitter and the FTC to evaluate the company's privacy, data protection, and information security program— 'felt as if the FTC was trying to influence the outcome of the engagement before it had started.'"
Sworn testimony by those involved in the case revealed that the FTC had "attempted to co-opt EY's independent assessment in order to generate evidence of 'deficiencies in Twitter's privacy and information security program'" in the aftermath of Musk's acquisition of the platform.
The FTC's efforts allegedly included "very specific types of procedures" they expected EY to perform and the conveyance of "expectations … about what th[e] results should be before [EY] had even begun any procedures."
"The FTC was so 'adamant' with EY," X Corp's lawyers wrote, "conveying that 'this is absolutely what you will do and this is going to occur, and you’ll produce a report at the end of the day' that would be negative about Twitter."
They added that senior EY leaders "feared that, if EY resigned as the independent assessor, '[t]he FTC [would] take exception to [EY's] withdrawal and create 'other' challenges for EY over time."
"There simply is no way to square the striking record of bias recounted above—along with other evidence described in this motion—with any semblance of the impartiality, due process, or equitable conduct that the law requires from administrative agencies like the FTC when they act pursuant to court-authorized and -supervised consent orders," X corp's lawyers added, calling on the court to "intervene to stop the FTC’s ongoing improper conduct."
Elon Musk responded to the bombshell allegations, saying they amounted to "Insanely illegal overreach by FTC."
During a hearing on Thursday, House Judiciary Chairman Jim Jordan grilled FTC Chairperson Lina Khan over her agency's alleged treatment of EY consultants.
"They're the independent assessor in this consent decree the FTC has with Twitter, and you're telling the guy ... what you want the outcome to be?"
Khan said she was "unfamiliar" with the accusations leveled by the consultant.
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