Another big time fox nominated to be gatekeeper to the henhouse

Thursday, August 03, 2006 at 12:13 PM

On August 1, President Bush sent the Senate his nomination to replace the resigned head of OMB's "Office of Information and Regulatory Affairs" (OIRA).  The nomination?  Susan E. Dudley who was serving as Director of the Mercatus Center at George Mason University's Regulatory Studies Program.

Three really important things here:

1. The OIRA is very important.

While it's web site is remarkably uninformative as to its duties, Wikipedia describes it as (emphasis added): agency within the Executive Office of the President. It is staffed by both political appointees and career civil servants, who have been carrying out the same kinds of economic analysis and related analyses for the past 20 years. In addition to reviewing draft regulations under Executive Order 12866, OIRA reviews collections of information under the Paperwork Reduction Act, and also develops and oversees the implementation of government-wide policies in the areas of information technology, information policy, privacy, and statistical policy.

Executive Order 12866 describes OIRA's role in the rulemaking process. In it, the President directs agencies, to the extent permitted by law, to follow certain principles in rulemaking, such as consideration of alternatives and analysis of impacts, both benefits and costs. As the Executive Order directs, OIRA reviews agency draft regulations before publication to ensure agency compliance with this Executive Order.

In plain English, agencies have to get regs through OIRA before they can take effect, and OIRA gets to evaluate the proposed regulation's "benefits" and "costs."  You don't have to be a genius to know that OIRA can wreak havoc with regulatory schemes by overstating costs and understating benefits.  If the OIRA is in the hands of an anti-regulatory ideologue, you're going to get fewer, weaker, and more easily sidestepped regulations.

2. The Mercatus Center at George Mason University is funded by the Koch brothers, two very rich, very right wing oil men dedicated to deregulation of energy and the environment

According to the Center for Public Integrity:

Koch Industries could be the biggest oil company you have never heard of--unless, that is, you hang around the halls of government in Washington.

Koch Industries (pronounced "coke") is a huge oil conglomerate controlled by brothers Charles and David Koch, two of the country's richest men and among the biggest backers of conservative and libertarian causes. With estimated revenue of about $40 billion last year, Koch is bigger than Microsoft, Merrill Lynch and AT&T.
Although it is both a top campaign contributor and spends millions on direct lobbying, Koch's chief political influence tool is a web of interconnected, right-wing think tanks and advocacy groups funded by foundations controlled and supported by the two Koch brothers.

Among those groups are some of the country's most prominent conservative and libertarian voices including the Cato Institute, the Reason Foundation, Citizens for a Sound Economy and the Federalist Society. All regularly beat the drum in official Washington for the causes the Koch's hold dear--minimal government, deregulation, and free market economics.

For the Kochs, conservative and libertarian views are a family tradition. Fred Koch, who founded the company's predecessor in 1940, helped establish the ultra right-wing John Birch Society.
In late 2000--as the Clinton Administration was preparing to leave office--Koch was hit with a 97-count indictment for covering up the discharge of more than 15 times the legal limit of benzene, a carcinogen, from a refinery in Corpus Christi, Texas.

The company faced penalties of more than $350 million. Four Koch employees were also charged individually and faced up to 35 years in prison.

Three months after the Bush administration took office--and just before the lawsuit went to trial--the Justice Department abruptly settled the case. Koch agreed to pay $20 million and plead guilty to a single count of concealment of information. In return, the Justice Department dropped all criminal charges against Koch and the four employees.
After facing the spate of government lawsuits brought by the Clinton Administration, Koch cranked up its policy influence machine to gut sections of federal environmental laws causing the company problems.

Koch's primary weapon in that battle was--and remains--the cadre of think tanks and other advocacy groups it finances. The brothers or their representatives usually sit on their boards, taking a hands-on approach to make sure the groups push the company's interests.

All of those groups are libertarian or conservative, pushing heavily for deregulation of industries and minimal government. They are also highly effective, particularly since Republicans took over the White House and Congress.

The largest recipient of the Koch's policy influence grants is George Mason University, which has received more than $23 million from the family's foundations between 1985 and 2002, according to the National Committee for Responsive Philanthropy.

The Fairfax, Va.-based school hosts several Koch funded institutes and think tanks. Richard Fink, a director and executive vice president at Koch, serves on the university's board of visitors. An economics professor at the university, he helped found another Koch-funded think tank called Citizens for a Sound Economy in the mid-1980s.
Another Koch group housed at GMU is the Mercatus Center.

Koch family money was used to support Mercatus in the mid-1980s and still finances the organization today. Charles Koch and Richard Fink are on the Mercatus board of directors.

Situated at GMU's Law School in Arlington, Va., Mercatus defines itself as "an education, research and outreach organization."

"Outreach" in Mercatus's case includes an intense lobbying blitz of the federal government, including Capitol Hill breakfasts and luncheons hosted by deregulation scholars.

Mercatus has been effective in its political goals--and those of Koch Industries.

In a December 2001 report, the White House's Office of Management and Budget singled out eight major Environmental Protection Agency rules for review. Five of them, including a linchpin of the Clean Air Act called the New Source Review, came from public interest comments filed by the group.

So neither Koch Industries nor Mercatus is what you could call an objective party when it comes to regulation.  They are active, well-funded opponents of regulation who spend a lot of time, money and effort coming up with reasons not to regulate.

3. Susan Dudley herself is pretty biased against regulation

As Director of Mercatus, Dudley penned a lovely little 2005 pamphlet titled PRIMER ON REGULATION.  As a "primer" it makes an effective "screed."  Read it for yourself if you don't want to trust me.  But the pamphlet is masterful in its "description" of regulations, the regulatory process, the legal framework authorizing regulations, and the wisdom (usually the lack of) behind various types and subjects of regulation.

As one brief example, Chapter one on What is Regulation? goes into incredible detail on the many, many ways in which regulations raise prices, raise costs, limit the choices of consumers and producers, and, sometimes, even cause injury to the very people the regulations are designed to protect.

To read this section is to wonder what kind of demented people would ever want to enact such expensive, useless, and dangerous regulations.  But, just to be really evenhanded, Dudley tells you about the benefits of regulations.  After pages of detail on the costs, the entire description of the benefits consists of this:

Regulations have benefits as well as costs, but most people are unaware of their reach and influence. Sometimes regulations confer benefits on all of us, and sometimes they just benefit a subset of consumers or producers.

Objectivity, thy name is Dudley.

Once again, we've got a major league fox nominated to be the gatekeeper to the henhouse.  And this one is pretty blatant.  But given the laziness of the press, the passivity of the populace, and the meekness of the Senate, anyone want to bet that this nominee slips right on into the OIRA job without much more than a little television posturing by the opposition?