Law Student Group Blasts F.T.C. For Incompetence, 'Absenteeism'

"Spectacular lassitude and office absenteeism" prevail in the Federal Trade Commission, a group of Harvard and Yale law students charged in a 185-page report released yesterday.

The report came out of an investigation directed by John Schulz, an assistant law professor at the University of Southern California. The investigation was organized last spring by Ralph Nader, author of Unsafe at Any Speed, and lasted over the summer.

The students stated that Paul R. Dixon, the head of the Commission, should resign immediately. "Dixon's chief and perhaps only contribution to the commission's improvement would be to resign from the agency that he has so degraded and ossified," they wrote.

Ignores Possibilities

The report charged:

* The Commission seldom attempts to investigate the possibility of deceptive trade practices, particularly in ghetto areas.

* The Commission rarely uses its most powerful enforcement tool, preliminary injunctions. Its method of seeking compliance with cease and desist orders is "grossly inadequate" and enforcement delays are "excessive."

* "Cronyism" is widespread in the agency. Partisan politics is the main determinant of who gets what positions.

* The Commission masks its failures by misrepresentation, secrecy, and "collusion with business interests."

The seven students testified at a hearing held by the F.T.C. on Nov. 13. The report that appeared yesterday is a greatly expanded version of this testimony. Among the facts revealed in the report are:

Stop Functioning

* A Civil Service Commission report issued in 1965--and suppressed by the F.T.C. since then--called the commission racist and also said that if its workload decreased any further, it might as well stop functioning. Its workload has markedly decreased.

* One of the Commission's branches exists only for the benefit of certain F.T.C. members. This is an office at Oak Ridge, Tenn., a place with an infinitesimal population. There is no apparent reason for the office's existence, except that the head of the House Appropriations Sub-committee--Joseph Evans--who has jurisdiction over the F.T.C. comes from that area, as does the Commission's chairman.

'Name Names'

Three Harvard law students took part in the inquiry: Andrew Egendorf, 1L; Robert Fellmeth, 2L; and William H. Taft, 3L. Fellmeth said the report would probably have an effect since it was the most complete discussion of the F.T.C. to date--and the only one since 1949. It also "has the guts to name names," Fellmeth said.