New Research Affirms That Corporate Interest Lobbying at OIRA Holds Sway

When asked by a reporter why he robbed banks, the notorious bank robber Willie Sutton is said to have responded, “Because that’s where the money is.”  For decades, the accepted conventional wisdom held that a similar dynamic motivated legions of industry lobbyists to parade through the front door at the White House Office of Information and Regulatory Affairs (OIRA).  Why—one might ask—does industry spend so much time complaining to OIRA’s political appointees and staff-level economists about rules they find inconvenient to their bottom line?  Because, like CPR has been saying for many years in reports, apparently that’s where the regulatory relief is to be had.

In 2011, we released a ground-breaking report that sought to move beyond mere intuition and confirm with actual data the degree to which industry was able to wield its outsized influence to secure favorable deregulatory changes to agencies’ pending rulemakings.  Using publicly available data regarding OIRA’s meetings with outside lobbyists, the report found that rules that were subject to extensive lobbying during OIRA review were indeed more likely to be changed and delayed by OIRA.  Our specific findings included:

• Sixty-five percent of the participants represented regulated industry interests as compared to just 12 percent of participants appeared on behalf of public interest groups;
• Rules that were the subject of meetings were 29 percent more likely to be changed than those that were not; and
• Among the rule reviews that involved lobbying by outside parties, 12 percent lasted longer than 120 days—the maximum amount of time allowed for OIRA’s reviews under Executive Order 12866.

This month, two researchers at the University of Wisconsin-Madison—Simon F. Haeder and Susan Webb Yackee—published their own study on lobbyist influence at OIRA, which provides an even more detailed look at how interest groups—particularly those representing the business community—succeed in securing regulatory changes by lobbying OIRA.  By using plagiarism-detecting computer software to compare the text of draft final rules submitted for OIRA review to the text of the final rules that emerged at the conclusion of the review, the study’s authors were able to identify and measure quantitatively the extent of substantive changes that were made to agencies’ rules during the OIRA review process.  They then used an OIRA meetings database modeled on CPR’s own meetings database to examine whether and to what extent such substantive changes in agency rules correlated with outside group lobbying at OIRA.

The study finds that, depending on the circumstances, lobbying OIRA for rule changes can work, and that in key ways the process of seeking rule changes tends to favor lobbyists from the business community who typically pursue changes that weaken public protections.  These results seem to provide additional evidence that OIRA operates as a fundamentally deregulatory institution.

Some of the key specific findings of Haeder’s and Yackee’s study include the following:

• Increases in interest group lobbying result in more extensive substantive changes to agency rules;
• The extent of substantive changes to agency rules is even greater when lobbying at OIRA is carried out by experienced lobby firms; and
• Uncontested lobbying of OIRA by corporate interests is more likely to result in changes to agency rules, but uncontested lobbying of OIRA by public interest groups does not increase the likelihood of rule changes.

These last two findings warrant further consideration.  With regard to experienced lobbying firms, one can assume that the public interest community is just as free as the business community to deploy an experienced lobbyist to make its case to OIRA, and, in some cases, it has.  But, due to the obvious resource disparities, public interest advocates are simply unable to deploy experienced lobbyists with the same frequency as regulated industry.  More to the point, serious resource disparities ensure that the public interest community is unable to participate in OIRA lobbying activities at anywhere near the same rate of frequency as representatives of the business community.  The barriers to participation are far too great for the many public interest organizations not located around the District.  Even for those that are located in DC, a limited budget and competing priorities limit their capacity to lobby OIRA to the same extent as big business.  (The fact that OIRA gets at least two bites at the regulatory review apple—once for draft proposals and a second time for draft final rules—only compounds the problem.)

The disparity in participation rates, of course, raises significant concerns regarding Haeder’s and Yackee’s third finding: the disparity in results from uncontested lobbying.  Their research confirms public interest groups may suffer significant costs when they fail to counter industry lobbying OIRA in the form of unfavorable rule changes.  These costs might encourage corporate interests to lobby OIRA at every opportunity as part of a broader strategy to stretch even thinner the already limited resources of the public interest community, thereby enhancing the overall effectiveness of their own participation in OIRA lobbying activities.

This disparity in results is also suggestive of the inherent antiregulatory bias of OIRA as an institution.  Industry’s arguments for regulatory relief seem to find a sympathetic ear among OIRA’s political appointees and the economists that most make up its career staff—particularly when these arguments are presented unopposed.  In contrast, OIRA staff might be less amenable to the public interest community’s calls for stronger safeguards, since they are more preoccupied with political calculations or appeals to cost-benefit analysis—considerations that tend to favor profits of well-connected industries at the expense of the public interest.  No organized industry opposition is necessary to prime the pump.

Perhaps the most important take-home message from Haeder’s and Yackee’s work is that OIRA plays a highly influential role in the rulemaking process—one that is all too often overlooked by the media and policymakers alike.