In a blistering broadside against regulated industries, Sen. Elizabeth Warren (D-Mass.) said powerful special interests have co-opted the regulatory process and are able to convince regulators to shape rules in their favor.
"Thanks to corporate influence, the rulemaking process often becomes the place where strong, clear laws go to die," Warren told the audience of a Regulatory Capture Forum sponsored by the Administrative Conference of the United States in Washington Thursday.
Warren, who has pushed for a more stringent regulatory regime, said the existing rulemaking process allows interest groups to tilt the scales in their favor at every stage. She said, for instance, industry groups deluge federal agencies with comments on proposed rules in an orchestrated attempt to delay the final regulations.
She added that while the Dodd-Frank Act was enacted almost six years ago, agencies have not issued one quarter of the final rules required for enforcement.
Warren's comments drew a quick response from John McKechnie, a senior partner at the Washington-based strategy firm Total Spectrum.
"It's one thing for elected officials to push for more aggressive regulation," he told CU Times. "But to also say that the private sector needs to sit down and shut up? Has it really come to this? The last thing we need is a large, unchecked government apparatus that's taking aim at legitimate, legal businesses."
But Warren said industry groups dominate the comment period following the release of proposed rules. That dominance results in more complex rules that are more to the liking of powerful players in the game, she said.
Warren called for several changes in the rulemaking process. She said that first, all meetings between agencies and interested parties should be publicly disclosed, both before and during rulemaking. Financial relationships between commenters and industries should be disclosed as well, she said.
Rules should also be simplified, she said, adding that complex rules inevitably contain carve-outs for business interests. She added that states have experimented with public interest advocates who may provide meaningful feedback on rules.
Finally, Warren said the so-called revolving door should be changed to prohibit business interests from giving bonuses to employees who accept government positions.
"Regulatory reform is badly needed, but the reforms must address the central problem – a tilted playing field that benefits the rich and powerful," Warren concluded.
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