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FTC commissioner on the Web privacy debate

Industry Standard
Federal Trade Commissioner Orson Swindle  

(IDG) -- Federal Trade Commissioner Orson Swindle is a lot like the fellow prisoner of war he spent 15 months with at the notorious "Hanoi Hilton." He and former cellmate John McCain both are iconoclastic conservatives known for breaking ranks with fellow Republicans.

But Swindle, an honest man with an incongruous last name, now finds himself at odds with his old friend in the growing debate over online privacy. McCain, chairman of the Senate Commerce Committee, is one of dozens of legislators pushing for privacy bills. Meanwhile, Swindle, who owes his job to McCain, opposes any government regulation of the Internet and dissented from the FTC's recommendation in May that Congress rein in Web sites' collection of consumer information.

"Legislation could have a dampening effect on the growth and expansion and the vitality of e-commerce," the 63-year-old Swindle says. "Our society functions on the free flow of information. If we have to have everybody's approval on everything, things would come to a grinding halt."

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His hands-off stance is not so popular these days. Consumer groups, state government officials and even technology industry heavyweights like America Online and Hewlett-Packard favor some sort of federal regulation. With the likelihood of legislative battles over privacy erupting next year, Swindle is emerging as the Internet industry's point person on the FTC for self-regulation. He's been taking his message on the road, recently appearing before a gathering of Silicon Valley executives sponsored by TechNet, a bipartisan lobbying group.

Both presidential candidates favor self-regulation. But Swindle's stance may gain more currency should Texas Gov. George W. Bush win the November election. Bush would have the opportunity to appoint a majority of FTC commissioners, who presumably would reflect his pro-business views. Swindle's term expires in 2004.

In the meantime, Swindle doesn't mind being the lone voice in the crowd. "When you've been through what I've been through, standing alone isn't a mountain to climb," he explains.

"I do not mean to trivialize the public concerns about privacy intrusions. I don't like intrusions of any kind, especially when they come from the government," he adds. "It is a legitimate concern. The problem is how we solve it."

Swindle's maverick streak might come from his strong grandmother who raised him in the small town of Camilla, Ga. Swindle left home to attend Georgia Tech, earning a degree in industrial management in 1959. After graduation, he joined the Marine Corps, as his father had done.

A Marine aviator, Swindle was shot down over North Vietnam in 1966 while flying his 205th combat mission. He met McCain after being captured, not knowing how their lives would intertwine later. "We paid a heck of a price," Swindle says. "We helped each other a great deal." He was released in 1973, shortly before McCain, and awarded two Silver and two Bronze Stars and two Purple Hearts.

While continuing to serve in the Marines, Swindle earned an MBA from Florida State University. He retired from the military in 1979 and worked as the general manager of a small construction company in his hometown for about a year. That job and a later stint as executive director of a preschool are the sum of his experience in business.

He turned to McCain's first wife, Carol, for his next professional move. Carol McCain worked for Nancy Reagan during the 1980 presidential campaign and introduced Swindle to the man running Reagan's campaign in Georgia. Swindle ended up serving as a district chairman in the state. When a Reagan administration official offered him a job after the inauguration, he was surprised. "I didn't know about patronage," Swindle says.

He served under Reagan from 1981 to 1989, first as the Georgia director of the Farmers Home Administration for the U.S. Department of Agriculture and later as an assistant secretary of commerce. It was a stormy tenure: Swindle refused to release funds for projects he considered to be the product of "pork-barrel politics." He subsequently caused a furor when he held up $11.8 million for a shopping and entertainment complex backed by House Speaker Jim Wright, a Texas Democrat. The White House ordered Swindle to apologize, but the uproar helped mobilize Republicans in a campaign that eventually forced Wright to step down.

Come the Bush administration, Swindle "was not invited to stay," he recalls with a chuckle - perhaps because he favored Rep. Jack Kemp as Reagan's VP over George Bush.

A die-hard Reaganite, he parted ways with the Bush Republicans and in 1992 became the first national leader of Ross Perot's United We Stand America, the predecessor to the Reform Party. "My old friend Ross Perot asked me to help and I was impressed by his capacity to get people involved" in politics, Swindle says. He left the organization when it began evolving into a political party.

The next year he hooked up with Kemp and other refugees from the Reagan administration to form a conservative policy group called Empower America. Swindle didn't stay long, and Empower America became known for its high salaries paid to executives and its feuds with other Republicans.

Swindle returned to Hawaii, where he had been living with his second wife, Angie, since 1989. There, too, he played the odd man out, running unsuccessfully for Congress in 1994 and 1996 as a Republican in a traditionally Democratic state.

It was John McCain who rescued Swindle from obscurity. As Senate Commerce Committee chairman, McCain screens presidential appointees to the FTC. Only three members of the president's party may sit on the five-member commission, and President Clinton needed to appoint a Republican to an open position. McCain suggested his POW buddy. When McCain called Swindle about the job, Swindle first had to figure out exactly what the commission did. In December 1997 he was sworn in to a seven-year term.

Swindle is the only nonlawyer on the FTC, which, he claims, allows him to approach issues from a citizen's perspective. His colleagues and observers say Swindle adds balance to the panel.

"I suspect he sometimes thinks these lawyers are talking in their artificial world with their artificial constructs, and in some ways, he's like a breath of fresh air in the ivory tower," says Thomas Leary, the other Republican on the FTC. "He has a hard-headed, practical view of things because he's not trained as a lawyer."

Swindle "will come up with answers to problems we address that will surprise you," says FTC Chairman Robert Pitofsky. "He's not entirely predictable, and he's very thoughtful."

A tall man with white hair, an easy smile and a deep Southern accent, Swindle has the congeniality and sincerity of a favorite uncle. His good sense of humor and relaxed manner make him a suitable government envoy to Silicon Valley and elsewhere as he crusades for self-regulation. Swindle's message to e-commerce firms: Shape up or face the consequences.

"I think industry can [regulate itself]. I think consumers have become more aware" of privacy risks, he says. Consumers, he believes, would be perfectly happy relinquishing their information if they received something in exchange. "Our privacy is valuable, but we want to see something in return for it. Maybe that's a PC," he says, referring to companies that offer "free" computers to customers willing to disclose personal information and look at ads.

Individual preference aside, the Internet depends on the free flow of information, Swindle argues. "Consumers need to know one of the ways [the Web] is made free to us is through advertisements. Ads depend on market analysis, which is information and exchange of information, use of information and, most essentially, the collection of information."

If left alone, the Internet industry will resolve its problems, Swindle insists. He claims, unconvincingly, that this hands-off approach has already banished the bane of the Internet, spam. "Technology has cut the vast majority of [unsolicited e-mail] out," he says earnestly. "Talk about the industry making it better."

Where privacy advocates see the specter of a corporate Big Brother gathering details on consumers' every move, Swindle sees enterprise thriving. "This whole wave we're on right now is probably inspired by the fact that it's essentially unregulated."

But even some industry officials find that view unwarranted. "Self-regulation will never get the bad actors, the free riders," says Scott Cooper, Hewlett-Packard's manager of technology policy. "It will never offer consumers that level of confidence you get if you have that floor of public regulation."

Privacy advocates think their movement is reaching a critical mass and that Swindle is holding on to a well-intentioned but ultimately doomed ideal. "I think he's out of step with what the American public thinks should happen," says Deirdre Mulligan, staff counsel for the Center for Democracy and Technology. "He is out of step with other policy makers, and these are policy makers who are not looking to cripple or hinder the growth and development of the Internet. In many ways, he's becoming a lonelier voice."

But Swindle remains undaunted. The motto of his family's Scottish clan is "Never forget."

And his screensaver displays a quote from Winston Churchill: "Never, never give up."

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