Rule-making is a form of government failure that occurs when the regulatory body, created to act in the public interest, instead promotes the commercial or political concerns of special interest groups that dominate the industry or sector charged with regulating. When regulatory capture occurs, the interests of a company or group of politicians are prioritized over the public interest, which causes a net loss to the public. Government agencies that suffer from arrest of regulations are called "arrested institutions".
Video Regulatory capture
Theory
For theorists of public choice, rule-making occurs because groups or individuals with high interest in the outcome of policy or regulatory decisions can be expected to focus their resources and energy in an effort to get their preferred policy outcomes, while community members, each with only small individual stocks in the results, will ignore it altogether. Regulation-making refers to action by interest groups when a focused resource imbalance aimed at a particular policy outcome successfully "captures" influence with staff or commission members of the regulatory body, so that favored policy outcomes from specific interest groups are implemented.
The theory of regulatory capture is the main focus of a branch of public choice called the regulatory economy; Economists in this specialization are critical of the conceptualization of government regulatory interventions as motivation to protect the public interest. Frequently quoted articles include Bernstein (1955), Huntington (1952), Laffont & amp; Tirole (1991), and Levine & amp; Forrence (1990). Regulatory arrest theory is associated with Nobel economist George Stigler, one of the main developers.
The possibility of regulatory taking is the risk borne by the agent by its nature. This indicates that the regulatory body should be protected from outside influences as much as possible. Alternatively, it may be preferable not to make the agent entirely granted in order for the agency to become a victim, in which case it can serve the subject it administers rather than those designed by the agency to be protected. The caught regulatory body is often worse than there is no rule, because it holds the authority of the government. However, increased transparency of agencies may reduce the effects of capture. Recent evidence suggests that, even in mature democracies with high levels of transparency and media freedom, wider and more complex regulatory environments are associated with higher levels of corruption (including regulatory capture).
Relationship with federalism
There is a strong academic literature which shows that smaller government units are easier for small concentrated industries to perpetuate them than large ones. For example, a group of countries or provinces with large timber industries may have legislative and/or their delegations to national legislatures taken by timber companies. These states or provinces later became the industry's voice, even blocking national policies that would be favored by the majority across federations. Moore and Giovinazzo (2012) call this "distortion gap".
The reverse scenario is possible with a very large industry. Very large and powerful industries (eg energy, banking, weapons system construction) can capture the national government, and then use that power to block policies at the federal, state or provincial level that voters may want, even if local interests can block priorities national level.
Economic reasons
The idea of ​​arresting the regulation has a clear economic basis, where private interests in an industry have the greatest financial impact in regulatory activity and are more likely to be motivated to influence regulatory bodies rather than scattered individual consumers, each of whom has few specific incentives. to try to influence the regulator. When the regulator establishes an expert body for checking policy, it always displays current or previous industry members, or at least, individuals with contacts in the industry. Capture is also facilitated in situations where the consumer or taxpayer has a poor understanding of the underlying problem and the business enjoys the benefits of knowledge.
Some economists, such as Jon Hanson and his co-authors, argue that the phenomenon extends beyond just political institutions and organizations. Businesses have an incentive to control whatever has power over them, including institutions from media, academia and popular culture, so they will try to capture it as well. This phenomenon is called "deep capture".
The general interests of regulation are based on market failures and welfare economies. He argues that regulation is the government's response to public needs. The goal is to make up for market failures, improve resource allocation efficiency, and maximize social welfare. Posner points out that the theory of public interest holds the assumption that the market is fragile, and that if left unchecked, it will tend to be unfair and inefficient, and government regulation is an inexpensive and effective way to meet the needs of social justice and efficiency.. Mimik believes that government regulations are public administration policies that focus on personal behavior. This is a rule taken from the public interest. Irving and Brouhingan see regulations as a way to comply with public needs and undermine the risks of market operations. It also states the view that regulation reflects the public interest.
Maps Regulatory capture
Development
A review of US historical regulations in the late nineteenth century, particularly the railway tariff setting by the Interstate Commerce Commission (ICC) in 1887, revealed that regulation and market failure were irrelevant. At least until the 1960s, in regulatory experience, regulation was developed toward producer profits, and regulation increased producer profits within the industry. In potentially competitive industries such as the trucking industry and taxi industry, regulations allow prices to be higher than costs and prevent entrants. In natural monopoly industries such as the electric power industry, there is the fact that regulations have little effect on prices, so industry can make a profit above normal profit. Empirical evidence proves that regulation is beneficial to producers.
These empirical observations have led to the emergence and development of regulatory capture theory. Contrary to the theory of regulation of public interest, the theory of regulatory regulation states that regulatory provisions adapt to the industry's need for regulation, that is, legislators are controlled and captured by industry in regulation, and regulatory agencies are gradually controlled by industry.. That is, the regulator is captured by the industry. The basic view of the theory of regulatory capture is that no matter how regulatory schemes are designed, industry regulation by regulatory bodies is actually "captured" by the industry. The implication is that the regulation increases the industry's profitability rather than social welfare.
The above mentioned regulatory arrest theory is basically a pure catch theory in the early days, namely regulators and lawmakers captured and controlled by the industry. The later arrangement models such as Stiegler (Model Stigler) -Pelzmann (Pelzmann Model) -Becker (Becker Model) belong to the theory of arresting rules in the eyes of Posner (1974) and others. Because all of these models reflect that regulators and legislators do not pursue the maximization of the public interest, but maximize personal interests, namely using the theory of "self-interest" to explain the origin and purpose of the rule. Aton (1986) argues that Stigler's theoretical logic is clearer and more central than the previous "capture theory" hypothesis, but it is difficult to distinguish between the two.
Regulatory regulatory theories have a special meaning, that is, the experience statement that rules are beneficial to producers in real life. In fact, basically this is not a correct setup theory. Although analytical results similar to the Stigler model provide interpretation and support for regulatory capture theory are beneficial to the producer, but the latter method of analysis is completely different. Stigler used standard economic analysis methods to analyze regulatory behavior, then created a new regulatory theory - economic theory of regulation. Of course, different divisions depend on sharing criteria, and they basically depend on different understanding of the researchers about certain concepts.
Type
There are two basic types of decision-making:
- Materialist capture , also called finance taking , in which the arresting motive is based on material interests. This can be the result of bribes, turnstiles, political donations, or regulators' desire to keep government funding. These forms of arrest often become political corruption.
- Non-materialist footage , also called cognitive capture or cultural capture , where regulators begin to think like regulated industries. This can be attributed to industry interest lobbying.
Other differences can be made between arrests held by large companies and small companies. While Stigler is especially mentioned, in his work, to large companies that catch regulators by swapping their vast resources (materialist capture) - small firms are more likely to retain non-materialist retrieval through special underdog rhetoric.
Weakness
The regulatory regulatory theory closely matches the history of the regulation and is therefore more convincing than the regulating public interest. However, the theory of regulatory capture also faces the same criticisms as the theory of regulating public interest, such as the lack of a strong theoretical foundation. The reason is that the theory of regulatory capture does not explain how regulation is gradually controlled and captured by the industry. There are many interest groups that are affected by regulation, including consumers, labor organizations, and producers. Why are regulation controlled by producers and not influenced by other interest groups? The original form of regulatory arrest theory does not provide some explanation for this; it just assumes that the regulation is biased towards the manufacturer.
Opinion against
Although there is ample evidence to support the theory of arrest of regulation, there are still some conflicting rules. Two regulatory characteristics are cross-subsidies and preferences for small-scale producers. Cross subsidies refer to the fact that a diversified company makes the price of a particular commodity below the average cost, and compensates the previous loss of sales revenue from another commodity whose price is higher than the average cost. Such price-fixing behavior conflicts with profit maximization. Therefore, it can not be said that the regulation of bias against producers. Cross subsidies usually arise in the following industries: railways, airlines, and inter-city communications. It usually takes the same form of charging for different customers, although the marginal cost of shipping products to consumers varies. Another characteristic of regulation is that it usually likes small-scale producers. Small-scale production companies often earn higher profits under regulatory conditions than large-scale producers, and under non-regulation, they often get very little.
The most powerful evidence of regulatory arrest theory lies in the fact that there are many rules in real life that are not supported by the industry. The level of industrial profits has been reduced due to regulations, including regulation of oil and gas prices, and environmental social regulations, product safety, and worker safety. Magat (1981) commented that, assuming that the theory of regulatory capture is very true, a series of deregulation rules such as aviation, cable television, natural gas and petroleum prices would not occur in the late 1970s, and people would not see the passing of the Reform Bill Taxes in 1986, the bill transferred a considerable tax burden on households to the company. This shows that captive prisoner theory is difficult to explain the internal reasons why many industries are regulated and then loosened up.
Example
Examples of the United States
Bureau of Management, Regulation and Enforcement Oceans
In the aftermath of the 2010 Deepwater Horizon oil spill, the Mineral Management Service (MMS), which has a regulatory responsibility for offshore oil drilling, is widely cited as an example of regulatory capture. The MMS then became the Bureau of Marine Energy Management, Regulation and Enforcement (BOEMRE) and on October 1, 2010, the collection of mineral rents was separated from the agents and placed under the Ministry of Home Affairs as the Office of Natural Resources Income (ONRR). On October 1, 2011, BOEMRE was then split into two bureaus, the Bureau of Environmental Safety and Enforcement (BSEE) and the Marine Energy Management Bureau (BOEM).
The three-stage reorganization, including the name change to BOEMRE, was part of a reorganization by Ken Salazar, who was sworn in as office as the new Interior Secretary on the same day as the name change was announced. Salazar's appointment was controversial because of his relationship with the energy industry. As a senator, Salazar opted against the amendment to lift tax relief for ExxonMobil and other major oil companies and in 2006, he chose to end protection limiting offshore oil drilling in Florida Gulf Coast. One of Salazar's important tasks is to "[end] the department's fun with the industry it organizes" but Daniel R. Patterson, a member of the Arizona Representative Council, said "Salazar has a very weak conservation record, mainly on energy development, global warming, wildlife which is endangered and protects scientific integrity.Not surprising that the oil and gas industry, mining, agribusiness and other polluting industries that have dominated the Interior support Salazar breeders - he is their friend. "Indeed, a spokesman for the National Mining Association, lobbying for the mining industry, praised Salazar, saying that he is not a doctrine of public land use.
MMS has authorized BP and dozens of other companies to drill in the Gulf of Mexico without first obtaining permission to assess threats to endangered species, as required by law. BP and other companies are also granted an exception because they have to provide an environmental impact statement. The National Oceanic and Atmospheric Administration (NOAA) issued a strong warning about the risks posed by the drilling and in a 2009 letter, accusing MMS of undermining the potential and potential consequences of a major spill in the Gulf of Mexico. The letter further accused MMS of highlighting the safety of offshore drilling while minimizing the risk and impact of the spill and undermining the fact that the spill has increased. MMS staff scientists and scientists say their reports are denied and altered if they find a high risk of accidents or environmental impact. Kieran Suckling, director of the Center for Biodiversity, said, "MMS has abandoned the pretense of regulating the offshore oil industry.The agency seems to think its mission is to help the oil industry avoid environmental laws."
After the Deepwater accident occurred, Salazar said he would postpone the granting of further drilling permits. Three weeks later, at least five more permits have been issued by the mineral agent. In March 2011, BOEMRE began issuing more offshore drilling licenses in the Gulf of Mexico. Michael Bromwich, head of BOEMRE, said he was distracted by the pace at which some oil and gas companies ignore the Deepwater Horizon as "complete abnormalities, perfect storms, one in a million," but will soon grant more permits to drill for oil and gas at bay.
Commodity Futures Trading Commission
In October 2010, George H. Painter, one of two Commodity Futures Trading Commission (CFTC) administrative law judges, retired, and in the process requested that his case be not submitted to another judge, Bruce C. Levine. The painter writes, "In the first week of Judge Levine at work, nearly twenty years ago, he came to my office and declared that he had promised Wendy Gramm, then the Chairman of the Commission, that we would never rule over the complainant's request," Painter write. "A review of his decision will confirm that he fulfills his oath." In a further explanation of his request, he wrote, "Judge Levine, under the pretext of cynicism to enforce the rules, forces complainants to run hostile procedural challenges until they lose hope, and withdraw their grievances or pay cheaply, regardless of the merits of the case "Gramm, wife of former Sen. Phil Gramm, is accused of helping Goldman Sachs, Enron, and other big companies gain influence over the commodities market. After leaving the CFTC, Wendy Gramm joins the Enron board.
Environmental Protection Agency
Natural gas drilling increased in the United States after the Environmental Protection Agency (EPA) said in 2004 that hydraulic fracturing "posed little or no threat" to drinking water. Also known as "fracking", the process was discovered by Halliburton in the 1940s. Whistleblower Weston Wilson said that the EPA's conclusions were "unsupported" and that five of the seven member review panels that made the decision had a conflict of interest. The Editorial New York Times says that the 2004 study "smoothed the industry and dismissed by experts as a shallow and politically motivated." The EPA is currently banned by law from regulating fracking, a result of "Halliburton Loophole," a clause added to the 2005 energy bill at the request of then vice-president Dick Cheney, who was CEO of Halliburton before becoming vice president. Legislation to close gaps and restore EPA authorities to regulate hydraulic fractures has been referred to both the DPR and Senate committees.
Federal Aviation Administration
The Federal Aviation Administration (FAA) has a dual mandate to promote aviation and manage its security. A report by the Transportation Department found the FAA manager had allowed Southwest Airlines to fly 46 planes in 2006 and 2007 that were late for safety inspections, ignoring the concerns raised by the inspectors. Audits from other airlines produced two airlines that caused hundreds of aircraft, causing thousands of flight cancellations. The House Transportation and Infrastructure Committee investigated the matter after two FAA expressors, inspectors Charalambe "Bobby" Boutris and Douglas E. Peters, contacted them. Boutris said he was trying to ground the Southwest after finding a crack in the fuselage, but was prevented by a supervisor who he thought was friendly with the airline. The committee then held hearings in April 2008. James Oberstar, former chairman of the committee said his investigation found a pattern of widespread regulatory abuses and regulatory abuses, allowing 117 aircraft to be commercially operated even though they were not in compliance with the FAA safety rules. Oberstar said there was a "fun culture" between senior FAA officials and airlines and "systematic disturbances" in the FAA culture that resulted in "irregularities, bordering on corruption."
On 22 July 2008, a bill was approved unanimously in the DPR to tighten regulations on aircraft maintenance procedures, including the establishment of a whistleblower office and a two-year "cooling off" period that the FAA inspectors or inspectors supervisors must wait before they can work for those who are regulated. The bill also requires the rotation of the primary maintenance inspector and stipulates that the word "customer" is true applicable to the flying public, not an entity governed by the FAA. The bill died in the Senate committee that year. In 2008 the FAA proposed to finance Southwest $ 10.2 million for failing to inspect the old planes for cracks, and in 2009 Southwest and FAA agreed that Southwest would pay a $ 7.5 million fine and would adjust the new safety procedures, by doubling which is good if Southwest fails to implement. In September 2009, the FAA administrator issued a directive mandate that the agent used the term "customer" only to refer to the flying public.
Prior to the deregulation of the US air industry, the Civil Aviation Council was in charge of maintaining the oligopoly of US airlines.
In a June 2010 article on regulatory filing, the FAA is cited as an example of the "old-fashioned" arrest, "in which the aviation industry openly dictates its regulatory regulation, regulates not only favorable regulation but puts key people to lead this regulator."
Federal Communications Commission
Law scholars have pointed to the possibility that federal agencies such as the Federal Communications Commission (FCC) have been captured by media conglomerates. Peter Schuck of Yale Law School believes that the FCC can be captured by the leaders of the media industry and thereby strengthen the company's cartel operations in the form of "corporate socialism" that serves to "regressively impose taxes on consumers, impoverish small firms, impede new entries, innovation, and reduce consumer choice ". The FCC selectively grants communications licenses to several radio and television stations in a process that excludes other citizens and small stations from having access to the public.
Michael K. Powell, who served in the FCC for eight years and served as chairman for four, was named president and chief executive officer of National Cable & Telecommunications Association, lobby group. Beginning April 25, 2011, he will be a major lobby and industry liaison with Congress, the White House, FCC, and other federal agencies.
Meredith Attwell Baker is one of the FCC commissioners who approved the controversial merger between NBC Universal and Comcast. Four months later, he announced his retirement from the FCC to join Comcast's Washington lobby office, D.C. By law, he was forbidden to lobby anyone at the FCC for two years and the deal Comcast made with the FCC as a condition of approving the merger would forbid him to lobby every lifetime executive branch institution. Nevertheless, Craig Aaron, of Free Press, who opposed the merger, complained that "a thorough industrial arrest by the industry is hardly raising eyebrows" and says public policy will continue to suffer "persistent turning doors at the FCC".
Ajit V. Pai, a former Verizon lawyer, is the current FCC chairman.
Federal Reserve Bank of New York
The Federal Reserve Bank of New York (New York Fed) is the most influential of the Federal Reserve Banking System. Part of the New York Fed's responsibilities is the Wall Street regulation, but its president is elected by and reports to the board dominated by the chief executive of some of the banks it oversees. While the New York Fed has always had a closer relationship with Wall Street, during the years when Timothy Geithner became president, he became very close to Wall Street banks, as banks and hedge funds pursued an investment strategy that led to the 2008 Financial Crisis, which failed to fail by the Fed.
During the financial crisis, several major banks on the verge of collapse were rescued with emergency government funds. Geithner engineered a $ 30 billion New York Fed purchase from credit default swaps from American International Group (AIG), which was sold to Goldman Sachs, Merrill Lynch, Deutsche Bank, and Socià © à © tÃÆ' © © © rale. By purchasing these contracts, banks receive a 100-cent "bailout" for the contract. If the New York Fed allows AIG to fail, the contract will be worth much less, resulting in a much lower cost for a taxpayer-funded bailout. Geithner defended the unprecedented use of an unprecedented amount of taxpayer funds to save the bank from their own mistakes, saying the financial system would be threatened. At the January 2010 congressional hearing into the AIG bailout, the New York Fed initially refused to identify the opponents who benefited from the AIG bailout, claiming the information would harm AIG. When it became clear this information would become public, the legal staff at the New York Fed sent an e-mail to warn them, bemoaning the trouble of continuing to make Congress in the dark. Jim Rickards called the bailout a crime and said "regulatory systems have become prisoners to banks and non-banks".
Food and Drug Administration
Some people accuse the US Food and Drug Administration (FDA) of acting for the benefit of the agricultural, food and pharmaceutical industries at the expense of the health interests of consumers. One example cited by critics is the Bovine somatotropin recombinant agreement, which involves three FDA employees with relationships with Monsanto, the company seeking approval, namely Margaret Miller, Michael R. Taylor, and Suzanne Sechen. However, in response to a lawsuit brought by Jeremy Rifkin in connection with a potential conflict of interest, the FDA released the results of an internal audit that found no conflict and in 1992 the General Accounting Office of the United States (GAO) conducted an investigation and found 'no conflicts of financial interest with respect to drug approval 'and only' one minor deviation from current FDA regulations'. (Excerpts are from GAO ​​1994 report) ".
Trade Commission between countries
Historians, political scientists and economists often use the Interstate Commerce Commission (ICC), the now defunct federal regulatory body in the United States, as a classic example of arresting regulations. The creation of the ICC is the result of widespread and long-lasting anti-rail agitation. Richard Olney joined the administration of Grover Cleveland as the attorney general shortly after the ICC was founded. Olney, a former prominent railway attorney, was asked if she could do anything to get rid of the ICC. He replied,
The Commission was later charged with acting for the benefit of railroad and truck companies. ICC, critics claim, sets levels at artificially high levels and excludes new competitors through a strict licensing process.
"The commission... is, or can be, very useful for the railroad.This fulfills the popular demand for government oversight of the railroad, at the same time that supervision is almost completely nominal.More, the older such a commission would be , increasingly likely to be found to take a business view and the railroad things.... Part of the wisdom not to destroy the Commission, but to exploit it. "
While the Inter-state Trade Act prohibits "inappropriate and unreasonable prejudices" against passengers between countries, within sixty-six years before Sarah Keys v. Carolina Coach Company (1955) The ICC has decided against any black applicant who carries a complaint of racial segregation, earning the nickname "Confederate Supreme Court". The ICC then fails to enforce Key vs. Carolina Coach, attempted to justify separate but equal separations for six years before being forced by the Justice Department under then Attorney General Robert F. Kennedy to act in response to the 1961 Freedom Riders protests.
Nuclear Regulatory Commission
According to Frank N. von Hippel, despite the Three Mile Island crash in Pennsylvania in 1979, the Nuclear Regulatory Commission (NRC) is often too scared to ensure that 104 American commercial reactors are operated safely:
"Nuclear power is an example of a textbook on the subject of" rule-making "- where the industry gains control of a body that is meant to regulate it.Under the rule can be challenged only by strong public oversight and Congressional oversight, but in 32 years since Three Mile Island, interest in nuclear regulation has dropped dramatically. "
Later, candidate Barack Obama said in 2007 that five NRC members had become "the industrial prisoner who organized it" and Joe Biden indicated he did not believe in the agency at all.
The NRC has licensed "any single reactor requiring it", according to Greenpeace USA nuclear policy analyst Jim Riccio, to refer to the agency approval process as a "rubber stamp". In Vermont, ten days after the 2011 T-hsu earthquake and tsunami that damaged Japan's Daiichi plant in Fukushima, the NRC approved a 20-year extension to the Vermont Yankee Nuclear Power license, though the Vermont state legislature has chosen to reject such extensions. The Vermont plant uses the same GE Mark 1 reactor design as the Fukushima Daiichi nuclear power plant. The plant has been found to leak radioactive materials through underground pipelines, which Entergy, the company runs the plant, has denied under oath even there. Representative Tony Klein, who heads the Vermont Building and Energy Resources Committee, said that when he asked the NRC about the pipe at the hearing in 2009, the NRC did not know about their whereabouts, let alone that they leaked. On March 17, 2011, Union of Concerned Scientists (UCS) released a critical study on the performance of NRC 2010 as a regulator. UCS said that over the years, it has found the enforcement of NRC safety rules not "timely, consistent, or effective" and quoting 14 "barely" in US plants in 2010 alone. Tyson Slocum, an energy expert at Public Citizen, said the nuclear industry has "invested itself in political formation" through "credible friends from George Bush to Barack Obama", that the government "really only became the cheerleader for the industry.
Although there are exceptions, there are some revolving doors. Jeffrey Merrifield, who was at the NRC from 1997 to 2008 and appointed by Clinton and Bush presidents, left the NRC to take an executive position at The Shaw Group, which has a NRC-regulated nuclear division. However, most former commissioners return to academia or public services at other institutions.
Associated Press (AP) investigations for a year show that the NRC, which works with industry, has loosened the rules so that the aging reactor can remain in operation. AP found that plant wear and tear, such as clogged drains, cracked parts, leaky seals, rust and other damage resulted in 26 warnings about emerging safety issues and may be a factor in 113 out of 226 warnings issued by the NRC between 2005 and June 2011. Recurrent NRCs giving industry permission to delay repairs and problems often get worse before they are fixed.
However, a paper by Stanford University economics professor John B. Taylor and Frank A. Wolak compares financial services and the nuclear industry. While acknowledging both are vulnerable in principle to catching the rules, they conclude that regulatory failure - including through regulatory arrest - has more problems in the financial industry and even suggests the financial industry make analogues to the Nuclear Power Operations Institute to reduce regulatory risks.
Currency Financial Supervisory Office
The Office of the Currency Financial Supervisory (OCC) has strongly opposed the efforts of 50 state prosecutors, who have united to punish banks and reform the mortgage modification process, following the subprime mortgage crisis and the financial crisis of 2008. This example is cited in The New York Times as evidence that the OCC is "the prisoner of the bank that should be governed".
Securities and Exchange Commission
The Securities and Exchange Commission of the United States (SEC) has also been accused of acting for the benefit of Wall Street banks and hedge funds and dragging its feet or refusing to investigate cases or bring fraud and insider trading allegations. Financial analyst Harry Markopolos, who spent ten years trying to get the SEC to investigate Bernie Madoff, called agents "not functioning, prisoners to industry."
Similarly in the case of the Allen Stanford Ponzi scheme, there are repeated fraudulent warnings from within and outside the SEC for more than a decade. But the agency did not stop fraud until 2009, after the Madoff scandal became public in 2008.
The SEC has been recovered by the US Senate Committee on Finance, the Senate Judiciary Committee and federal district courts to illegally fire an employee in September 2005 critical of the boss's refusal to pursue Wall Street titan John Mack. Mack allegedly provided inside information to Arthur J. Samberg, head of Pequot Capital Management, who was once one of the world's largest hedge funds. After more than four years of legal battle, former SEC investigator Gary J. Aguirre filed a paper in the Freedom of Information Act (FOIA) case he had against the SEC, seeking an order to force the SEC to submit a Pequot investigation record to him. the reason that they do not accuse anyone. Aguirre has provided incriminating evidence about Pequot peoples trading involving Microsoft trading to the SEC in a letter dated January 2, 2009. The morning after FOIA Aguirre's letters were filed, the SEC announced that they had filed a lawsuit against Pequot and Pequot had agreed to crossed out $ 18 million in illegal profits and paid $ 10 million in fines. A month later, the SEC settled an incorrect Aguirre termination suit of $ 755,000.
The list of officials who have left the SEC for a very lucrative job in the private sector and who have occasionally returned to the SEC include Arthur Levitt, Robert Khuzami, Linda Chatman Thomsen, Richard H. Walker, Gary Lynch, and Paul R. Berger. The Government Oversight Project (POGO) released a report on May 13, 2011, which found that between 2006 and 2010, 219 former SEC employees tried to represent clients before the SEC. The former employee filed 789 statements that informed the SEC of their intention to represent outside clients before the commission, some filing within a few days after leaving the SEC.
Reporter Matt Taibbi calls the SEC a classic case of regulatory arrest and the SEC has been described as an agency formed to protect the public from Wall Street, but now protects Wall Street from the public. On August 17, 2011, Taibbi reported that in July 2001, an initial fraud investigation against Deutsche Bank was blocked by Richard H. Walker, director of enforcement of the SEC, who began working as general counsel for Deutsche Bank in October 2001. Darcy Flynn, a Lawyer The SEC, the whistleblower who revealed the case also revealed that for 20 years, the SEC has routinely destroyed all documents related to thousands of closed initial questions rather than proceeding to formal investigations. The SEC is legally required to keep files for 25 years and the destruction should have been done by the National Archives and Archive Administration. The lack of files eliminates sympathizers from possible backgrounds when investigating cases involving the company. Documents were destroyed for questions to Bernard Madoff, Goldman Sachs, Lehman Brothers, Citigroup, Bank of America and other major Wall Street companies that played a key role in the 2008 financial crisis. The SEC has since changed its policy to destroy those documents and the SEC general investigator is investigating this issue.
Federal Trade Commission
The decision, known as In re Amway Corp, and popularly called Amway '79, made the FTC a spearhead of the newborn Multi-Level Marketing industry. The situation peaked in December 2012 when Pershing Square Capital Management's hedge fund announced a short $ 1 billion position against the company, and clearly expects the FTC to act, which to date has not. From the standpoint of forensic accounting, there is no difference between Ponzi schemes like the Madoff scandal, and the pyramid scheme, except that in the latter the money was laundered through the sale of the product, not the investment. The press has many reported why the FTC will not act, eg Forbes although legal opinion has been very supportive in some circles, such as Prof. William K. Black, who was instrumental in bringing thousands of criminal charges in the S & L, which is also full of regulatory capture issues.
District of Columbia Taxicab Commission
The District of Columbia Taxicab Commission has been criticized for being tied to taxi and driver companies rather than ensuring that the District has access to "safe, comfortable, efficient and affordable taxi experience in well-equipped vehicles". In particular, the Uber sedan service faces obstacles from commissions and city councils that prevent it from competing with taxis. Uber's plan to launch a cheaper service called UberX was canceled after the city council proposed an amendment that would force the sedan service to charge at least five times the rate of taxi fall and higher time and distance charges, explicitly to prevent UberX from competing with taxis. Washington State Liquor Control Board and I-502
Some commentators have acknowledged that when the I-502 Initiative was "legalized" by the State's marijuana, it was done in a way that caused the State to run a monopoly on legalized marijuana at a price far above the existing medical pharmacies, which the State is now trying to shut down shop- recreational stores, where prices are 2-5 times higher than products can be obtained elsewhere.
Canadian example
Canadian Radio and Telecommunication Commission
In August 2009, the Canadian Radio-Television and the Telecommunications Commission (CRTC) were temporarily requested by Bell Canada to enforce user-based billing to Internet wholesalers, sparking protests from both wholesalers and consumers, who claimed that the CRTC was "kow- towing to Bell ".
On February 2, 2011, CRTC chairman Konrad von Finckenstein testified before the Standing Committee of the Industry, Science and Technology Council to defend the agency's decision. Critics Steve Anderson said, "The stubbornness of the CRTC in the face of public mass criticism demonstrates the power of Big Telecom's lobbying influence, while government officials recognize the need to protect the interests of citizen communication, the CRTC has affirmed that their priorities are lying elsewhere."
Japanese example
In Japan, lines can be blurred between the purpose of solving the problem and somewhat different goals making it seem as if the issue is being addressed.
Nuclear and Industrial Safety Agency
Despite warnings about its safety, Japan's Nuclear and Industrial Safety Agency (NISA) regulator approved a 10-year extension for the oldest of six reactors at Fukushima Daiichi just one month before a 9.0 magnitude earthquake and subsequent tsunami damaged the reactor and caused the destruction. The conclusion to the Japanese Diet report on Fukushima attributes this directly to the decision-making.
Nuclear opposition Eisaku Sato, governor of Fukushima Prefecture from 1988-2006, said the conflict of interest was responsible for the lack of effectiveness of NISA as a watchdog. The agency is under the Ministry of Economy, Trade and Industry, which encourages the development of Japan's nuclear industry. Inadequate inspection is reviewed by a panel of experts drawn mainly from academics and rarely challenges agencies. Critics say the main weakness in Japan's nuclear industry is weak oversight. Seismologist Takashi Nakata said, "The regulators just stamped on the utility report."
Both ministries and agencies have links with nuclear power plant operators, such as Tokyo Electric. Several former ministry officials have been offered lucrative jobs in the so-called "sacred practices", "descendants of heaven". A panel responsible for re-writing Japan's nuclear safety rules is dominated by experts and advisors from utility companies, said seismology professor Katsuhiko Ishibashi who stepped out of the panel in protest, saying that it was rigged and "unscientific". The new guidelines, set in 2006, do not set strict quake standards across industries, not nuclear plant operators who are allowed to self-inspect to ensure their plants are compliant. In 2008, NISA found all the Japanese reactors in accordance with the new earthquake guidelines.
Yoshihiro Kinugasa helped write Japan's nuclear safety regulations, then checked and still in another position on another date, duty at the licensing panel, signing off on inspection.
Department of Health, Labor and Welfare (MHLW)
In 1996, the Ministry of Health and Welfare (now combined with the Ministry of Labor) was attacked by an HIV-contaminated blood scandal used to treat people with hemophilia.
Despite warnings about HIV contamination from blood products imported from the US, the ministry suddenly changed its position on heated and unheated blood products from the US, protecting Green Cross and the Japanese pharmaceutical industry, keeping the Japanese market from being flooded with blood thermal treatment from the United States. Since unheated blood is not taken from the market, 400 people die and more than 3,000 people are infected with HIV.
No senior officials were charged and only one lower-level manager was charged and convicted. Critics say the ministry's main task is industrial protection, not population. In addition, bureaucrats get amakudari jobs in related industries in their fields at retirement, a system that serves to block regulators. Moriyo Kimura, a critic working at MHLW, said that the ministry is not paying attention to the public interest.
Examples in Philippines
Tobacco control in the Philippines is predominantly in the Intergovernmental Committee on Tobacco (IACT) under the Republic of No. 9211 (Tobacco Regulation Act 2003). IACT membership includes pro-tobacco groups in the Ministry of Agriculture and National Tobacco Administration, as well as "representatives of the Tobacco Industry to be nominated by recognized and legitimate industry associations," Philippine Tobacco Institute (consisting of the largest local cigarette producers and distributors). In the case of the Philippine Supreme Court 2015, the Court ruled that IACT as an "exclusive authority" in regulating various aspects of tobacco control including access restrictions and tobacco advertising, promotion and sponsorship. In this regard, the Ministry of Health, which is the principal technical institution for disease control and prevention, is held without authority to establish tobacco control regulations unless IACT delegates this function. The IACT Organization also limits the Philippines' enforcement of the World Health Organization's Framework Convention on Tobacco Control.
International example
World Trade Organization
Academician Thomas Alured Faunce argues that the World Trade Organization does not infringe upon the benefit claims, especially when inserted in bilateral trade agreements, can facilitate intense lobbying by industry that can result in effective regulatory drafting of large areas of government policy.
See also
- Campaign funds
- Concentrated benefits and diffuse costs
- Company prosperity
- crony capitalism
- Iron triangle (US politics)
- Job license
- Political corruption
- Regulatory capitalism
- Search for rent
- Turn (political) doors
- Arrests country
- Literature
- 100,000,000 Guinea Pigs , by Arthur Kallet and F.J. Schlink, first published in 1933
- Other American groups promote transparency
- MAPLight.org, tracking money and politics in the US.
- Sunlight Foundation, promoting government transparency and accountability
Note
References
Bibliography
- Bernstein, M. 1955. Organize Business by Independent Commission . Princeton: Princeton University Press.
- Glover, P. 2007. "Crime Is Not Crisis: Why Health Insurance Costs Are So Great" '.
- Huntington, S. 1952. The Marasmus of the ICC: Commissions, Railways, and Public Interest. Yale Law Journal 614: 467-509.
- Laffont, J. J., & amp; Tirole, J. 1991. Politics of government decision-making. A theory of arrest of regulation. Quarterly Economic Journal 106 (4): 1089-1127
- Lee, Timothy B. (August 3, 2006). "Tangling the Web". The New York Times . Retrieved April 1, 2011 .
- Levine, M. E., & amp; Forrence, J. L. 1990. Regulatory, public interest, and public agenda. Towards synthesis. Journal of Economic Law & amp; Organization 6: 167-198
- Stigler, G. 1971. The theory of economic regulation. Bell J. Econ. Human. Sci . 2: 3-21.
External links
- Greg McMahon, Capture Rules: Causes and Effects (PDF) International Institute for Public Ethics. Paper given October 4, 2002 conference, Brisbane, Australia.
- Nakamura, Karen. "Resistance and Cooptation: The Deaf Federation of Japan and Its Relationship to State Power," Journal of Japanese Social Sciences, Vol. 5, No. 1 (April 2002), pp 17-35.
Source of the article : Wikipedia
0 Comments