This week, we learned that America squandered the opportunity to avoid an imminent critical shortage of lifesaving ventilators, and horrifying medical triage, amid surging COVID-19 cases in New York City, New Orleans, and elsewhere. The New York Times reported that a 2012 merger overseen by the Federal Trade Commission (FTC) foiled public-health officials’ push to replenish the nation’s ventilator supply.

In 2008, a small company named Newport Medical Instruments contracted with the Department of Health and Human Services to produce cheap portable ventilators. Newport was on the cusp of mass production when, amid increasing consolidation in the sector, medical technology giant Covidien acquired Newport for $100 million. Covidien was a significant player in the ventilator market and faced a potential loss of profits should Newport’s cheaper product succeed; so it canceled the contract, depriving the government of a ventilator stockpile. This appears to have been a “killer acquisition,” a deliberate scheme by a large incumbent to eliminate competition.

The merger approval at the center of this crisis, which seems to have reduced competition dramatically in the ventilator space, received little scrutiny from the Times. The article did not note, for example, that the antitrust enforcement agency charged with approving the merger—the FTC’s Bureau of Competition—allowed Covidien to acquire Newport without even a second request for information, or any divestitures. That means that a purchase of a potential ventilator competitor (which had already agreed to produce emergency stock for the federal government) in a concentrated market did not strike the FTC as remotely problematic.

The commission actually approved Covidien’s request to consummate the merger before the 30-day waiting period required under the Hart-Scott-Rodino Act finished.

The Covidien-Newport merger appears to have been a “killer acquisition,” a deliberate scheme by a large incumbent to eliminate competition.

While we do not yet know which firms represented the merging parties, we do know who led the FTC at the time of the Covidien-Newport merger. All of the FTC leadership later moved into private law firms representing corporate clients. This calls into question their incentives while overseeing those same corporations at the FTC.

All five commissioners who presided over the Covidien case eventually left the FTC for major private law firms with significant corporate antitrust practices. The chairman at the time, Jon Leibowitz, became a partner at Davis Polk, a firm which boasts its lawyers’ “substantial government experience” in obtaining merger approvals. Leibowitz’s prior government experience was as a Senate staffer, which he leveraged into a lobbying post with the Motion Picture Association of America before his FTC appointment. The two other Democratic commissioners, Edith Ramirez and Julie Brill, both left the FTC for partnerships at Hogan Lovells, which advertises its antitrust practice with the reassurance that their lawyers not only know the antitrust authorities, but have “been part of them.” Ramirez is still there as the co-head of the antitrust practice, while Brill is now the chief privacy officer at Microsoft.

The FTC’s Republican leadership at the time of the Covidien merger has acted no differently. The late Republican commissioner J. Thomas Rosch came to the FTC from BigLaw firm Latham & Watkins and returned there in a counseling role afterward. Republican commissioner Maureen Ohlhausen joined the FTC in the midst of Covidien’s merger proposal in April 2012. She now leads Baker Botts’s antitrust section. When Baker Botts announced she’d joined the firm, the managing partner made clear her experience would “directly benefit” clients on FTC-related matters. Before becoming commissioner, Ohlhausen revolved out of FTC staff-level positions two other times.

The sub-commissioner-level leaders have taken their own spins through the revolving door too. Richard Feinstein was the director of the Bureau of Competition at the time of the Covidien-Newport merger. Feinstein left the FTC to become a partner at Boies Schiller Flexner, echoing a pattern from earlier in his career when he joined the same firm after serving as an assistant director at the commission. Boies Schiller Flexner’s antitrust practice boasts “eminent practitioners” with “significant” government experience.

All in all, the leadership who presided over the truncated and, we see now, significantly damaging Covidien-Newport merger review were uniformly individuals whose long-term career interests gave them incentives to allow corporations with market power to consolidate even more.

The FTC is maintaining its reliance on lawyers who spin between the commission and private law firms.

Covidien’s acquisition of Newport was part of a larger trend of consolidation in the medical supply industry. As the Times notes, Covidien acquired five other medtech companies in 2012, and acquired eight companies that year in total. Medtech mergers and acquisitions were on the rise in 2011, with 414 transactions in the first ten months of that year alone compared to 262 in 2010. After analyzing firm data from 2006 to 2016, McKinsey & Company declared in 2018 that the largest medtech companies “must” engage in mergers and acquisitions to stay on top. Eventually, Covidien itself was acquired—in 2015, Medtronic bought Covidien for $50 billion, the largest medtech merger ever at the time, and moved its on-paper corporate offices to Ireland (where Covidien called home) in a tax-dodging “corporate inversion.”

As of now, we lack knowledge of the private-firm attorneys who represented Covidien and Newport themselves. Nor do we know the more junior FTC officials who worked on the case. As part of the Revolving Door Project’s work this year, we will be building out a detailed database of the career paths of attorneys on all significant mergers analyzed by the United States’ competition authorities. Through Freedom of Information Act requests and other efforts, we will seek to reduce the fog of anonymity that often undermines the public’s understanding of how the revolving door operates over time.

The Covidien-Newport merger reduced competition and exacerbated the shortage of ventilators. The FTC officials we know had ultimate responsibility for this merger appear, through their professional moves, to have never had the private sector far from their heart while purportedly serving the public. Now that shortage has severe repercussions, while the FTC is maintaining its reliance on lawyers who spin between the commission and private law firms. In order to move to a less consolidated economy and avoid more deadly consequences, the enforcement agencies must end the expectation that a stint as a regulator is less a career than a prelude to a lucrative private-sector position promoting corporate consolidation.