Corporate Capture of the Rulemaking Process, RegBlog: Regulatory capture is a big deal. It is one way in which powerful corporations rig the system to work for themselves—and the rest of America pays the price. The tilt in Congress is pretty much out there for everyone to see, but corporate influence works its magic even better in the shadows—and that’s where rulemaking occurs. This essay focuses on one aspect of this pervasive phenomenon: the capture of agencies as they write the rules.
When it comes to undue industry influence, our rule-making process is broken from start to finish. At every stage, the process is loaded with opportunities for powerful industry groups to tilt the scales in their favor.
Senator Warren delivers remarks at the recent Regulatory Capture Forum held by the Administrative Conference of the United States.
The tilt starts early. For example, a 2011 study of U.S. Environmental Protection Agency (EPA) records from 1994 to 2009 found that industry groups held a virtual monopoly over informal communications with EPA that occurred before proposed rules on hazardous air pollutants were publicly available. On average, industry groups engaged in 170 times more informal communications with EPA than public interest players—communications that occurred before any proposed rules were even written.
Similarly, with financial regulation, the big banks and their friends have been lobbying the agencies aggressively. ...