CPR's Shapiro Testifies in Congress on 'Agency Capture' by Industry

The Minerals Managements Service's coziness with an industry it was supposed to be monitoring has brought attention back to an all-too-pervasive problem: regulatory agencies becoming "captured" by the regulated industries.

This morning the Senate Judiciary Committee's Subcommittee on Administrative Oversight and the Courts is holding a hearing on “Protecting the Public Interest: Understanding the Threat of Agency Capture.” CPR Member Scholar Sidney Shapiro is testifying about the nature and extent of agency capture, and what Congress can do about it. (There's also a news release.)

Shapiro says there are three preliminary types of capture:

• Political Capture occurs when an agency fails to protect the public and the environment because regulators friendly to industry block regulatory efforts or do not enforce the laws and regulations then in effect.
• Representational Capture occurs when industry representatives regularly appear before an agency, offering detailed comments and criticisms, while the agency seldom, if ever, hears from public interest groups or members of the public. Empirical studies have repeatedly shown that this imbalance is significant.
• Sabotage Capture occurs when regulatory critics create roadblocks that slow or prevent regulation even in future administrations that seek to protect the public and the environment. This type of capture is more subtle and difficult for the public to perceive, and is most prominently exhibited today as the defunding of the regulatory agencies and the politicization of rulemaking by the White House. 

 Shapiro presents four recommendations for Congress:

•  Improved Oversight.  Regulatory agencies cannot adequately police themselves, and public interest groups lack the resources to match up with industry in terms of advocacy before agencies and the courts. Congress should institute more systematic oversight.
• Linking Oversight and Appropriations.  Congress has sometimes cut the budgets of regulatory agencies, even as their responsibilities grow with an expanding economy. Congress has failed to study the impacts of these cuts, and without this information, it is not in a position to consider what tradeoffs are involved when agencies lack the resources they need, and whether refunding them is a higher priority than other items in the budget.
• Positive Metrics.  The deterioration of regulatory government has gone relatively unnoticed because Congress lacks a good means for measuring the performance of the regulatory agencies. Congress should therefore require the development of rigorous and concise “positive metrics,” which are measurements of agency performance that would alert Congress and the public when health and safety agencies have been captured.
• True-Up Budget Estimates.  The congressional dialogue over funding would be improved if agencies were required to make it clear how much money it would really take to implement their mandates. Current agency budgets are typically far short of what is required to meet agencies’ statutory obligations, and as a result, Americans are inadequately protected from a variety of hazards. “True-up estimates” would focus on the resources the government itself would need, calculated in constant dollars over a decade-long period, to do the work necessary to protect the public and the environment.